Agriculture sector to clock 3.4% growth
May 17, 2013
Farm sector is likely to record 3.4% growth in 2013-14 if monsoon is normal as has been forecast, Prime Minister’s Economic Advisory Council Chairman C Rangarajan said on Wednesday.
“We had projected average growth rate of 3.4 per cent for agriculture sector in the 11th Plan. All indications are that monsoon will be normal, we expect agriculture sector to do well this year...If monsoon is normal, 3.4% growth rate is achievable in the agriculture sector this fiscal,” Rangarajan said.
Agricuture and allied sectors have grown by a mere 1.8 per cent in the last fiscal. Drought in several states such as Maharashtra, Karnataka, Rajasthan and Gujarat caused due to bad monsoon had had a negative impact on crop production. The Indian Meteorological Department has forecast normal rainfall to be 98 per cent of the long period average (LPA).
India’s food grain output has dropped from 259.32 million tonnes in 2011-12 to 255.36 million tonnes in 2012-13.
MEA to draw roadmap for Missions to push exports
May 17, 2013
The External Affairs Ministry Thursday said it will draw a roadmap for Indian Missions abroad to push export promotion activities and help the country to arrest export slowdown.
"The Ministry of External Affairs intends to try and draw a roadmap for Indian Missions abroad in the identified core areas of export and investment so that all export promotion activities have a certain focus and are result oriented," an official statement said.
The issue was discussed during a meeting chaired by Pinak Ranjan Chakravarty, Secretary (Economic Relations) on Wednesday.
The meeting, which was was attended by representatives of 26 Export Promotion Councils and business chambers - Ficci, CII, Assocham and PHD Chamber, aimed at identifying the possible thrust regions and products for undertaking export promotion activities.
"Providing market intelligence was one area in which missions? assistance was found useful and this could be further strengthened. The possibility of investment promotion and business development in the two key sectors of pharmaceuticals and electronics was discussed," the statement said.
EPCs have suggested export promotion activities which could be carried out by the Missions.
"The EPCs identified certain areas and countries, which in their view, could be concentrated upon for market expansion activities. These included markets of Latin America, Eastern Europe, East Asia and South East Asia," it said.
The councils also raised some of the problems which they face in different sectors.
"The participants were assured that their suggestions would be looked into and conveyed to Indian Missions abroad, where necessary," it added.
It was also agreed that regular meetings on investments, exports and sectoral issues would be held by the ministry so that these interactions are dynamic and lead to substantial outcomes.
It follows an earlier meeting chaired by Ranjan Mathai, Foreign Secretary in February 2013, wherein it had been decided that regular meetings would be held with the business chambers and other entities to identify focus areas for trade and investments.
India's exports declined by 1.76 percent to USD 300.6 billion in 2012-13. Trade deficit during the fiscal touched an all time high of USD 190.91 billion.
India-EU FTA: Top officials hold second round of talks
May 17, 2013
Chief negotiators of India and the EU Thursday held the second round of talks on the stalled free trade agreement on which the discussions had started in June 2007.
"Both the sides have discussed all the issues regarding intellectual property rights and investments," a source said.
Although the technical level talks between the two sides started on Monday, the three-day deliberations between the chief negotiators started yesterday.
India and the 27-nation bloc have been negotiating a Broad-based Trade and Investment Agreement (BTIA) which aims at slashing or eliminating duties on over 90 percent of the goods traded between the countries besides liberalising services and investments sector.
However, substantial gaps have yet to be bridged on several issues.
Besides significant duty cuts in automobiles, EU is pressing for tax reduction in wines and spirits and dairy products, a hike in FDI cap in the insurance sector and a strong intellectual property regime.
On the other hand, India wants liberalised visa norms for its professionals, data secure status and market access in services and pharmaceuticals sector.
The total trade between India and the EU stood at USD 94.43 billion during April-February 2012-13. It had aggregated to USD 109.86 billion in the entire 2011-12 fiscal.
China pledges to fix trade deficit issue with India
May 17, 2013
China is sending an investment promotion mission and one of the biggest ever business delegations to India next week to accompany Premier Li Keqiang on his State visit, top officials said on Thursday, to demonstrate that the government was taking ‘very seriously’ the widening trade imbalance.
China and India are, next week, expected to sign a number of business cooperation agreements, including investment and financing deals, as Mr. Li travels to New Delhi and Mumbai.
His visit takes place against the backdrop of fast-rising bilateral trade, which reached $66 billion last year as China became India’s second-largest trading partner. Bilateral trade stood at a few billion dollars a decade ago.
Despite the rapid increase in overall trade, the increasingly unbalanced nature of the relationship has emerged as a source of concern, with the deficit reaching a record $29 billion last year, in China’s favour. Indian imports of Chinese machinery and equipment, particularly in the power and telecom sectors, have emerged as a key driver of trade, while India continues to export raw materials such as iron ore.
While India is pushing for greater market access for information technology and pharmaceuticals companies, it has had limited success so far.
China was taking the issue of the imbalance ‘very seriously’ and had launched a number of initiatives to bridge the gap, Chinese Vice Commerce Minister Jiang Yaoping told reporters on Thursday. An investment promotion mission will travel to India next week, he said, to follow up on the work of three earlier missions sent in 2008, 2010 and 2012.
“We believe that balanced trade is conducive to interests of both sides,” he said. “The reason we have a trade imbalance is because of economic patterns and structures of the two countries.’’
Mr. Jiang said the nature of the trade relationship was changing, particularly with India emerging as the biggest destination for project contracts for Chinese companies. As of March, 2013, he said, Chinese companies had completed projects in India worth $35.1 billion. Both countries, he said, had signed purchase contracts worth $1.65 billion, financing agreements worth $11.64 billion, and engineering and construction products worth $3.5 billion.
Next week’s visit will see deals signed for business cooperation agreements, as well as the first meeting of the China-India CEOs forum and a China-India business cooperation summit.
Bilateral trade reached $73 billion in 2011, when China became India’s largest trade partner, but fell to $66 billion last year on account of the global downturn. As of April this year, trade was down 6.2 per cent. Mr. Jiang, however, said he was optimistic that the $100 billion target for 2015 would be ‘realised on schedule’.
Chinese Vice Foreign Minister Song Tao said, on Thursday, China would take steps to “facilitate Indian companies’ efforts to explore the China market,” pointing out that China will import $10 trillion worth of goods and invest $500 billion overseas in coming years.
“We hope that the Indian side will take a proportionate share of China’s imports and outward investment,” he said. “We are ready to work with India to tap into the potential of bilateral trade and better promote two-way investment, so that we can gradually resolve the issue of the trade deficit”.
Border trade talks put off with Bangladesh due to 'Mahasen'
May 17, 2013
A high-level talk between India and Bangladesh on setting up of border 'haats' (markets) was put off due to tropical storm 'Mahasen'.
"The meeting was scheduled to be held on Tuesday last but the Deputy Collector of Feni district of Bangladesh informed our Director for Industries and Commerce over telephone that the meeting was postponed due to cyclonic storm Mahasen," state Industries and Commerce Minister Jitendra Chowdhury told reporters here on Thursday.
He said that the Bangladesh government in a circular has asked the officials not to leave station in view of the cyclone.
The meeting was scheduled to be held at Srinagar checkpost in Sabroom subdivision of south Tripura district, neighbouring Feni district of Bangladesh.
The cyclonic storm hit the Chittagong division of Bangladesh today.
Chowdhury hoped that the meeting would be held soon to finalise setting up of border haats in south Tripura district.
The first 'Border Haat' came up in 2011 at Kalaichar in Meghalaya's West Garo Hills district.
India and Bangladesh have agreed to set up eight more border haats in the north-eastern states of Tripura, Meghalaya and Mizoram to increase border trade between the two neighbouring countries.
Bilateral trade with Canada may touch $15 billion by 2015
May 17, 2013
India's bilateral trade with Canada is expected to grow to $15 billion by 2015 from the present $5.8 billion, Canadian Consul General Richard Bale said here today.
"Currently the bi-lateral trade stands at 5.8 billion dollars and is expected to grow to $15 billion by 2015. Currently there are 700 Canadian companies in India," Bale said at a conference on Renewable Energy here.
During the India visit of Canadian Prime Minister last November, both the Prime Ministers set an ambitious target to conclude a Comprehensive Economic Partnership Agreement ( CEPA) by the end of the year that would boost the Indian and Canadian economics by $6 billion and result in a significant increase in bilateral trade, Bale said.
We believe that by combining Canadian technology and expertise with Indian talent, Canadian and Indian manufacturers can develop and deliver advanced and competitive products and services for India, Canada and third country markets, he said.
The government of Canada has committed $13.8 million over five years to establish Canada-India Research Centre of Excellence. The Centre will fund greater collaboration between Indian and Canadian researchers and is expected to be operational by year-end, Bale added.
Canadian investments in science and technology currently amount to $12 billion per year and have created one of the strongest science and technology bases in the world, he said.
'India-South Africa trade to cross $20 bn soon'
May 17, 2013
Trade between India and South Africa is expected to rise to more than $20 billion in the next two to three years and value-added products would be thrust area of the South African exports in the coming days, two South African diplomats said Thursday.
Bilateral trade between the two countries stood at $14.7 billion during 2012-13.
"We expect that in the in next two to three years the trade volume would cross the $20 billion mark," Sarat Pradhan, senior economic advisor, High Commission of South Africa in India, said at an interactive meeting organised by Bengal National Chamber of Commerce and Industry (BNCCI) here.
Bilateral trade between the two countries grew exponentially from $3 million in 1992-93 to $4 billion in 2005-06, while the figure was close to $7 billion by the end of 2011.
While raw materials, gold, inorganic chemicals, precious metals and oils have been the major export items to India, South Africa is now emphasising on several value-added products for export promotion.
"Value-added products such as capital equipment, electrotechnical equipment, safety equipment as well as mining and mineral products will be the thrust areas," said Stefanus Botes, minister counsellor (Economic) at high commission.
Informing that currently Indian firms had a total investment of $7 billion in South Africa, Botes invited more companies to invest and form joint-ventures in different sectors in the country.
The officials said inland fishing was an important area where Indian companies could invest.
Release of handbook on the “India-Sri Lanka Free Trade Agreement”
May 17, 2013
A Handbook on the India-Sri Lanka Free Trade Agreement was released on 15 May 2013 by Rishad Bathiudeen, Minister for Industry and Commerce, Government of Sri Lanka and Ashok K. Kantha, High Commissioner of India. The handbook was brought out by the High Commission of India in collaboration with the Institute of Policy Studies, Sri Lanka.
Mr. Anura Sirwardena, Secretary, Ministry of Industry & Commerce, Mr. Saman Kelegama, Executive Director, Institute of Policy Studies, Mr. Vish Govindaswamy, President, India-Sri Lanka Chamber of Commerce and Industry (ISLCCI), Dr. Indrajith Coomaraswamy, Director, Pathfinder Foundation, Mr. Sunil G. Wijesinha, President, National Chamber of Commerce, Mr. P. Kumaran, Deputy High Commissioner, Mr. Manish, Economic & Commercial Counsellor, members of Indo-Sri Lanka Chamber of Commerce & Industry, representatives of various business houses, India CEOs, officials from government departments and media representatives participated in the event.
In his remarks at the event, Rishad Bathiudeen noted that India and Sri Lanka were inseparable friends with a vibrant and growing economic and commercial partnership which had witnessed both trade and investment expanding greatly in recent years. Over the past decade or so, the India-Sri Lanka Free Trade Agreement (ISFTA) had made a substantial contribution in bringing 70% of Sri Lankan exports to India under the FTA, while only about 30% of the Indian exports to Sri Lanka were being made under the FTA. At a time when Sri Lanka’s traditional markets in the West were showing slow recovery from the global economic crisis, the growing markets in Asia, including that of India, provided a great opportunity for enhancing Sri Lankan exports via the ISFTA. As a result, in 2012, imports from India stood at 19% of the overall imports of Sri Lanka (largest source of imports to Sri Lanka), while Sri Lanka’s exports to India stood at 5.8% of overall exports of Sri Lanka (3rd largest destination for Sri Lankan exports), with total trade between the two countries amounting to US$ 4.2 billion.
Dr. Saman Kelegama, Dr. Indrajith Coomaraswamy and Mr. Vish Govindaswamy, during their remarks, sought to dispel the misconceptions surrounding some of the criticisms of the ISFTA. Although there was a commonly-held misconception that a FTA between a large and a small country would appear to bring all benefits for the larger country, if the asymmetry between the two countries was duly accommodated by recognizing the principle of Special and Differential Treatment (SDT) for the small country, a “win-win” situation could be worked out.
This asymmetry was accommodated in the ISFTA right from the outset, by offering a longer tariff liberalization period for Sri Lanka, a larger negative list, favourable rules of origin, etc. This had enabled more than 70% of Sri Lankan goods to be exported to India via the FTA (83% in 2011) compared to less than 30% for India (13% in 2011). The Import-Export ratio between Sri Lanka and India had declined from 10.3 to 1 in 2000, to 6.4 to 1 in 2012. Had the FTA not happened, Sri Lankan exports to India would have been considerably less than what has been achieved and the trade deficit would have been much larger, given the large volume of Indian exports being made outside the FTA. It had to be noted that the trade deficit with India got somewhat compensated by the large capital flows from India to Sri Lanka in terms of FDI, aid, etc. Thus, there was little logic to use the trade imbalance alone as a guide to assess the progress of an FTA.
In his address, Ashok K. Kantha, High Commissioner of India, recalled the urgent need to promote further Indo-Sri Lankan trade by various stakeholders including the Governments of Sri Lanka and India, Chambers of Commerce and Industry of both the countries and above all the businessmen and entrepreneurs, and to take them to the next level.
The High Commissioner highlighted that in 2011-12, India’s imports from Sri Lanka went up by almost 45% to cross US$720 million, making Sri Lanka the largest source of merchandise from the South Asian region for India. This was a big jump from the US$45 million imports in 2000-01, when Sri Lanka occupied 4th rank as an import source for India in the region. Sri Lanka’s exports to India had multiplied by over 16 times in this period, while India’s exports to Sri Lanka had gone up by less than 7 times. There was thus no doubt that the FTA had brought significant benefits to both sides, but more to Sri Lanka. A number of top Indian companies had displayed high interest in Sri Lanka, investing in the country across sectors such as infrastructure,
manufacturing, services, and construction. The cumulative FDI approvals for Indian investments stood at about US$ 1 billion since 2003, with investment inflows of US$160 million in 2012. Nearly US$ 2 billion worth of FDI had been committed by Indian companies for the next five years or so. However, the investment flow was by no means one-sided as Sri Lankan companies too were finding substantial opportunities in the large Indian market, leveraging FTA provisions. The bilateral economic cooperation today extended across multiple areas of engagement, including trade in goods and services, tourism, infrastructure, education, science and technology, and agriculture. Air connectivity had gone up manifold and there were about 120 flights a week between Colombo and eight destinations in India; almost one-fifth of tourist arrivals in Sri Lanka was from India. The beneficial synergy in bilateral economic relations was best illustrated by the container traffic of Colombo Port, which handled nearly thirty percent of the container transshipment business of India; India-linked cargo, in turn, accounted for over three-fourths of the Port’s total container transshipment volume.
The High Commission er made a special emphasis on the impetus generated during the landmark visit of. Anand Sharma, Minister of Commerce, Industry and Textiles, Government of India, to Sri Lanka from 3-5 August 2012 coinciding with the inauguration of the “The India Show – Land of Limitless Opportunities”. During the visit, the two governments had set an ambitious target of doubling bilateral trade to reach US$ 10 billion by the year 2015. It was also decided to take several key steps to further deepen trade and investment relations, including by focusing on increasing Sri Lanka’s export capacity with promotion of manufacturing of products like automobile parts, engineering products and pharmaceuticals, with Indian investments and forging linkages across the production and supply chains of the two countries. To take these proposals forward, the two governments had constituted a high-level Joint Task Force.
Highlighting the non-reciprocal concessions granted by the Government of India in recent months, the High Commissioner said India had taken several key initiatives, including allowing export of 8 million pieces of garments to India by Sri Lankan exporters (condition of importing fabric from India for exporting 5 million pieces of garment removed); issue of import permits for processed meat for one year (earlier it was six months); allowing import of two additional fruits, namely Rambutan and Mangosteen from Sri Lanka; proposing to enter into a Customs Cooperation Agreement and signing a Double Taxation Avoidance Agreement.
Both Rishad Bathiudeen and the High Commissioner conveyed their sincere appreciation to the Institute of Policy Studies of Sri Lanka for partnering with the High Commission in bringing out the handbook. The High Commissioner also acknowledged the support received from the Ministry of Commerce and Industry, Government of India, and the various government departments and the chambers of commerce and industry in Sri Lanka.
The ‘Handbook on the India-Sri Lanka Free Trade Agreement’ aims at facilitating a better understanding of the close economic and commercial partnership that has resulted between the two countries following the entry into force of the FTA. Although there is a lot of information and literature on the ISFTA, they remain scattered. The handbook attempts to bring this scattered information together to assist the business community and other stakeholders to obtain a better understanding of the ISFTA. In addition to a brief analysis on what has happened so far under the ISFTA, the handbook reproduces the Free Trade Agreement and technical details relevant to the Agreement such as the Negatives Lists, Rules of Origin, etc., and agencies dealing with the ISFTA.
ANZ India trip pays off for Kiwi exporters
May 17, 2013
A business trip to India, organised by ANZ Bank, has generated new business for several customers who took part.
Late last month ANZ took 13 New Zealand businesses, including meat, dairy, wine, fruit and juice exporters, on an eight-day trip to India – a key destination for New Zealand businesses looking to expand.
The group visited Delhi, Mumbai and Bangalore, and attended 109 meetings with prospective buyers, customers, business partners and Kiwi companies already working in India. Business workshops were held by ANZ India, NZTE, the New Zealand High Commissioner to India, KPMG and AZB Partners.
“The goal was to give customers a better understanding of how to do business in India and connect them with ANZ’s networks in India that will help them expand their business into this enormous market,” said Sunil Kaushal, ANZ Head of India Relations.
“Already the new connections have paid off for several customers, who have secured new orders for their produce, while others built relationships that are expected to lead to more export orders.”
For example, Heath Wilkins, of Birdhurst Ltd/Golden Bay Fruit Ltd, doubled the number of containers of apples he exports to the Indian market by cementing existing contacts and establishing new ones during the trip.
India is one of Asia’s fastest-growing economies with a burgeoning middle class that already numbers 560 million. Rapid urbanisation is changing Indian dietary habits and is creating significant demand for protein and specialty foods.
“The opportunities for New Zealand exporters are enormous. However, capitalising on the demand requires New Zealand businesses to have a good understand of India, great relationships with business partners, and a sound knowledge of the products Indians want to buy,” Mr Kaushal said.
“With a presence in 32 countries, including India, ANZ has the networks to help New Zealand businesses reach out to new markets and new opportunities.”
While in India the group visited the Taj Mahal in Agra and attended an India Premier League match between the Delhi Daredevils and Mumbai Indians at the Ferozashah Kotla Stadium in New Delhi. On ANZAC Day the group attended a Dawn Service in Mumbai.
Indian growers help Ethiopia become world's fourth largest flower exporter
May 17, 2013
Indian-owned firms in Ethiopia are making flowers the country's third-largest export earner after coffee and khat, a kind of chewable cannabis.
In the last five years, the Ethiopian floriculture industry has become the second largest flower exporter in Africa (after Kenya) and fourth largest flower exporter in the world. According to one estimate, the export value earned by the country is expected to rise up to $550 million by 2016.
Revenues from flower exports have grown from $27.9 million dollars in 2002-03 to $178.3 million dollars in 2010-11.
Ethiopia has a comparative advantage in the production of roses, especially with favourable climate conditions and availability of labour. The Ethiopian Government also offered incentives to investors.
"Ethiopia has the ideal climate, appropriate conditions and stable, year-round temperature that can ensure better production and quality flowers. The region is acknowledged as one of the best flower growing areas," said the Ethiopian Horticulture Producers & Exporters Association (EHPEA).
Debre Berhan, at an elevation of 2,840 metres above sea levels, has the ideal climate to grow flowers.
One Indian company, ASK Flowers and Greens Plc, is in Debre Berhan town in Amhara regional state, 130 km north of the capital Addis Ababa, which exports 1.2 million flowers a year to European, Middle Eastern and African markets.
Shahab Khan, who set up ASK Flowers and Greens Plc in 2007 at an investment of 20 million birr (US$1 million), said he was putting in another 10 million and planning to enter the Russian market.
"The expansion will add 11 hectares and we expect it to grow over 400 percent of the current capacity," Khan told IANS.
The expansion will see the construction of greenhouses, pack houses, cold storages, irrigation systems, a farm managers' residence, a service water reservoir and a bore-well. "We also envisage entering the Russian market."
ASK was the first flower investment in Amhara. Debre Berhan mayor Getahun Zeke said a farm of ASK type, on a three hectare plot leased from the town administration, is one of the incentives for foreign investors in the country.
In 2012, another Indian, Sanjay Bengali, had set up Esimo Flowers & Agro Industries Plc in the same area with an investment of 100 million birr (US$5 million). Esimo plans to harvest to 90,000 or 100,000 stems.
Bengali has earlier said his company would be growing roses that are bred locally and are similar to Ecuadorian and Colombian breeds.
Another Indian firm, Karuturi Global, is also engaged in the production of cut roses across Ethiopia and Kenya.
1.09 Cr tonnes of wheat procured in Punjab
May 17, 2013
The Government agencies and private millers procured more than 1,09,86,697 tonnes of wheat till last evening.
Out of total procurement of 1,09,86,697 tonnes of wheat in all the procurement centers of Punjab, the Government agencies procured 10782914 tonnes of wheat till date whereas private traders procured 1,27,296 tonnes of wheat. Till May 15, PUNGRAIN had procured 19,81,046 tonnes (18.0 %) whereas MARKFED 23,87,471 tonnes (21.7 %). PUNSUP 21,96,096 tonnes (20.0 %), PSWC 12,62,075 tonnes (11.5 %) whereas PAIC had procured 10,33,340 tonnes (9.4 %) of wheat.
The Central Government agency FCI had been able to procure 1922886 tonnes (17.5 %) of wheat.
The spokesman added that District Sangrur with 9,44,835 tonnes of wheat procurement was leading in procurement operations whereas District Sangrur with 8,63,860 tonnes of procurement was at second slot. While Patiala with 8,08,381 tonnes of wheat procurement ranked at third position.
The State Government has set up more than 1,750 procurement centers and mobilized its total machinery to ensure smooth procurement of wheat, the spokesman added.