Product Country
Increase Font Size Decrease Font Size
Menu
Market News
New policy framework must to address export finance issues: Commerce secretary Rita Teaotia

Jan 15, 2018

The country needs to spruce up its policy framework to address exporters' finance needs if we were to become a USD 5-trillion economy, a top government official said. 
 
To become a $5-trillion economy, we need 40 per cent trade contribution and exports of at least $1 trillion. To achieve this, we must actually gear up our policy framework and address the precise needs of export finance and institutions serving exporters, commerce secretary Rita Teaotia said here today. 
 
Addressing an industry event organised by trade lobby Assocham,' she said, banks and financial institutions need to become more sensitive towards small units, which contribute 30 per cent of exports in terms of value. 
 
 
We are facing several challenges on trade finance issues. Our policy framework is not entirely geared up to recognise risks of overseas markets and credit availability. 
 
There is a large challenge for MSMEs and unless we address that, we are not going to become a significant global player, the top commerce ministry official said. 
 
The commerce secretary also stressed upon the need to spruce up banking policy to serve the needs of small manufacturers, services sector and exporters. 
 
She said the commerce ministry provides both guarantees and insurance for export finance through various schemes like merchandise exports scheme. 
 
But these alone cannot make a difference and it is necessary for the banking sector and financial institutions to be more sensitive to these sectors, Teaotia said. 
 
Stressing on the importance of like gems & jewellery, pharma and handloom sectors, she said these sectors offer good potential to excel. 
 
    
Source: The Economic Times



Commerce Ministry panel's proposal to end MAT on SEZs under review

Jan 15, 2018

The minimum alternate tax levied on special economic zones (SEZs) that hit fresh investments in the scheme is under review. A panel appointed by the commerce department had recommended removal of MAT for manufacturing units and zones to boost exports as well as job creation in the country. 
 
The recommendations of the report are being examined, said a government official, who did not wish to be identified. A final call on the proposal will be taken in the budget keeping in view revenue implications and benefit that may accrue to the country in terms of manufacturing boost and jobs, the official said. Finance minister Arun Jaitley will present his fifth budget and the last full one of this NDA government on February 1. ET had earlier reported on the recommendations of the panel set  up to review the SEZ norms. 
 
 
Tax experts said removal of MAT would boost business sentiment. Ideally, MAT should not be levied on SEZ units, as it's against the very concept of providing tax concession to the industry to promote investment and exports from India, said Vikas Vasal, partner, Grant Thornton India LLP. 
 
The SEZ policy was unveiled by the NDA government in 2000. In 2016-17, the revenue loss to the government on account of concessions to SEZs was Rs 10,182 crore. There will be a bigger loss of revenue if MAT is withdrawn. 
 
 
MAT was introduced to bring into the tax net zero tax companies which in spite of having earned substantial book profits and having paid big dividends, do not pay any tax due to various tax concessions and incentives provided under the income tax law. MAT is levied at the rate of 18.5% plus surcharge and cess as applicable on book profit. 
 
The erstwhile United Progressive Alliance government had brought in the SEZ Act in 2005 that provided for exemption from income tax for 15 years for these zones as well as units the located in these zones. There was no sunset date for this exemption. 
 
 
The government then amended the income tax law in 2012 to impose MAT on SEZs at rate of 18.5%. The Narendra Modi-led NDA government introduced sunset date for SEZs in 2016, but did not withdraw MAT despite hectic lobbying by industry and representation by the commerce department due to revenue considerations. Sunset date was introduced in line with the government's big plan to phase out exemptions and reduce corporate tax rate to 25%. According to the sunset clause, only an SEZ unit that commences operations on or before March 31, 2020, shall be eligible for income tax holiday. 
 
 
 
Tax laws must be rational for all, and not just special enclaves. MAT is supposed to discourage companies from arranging their tax affairs in a way that would lead to huge profits, dividend payout and no tax liability due to depreciation and other incentives. MAT can be scrapped when exemptions are removed while lowering rates so that taxable profits can be aligned with book profits. Lowering the MAT rate makes sense, uniformly across sectors. 
 
    
Source: The Economic Times



US sees India an alternative hub for business to China

Jan 15, 2018

 India can be an alternative investment destination for American companies which are downgrading their businesses in China, US Ambassador to India Kenneth Juster has said and that his country would like to see a free trade agreement with India.
 
Juster said some of the US companies have been encountering difficulties in carrying on their business in China. Accordingly, some companies are downgrading their operations there, while others are looking with great interest at alternative markets. India can seize the strategic opportunity through trade and investment to become an alternative hub for US business in the Indo-Pacific region, he said, delivering a policy speech, the first since he took over as Ambassador to India in November.
 
The speech on Thursday was organised by the think-tank Carnegie India.
Juster said he saw enormous potential in the US-India economic relationship, but there are also issues between the two sides which, he said, should be handled strategically and and not just on an issue by issue basis.
But if we don’t handle it well it can be one of increasing irritation, and I’d like us to get beyond some of the small issues, and as I said, do that strategically.
 
He said both countries should take a long-term view and that can really help build both the economies, create more jobs, lead to more growth.
 
Stressing that policies of President Donald Trump's 'America First' and Prime Minister Narendra Modi's 'Make in India' are not incompatible, Juster said investing in each other's markets would increase economic interaction and volume of trade, and lead to collaboration on emerging technologies.
 
Ultimately, I’d love a vision of a US-India Free Trade Agreement, he said, adding that it would send the right signal to the business communities in both countries.
 
On the area of defence, he said some major agreements could be expected in 2019.
Perhaps, in the next year we can announce some major agreements -- fighter jets, advanced helicopters, unmanned ground vehicles and intelligence exchange.
 
The envoy emphasised India's role in the Indo-Pacific region and suggested taking Indo-US military cooperation to a new level by posting liaison officers at each other's operational/combat commands.
    
Source: UNI India



Netanyahu's India visit: Innovation to top agenda

Jan 15, 2018

Defence, agriculture and water management may be among the major sectors of cooperation between India and Israel, but during Israeli Prime Minister Benjamin Netanyahu's visit to India next week, innovation will top the agenda, Israeli Ambassador to India Daniel Carmon said on Friday.
 
 
Speaking at a media briefing here ahead of the prime ministerial visit, Carmon said cooperation in agriculture and water were the highlights of Prime Minister Narendra Modi's visit to Israel in July last year and the emphasis on this would continue. 
 
But I would say the most important element of what we want to put together on the joint table is innovation, he said. 
 
Innovation that would, you know, touch any of the areas in which we cooperate. Innovation could be in the field of defence, innovation could be in the field of agriculture, innovation could be in the field of IT, of R&D.
 
The Ambassador described innovation as a cross-cutting issue and said this would be reflected in the discussions between Prime Ministers Modi and Netanyahu.
 
Carmon referred to the two Prime Ministers' scheduled visit to the iCreate Innovation Centre for Entrepreneurship and Technology on the outskirts of Ahmedabad and said that the centre has a big clement of Israeli ecosystem in innovation. 
 
    
Source: The Economic Times



Comprehensive policy to promote agriculture exports on anvil

Jan 15, 2018

The commerce ministry is working on a comprehensive policy covering issues such as logistics to promote export of agri commodities like tea, coffee, fruits and vegetables, a senior official said. 
 
India is one of biggest producers and exporters of agri commodities, and still holds huge potential to increase shipments. 
 
 
So, the possibility of value addition and moving up in the global value chain is immense. All important elements such as logistics, certification and traceability of items would be part of the new policy, the official said. 
 
It is important to have proper infrastructure to promote exports. 
 
This move would help serve the government's objective to double farmers' income and increasing exports. 
 
The ministry has started the process of identifying factors such as where maximum import demand is, areas that can be looked at, India's contribution to, and steps required to promote exports. 
 
The official said they are also studying global markets and trying to understand where the potential is. 
 
Another elements which would become part of the policy include ways to ensure quality of products and monitoring the value chain. 
 
    
Source: The Economic Times



Commerce Ministry working on new support measures for next FTP

Jan 15, 2018

The commerce ministry is working on new schemes for the next foreign trade policy (FTP), to be released in 2019-20, with a view to boost exports, a senior government official said. 
 
The ministry has asked all the commodity boards and the concerned ministries to identify those support structures, which are compliant to global trade rules. 
 
 
These support measures could be some schemes or some incentives or it could be infrastructure related. These measures should benefit maximum number of industries, the official said. 
 
The ministry has recently released the mid-term review of the current foreign trade policy. 
 
We have started the work now, so that by the time we have to come with the new FTP, we would be ready with the final blueprint as we have to consult finally with the finance ministry, the official added. 
 
The five-year foreign trade policy provides guidelines for enhancing exports with the overall objective of pushing economic growth and generating employment. 
 
Under the policy, the government announces steps for exporters. Currently, the government has two schemes - merchandise and services export from India scheme. The Finance Ministry has to allocate funds for these schemes. 
 
Last month, the government announced incentives worth Rs 8,450 crore to boost exports of goods and services, mainly from labour-intensive sectors. 
 
    
Source: The Economic Times



India to post average GDP growth of 7.3 per cent over 2020-22'

Jan 15, 2018

The Indian economy is expected to witness an average GDP growth of 7.3 per cent over 2020-22, says a Morgan Stanley research report. 
 
According to the global financial services major, the structural growth story in India remains strong from a medium term perspective. 
 
The uptick in the private capex cycle, which we anticipate will begin in 2018, will ensure that the economy enters into a sustained and productive growth cycle, Morgan Stanley said in a research note, adding that over 2020-22, it expects the economy to post an average GDP growth of 7.3 per cent. 
 
 
Moreover, the overall policy mix will also remain supportive of a further improvement in productivity, which will help keep macro stability risks limited, it added. 
 
The global brokerage expects recovery in private capital spending in 2018 which will aid in overall economic recovery. 
 
Moreover, corporate returns expectations and balance sheet fundamentals are also improving, and a strengthening financial system will be able to meet investment credit demand. 
 
    
Source: The Economic Times



GDP growth not justifiable unless benefits reach farmers: Arun Jaitley

Jan 15, 2018

Ahead of the Budget, Finance Minister Arun Jaitley today said the agriculture sector is the top priority for the government because the country's economic growth is not justifiable and equitable unless the benefits are clear and evident in the farm sector. 
 
 
Therefore, the government's priority is to ensure the gains reach the farmers and the growth is visible even in the farm sector, he said at an event here. 
 
As per latest Central Statistics Office (CSO) data, the country's economic growth is expected to slow to a four-year low of 6.5 per cent in the 2017-18 fiscal, the lowest under the Modi-led government, mainly due to poor performance of agriculture and manufacturing sectors. 
 
The CSO has pegged farm and allied sector growth to slow to 2.1 per cent in the current fiscal from 4.9 per cent in the preceding year. 
 
India is one of the fastest growing economies in the world and the growth is benefiting people in different sectors. 
 
But maximum population is dependent on agri-sector and unless the gains are clear and evident, the (economic) growth is not justifiable and equitable, Jaitley said after launching options trading in guarseed on NCDEX. 
 
Among the priority areas, agriculture sector is on the top, he said. Ensuring the benefits reach the agri-sector and growth is visible -- this is among the priority areas for us.
 
Jaitley further said: We see in some places the problem of falling prices because of higher production. Farmers are not getting the price for their produce.
 
 
    
Source: The Economic Times



Archive