News, leads and analysis related to India’s trade and all that’s happened on the policy front during the month of April 2016

India-Japan

Food Imports

Under the scanner no more!

Good news for those involved in imports of processed food products. India has decided to take Japanese food products off the list of products that need to go through radioactive scanners before entering the Indian market. An order released by The Food Safety and Standards Authority of India (FSSAI) states, “The advisory dated 15.03.2011 issued regarding monitoring of food articles imported from Japan for radioactive contamination, issued earlier as a temporary measure in 2011, is hereby withdrawn.”

The decision comes five years after the Fukushima nuclear disaster in Japan. The move is expected to be welcomed by exporters of food products from Japan, which otherwise run the risk of radioactive contamination, as they will now get easy access into Indian territory. However, the decision to discontinue the scanning of food items has alarmed some experts who believe that it is far too early for such a step. According to FSSAI officials, the screening was unnecessarily delaying the process of imports from Japan. While India has decided to discontinue scanning, countries like US, Russia, Germany, Turkey and Australia are still strictly scanning all products which are being sourced from Japan, a process that was put in place in 2011 after leaks from Fukushima Daiichi nuclear plant. Even as FSSAI officials say no contamination was found in items from Japan, in March 2015, radiation was found in samples of green tea imported from Japan in US. Japanese food products currently being imported to India include sea food, confectionery, fruits and vegetables. According to APEDA, India’s imports of agro-food products from Japan in FY2015 stood at $4.09 million, which given this decision is expected to rise in FY2016.

Shark Fins

Export Ban

Even sharks deserve kindness

The Kerala High Court’s directive to put a stay on a writ petition filed by a Kochi-based seafood exporter to remove the ban on ‘shark fin’ exports has been met with disappointment by shark meat exporters across the country. The exporter from Kochi was contending that the ban was issued without consulting seafood exporters and had nothing to do with marine fishery conservation. For the uninitiated, shark fin is a delicacy and considered a lucky charm in many cultures, especially in the South-East Asian countries. According to a release by the United Nations, India is the second-largest shark catcher in the world (Indonesia ranks No.1) averaging 75,000 tonnes of sharks every year. The ban was aimed to check reckless destruction of sharks while securing the fins. ‘Finning’ is a barbaric practice where shark’s fins are chopped off and the rest of the body dumped back into the sea while still alive. Through a notification issued by the DGFT on February 6, 2015, prohibition of export of shark fins was put into place. It’s worth noting that about 70 million sharks are killed every year worldwide for their fins.

India-IMF

Global Economy

Bright spot to a shining star

 

 

 

hristine Lagarde, Head of IMF

After endorsing India as a bright spot in the otherwise gloomy global economy, the International Monetary Fund (IMF) added another feather to India’s cap as the Fund’s Chief Christine Lagarde said, “India’s star shines bright” amid global challenges. At a conference on ‘Advancing Asia: Investing for the Future’, the IMF chief further said: “the world’s fastest-growing large economy is on the verge of having the largest and youngest ever workforce and, in a decade, set to become the world’s most populous country.” It must be noted that IMF in its Regional Economic Outlook for Asia and the Pacific released in October last year had said that India will be a ‘bright spot’ in the global economy.

 

MarutiSuzuki

Baleno Exports

With love, from India

Providing a further boost to the Make in India initiative, Maruti Suzuki India started exports of its premium hatchback Baleno, which was launched in India in October last year, to Europe recently. The first consignment comprising 1,800 units was shipped from Gujarat’s Mundra Port. The car is expected to go on sale in Europe this spring season. The shipment to Europe comes just a month after the made-in-India Baleno was exported to Japan by the Indo-Japanese carmaker – the company for the first time exported an India-made car to its home market. It must be noted that Baleno, which is being produced only in India, is expected to be exported to over 100 international markets.

India-Kuwait

Poultry Exports

Ruffling feathers, yet gain

When Kuwait had lifted the ban on imports of Indian poultry products six months back, the move had brought cheer to the domestic poultry sector. But that joy was short-lived as the Persian Gulf nation has re-imposed the ban on imports of poultry products from India in the wake of an outbreak of avian influenza or bird flu in some states, which was confirmed by the Department of Animal Husbandry in January this year. It may be recalled that Kuwait, in October last year, had lifted the ban on imports of Indian poultry products, which was imposed in 2013. Even as Kuwait has a small share in India’s exports of poultry products, the move is likely to impact the domestic industry. According to the provisional estimates by Agricultural and Processed Food Products Export Development Authority (APEDA), India’s poultry exports during April-December period of 2015-16 jumped to Rs.584 crore from Rs.484 crore during the corresponding period last year.

India-Myanmar

Locomotive Exports

Chugging into Myanmar

In a bid to help the country bolster its rail transportation system and meet the increasing demand for passenger and freight traffic, India will supply 18-meter gauge diesel electric locomotives to Myanmar. A contract was signed in March between Indian public sector undertaking, RITES and Myanmar Railways. With features like fuel-efficient engine, microprocessor controls and ergonomic cab design, the locomotives will be made by Diesel Locomotive Works in Varanasi. The project is being funded under a line of credit extended by the India to Myanmar. Rajeev Mehrotra, CMD, RITES said, “We are making all efforts to augment export of rolling stock manufactured at Railway Production Units and response from South East Asian markets is very encouraging.”

INDIA-IRAN

Easing Import Tariff

Meeting over a cup of tea

In a move to make Indian tea more competitive in the lucrative Iranian market, the Indian government has approached Iran’s Customs authorities and asked them to be more flexible while arriving at import duties to correct the disproportionately high levies being imposed on low-priced Indian tea. India has requested Iran to have different tariff lines for premium varieties and non-premium varieties and also two separate ones for peak-season and off-season. If the Iranian authorities become flexible in calculating import tariffs of low-value tea, it would make Indian tea more competitive in the Persian country. Notably, an import duty of 20% is imposed by Iran along with 9% VAT on Indian tea. Indian tea exporters fervently hope that Iran will be amenable to India’s request. Besides being the second-largest importer, Iran is a crucial export market for Indian tea owing to high price realisations. Iran, under a trade pact, had recently agreed to purchase 30 million kg of Indian tea annually.