Natural gas imports, aircraft buys will help reduce trade deficit with US, says Suresh Prabhu :

Commerce and industry minister Suresh Prabhu has said that India’s purchases of commercial aircraft and gas from the US will help bridge the trade deficit between the two countries. In 2017-18, India had a $21 billion trade surplus with the US. 

In his interaction with business leaders during his just concluded visit to the US, the minister noted the encouraging growth in trade volumes through purchases of US-made civilian aircrafts by Indian companies and enhanced cooperation in the area of energy, including procurement of petroleum and LNG by India from the US. 

He also pointed out that India’s rapid economic growth will create significant new market opportunities in these and other areas and added that these purchases have already led to reduction in bilateral trade deficit in 2017. 

“Future sales will sustain this trend and create a balanced trade relationship between the two countries,” the commerce and industry ministry said in a statement on Wednesday. 

His statement assumes significance in the wake of US president Donald Trump accusing India of levying 100% tariff on some American products and threatened to even cut off trade ties if America's trading partners did not cooperate. The two countries have been embroiled in a host of trade spats with the US has imposed additional import duties on steel and aluminium from India, delayed extension of the generalised system of preferences offering duty-free/low duty market access to many Indian products and initiated a dispute targeting New Delhi’s export promotion schemes. 

On specific goods, Washington has demanded zero duty on Indian imports of Harley Davidson motorbikes, sought market access for American poultry and dairy products besides asked for reduction of Indian price caps on medical devices like stents and knee implants. 

13 Jun 2018 ET ET

‘Allow GM food crops to improve export potential’


PHD Chamber of Commerce and Industry (PHDCCI) on Thursday urged the Centre to promote and propagate genetically modified (GM) foods to enable India to catapult its agriculture and horticulture economy and make the country one of the largest exporters of agri products.

Countries that adopted GM food technologies and their applications to improve the productivity and quality of their agri products have become net exporters of food products from food importing nations in the last couple of years, and India needs to look at this with proactive mindset, said PHDCCI Vice-President Rajeev Talwar while speaking at a seminar on industrial growth.


Industrial policy

The Chamber also appealed to the government to prepare a ground for 4th industrial revolution in India’s forthcoming industrial policy statement so that all and relevant emerging issues on the industrial front are addressed at the right time.

“The time has come for India to prepare a solid ground for forthcoming industrial revolution so that it does not miss out an opportunity to become one of the lead economies in the world in next few years,” he said.


30 May 2018 ITP ITP

India, Vietnam to take steps to achieve $15 billion trade

India and Vietnam will explore "substantive and practical measures" to achieve the bilateral trade target of USD 15 billion by 2020, according to a joint statement issued here.

Prime Minister Narendra Modi held delegation level talks with Vietnamese President Tran Dai Quang yesterday, who is on a three-day India visit.

The joint statement further said both the sides agreed to hold the next Meeting of the Joint Sub-Commission on Trade in Vietnam's capital city Hanoi in 2018 at the earliest.


"In order to realize potential to both increase the volume of trade and diversify its composition, they (Modi and Tran) requested the relevant ministries and agencies on both sides to explore substantive and practical measures to achieve the trade target of USD 15 billion by 2020 including but not limited to utilising established mechanisms, strengthening exchanges of trade delegations, business-to-business contacts, regular organisation of trade fairs and events," the joint statement said.

As per the statement, both the sides urged leaders of business and industry of both countries to explore new trade and investment opportunities in identified priority areas of cooperation.

The Vietnamese president applauded Prime Minister Modi's efforts which improved India's ranking in the 'ease of doing business', it added.

Referring to defence cooperation, the joint statement pointed out that their cooperation in oil and gas exploration, thermal and hydroelectric power and renewable energy and energy conservation is registering remarkable progress.

The Vietnamese president "welcomed Indian businesses to expand their oil and gas exploration and exploitation activities on land and in the continental shelf and Exclusive Economic Zone (EEZ) of Vietnam," the joint statement said.

It also pointed out that the Vietnamese side took note of the request by India on actively considering signing the Framework Agreement of the International Solar Alliance with a view to strengthening the cooperation in the renewable energy space.


09 Mar 2018 ITP ITP

Bar-coding for exports: Small-scale pharma producers get relief

The Centre has decided not to take any immediate action against small-scale manufacturers of pharmaceuticals who have not fully implemented the track-and-trace bar-coding requirements for exports by the stipulated deadline of March 31, 2017.

Instead, the Commerce and Pharmaceuticals Departments are discussing ways to help the small manufacturers finance the machinery and infrastructure needed to implement the “parent-child relation’’ system for exports, a government official has said.

“There are some very small pharmaceutical companies who are finding it hard to come up with the resources to install the required machinery, including scanners. They have sought help from the government in the form of subsidies. We are examining in what form we could give them the required financial support,” the official said.

The Centre had put in place procedures relating to tracking and tracing of export consignment of pharmaceuticals and drugs using bar code technology in 2014 to prevent substandard or fake medicines manufactured illegally in other countries (including China) entering international markets with a ‘made in India’ tag. While most large and medium exporters have the system in place, the small manufacturers are lagging.

The Commerce Department has asked to the Pharmaceuticals Department to examine if there is any way of including subsidies for bar-coding infrastructure for the SSI sector under any of their existing schemes on quality upgradation.

“Once the new pharmaceutical policy, under deliberation, comes through, some provisions could be made on this. Till then, the Centre is not likely to take any action against small drug producers who haven’t the required bar-coding systems in place,” the official added.

The track and trace systems is unique with identifying printed code on each product in various stage of packaging and it allows traceability throughout the supply chain and helps in facilitating the manufactures’ identifications.

While bar code labelling at primary level (the material that first envelops the product) is voluntary, it is mandatory on secondary level packaging (boxes, cartons etc) and tertiary level (bulk handling & shipping in barrels etc).

The government also mandated implementation of parent-child aggregation at the secondary and tertiary levels of packaging for exports which basically means maintaining data (based on a unique ID) on which secondary packages went in which tertiary shipper.

The deadline for the SSI manufacturers to implement it was extended to March 31 2017, which has now lapsed.

01 Aug 2017 ITP ITP

Govt targets $60 billion gems, jewellery exports by 2022

Mumbai: The government hopes the gems and jewellery sector to grow 6-7% per annum and has set at target of $60 billion exports by 2022 from the present $43 billion, a senior officer said here on Thursday.

“We are hopeful of country’s gems and jewellery exports to touch $60 billion by 2022 and expect 6 to 7% growth in exports annually,” department of commerce joint secretary Manoj Dwivedi told reporters on the sidelines of a jewellery show here.

India exported gems and jewellery worth $43.2 billion during fiscal 2017, a rise of nearly 10% over the previous fiscal’s export figure of $39.2 billion. After inaugurating 34th edition of the India International Jewellery Show, IIJS 2017, Dwivedi said, “the jewellery industry needs to achieve a higher scale of achievement in the coming years in order to become globally competitive and promote jewellery exports”.

“The government is making various policy initiatives to find out ways and means to improve this sector since it is only sector having maximum employment opportunities to both skilled and unskilled workers pan India,” he added.

Although the downward trend witnessed in the global markets, the country’s gems and jewellery exports showed upward trend, which is very positive sign, he said. “We want to explore new markets for jewellery and diamond exports for which process is on,” Dwivedi said.


Praveenshankar Pandya, chairman, GJEPC, said that having crossed the $40 billion exports mark, the trade body is now devising a strategy named Vision 2022 to enable India attain global leadership position in gems and jewellery.

“We have set the exports target of $60 billion by 2022 and $80 billion by 2025. The trend this year is good and we target growth of 10% in the current year. We will be happy to register $47 billion exports this year,” he said.

On the sidelines of IIJS 2017, GJEPC also signed a MoU with Diamond Producers Association (DPA) to support the miner-backed group’s international diamond- jewellery promotion efforts. The industry will be spending $200 million for the promotions of the trade across the globe and India may get share of around $5 million for the promotions, Pandya added.

Meanwhile, India International Jewellery Show, a five-day B2B event which opened on Thursday, is expected to provide business opportunity to explore the various multi-faceted aspects of the industry. The event witnessed more than 870 exhibitors participation, which includes participation from 30 countries.

01 Aug 2017 ITP ITP

India’s finished steel export rises by 6% in July, import also increases

India’s finished steel export increased by 64.2% in July 2017 and reached to 0.770 million tonnes (mt) from 0.469 mt in July 2016. The imports of finished steel also increased by 42.2% and grew from 0.561 mt in July 2016 to 0.798 mt in this July.

This data was published by a report by Joint Plant Committee (JPC) that collects data on the steel and iron industry of the nation. JPC is backed by the Ministry of Steel and is the only organization that collects data on this industry.

As per the report, “India was a net importer of total finished steel in July 2017 but maintained its net exporter status for the cumulative period, i.e. during April-July 2017”.

During the said period of April-July 2017, the export of total finished steel surged up by 65.5% and reached 2.807 mt from the 1.696 mt recorded during the same period in last year as per the same report.

In the same period, the import of total finished steel was at 2.505 mt which was 4.7% higher from 2.393 mt in April-July 2016. The Total finished steel consumption increased by 3.7% reaching 6.905 mt in July 2017 from 6.660 mt recorded in July last year.

The report also told that the overall consumption fell down by 4.2% in July 2017 when compared with consumption of 7.210 mt in June 2017.

The consumption of total finished steel in April-July 2017 increased by 4.4% from26.736 mt in April-July 2016 to27.911 mt. This increase was mainly due to increase in production for sale and imports.

India is the third-largest producer of crude steel in the world after China and Japan and now aiming to go the second place.

21 Aug 2017 ITP ITP

India-made garments have the largest pie in US imports in H1

For the first time in the history of India’s garment exports to the US, the country has clocked top position in market share in the category ‘men/boys knitwear shirts cotton’ (a variety of knitwear) for the first six months of 2017.
This was attributed to the slowdown in Exporters, however, said they will not be able to retain top position. Exporters say that since the US market offers a level playing field, they were able to compete with other countries, but the recent appreciation of the rupee against the dollar will be a major hurdle to them.

The data released by the Office of Textile and Apparel, US department of commerce, show that India exported 8.5 million dozens of men/boys shirts cotton to the US. India’s share in men/boys knitwear shirts import by the US stood at 8.7 per cent in June.
After a dip in 2014, India’s market share has been growing steadily. In 2013, India’s market share was 6.4 per cent and dropped to 6.2 per cent in 2014. From then it has been steadily increasing, and in 2016 it stood at 7.8 per cent.
Contrary to that, China’s market share, which was 11 per cent in 2012, dropped to 9.6 per cent in 2016 and is now 8.5 per cent. In other segments including women/girls knit shi-rts/blouses, cotton, men/boys cotton trousers, breeches, shorts, and cotton nightwear/pajamas, India and others’ market shares have increased.
While China’s loss is India’s gain, exporters are not happy because Vietnam is running India close. Bangladesh is also increasing its market share. The data show Vietnam exported 8.47 million dozens of men/boys knitwear to the US. Tirupur Exporters Association President Raja M Shanmugam said heavy investment increased India’s share in export. “The US is the only country that gives us a level playing field, and that is why we could compete,” said Shanmugam, adding that the country was losing the edge now because production cost was increasing here.
 An exporter said: “We will not be able to compete with Vietnam or with any countries because products made here are becoming costlier.”
 For example, exporters are quoting 3-5 per cent higher prices after the rupee appreciated, while the hike should be of around 7 per cent to compensate them for the losses on account of currency fluctuation. On the other hand, competitors' currencies have depreciated and they are bringing down the prices.

21 Aug 2017 ITP ITP

LUXURY CARS CESS : GST Council approves hike in luxury car cess

If you are thinking of buying an SUV or a luxury sedan, then You might want to hurry up and decide quickly as the Goods and Services Tax Council is said to have decided to raise the cess on luxury automobiles to 25% from 15% now. To be sure, the rates may not go up immediately as any increase in the cess will require an amendment to the GST compensation law.  The council approved an amendment to the GST law to enable an increase in the rate of levy of compensation cess," said a government official aware of the council's deliberations on Saturday.  The overall view within the council was to have the cess on high-end automobiles pegged higher so that it can be increased if the need arises, the official added.  Cars have been placed in the highest 28% tax bracket under GST, which has replaced 17 state and central taxes as also 23 cesses. It should be noted that the GST Council has already set the maximum levy inclusive of cess at 40%.  Small petrol cars of 4 metres length and up to 1,200 cc engine capacity attract a 1% cess while diesel cars of that length and up to 1,500 cc capacity face a 3% cess. The cess on mid-size, large cars or SUVs is 15%, which added up to a reduction in levies on some models under the GST regime.  A number of car makers had cut prices after the rollout of GST on July 1 to pass on the reduction to buyers. However, some car makers had to raise prices of small cars after the cess was imposed on them.  The government maintains that industry stands to benefit from seamless input tax credit and should help reduce prices overall. The Centre introduced a separate GST (Compensation to the States for Loss of Revenue) Bill, 2016, for the imposition of a cess on certain luxury goods and so-called sin goods to compensate states for any loss of revenue due to the implementation of GST.  A provision to compensate states was also made in the constitutional amendment that makes it mandatory for the Centre to provide for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years. 

10 Aug 2017 ITP ITP

CBEC gives this clarification on GST rates on sweets, garments.

Sandesh, the famous sweet made from concentrated milk, will attract 5% goods and services tax (GST) even when prepared with a chocolate layer, the Central Board of Excise and Customs (CBEC) clarified on Thursday. Sandesh, the famous sweet made from concentrated milk, will attract 5% goods and services tax (GST) even when prepared with a chocolate layer, the Central Board of Excise and Customs (CBEC) clarified on Thursday. It added that any ingredient — khoya or male — prepared from concentrated milk will be taxed at 5%. The clarification on GST rates was issued by CBEC through a set of frequently-asked questions (FAQs). “The sweet shops in Kolkata were under panic because there were apparently different GST rates based on the type of sweet and ingredients. Now the government has clarified that GST rate on all Bengali sweets is 5%,” Archit Gupta, founder and CEO of ClearTax, said. Additionally, the department also clarified rates of certain items that fell under two different categories. For instance, while fresh tamarind will attract 0%, dry tamarind will be levied with 12% GST, CBEC said. Similarly, it was clarified that ready-made garments would be taxed on the actual sale value and not on the maximum retail price. “The sale value referred to in the notification refers to the transaction value and not the retail sale price of such ready-made garments,” CBEC said. If a wholesaler supplies ready made garments for a transaction value of Rs 950 per piece to a retailer, the GST levy would be at 5%, CBEC said. It added that if the retailer sells such garments for Rs 1,100 per piece, the GST levied on this will be 12%. Clarity is still needed for many items such as automobile repairs, movie halls. Local bodies are allowed to levy their own tax thus bringing the total taxes to 58% in places like Tami Nadu (28% GST+30%). There is still no clarification regarding the various state tax holidays and state benefits enjoyed by many industries,” Gupta said.

10 Aug 2017 ITP ITP

GUAR EXPORTS : Guar prices surge on good exports, heavy rain

Guar prices have jumped about 10% in the last one month due to good export demand for guar gum and excessive rain in the guar growing areas of Rajasthan and Gujarat, which have damaged the crop in large areas. In futures market, guar seed prices have moved higher by more than Rs 300 per quintal while guar gum prices have increased by nearly Rs 700 per quintal during the last one month. The most active guar contracts for October delivery at the National Commodity and Derivative Exchange (NCDEX) have been trading on a positive note in the last two weeks.Guar seed prices increased 6.3% or Rs 210 to trade at Rs 3,632 per quintal while guar gum prices jumped close to 9.4% or Rs 676 to trade at Rs 7,724 per quintal during the timeframe. As per the data from the Agricultural and Processed Food Products Export Development Authority, India's guar gum exports for first three month of 2017-18 almost doubled to 145,775 tonne due to higher demand from the US. "The US is expanding its shale gas production in which guar gum is used as a fracking agent. India mainly exports guar gum to the US, Germany, Russia and China, which is used largely by the oil extracting companies," said Ritesh Kumar Sahu, fundamental analyst, agri commodities, Angel Commodities Broking.

As exports are picking up, the area under guar is also seen higher this season.Despite higher acreage, there are reports of largescale damage to standing guar crops due to excess rain during the last week in the major guar sowing districts of western Rajasthan. These districts that include Bikaner, Barmer, Jaisalmer, and Jodhpur account for more than 80% of guar acreage in Rajasthan.According to the Indian Meteorological Department, the cumulative rainfall received from June 27 to July 2 in Western Rajasthan has been 231% of the benchmark long period average (LPA) with rain of 66.8 mm against normal of 20 mm.

09 Aug 2017 ITP ITP