Logistics Performance Index
On wheels of progress
India has yet another reason to cheer! The country has jumped 19 places in the World Bank ranking in the global logistics performance. According to the World Bank’s Logistics Performance Index 2016, India grabbed the 35th rank, 19 places up from its previous rankings of 54th in 2014, reflecting an improvement in the movement of goods within the country. In its biennial report titled, ‘Connecting to Compete 2016: Trade Logistics in the Global Economy’, India on a scale of 1 to 5, stood at 3.42 compared to its LPI (Logistics Performance Index) score of 3.08 in 2014. While Germany topped the rankings again, India surpassed advanced economies like Portugal and New Zealand. The analysis was conducted under six parameters: quality of trade and transport infrastructure, competence and quality of logistics services, efficiency of customs and border management clearance, ease of arranging competitively priced shipments, ability to track and trace consignments, and frequency with which shipments reach consignees within scheduled or expected delivery times. Among the six sub-indices, India made remarkable progress on ‘the efficiency of customs and border management clearance’, jumping from 65th position in 2014 to 38th position in 2016.
Pharma Exports
Tiger trumps Dragon again
India yet again gave China a bitter pill to swallow. Maintaining its lead in pharma exports in 2015, India moved ahead of the Dragon in all major markets including US, European Union and Africa. According to a statement by the Commerce Ministry, the country’s pharma exports rose 7.55%, from $11.66 billion in CY2014 to $12.54 billion in CY2015. China’s export, on the other hand, grew by 5.3%, and could clock only $6.94 billion. While India’s exports of pharma products to US rose 23.4% to $4.74 billion, China’s exports to US could grow to $1.34 billion only. US is the largest market for India’s pharma exports followed by UK, South Africa and Russia. India’s pharma industry is estimated at over $20 billion, but the only concern is that India is still hugely dependent on China for imports of active pharmaceutical ingredients (APIs), which are bulk drugs necessary to produce medicines. In 2015, India imported APIs worth $3.9 billion, out of which APIs worth $3.3 billion were specifically imported from China.
Fishery Subsidies
Safety Net For Fishermen
India has demanded a special and differential treatment from WTO to draft its own subsidy rules for its fishing community. Under the current scheme, subsidies are provided in the form of support for motorisation of fishing boats, fuel rebates and infrastructure support, which fall under the targeted subsidies list that the WTO has proposed to eliminate. Fishery is an important sector that provides employment to millions of people in India. It contributes 1.07% to India’s GDP and 5.30% to agriculture and allied activities. Fish and its products have presently emerged as the largest group in agricultural exports of India, with MPEDA reporting exports of 10.51 lakh tonne, in terms of quantity, and Rs.33,442 crore ($5,511.12 million) in terms of value in FY2015. This accounts for around 1.7% of the total exports from India and nearly 20% of the agricultural exports. India exports more than a hundred different types of fish and shellfish products to about 114 countries. Therefore, India’s move to protect its fishing community is a brave step. India holds the view that the developing countries should be exempted from giving up their fishery subsidies because it offers a livelihood to millions.
Etca
The wait is finally over
Sri Lanka has finally decided to sign the proposed Economic & Technical Cooperation Agreement (ETCA) with India. Although it took time to finalise, ETCA is likely to yield the desired outcome because India is Sri Lanka’s largest trading partner and incidentally its fifth-largest source of foreign direct investment. The intent of ETCA is to enhance economic, trade and investment cooperation between the two countries, which will serve as an extension to the FTA that Sri Lanka signed with India in 2000. It’s worth noting that in FY2016, the bilateral trade between India and Sri Lanka was down to $6.05 billion from $7.45 billion in FY2015. In FY2016, India’s exports to Sri Lanka were $5,307.70 million, 2.02% of India’s total exports to the world.
Textile Exports
Time to explore new avenues
In an attempt to reduce their dependence on traditional export markets such as US and EU, textile exporters from India are now eyeing opportunities in Iran. In this regard, a delegation led by Commerce Ministry accompanied by industry players visited Iran and discussed issues related to taxes and policy support for textile exports to Iran. The Iranian authorities, following the visit by the Indian delegation, has agreed to lower import duty on textiles and apparels up to 25% over t
he next two years. Interestingly, until two years ago, an import duty of 200% was levied on textiles and apparels entering Iran, which was gradually reduced to 32% and 55%, respectively.
Pigeon Pea Imports
From Mozambique, with love
In a bid to control the price of pigeon pea or tur daal in the domestic market, in a recent meeting, the Union Cabinet approved imports of 100,000 MT of pigeon pea from Mozambique. India and Mozambique signed an MoU which would allow India to import a minimum quantity for a period of five years from the African country. The quantity will increase to 200,000 MT by 2021-22 and imports will happen through both government and private channels. This G2G (government-to-government) import deal has been touted as a move that will address food-security in India while encouraging farmers in Mozambique to grow more pigeon peas. Prime Minister Narendra Modi in his address in Mozambique pointed out that food security is an important agenda for the government. The objective behind promoting pigeon pea imports from Mozambique is that the domestic supply of the pulses often proves inadequate to meet the demand, thereby prompting price wars. The deal is expected to turn out to be a win-win proposition for both India and Mozambique.
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