News, leads and analysis related to India’s trade and all that’s happened on the policy front during the month of February 2015

 

India-Lebanon

Fruitful Exchange

Wining and dining the Lebanese way

 

Indians will have the chance to taste the uniqueness of Lebanese wine and honey once the ongoing talks between the two countries come to fruition. This, after Indian Agriculture Minister Radha Mohan Singh and his Lebanese counterpart Akram Chehayeb, in a recent meeting, explored potential avenues for bilateral trade between the two countries. Singh urged Lebanon to avail investment opportunities in India and suggested that the country should contemplate setting up mega food parks and cold chains in India to ensure better supply chain. He also urged Lebanon to consider Indian imports of items like potatoes, tomatoes, durum wheat and sugar. On his part, the Lebanese minister, Akram Chehayeb, sought imports of olive oil, honey, wine, apples and grapes apart and some other food products by India. Radha Mohan Singh also called for sharing of research and development and technology transfer between the two countries. “There is a need for exchange of modern processing and packaging techniques of fruits and vegetables between the two countries,” he added. Akram Chehayeb also requested the Indian government to simplify visa procedures saying that it would strengthen bilateral trade. Henri Atallah, one of Chehayeb’s advisors, claimed both the countries are also thinking of signing a memorandum of understanding (MoU) to resolve the issue of high import duties in India, especially that for wine.[sociallocker id="9714"]

 

Beef Exports

Hindutva

Always on the cards

 

With fringe right-wing elements getting a ‘boost’ under Modi Sarkar, India’s beef exports are going through a period of uncertainty. While this is yet to reflect in export figures, traders feel the recent surge in raids/attacks on abattoirs, meat processing plants and cattle-carrying trucks, is a sign of things to come. It’s worth noting that despite a ban in states like Odisha, and Hindu religious sentiments strongly against cattle slaughter, India is the second largest exporter of bovine meat in the world, with exports valued at $72.5 million in FY2014 – almost all of it being boneless bovine meat to countries like UAE, Saudi Arabia and Jordan.

 

India-US Trade

Jobs

Whose job is it anyway?

Following President Barrack Obama’s visit to India in January, the US has said that trade ties between the two countries should be mutually beneficial and create employment opportunities in both the countries. Speaking to the media, White House Press Secretary Josh Earnest recently said, “There is an opportunity for us to try to advance the interests of both our countries by working together and by coordinating our efforts.” While ties between India and the US are getting rosier by the day – the best testimony of it being reciprocal state visits by both Obama and Modi – the idea that the Indian outsourcing industry is ‘stealing away’ American jobs continues to have symphatisers in the US, forcing US politicians to, often, resort to rhetoric and tie any kind of trade concessions to India, with job creation in the US. The rhetoric against India is also a function of the fact that the US is the top destination for both India’s merchandise exports and IT outsourcing.

 

Telecom Exports

Make In India

Tuning in for the future

India’s telecom industry is envisioning to achieve an export target of $10 billion by 2020. And at the heart of this ambition is the ‘Make in India’ initiative, which has raised expectations. Rakesh Garg, Secretary, Department Telecom, has recently stated that India is targeting a 25% CAGR in telecom equipment exports over the next five years. Speaking at an event, Garg said, “The emerging markets of Africa, Latin America, South East Asia and CIS countries were natural destinations for Indian exports as they have the highest potential for growth.” He also said, “Telecom equipment is increasingly being identified by its design and software in which India has very strong and proven capabilities.” According to Telecom Export Promotion Council (TEPC), in FY2014, India’s telecom equipment exports were valued at Rs.19,654 crore. Recently, Union IT Minister Ravi Shankar Prasad also said that the government’s Make in India, Digital India and Skill India programmes will provide huge opportunities to Indian companies, which are looking to manufacture domestically. This will subsequently lead to higher exports. It’s worth noting that the government has been trying hard to reduce India’s imports in the electronics sector.

 

 

Motor Vehicle Agreement

Cross-Border Transport

Leeway for a freeway

 

In an initiative to provide an unrestricted passage for cross-border transportation of cargo, India, Bangladesh, Bhutan and Nepal have finalised a Motor Vehicle Agreement (MVA) that would facilitate the free-movement of trade and passengers between these countries. According to a press release issued by the Ministry of Road Transport and Highways, GoI, the four SAARC (South Asian Association for Regional Cooperation) nations have worked out plans for the speedy implementation of the agreement and enable seamless transit of passenger and cargo vehicles. This agreement, which has been modelled on the one prevalent in Europe, will allow passenger, personnel and cargo vehicles of these countries travel in designated key routes avoiding transshipment of goods at the border crossings. The four nations have also decided to form sub-regional committees to look after the overall facilitation of land transport and monitor the implementation.

 

India-Myanmar

Joint Trade Committee

Enhancing connectivity for bilateral benefits

India and Myanmar have agreed to remove impediments to bilateral trade and focus on good connectivity between the two countries. At a recently held meeting of India-Myanmar Joint Trade Committee, which was co-chaired by India’s Minister of Commerce and Industry, Nirmala Sitharaman and Myanmar’s Commerce Minister U. Win Myint, both countries reasserted their commitment to promoting two-way investments and infrastructure development, especially for border trade. The meeting also discussed trade issues pertaining to agriculture, energy, skill & entrepreneurial development, pharmaceutical, among other key sectors. On its part, India also offered to upgrade trade training institutes in Yangon and provide training to Myanmar’s officials on WTO rules and international trade related issues.

 

Handicraft Exports

E-Commerce

When art meets technology

With Prime Minister Narendra Modi asking Ministry of Tribal Welfare to explore the possibilities of online marketing of handicraft products through e-commerce platforms, India’s exports of handicrafts are set to get a major impetus. This, as a host of handicraft exporters are already eagerly waiting to join hands with popular portals and better tap this segment. With increased Internet penetration and adoption of smart devices by people across the globe and India, the industry is looking at increasing the total value of handicrafts exports, thereby also creating employment opportunities for millions. It’s worth noting that it’s long been felt that Indian handicrafts exports have failed to reach their potential due to the shortage of promotional activities and lack of market access.

 

DGFT

Easy Access

Just a click away

 

Ease of doing business in India has got a major boost. With Directorate General of Foreign Trade (DGFT) operationalising online filing of Importer Exporter Code (IEC) applications and online processing and issue of e-IECs in digital format, new entrepreneurs, exporters, importers can now apply online for the issue of new IECs from the comfort of their homes, thereby avoiding visits to the Regional Authority’s (RA) office. Even the processing of such applications by RAs can now be done online and the digitally signed e-IEC would be issued/emailed to the applicants within two working days. In case the application is incomplete or otherwise ineligible, the same shall be rejected and an auto generated rejection letter/email, with reasons for rejection, would be sent to the applicant. There won’t be any ‘Deficiency Letters’ anymore.

Efforts are also underway to enable payment of fees through debit/ credit cards (option of net banking is already there), which would further facilitate this process. Once fully implemented, the online system would be made mandatory.

The DGFT is also working on creating a platform for message exchange/ integration in its system with Income Tax Department and Ministry of Corporate Affairs for verification of PAN and DIN/CIN details respectively. Once implemented, this would further reduce the processing time of e-IEC applications at the RA level. Many feel, this is an important and path-breaking initiative by Department of Commerce/DGFT towards ‘Digital India’ vision of Prime Minister Modi, thereby boosting India in the ‘Ease of Doing Business’ ranking.

 

Wheat Exports

Subsidy

Boon for some, bane for others

The contentious issue of India subsidising its farmers has again reared its ugly head with USA’s wheat industry accusing the country of far exceeding its WTO commitments. In a media release, US Wheat Associates said, “Increasing support levels gave Indian farmers an artificial incentive to produce more wheat. In fact, India’s wheat production increased by 35% over those seven years (FY2006 to FY2014) to record levels. That buoyed world wheat supplies and increased pressure on prices that hurt wheat farmers in other countries.” It’s worth noting that India’s exports of wheat and meslin have always been a function of political diktats and the MSP-distorted prices have seen immense volatility in exports in the last 10 years.