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

China

Tourist Visa on Arrival

Cultural exchanges for a change

It’s one kind of inflow from China that India won’t mind at all. Post Finance Minister Arun Jaitley’s announcement in the Union Budget that the government will expand the list of countries, whose citizens are eligible for Tourist Visa on Arrival (TVoA), Ministry of Tourism is contemplating the same for China. Giving this information, Union Minister of Tourism Dr. Mahesh Sharma said the government was exploring this possibility with a view to boost its relations with China. To discuss the same, a six-member Chinese delegation, led by Wang Zuoan, Minister of Religious Affairs of China, was in New Delhi recently. During the visit, the Chinese minister said the main focus of the delegation’s visit to India was to take the cooperation between India and China ahead, mainly in areas of Buddhist studies and cultural exchanges. In the meeting, both sides also agreed to jointly hold an exhibition on Xuang Zang (Hsuan Tsang) in India and China. India, on its part, also proposed to host virtual museums on Indian culture on Chinese platforms.

Navy Helicopters

Italian Connection

‘Make in India’ saves the day

Government of India has allowed Italy-based AugustaWestland, which is currently under the CBI scanner for alleged graft, to bid for a Naval Utility Helicopter (NUH) contract, on the condition the firm ties up with a local vendor. The Indian Navy contract for 100 NUHs is estimated to be worth around $2 billion and the Anglo-Italian multinational firm is fielding its AW-109 helicopter for the project. The project intends to develop 100 helicopters under the ‘Buy and Make in India’ category of the Defence Procurement Procedure 2013. However, the local partner is yet to be confirmed, potential partners being Reliance Defence and Aerospace, Axis Aerospace, Bharat Forge, Hindustan Aeronautics (HAL) and Larsen & Toubro, among others.

Canada

FTA

Cementing people ties with goods and services

In what could be clearly called a shot in the arm of the proposed free trade agreement (FTA) between India and Canada, Prime Minister Narendra Modi has said a roadmap will be laid for the same by September 2015. “We will implement the roadmap to conclude the Comprehensive Economic Co-operation Agreement by September, 2015,” Modi said at a joint press conference with his Canadian counterpart Stephen Harper. He also said the Bilateral Investment Promotion and Protection Agreement (BIPPA) between the two countries will be concluded soon. Terming India a ‘vibrant democracy’, the Canadian Prime Minister said there’s no reason why the two countries should not have a FTA. It’s worth noting that despite a massive expat Indian population in Canada, trade between the two nations has never even come close to its potential, with the same crossing the $5 billion per annum mark for the first time in FY2014.

Iran

Transit Route

Friend’s friends are friends

It seems Commerce Secretary Rajeev Kher’s recent visit to Iran wasn’t just about improving bilateral trade and investment between the two countries. Kher’s discussions with his Iranian peers reportedly revolved around the expansion of the International North South Corridor Transit Route, which is much shorter than the existing route between India and Russia and East European markets. A study has revealed that this route would drastically reduce transportation costs for Indian exporters and importers. India will organise a conference, with an aim to popularise the route, in June this year. Commenting on his discussions regarding boosting trade between India and Iran, Kher said, “Both the countries have agreed to cooperate in sectors like petroleum, petrochemicals, gold, stones and rare earth metals”. It’s worth noting that Iran is keen to develop its rail and power infrastructure and irrigation facilities taking advantage of India’s strength in engineering and projects exports.

Belarus

Lacklustre Trade

Trying to break the land lock

Following his meeting with Belarusian Foreign Minister Vladimir Makei at the Rashtrapati Bhavan, President Pranab Mukhrejee has said the Indian and the Belarusian governments need to take all necessary steps to boost trade relations between the two nations. “There is enormous scope to expand and deepen these relations given the potential that exists in both the countries. Belarus is the second largest supplier of potash fertiliser to India and India is a key supplier of pharmaceuticals for Belarus. Import of potash fertiliser is important for India’s food security. There are many more areas where India and Belarus could cooperate more productively,” Mukherjee said. On his part, the Belarusian minister said, “Even though Belarus is a small country, it has capabilities in many areas of industry and science. It is possible to make advances in different areas of cooperation. Belarus can contribute to the ‘Make in India’ initiative of the Indian government and is ready to consider transfer of technology.” It’s worth noting that despite a lot of potential, the value of trade between India and Belarus has never crossed even the $500 million per annum mark and in FY2014, actually, hit a six-year low of just $211.1 million.

Freight Corridor

Letters of Award

The potential game changer

A consortium led by GMR Infrastructure has been issued Letters of Award for the construction of a 417 km long stretch of the Eastern Dedicated Freight Corridor rail project on EPC (engineering procurement contract) basis. The Rs.5,080 crore project has been divided into two packages – Package 201, from Mughalsarai to Karchana (near Allahabad) for 180 km, and Package 202, from Karchana to Bhaupur (near Kanpur) for 237 km. The World Bank funded project involves the design and construction of civil structures and track works for double railway line on Design-Build Lump Sum basis and is expected to be completed in 45 months. Earlier, in November 2014, the GMR led consortium had emerged as the lowest amongst five other bidders for the project. It’s worth noting that the Dedicated Freight Corridor Corporation of India Ltd. has been set up as a SPV under Ministry of Railways to undertake construction, maintenance and operation of Dedicated Freight Corridors in the country.

New TEEs

Andhra Pradesh

Not just a gimmick, one hopes

The new FTP has conferred the status of Towns of Export Excellence (TEE) on Visakhapatnam and Bhimavaram in Andhra Pradesh. The recognition will ensure that trade associations of the two towns will get financial assistance from the government under MAI on priority basis, along with several other benefits.

However, stakeholders feel while the announcement is encouraging, the government must expedite infrastructure development in both the towns if it is really interested in export promotion from the region. Reacting to the announcement, Bhaskara Rao Potluri, Executive Director, Andhra Chambers of Commerce & Industry Federation, said, “With Andhra Pradesh government setting a target of Rs.60,000 crore worth of marine exports by 2020, it is no surprise that the Centre is looking at Bhimavaram as a production base and Visakhapatnam as a base for marine exports, particularly for shrimps. However, none of the expansion in these two towns should face the same fate as the state’s SEZs.”