India's payments authority, central bank, and industry are urging the government to allow a fee on digital payments to large merchants via UPI. This Merchant Discount Rate (MDR) aims to boost investment for payments firms and revive slowing UPI growth. A rate of 0.2% to 0.3% is suggested. The final decision rests with Prime Minister Narendra Modi's office. India's payments authority, the central bank, and industry are pushing the government to allow a fee on digital payments to large merchants made via its homegrown network to help boost growth, five sources told Reuters.
All the sources requested anonymity because the discussions are private. The Prime Minister's office, the Reserve Bank of India, the finance ministry and the National Payments Corporation of India (NPCI) did not immediately respond to emails seeking comment. The Payments Council of India (PCI), a lobbying body, has requested the prime minister's office to advocate for a 0.3% MDR on payments to large merchants through UPI, according to a letter reviewed by Reuters. Without the MDR, "it will be very difficult to get the next set of Indians on the digital payments bandwagon," said Vishwas Patel, chairman of the PCI.
Source: The Economic Times
India and the Netherlands discussed deepening strategic economic ties during Commerce Secretary Sunil Barthwal’s visit to the Netherlands.Talks focused on policy alignment, trade barrier reduction, and setting up a Joint Trade and Investment Committee.
Source: The Economic Times
US President Donald Trump claimed that talks with India on trade tariffs were 'coming along great' and expressed optimism about reaching a deal soon. The report further stated that the "forward most-favoured-nation" clause, which has rarely been granted by the Centre in previous trade talks, would automatically apply to the US, ensuring that the latter automatically gets any better tariff terms that the Centre grants to the other countries.
India-US trade talks
Earlier yesterday, US Treasury Secretary Scott Bessent noted that trade talks with India were moving well. He also hinted at the fact that India could become one of the first countries to sign a deal with the US. The sentiment was echoed by Howard Lutnick, the commerce secretary. In an interview with CNBC, Lutnick, without giving many details, said that while one of the trade deals is done, the US was still waiting for approval from an unnamed country's prime minister and its parliament. Statements issued by the Trump administration also indicate that the two sides have already agreed on a plan for their trade discussions.
The Trump administration has claimed that it wants to sign deals with India and other countries before the 90-day pause ends.
Trump's tariffs
Donald Trump implemented the "reciprocal trade tariffs" on April 2 and announced a discounted tariff rate on several countries, including India. A 26 per cent tariff was imposed on India, in comparison to the 52 per cent imposed by India on US products. However, on April 9, he announced a 90-day pause on all reciprocal tariffs imposed, following a turmoil in the markets, but the 10 per cent baseline tariffs imposed were left intact. The pause was applied to all the countries except China.
Source: Business Standard
The dip in India’s industrial output growth to 3.6 per cent in the January to March 2025 quarter from 4.1% in the preceding quarter, could adversely impact the official GDP growth estimate of 6.5 per cent for 2024-25 by up to 20 basis points (bps), economists reckon. The National Statistics Office (NSO) second advance estimates of national income for FY25, released on February 28, had pegged GDP growth at 7.6 per cent in the final quarter of the year (Q4), factoring in industrial GVA growth at 5.6 per cent.
Source: Business Standard
Two days of intense negotiations between India and the United Kingdom (UK) aimed at finalising a long-pending Free Trade Agreement (FTA) ended without a breakthrough, since both sides couldn’t resolve four-five outstanding issues, a person aware of the matter said.
“Both sides tried to finalise the deal during these two days but couldn’t close the negotiations. Four-five issues still need to be sorted,” the source told Business Standard, without specifying the exact points of contention.
Preparations had been made for a formal announcement, with both sides anticipating a conclusion of the agreement, it has been learnt.
Source: Business Standard
India and the US have made “positive progress” in the latest round of discussions on the proposed Bilateral Trade Agreement, the Ministry of Commerce and Industry said in a statement on Tuesday.
The meetings in Washington covered a broad spectrum of issues including both tariff and non-tariff matters, the ministry said. Officials had “fruitful discussions” and explored a roadmap for concluding the first tranche of a “mutually beneficial, multi-sector” trade agreement by Fall 2025 (September-November 2025), the ministry said. It further said that talks also focused on identifying “opportunities for early mutual wins". These steps are seen as part of a larger effort to deepen economic cooperation and strengthen supply chain integration between the two countries.
While most expert-level discussions have so far taken place virtually, the ministry announced that “in-person Sectoral engagements are planned from end May” to build further consensus. These developments follow the Leaders’ Statement from February 2025, which called for enhanced India-US economic ties through greater integration via the Bilateral Trade Agreement.
'India likely to secure first trade deal'
Last week, US Treasury Secretary Scott Bessent had indicated that India is likely to become the first nation to conclude a bilateral trade agreement designed to prevent the imposition of US President Donald Trump’s reciprocal tariffs.
Speaking at a media roundtable held in conjunction with the World Bank and International Monetary Fund’s annual meetings in Washington, Bessent noted that talks with India are close to wrapping up. He credited the progress to India’s comparatively open approach to trade.
“India also has fewer non-tariff trade barriers, obviously, no currency manipulation, very, very little government subsidies, so that reaching a deal with the Indians is much easier,” Bessent said, according to the New York Post.
Under current US policy, Indian exports face a 10 per cent baseline tariff, with an additional 26 per cent reciprocal tariff proposed but placed on hold for 90 days. That suspension ends on July 8. The proposed hike is part of Trump’s wider push to encourage trading partners to reduce trade barriers and address the US trade deficit.
Source: Business Standard
The Ministry of Commerce and Industry is looking to extend its export-incentive scheme the Remission of Duties and Taxes on Exported Products (Rodtep) beyond its current expiration date of September 30.
Exporters have been appealing to the government to continue the scheme past that date, amid ongoing geopolitical uncertainties and the threat of reciprocal tariffs from the United States which have been largely paused for 90 days starting April 9. The scheme will be extended beyond September 30.
Source: Business Standard
Life, they say, is full of surprises. With the election of Trump as the US President, a Pandora’s box of surprises has opened up. Things which were unheard and even inconceivable have happened. The world is in a state of shock – perhaps what President Trump wanted – tariffs and turmoil!
However much may be the turmoil, for the optimist there is always a silver lining. For India, it is time to quickly wake up, put the house in order and make the most of the opportunity to reclaim the grounds which we have been losing over the last 15-20 years as one of the market leaders in textiles. Global textile industry contributed to US$ 592.8 billion in textile exports in 2024, with China leading the way with US$ 286 billion, followed by Bangladesh at US$ 46.2 billion, Vietnam US$ 43.7 billion, India US$ 41.4 billion and Germany US$ 40.4 billion. This is followed by Turkey, Italy, US, Spain and Pakistan. This list is of the top 10 textile manufacturing countries.
Quick look back to 2010, China was still the leader, followed by India, then Vietnam and Bangladesh and Indonesia. In the last 20 years or so, we have lost a lot of ground and are continuing to slide back.
Textiles are produced with three major raw materials. Cotton, which we all understand in India, man-made fibre, -a derivative of petroleum and viscose which is made of wood pulp, specifically derived from trees like beech, pine eucalyptus and bamboo. There are also other fibres like silk, banana, etc, but they are insignificant as compared to these three. India is the second-largest producer of cotton in the world after China. Seventy-five per cent of the world's cotton is grown between China, US, India and Pakistan. Huge amounts of cotton grown locally explains the presence of large scale cotton textile industry in the country. In terms of the global textile manufacturing, man-made fibre (MMF) as a raw material dominates the scene with a 72 per cent share, while other natural fibres like cotton and others make up for the remaining 28 per cent of the market. India’s share of MMF textile is diametrically opposite to the world ratio ie., approximately 70 per cent cotton and 30 per cent MMF. In the global textile market, since our presence in the MMF textile market is very thin, we are being driven out of the market. Our over-dependence on cotton, for which the global market is shrinking and under-presence in the MMF market is the real nemesis of the textile industry of India.
India’s thin share in MMF textile market
Increasingly, the human preference has moved to MMF textiles because of its easy to wear and easy to maintain features. So, why is it that we have not been able to catch up with the world in the MMF segment, the segment which is the fastest growing segment in the textile market?
The hard truth of the stunted growth of Indian textile manufacturing is that the availability of raw materials - PTA (Purified Terepthalic Acid) and MEG (Monoethylene Gylcol) needed for the industry at internationally competitive prices. Similar is the case of viscose. There has been a stranglehold on the supply of raw materials for the domestic industry. A couple of manufacturers control the supply of PTA, MEG and viscose in the country. Anti-dumping duties were brought about and were in play for the last 25 years or so preventing the entry of reasonably priced materials from other countries. Because of the monopolistic nature of domestic suppliers, the raw materials were available to the industry at higher than the international prices. Once the raw material costs were higher, the textile industry found it uncompetitive to produce the products made out of these as they could not compete with Vietnam, Bangldesh, Pakistan etc. These countries availed the benefits of cheaper raw materials at international prices.
The present government took a bold decision to remove these anti-dumping duties in the budget of 2020-21. The industry moved forward quickly, committing Rs 10,000 crore investment by 10 or so manufacturers. However, the restrictions in the raw material supply have been again brought back in the form of Quality Control Orders (QCO’s), thereby making the raw materials again available at higher than the international prices. QCO’s should, in fact, be levied on the value added products to discourage finished products rather than the raw materials. The tragedy is that the country is not self-sufficient in manufacturing the raw materials, yet international supplies have been restricted under the garb of dumping.
Another issue which needs to be immediately addressed, in order to boost the growth of textile industry, is the issue of inverted duty structure in the value chain of MMF. While the duty structure is 5 per cent across the value chain in the cotton sector, the MMF value chain suffers from inverted duty structure from PTA, MEG, fibre ranging from 18 per cent to 12 per cent. Ideally, the entire industry should have a fibre-neutral duty structure ie., at 5 per cent across the board. This has been recommended by expert committees set up for suggesting improvement in the sector. If that is not feasible, then the MMF sector should at least have a 12 per cent duty rate across the board. This gives relief to the industry which otherwise leads to working capital getting locked up, making the wafer thin margins in a highly competitive world trade, further stressed.
Golden chance to break into the US markets
With 46 per cent US tariffs on Vietnam, 37 per cent on Bangladesh, much higher than 27 per cent on India, India has a chance to take advantage of the delta in tariffs. Besides, these countries were so far availing the benefits of being Least Developed Country (LDC) and also the Generalised System of Preferences (GSP ). Since these benefits have been thrown out of the window by the Trump administration, it is our golden chance to break into the US markets in a very big way by removing all restrictions on raw materials needed to manufacture textiles. PLI Scheme focused on MMF has already been approved by the government. We need to take a policy decision about our unambiguous position on raw material availability for the next 15 years at least. Once the position of the country is clear, the industry will come forward in a big way to invest in the MMF industry.
Together with the price advantage because of the tariffs delta with our competitors, the existing cotton apparel and made-up industry will also get a big boost. We can consider extending the PLI scheme to this sector also to encourage fresh investments in the cotton sector too. The impending FTAs with the UK and EU should also be seen as a major upcoming opportunity for the Indian textile industry. We need to augment our production capacities to meet the great opportunity given by this tariff turmoil and also be ready to reap the rewards of these impending FTAs. Textile as a sector is going to be a major beneficiary in these FTAs.
Source: Business Standard
Vietnamese Prime Minister Pham Minh Chinh recently called for setting up of free trade zones (FTZs) in key economic regions and exploring duty-free ports as part of an effort to stimulate growth, boost global competitiveness, attract investment and turn the country into a leading logistics hub in the digital era.
Part of Directive 47, the initiative outlines urgent tasks and strategic measures aimed at accelerating growth this year, according to domestic media reports.
Vo Tan Duc, chairman of the People’s Committee of Dong Nai province, has proposed a 2,000-hectare pilot free trade zone near Long Thanh International Airport and Phuoc An Port during a recent session with construction minister Tran Hong Minh. In parallel, the central coastal city of Da Nang is furthering its development ambitions through a new memorandum of understanding with Vin group. Focused on green transformation and sustainable development between 2025 and 2030, the agreement includes probable setting up of a free trade zone and a financial center.
Source: Fibre2fashion
DHAKA : After India’s revocation of transshipment facilities to Bangladesh, Dhaka is speeding up efforts to enhance its own air cargo capacity. Since India on April 8 revoked the use of its transshipment facilities with immediate effect, Bangladesh has been looking to reduce its dependence on India for its exports. Bangladesh’s exports are heavily reliant on Indian infrastructure, particularly its textile sector, with Indian terminals permitting an ease of supply for Dhaka’s exports, both to India and internationally. The sudden disruption has effectively halted all of Bangladesh’s exports to Nepal and Bhutan, as well as caused several delays and mounting costs for its textile exports.
Given its dwindling economy, fall in exports, and lack of infrastructure, Dhaka has been looking to fast-track its efforts to diversify export channels and reduce dependence on India, according to The Daily Star.
In a first move to address the shortfall, Sylhet’s Osmani International Airport is set to launch dedicated cargo operations today and become the country’s second airport to handle freighter flights after Dhaka’s Hazrat Shahjalal International Airport (HSIA).
A chartered Airbus A330-300 freighter of Galistair Aviation is to depart Sylhet, carrying up to 60 tonnes of garments to Spain, said Shakil Meraj, director (in-charge) of the Cargo Department of Biman Bangladesh Airlines (BBA).
The shipment is bound for Inditex, the Spanish clothing company that owns several major fashion brands, including Zara. The BBA will provide cargo and ground-handling services for the inaugural flight.
The inaugural ceremony will see Bangladesh’s Ambassador to Mexico M Mushfiqul Fazal Ansarey, Civil Aviation and Tourism Secretary Nasreen Jahan, and Civil Aviation and Commerce Adviser Sk Bashir Uddin as chief guests.
“This is a significant milestone as Sylhet becomes operational for cargo flights,” said Civil Aviation Authority of Bangladesh (CAAB) Chairman Air Vice Marshal Md Monjur Kabir Bhuiyan. He added that explosive detection systems, X-ray scanners, and additional security arrangements had been installed to meet international freight handling standards.
The initiative to open Sylhet is part of a broader strategy to decentralise and expand Bangladesh’s cargo-handling capacity.
In an earlier emergency meeting held in Chattogram on April 21, Group Captain Alamgir, director of the airport, said preparations were underway to restart cargo services and that initial capacity would allow at least two large freighter flights per week. “India’s decision is a wake-up call. We now have an opportunity to become more self-reliant,” Alamgir said. Industry stakeholders have welcomed the move but stressed that long-term success would depend on comprehensive infrastructure improvements and cost competitiveness. India revoked the transshipment facility due to congestion at its ports and airports caused by an overload of Bangladeshi cargo, leading to logistical delays and rising costs for Indian exports.
Source: Daily Excelsior
