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

INDIA-World Bank

Ease of Doing Business

Where do you stand?

Gujarat, Prime Minister Narendra Modi’s home state, has bagged the top honour in the ranking of states on ease of doing business index in India, according to a recent report titled ‘Assessment of State Implementation of Business Reforms’ by the World Bank. Gujarat with a 71.04% score has been ranked as the best place in the country for starting or setting up or doing a business, followed by Andhra Pradesh with 70.12% score. In the first-of-its-kind ranking of states, Jharkhand (63.09%) and Chhattisgarh (62.45%) – the two newly-formed states – have come at the third and fourth position respectively, based on the ease of doing business and reforms implementation. While National Capital Delhi fell far behind at fifteenth rank, Mumbai occupied eighth rank. Northeastern states of Meghalaya.

Nagaland and Arunachal Pradesh were at the bottom of the the index, in which the NDA-ruled states occupied the top six slots. The World Bank report compiled by DIPP, with a support from consultancy firm KPMG, CII and FICCI is based on a 98-point action plan and eight other parameters such as setting up of business, labour and tax reforms, land allotment, infrastructure and procedure for environmental clearance, etc. It is worth-mentioning that the World Bank was requested by the Modi government to carry out the exercise to help India improve its ranking in the ‘Ease of Doing Business’ report. India had fallen two places to 142 (out of 189 countries) in World Bank’s “Ease of Doing Business” index in 2015. PM Modi has now set a target to push the country to the top 50 list in three years.

HERO MOTOCORP

First overseas plant

Going global, in true sense!

Setting a historic milestone, the world’s largest two-wheeler manufacturer Hero MotoCorp commenced operations at Villa Rica in Colombia, its first manufacturing plant outside India. Poised to be an export hub for other Andean countries, the Colombian manufacturing facility will also be a strategic base for shipping the company’s products to North American markets such as Mexico and US. Built at a cost of $70 million, the latest facility is Hero MotoCorp’s fifth manufacturing plant including the four others in India. With an initial production capacity of 80,000 units per annum, the new plant will manufacture ten products from the company’s portfolio including the best-selling and globally successful range of motorcycles and scooters. The Indian two-wheeler giant is fast building up a global manufacturing base with another overseas manufacturing facility coming up in Bangladesh. Hero MotoCorp currently sells its range of two-wheelers in 24 countries including Egypt, Turkey, Ecuador, Colombia, Costa Rica, Mozambique, Tanzania and Uganda.

STEEL IMPORTS

Safeguard duty

A temporary respite

Domestic steelmakers, threatened by rising cheap imports, now have a reason to cheer! For, the Directorate General of Safeguards (DGS) has recommended 20% safeguard duty for a period of 200 days on certain steel products to curb a surge in the lower-priced imports. The duty has been recommended for common variety of flat steel products including hot-rolled coil used in car manufacturing. However, it’s a temporary step, the safeguard duty is an emergency measure, imposed to meet domestic industry’s demand and as protection against rising cheap imports. WTO-compliant, the safeguard duty, if imposed, applies to imports from all countries. The DGS concluded that “there was a direct co-relation between the increase in imports and serious injury suffered by the domestic industry as imports increased more than two and a half times during 2015-16 as compared to base year 2013-14.” The recommendation would now be examined by the Board of Safeguards.

INDIA-AUSTRALIA

Uranium Exports

Deal or no deal?

Tony Abbott Australian Prime Minister

If everything goes well, India – after months of wait – will soon be able to import uranium from Australia. For, a high-level Australian parliamentary committee has given its cautious nod to sell uranium to India, if the sub-continent agrees to meet a number of safeguards.

The key panel cautiously backed a nuclear deal signed with India last September, during Australian Prime Minister Tony Abbott’s visit to India. Almost a year after it was tasked to review the uranium sales deal, the Treaties Committee of the Australian Parliament tabled a report stating that it ‘supports’ the nuke deal and recommended it to be completed. To prevent the potential risks of the treaty including the likelihood for uranium to be used in nuclear weapons, the government-dominated committee has made six recommendations including the one that says the agreement be ratified only if India manages to achieve full separation of civil and military nuclear facilities. Panel’s Chairman and Liberal National MP Wyatt Roy said the deal could raise exports by adding up to $1.75 billion. Australian authorities estimate that India’s uranium imports would grow to 2,000 MT a year, valued at $200 million. 

India-Belarus

Trade target

Taking it to the next level

India and the east European nation of Belarus have agreed to set a bilateral trade target of $1 billion by 2018. During the seventh meeting of the India-Belarus Inter-Governmental Commission held in the Belarusian capital Minsk, both the sides agreed that the present level of trade did not reflect the true depth of engagement between the two countries. While both the sides talked about stepping up cooperation in pharmaceutical sector, the meeting also focused on enhancing cooperation in sectors such as mining machinery, energy, tourism and fertilizer. India also expressed its interest in investing in the Belarusian potash industry and raising the number of Indian students in Belarusian universities.