News, leads and analysis related to India’s trade and all that’s happened on the policy front during the month of August 2014 Hyundai India Exports to Europe

India’s loss is Turkey’s gain

  Korean auto giant Hyundai Motors has announced that it will no longer export cars to Europe from India. Instead, it has decided to cater to the European markets from its plants in Turkey and the Czech Republic. The announcement is being seen as a blow to India’s ambitions of emerging as a major auto hub. It is also a major blow to the Chennai Port, which used to cater to most of the company’s exports. Hyundai India’s Chennai plant has a production capacity of around 6.8 lakh units/year and a big chunk of the total production was exported to the European market. A company official said the decision was made to meet growing domestic demand. Hyundai India has been India’s largest auto exporter, accounting for around 45% of India’s total car exports. The decision is expected to help the company save on transport costs and avoid import duties levied by European nations. However, the company claims that cars produced at the plant will continue to be exported to Latin America, the Middle East, Australia and Asia. It’s worth mentioning that Hyundai India started exporting cars from India in 1999 and its cars manufactured at its Chennai plant have been exported to around 120 countries across the world. India-China Free Trade Agreement

Wining and dining with the dragon

The Federation of Indian Exports Organisations (FIEO) has made a brave request. Pitching the idea that a free trade agreement (FTA) with China would actually be more beneficial to India than China, FIEO President Rafeeq Ahmed recently said, “Why are we afraid of China? If we enter into a FTA with China, it will benefit us. The government should not hesitate to talk about this. If Thailand can have an FTA with China, why not India? India should seriously look at this.” It’s worth noting that despite initiating the highest number of anti-dumping investigations, India’s trade deficit with China continues to spiral out of control – staying above $35 billion for each of the last three financial years. Rafeeq Ahmed’s recent statement assumes significance since there have been indications by the new government in New Delhi that India might take it easy when it comes to signing new FTAs. What’s interesting is that in 2012, FIEO had said that exports to countries with which India has signed FTAs, has shown a decline. The Department Of Industrial Policy & Promotion (DIPP) too has been opposing such pacts as they impact manufacturing negatively. Indian Tea Green Peace

As safe as its popularity

Following a recent sampling and testing of a variety of Indian tea products by Greenpeace to evaluate the level of residues of plant protection formulations, The Tea Board of India issued a press release, which said that all the samples tested comply with Indian laws and regulations. “Indian tea, which is very highly regarded all over the world, is totally safe and follow very stringent standards,” the release said. It’s worth noting that the Indian tea industry, led by the Tea Board of India, has been taking several steps to make tea cultivation more profitable and reduce reliance on synthetic plant protection products. It had recently organised a seminar that enabled Greenpeace to interact with the small tea growers. India-Australia Trade Uranium Exports

Only for the right reasons

During his forthcoming visit to India in September, Australian Prime Minister Tony Abbott is expected to sign a deal to sell uranium to India. This follows multiple rounds of talks between Indian and Australian officials, wherein India managed to convince Australia that the uranium won’t be used to make nuclear weapons. Selling uranium to India is a politically sensitive issue in Australia as the former is not a party to the Nuclear Non-Proliferation Treaty (NPT). Opposing the move, Australian senator Scott Ludlam said, “Australia will be directly complicit in fuelling the nuclear arms race between India and Pakistan.” He also offered an alternative solution by which Australia could play a role in India’s fight against perennial energy crisis. “Instead of fuelling this arms race, the Australian industry should be partnering with India’s vibrant solar sector,” Ludlam added. It’s worth mentioning that India runs a massive trade deficit against Australia, mostly because of rising coal imports from the country down under.       Nepal Power Exports

‘Power’ in return for power

  Ten Nepalese communist groups have joined hands to oppose a plan of the government of the Himalayan kingdom to sign a power trade agreement with India. Similarly, they have also made it clear that they are opposed to a project development agreement (PDA) involving hydro-power projects, including the Upper Karnali Project. “The government has agreed to sign both agreements within 45 days of Indian Prime Minister Narendra Modi visiting Nepal, giving monopoly to India on Nepal’s water and power development, which is objectionable,” they said in a joint statement. On the other hand, General Secretary of CPN-ML, which is a partner of the current coalition government in Nepal, P. Mainal said, “We are not against signing the deals with India but they should be done ensuring Nepal’s interests and on the basis of national consensus.” Estimates suggest that it is possible to generate 83,000 MW from Nepalese rivers, while the kingdom barely has a demand of about 1,000 MW – something that has not gone unnoticed by India. Indo-Pak Trade Gas Pipeline

For a brighter tomorrow, literally

For exporting out of trouble

Safeguard or protectionism?

A move sans logic?

Between a rock and a hard place