India's exports have recorded healthy growth in May and remained in the positive zone in June and the first quarter of the current fiscal despite global challenges, Commerce and Industry Minister Piyush Goyal has said. He also said that growth in the services sector is helping the country's outbound shipments to register positive growth rates. "In May, exports were positive, the figure for June is also positive. The first quarter is also in the positive territory," Mr. Goyal told PTI. India's merchandise exports rose 9.1% to $38.13 billion in May. During April-May this fiscal, the outbound shipments grew by 5.1% to $73.12 billion. The Commerce Ministry will officially release the export data for June on July 15. "Despite the ongoing two wars (Russia-Ukraine and Israel-Hamas), the Red Sea crisis, and container shortage issues, our exports are in a positive zone. One more advantage that we have is the fast pace growth in the services exports," the Minister said. He added that the services sector has received a boost from the government's Digital India mission. "The roll-out of 4G and 5G in the country too is helping the services exports of India," Mr. Goyal noted. Last month, the Minister stated that India's goods and services exports are expected to cross $800 billion this fiscal despite global challenges. In 2023-24, the shipments stood at $778.2 billion (goods $437.1 billion and services $341 billion). When asked about foreign direct investments (FDI) into the country, he said the inflows would increase once the international recessionary conditions start improving and interest rates in the U.S. and Europe start coming down. Irrespective of this situation, India is continuously receiving FDI, he added. The U.S. and other developed countries have high interest rates, and because of that, those markets are profitable to invest in. The Commerce Minister added that a healthy infusion of funds by foreign portfolio investments (FPIs) in India reflects greater confidence of investors in India despite high interest rates in developed economies. FPIs in June infused ₹26,565 crore in Indian equities, driven by political stability and a sharp rebound in markets. FDI equity inflows in India declined 3.49% to $44.42 billion in 2023-24. Inflows during January-March FY24, however, rose by 33.4% to $12.38 billion against $9.28 billion in the year-ago period. The total FDI — which includes equity inflows, reinvested earnings and other capital — declined marginally by one per cent to $70.95 billion during 2023-24 from $71.35 billion in 2022-23, data from the Department for Promotion of Industry and Internal Trade (DPIIT) showed.
Source: The Hindu
THE world knows that India’s mega market notwithstanding, pockets of abject poverty remain. No government in India, irrespective of its political ideology, can, therefore, ignore this reality and must continue efforts towards making the economy more equitable. A slew of Free Trade Agreements (FTAs) between developed countries and India are on offer. Hence, our policymakers must insist on two preconditions for any FTA. First, the transfer of critical state-of-the-art technology to India, and second, the acceptance of the Indian rupee as legal tender/currency of transaction between the parties involved in the FTA, thereby reducing the chronic pressure on the Indian currency and endless ‘devaluation’ thereof. Indeed, the suggested measures are easier said than done as no country, neighbour or superpower, however friendly, will ever give India the latest technology in critical sectors like defence. That’s understandable. Whether it’s the so-called globalisation or ‘decaying globalisation’, the transactional world believes neither in charity nor piety. Globalisation has turned into a nightmarish world of sanctions to punish, create bottlenecks and impose reckless prohibitions on anyone who is perceived as a threat to or an enemy of the West. Hence, let India get real and ready to play ball and make the pre-condition to any developed industrial nation or organisation interested in having an FTA with New Delhi to first give specify the required technology before signing on any mutual agreement for access to a market of 1.4 billion people. For example, if any proposal comes from the British, combat aircraft power-plant technology must be insisted upon. If it’s an EU-India FTA, both fighter and transport aircraft engines should be the prerequisites for inclusion in the protocol agenda or the list of items proposed. Enough is enough. It is time to address and curb the import mania of some Indians who tend to act as middlemen to get fat commissions in the name of cheap goods and quote the redundant cliché that ‘the consumer is the king’ who must get the so-called ‘quality’ imported stuff at throwaway prices. India should learn lessons from the American myopia and the European dystopia — of transferring their prime industrial production units (for cheap goods) to China 40 years ago and now shrieking and croaking like dying, headless chickens Regarding currency, the dominance of the dollar as reserve exchange is both unquestionable and indisputable even today. Nevertheless, what makes some countries apprehensive of the dollar is its brazen weaponization by the Americans and their allies. Thus, there is an increasing Western propensity to punish smaller, weaker non-West nations with sanctions. The Russia-Ukraine conflict has revived wide-ranging sanctions, which have created severe turbulence in international transactions. Consequently, the sanctioned countries are in search of alternative modes of payment to bypass the dollar. The aggrieved parties and their business partners are constantly trying to put their own currencies into the bilateral transaction baskets. Although the problem for India at this point is not acute per se, difficulties are mounting — more so because Russia has been a reliable, dependable, diplomatic and transactional partner. Owing to the international energy trade’s heavy dollar dependence, India faces uncertainties from the web of US-sponsored sanctions in the oil and gas sector, especially with regard to Russia. There are too many West-imposed dos and don’ts. Indeed, this is the prime reason that any Western country, individually or collectively, which is interested in having an FTA with India must ensure the inclusion of a rupee transaction along with the dollar, pound or euro. The EU is a developed, prosperous and high-tech grouping. Imagine the advantage of a consortium of 27 nations. Shouldn’t there be a level playing field for the currency transaction mechanism? During Britain’s rule of India (mid-18th to mid-20th century), both the pound and the rupee were interchangeable currencies for business, education, travel and tourism. Hence, there is no reason why a time-tested system should not be reintroduced for bilateral transaction in an FTA between New Delhi and London. The point is fundamental. In an FTA between one country’s market of 65 million people and the other’s 1.4 billion, the latter’s currency cannot be ignored or rejected for a mutual transaction. Similarly, if the 27-member EU’s market of 500 million and India’s market finalise an FTA, both the euro and the rupee must be tried out to be on a par for business and trade. For rather too long now, the threat of sanctions and monopoly of the Western currency have made globalisation a classic one-way street, leading, at times, to a state of Western monopoly, much to the gross disadvantage and inconvenience of the Global South. For more than five decades, the chronic depreciation of the Indian rupee — owing to its unacceptability born out of the volatility of Delhi’s recurring unbridgeable trade deficit — has painted a pathetic picture of the Indian currency in the world market. From Rs 5 to a dollar in June 1966, it is Rs 83-plus to a dollar today. That means, the Indian currency has fallen by Rs 78 in 58 years.
Source: Tribune
Trade Ministers' Meeting (Outreach Session) Shri Piyush Goyal, Commerce and Industry Minister of India, will visit Reggio Calabria, Italy on 16th and 17th July 2024 to participate in the outreach session of the G7 Trade Ministers' Meeting. During this visit, Shri Goyal will also engage in bilateral meetings with the trade ministers of G7 countries and other participating nations in the outreach session, reinforcing India's commitment to global trade and investment partnerships. This visit underscores India's strategic efforts to showcase the immense trade and investment opportunities it offers, emphasizing its status as a democratic nation with a strong rule of law. Prior to his visit to Italy, Shri Goyal will be in Switzerland on 14th and 15th July 2024 for business and official meetings with Swiss counterparts. The discussions will focus on the implementation of the European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) and charting a roadmap for the investment commitments made by EFTA, amounting to USD 100 billion. This visit aims to further strengthen the bilateral economic and comprehensive partnership between India and Switzerland, fostering deeper economic ties and mutual growth. At the G7 Trade Ministers' Meeting outreach session in Reggio Calabria, Shri Goyal will articulate India's vision for global trade and supply chain resilience, highlighting the significant reforms and initiatives undertaken to enhance the ease of doing business and attract foreign investments. In addition to the G7 outreach session, Shri Goyal will hold bilateral meetings with his counterparts from G7 countries as well as trade ministers from other participating countries. These meetings aim to explore new avenues for trade and investment, resolve bilateral trade issues, and deepen economic cooperation. India's ascent to the 5th largest economy in the world is a testament to its dynamic economic landscape and robust growth potential. The country offers a conducive environment for global businesses with its market-oriented reforms, skilled workforce, and strategic location. Shri Goyal's participation in these high-level meetings will further India's economic diplomacy, promoting the nation's interests on the global stage.
Source: PIB
Synopsis India's Index of Industrial Production (IIP) increased by 5.9% in May, up from 5% in April, according to data from the Ministry of Statistics and Programme Implementation. The government reported factory output growth of 5.7% in May 2023, a slight increase from the previous high of 11.9% in October 2023. The Index ofIndustrial Production (IIP) in India rose 5.9 per cent in May on an annual basis as against 5 per cent in April, revealed the data provided by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday. Consensus estimates were at 4.9 per cent for the said month. The factory output growth measured in terms of the Index of Industrial Production (IIP) had grown by 5.7 per cent in May 2023, the government said in a press release. The previous high of IIP was recorded at 11.9 per cent in October 2023, which slowed to 2.5 per cent in November, 4.2 per cent in December and 4.1 per cent in January 2024. As per the data, the growth rates of the three sectors Mining, Manufacturing and Electricity in in May 2024 stood at 6.6 percent, 4.6 percent and 13.7 per cent year-on-year respectively. In May 2023, the Mining, Manufacturing and Electricity grew by 6.4, 6.3, and 0.9 per cent respectively. According to use-based classification, the capital goods segment grew by 2.5 per cent in May, but it expanded by 8.1 per cent in the same month of last year. The output of consumer durables surged by 12.3 per cent during May compared to a marginal growth of 1.5 per cent in 2023 The output of non-durable consumer goods grew by 2.3 per cent after rising by 8.9 per cent in May 2023. Goods related to infrastructure and construction saw a marginal grew by 6.9 per cent in May 2024, against a 13.0 per cent expansion YoY. The data also revealed that, in comparison to the same period last year, the output of primary goods increased by 7.3 per cent in May 2024 as against 3.6 per cent.
Source: Economic Times
Ashish Gujarati, the vice president of the Southern Gujarat Chamber of Commerce and Industry (SGCCI), has urged the Finance Minister, in her upcoming Budget, to defer the MSME payment rule for a year and implement it gradually. This approach will help the industry transition from longer to shorter credit systems. He also highlighted the need for the government to ensure raw materials are available at international prices and quality to help Indian exporters compete globally. Gujarati stressed that the Government should not include fabric and garments in free trade agreements (FTAs) with various countries. He also suggested that the government should come out with a special incentive scheme for the weaving and knitting industry. Gaurang Bhagat, President of Gujarat-based Maskati Cloth Market Association has strongly demanded imposition of anti-dumping duty (ADD) on fabric imports from China, citing that Chinese suppliers are undercutting domestic prices. He expressed concerns over the manipulation of the Harmonized System Nomenclature (HSN) code to evade duties, which exacerbates the crisis in the domestic textile industry. Subir Mukherjee, Business Head-Denim at Bhaskar Industries, recommended duty-free cotton imports for fabric exporters or refunding import duties to support them. He also called for increasing the RoDTEP value cap for chapter 5211 to match chapter 5209, as denim exports under chapter 5211 constitute over 40 per cent of India’s total denim exports. Mukherjee suggested limiting duty-free imports to fabrics originating from Bangladesh or India to prevent Chinese fabric from entering India via Bangladesh. He also proposed conducting Indo-Bangla textile trade in Indian rupees to reduce transaction costs and urged significant investments in infrastructure to enhance delivery times and competitiveness.
Source: Apparel Resources
With talks to upgrade the existing India-Korea free trade agreement (FTA) moving forward, senior officials of both countries will hold the next round of negotiations from Wednesday in Seoul, an official said. The agreement, dubbed as comprehensive economic partnership agreement (CEPA), was operationalised in January 2010. So far, 10 rounds of review talks have been concluded. The Indian team "will visit Seoul from July 17-19" for the next round of review meetings, the official added. "In the 11th round, both the sides would discuss the broad contours for closing the deal," the official said, adding that Korea is keen to conclude the negotiations this year. The two countries have sought greater market access for certain products, which are under the negative list of the agreement. No customs duty concessions are granted for the goods under this list. The Department of Commerce has engaged with different ministries, including heavy industries, steel, and chemicals, to prepare the offer list. India has sought greater market access for certain products like steel, rice, and shrimp from South Korea to boost exports of these goods. India has flagged issues over Korean firms not buying Indian steel. The review exercise assumes significance as both sides have shared the hope that the CEPA upgradation negotiations would play an important role in strengthening and deepening economic cooperation between both countries. In general, such review or upgrade exercises include implementation issues, rules of origin, verification process and release of consignments, customs procedures, further liberalisation of trade in goods, and sharing and exchange of trade data. India has also raised concerns about the growing trade deficit between the two countries. India's exports to Korea dipped to $6.41 billion in 2023-24 from $6.65 billion in 2022-23 and $8 billion in 2021-22. The imports stood at $21.13 billion in the last fiscal as against $21.22 billion in 2022-23 and $17.5 billion in 2021-22. According to the economic think tank Global Trade Research Initiative (GTRI), India's trade deficit with South Korea increased at a much higher rate compared to its trade deficit with the world. It said India's trade with South Korea has shown significant changes in the periods before and after the implementation of the CEPA. Besides, a GTRI report has stated that Indian exporters are facing various non-tariff barriers in South Korea, including stringent standards, regulations, and certification requirements, and these barriers make it difficult for Indian goods to penetrate the South Korean market. According to GTRI, India is looking for greater liberalisation in the services sector, including healthcare and information technology (IT), and easier access for Indian professionals and service providers in the South Korean market.
Source: Business Standard
Commerce and Industry Minister Piyush Goyal on Monday held discussions with potential investors in Zurich and informed them about huge investment opportunities in India. The minister is in Switzerland regarding implementation of the India-EFTA Trade and Economic Partnership Agreement (TEPA). On March 10, India and EFTA signed a free trade agreement under which New Delhi received an investment commitment of $100 bn in 15 years from the grouping while allowing several products such as Swiss watches, chocolates and cut and polished diamonds at lower or zero duties. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. Goyal engaged in a series of meetings, highlighting India's growth story and met leading business figures and potential investors, including representatives from MSC Cargo, the commerce and industry ministry said in a statement. They discussed potential collaborations and investment opportunities in various sectors, aiming to attract investments and foster partnerships to support India's growth and development, it said. The minister also met senior officials from Zurich Airport, including Chairman of the Board of Directors, Zurich Airport, Josef Felder. "They explored opportunities for collaboration in enhancing airport infrastructure and advancing ancillary air services in India. The discussions centred on leveraging best practices and innovations to significantly improve the Indian aviation sector," it added. He also met WTO Director General Ngozi Okonjo-Iweala and discussed ongoing negotiations and the progress made since the 13th Ministerial Conference of the World Trade Organization. The discussions highlighted India's commitment to achieving fair and meaningful trade outcomes and ensuring free and equitable trade among member nations.
Source: Business Standard
India has flagged concerns over non-tariff barriers (NTBs) faced by its exporters with the Russian government, commerce secretary Sunil Barthwal said here on Monday. NTBs faced by Indian exporters are mainly in sectors such as marine products and pharmaceuticals. For instance, India has been finding it difficult to export marine products to Russia as exporters face certification and listing challenges related to exports. “These issues are being taken up at different forums. We are looking at getting greater market access and addressing these non-tariff barriers in areas such as marine products and pharmaceuticals,” Barthwal told reporters, adding that a visit to Moscow is also being planned. The secretary's statement comes against the backdrop of setting an ambitious target to increase bilateral trade to $100 billion by 2030, up from over $67 billion now. The target was set during Prime Minister Narendra Modi’s meeting with Russian President Vladimir Putin in Russia last week. “We are looking to raise the overall trade volume with Russia... We are looking at various sets of commodities such as electronics, engineering goods and other items, where trade can be enhanced,” the commerce secretary said. The trade between both the countries expanded rapidly over the last two financial years. However, it was mainly driven by a rise in oil imports from Russia, soon after its standoff with Ukraine started in February 2022. Trade deficit with Russia is also the second highest, raising concerns over an “imbalanced trade” between the two countries. Progress was made in areas such as government procurement, digital trade, technical barriers to trade, goods and market access. “We plan to hold more inter-sessional meetings in July and August, and we intend to have another round (of talks) in the last week of September,” Jain told reporters here. As far as the proposed FTA with the UK is concerned, another official said that with the new government taking charge in Britain, the two countries will take forward the negotiations. Last week, Commerce and Industry Minister Piyush Goyal said that both countries are “deeply committed” to signing an FTA. Earlier this month, Keir Starmer became Britain’s Prime Minister after his Labour Party’s landslide electoral victory against Rishi Sunak-led Conservatives. Starmer’s win has renewed hope for the long-pending India-UK trade deal. The portal will help exporters in meeting the non-tariff measures so that goods can be produced depending on the needs of different trade partners. “Different countries have different standards and they vary a lot and we have seen that in the case of spices. EU has very stringent standards while US has relatively liberal ones…so exporters have to send products as per their standards,” he added. On Monday, Business Standard reporter that the government is working towards a strategy to tackle non-tariff barriers faced by exporters by setting up a committee and launching a portal.
Source: Business Standard
The European Commission has approved a landmark decision permitting regional cumulation between Sri Lanka and Indonesia for selected textile and apparel products. This move, based on a joint request by the two countries, will enable them to export these products to the 27-member countries of the European Union under the EU Generalized Scheme of Preferences (GSP) scheme, potentially increasing Sri Lanka’s apparel exports to the EU market. After thorough examination, the European Commission determined that the conditions for granting cumulation between the two countries from two regional groups were met. The decision, effective from August 8, 2024, allows Sri Lanka to cumulate origin for certain materials from HS Chapters 51 to 55, 58, and 60 originating in Indonesia. Sri Lanka can then produce textile products of HS Chapters 61 to 63 under regional cumulation, provided both countries remain in the GSP scheme. “This decision not only strengthens trade relations with the European Union but also underscores the commitment of both countries to adhere to rigorous origin rules and administrative cooperation,” Sri Lanka’s Ministry of Foreign Affairs said in a press release. The approval of regional cumulation will enable Indonesia to export fabrics to Sri Lanka for re-processing into apparel products, which Sri Lanka will then export to the EU market. Leveraging Indonesia's strong textile production capabilities, Sri Lanka can secure a steady supply of high-quality materials. This arrangement is expected to enhance the competitiveness of Sri Lankan apparel in the global market, create employment opportunities, and bolster economic growth, offering a mutually beneficial outcome for both countries. Sri Lanka's export-oriented apparel industry, a key driver of the national economy, has significantly contributed to the country's economic growth over nearly three decades. In 2022, the apparel industry accounted for approximately 43 per cent of Sri Lanka's total export value, earning USD 5,591 million, a 10 per cent increase from 2021. The European Union stands as one of the three largest buyers of Sri Lankan apparel by volume and value. The industry employs nearly 350,000 workers directly and twice as many indirectly. Despite its substantial contributions, Sri Lanka’s apparel sector has a limited domestic fabric supply, with only six companies engaged in fabric production. Consequently, the industry relies heavily on imported fabrics, amounting to USD 2,080.81 million in 2022, with imports from five tariff lines excluded from the joint request constituting 59 per cent of total fabric imports. In contrast, Indonesia is a major textile producer with robust output in cotton, man-made fibres, and synthetics. The European Commission’s decision follows a concerted effort by the Joint Apparel Association Forum (JAAF), the Department of Commerce, the Ministry of Foreign Affairs, and the Sri Lankan Embassy in Brussels, in collaboration with the Indonesian Government and EU authorities, over several years. The implementation of this decision will require additional administrative measures from Sri Lanka and will be monitored by the European Commission to ensure proper management.
Source: Fibre2fashion
The Gulf Cooperation Council (GCC) and the United Kingdom (UK) are keen to sign a free trade agreement (FTA) this year, GCC secretary general Jasem Mohamed Albudaiwi recently said in London. He said this after meeting UK secretary of state for business and trade Jonathan Reynolds. Albudaiwi said he sensed a strong interest from the new British government and a sincere desire to complete the negotiation rounds for the proposed FTA, a Saudi news agency reported.Reynolds expressed the desire to have the agreement signed before the year end. Albudaiwi and Reynolds discussed ways to enhance economic and trade relations.
Source: Fibre2fashion
