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India, Turkmenistan hold talks on crucial transit corridor via Iran, Oman
Aug 16, 2017
India and Turkmenistan on Monday discussed ways to establish a transport transit corridor between Iran, Oman and Turkmenistan.
Nitin Gadkari, Minister for Road Transport and Shipping, met Rashid Meredov, Deputy Prime Minister and Trade Minister of Turkmenistan, on Monday.
The two sides discussed India’s joining the Ashgabat Agreement that envisages establishment of International Transport and Transit Corridor between Iran, Oman and Turkmenistan, said an official source. They also discussed ways to expand and deepen bilateral cooperation.
The meeting comes within days of Gadkari visiting Iran and stating that Chabahar port would be operational next year. Turkmenistan is known for having one of the largest gas reserves globally.
Turkmenistan is the Depository State of Ashgabat Agreement, which has Oman, Iran, Turkmenistan and Uzbekistan as founding members. Kazakhstan has also joined this arrangement.
In 2016, the Indian government decided to accede to the Ashgabat Agreement, a move that would enable the country to utilise this existing transport and transit corridor to facilitate trade and commercial interaction with the Eurasian region. India would become party to the agreement after consent from the founding members.
Further, this move would also be in synch with India’s efforts to implement the International North South Transport Corridor (INSTC) for enhanced connectivity. INSTC-Express Corridor is a transport link between India and Russia.
Recently, the External Affairs Ministry had a multi-stakeholder meet focussed on possible routes of INSTC, its popularisation, development and optimal utilisation of Chabahar port to complement INSTC and to provide connectivity to Central Asia, modalities of and impediments to multi-modal transport and way ahead.
The Hindu Businessline
India, Mexico plan to set up CEO Forum to boost trade ties
Aug 16, 2017
India and Mexico are planning to set up a CEO Forum of top businesses to coincide with Mexican President Enrique Pena Nieto’s proposed visit to India next year.
While the initiative to bring the industry closer follows Prime Minister Narendra Modi’s visit to Mexico last year, US President Donald Trump’s decision to cold shoulder its long-term ally and neighbour may have speeded up things, a government official told BusinessLine.
A meeting between Commerce & Industry Ministry officials and trade diplomats from the Mexican Embassy is scheduled this week on promoting exchanges between the business communities. Details on the proposed CEO Forum is likely to be discussed, the official said.
Mexico, which is looking at intensifying its economic partnership with big markets such as China and India following the cooling of relations with the US, believes that bilateral trade with India could touch $10 billion in the next five years from $6.41 billion at present with the right kind of policy push.
India, too, is eager to have closer business relations with the country which could be an alternative destination for Indian IT companies located in the US if the country stiffens its visa rules further. Top companies such as TCS and Infosys already have operations in Mexico.
When Modi met Nieto in Mexico last year, both underscored that trade and investment relations could develop to its full potential only through increased exchanges between people of the two nations. “A CEO Forum, through its regular meetings, could not only identify and work on areas of cooperation but also point out to both governments the irritants that need to be ironed out,” the official said.
In the joint communiqué released by Modi and Nieto after their meeting last year, the two stressed on encouraging cooperation in the infrastructure sector, among small and medium enterprises, in pharmaceutical products, in energy, in the automobile sector, in information and communication technology, in agriculture, in food processing and in other related sectors.
India also wants both countries to liberalise visa norms for easier movement of people including professionals which will give a boost to trade, investment and tourism. “Once the CEO Forum is in place more details on the areas of cooperation could be worked out. We hope to come up with names of corporates who could be part of the Forum in the next few months,” the official said. A bilateral High Level Group on Trade, Investment and Economic Cooperation already exists between the two countries but it has not met often since its inception in 2007.
The Hindu Businessline
Vegetable oil imports up 34 pc in July at 15.24 lakh tonnes
Aug 16, 2017
Vegetable oil imports rose 34 per cent during July to 15.24 lakh tonnes on higher shipments of cheaper refined palm oil and rupee appreciation in the last six months, according to industry data.
Imports of vegetable oils (comprising edible and non- edible oil) stood at 11.4 lakh tonnes in July 2016.
Edible oil imports rose to 14.89 lakh tonnes last month from 11.18 lakh tonnes in July 2016, the Solvent Extractors' Association said in a statement.
The Centre recently raised import duty on crude palm oil to 15 per cent from 7.5 per cent, degummed soyabean oil to 17.5 per cent from 12.5 per cent and RBD palmolein to 25 per cent from 15 per cent to ensure that farmers get good price for oilseed crops and do not shift to other crops, it added.
During November-July period of the 2016-17 oil marketing year, the import of vegetable oils increased by 4 per cent to 11.38 million tonnes compared to 10.9 million tonnes in the corresponding period of the previous year.
The strengthening of rupee in the last six months contributed to the imports of vegetable oils, SEA added.
Oil year runs from November to October.
Edible oil imports went up to 11.10 million tonnes during the first nine months of the 2016-17 oil year from 10.78 million tonnes in the year-ago period.
SEA pointed out that soyabean, rapeseed and groundnut are currently being sold below the minimum support price (MSP) and prices have fallen between 20 per cent to 30 per cent from last year.
The current prices are the lowest in the last five years and farmers are totally discouraged to sow the oilseeds and (it is) reflected in switching over from oilseeds cultivation to other crops.
The area under oilseeds reduced by over 17 lakh hectares in current kharif season and reported at 154.29 lakh hectares against 171.15 lakh hectares last year, SEA said.
During November-July period, palm oil import increased to 67.41 lakh tonnes from 61.75 lakh tonnes during the same period of the previous oil year.
The share of palm oil products increased to 61 per cent from 57 per cent, thanks to larger import of RBD palmolein, while soft oils import reduced to 43.59 lakh tonnes from 46.12 lakh tonnes during the period under review.
The Economic Times
Common use items exempt from e-way bill under GST
Aug 16, 2017
LPG, kerosene, jewellery and currency are among the common use items that have been exempted from the requirement of obtaining electronic permits for transportation under the Goods and Services Tax (GST_ regime.
The (GST) regime, rolled out from July 1, mandates obtaining permits called e-way bills for transporting goods consignment of more than Rs. 50,000 in value with a view to checking tax evasion.
A senior finance ministry official said the GST Council in its last meeting on August 5 approved a list of 153 items that have been exempted from the requirement of obtaining e-way bills. These include domesticated animals like live bovine animals, swine and fish, fruits and vegetables, fresh milk, honey, seeds, cereals and flour. Also exempted is movement of betel leaves, non-alcoholic toddy, raw silk, khadi, earthen pot and clay lamps, puja samagri and hearing aids. Human hair, semen including frozen semen and condoms and contraceptives have also been exempted.
The official said cooking gas (LPG) for supply to households and kerosene for sale under public distribution system (PDS) too have been exempted from the requirement of getting the consignment registered online before moving them. On the exempt list is also postal baggage as also currency, jewellery and used personal and household effects, he said.
E-way bill is also not required if goods are transported by non-motorised conveyances. Goods transported from international ports to hinterland ports for clearance by customs have been exempted from the requirement. The electronic permit would have to be generated when consignment value exceeds Rs. 50,000 and is optional if the value is less than that.
The provision would kick-in from a date to be notified by the central government after the backbone software for generating such permits is ready by the National Informatics Centre (NIC), which is likely by October.
Such a permit has to detail the goods being transported, the mode used, origin and destination besides details of the supplier, recipient and transporter. The official said there is no need of conveyance details when the distance of transport is less than 10 km within a state.
The e-way bills, which can be checked by designated tax officials by intercepting a transporting vehicle, are aimed at helping authorities keep track of goods and inter-state commerce. This is particularly useful when most states have dismantled border checkposts that operated under the previous indirect tax administrations, thereby reducing the time needed for the movement of goods across states.
The Hindu Businessline
CBEC liberalises norms for letters of undertaking
Aug 16, 2017
The Finance Ministry has further liberalised norms for letters of undertaking (LUT) to help exporters who have been facing difficulties under the Goods and Services Tax (GST) in timely shipment of consignments.
The Central Board of Excise and Customs (CBEC) has now clarified that all registered exporters who have received remittances of ?1 crore or 10 per cent of export turnover in the previous fiscal will be eligible to get LUTs. It will also be available to exporters of all kinds of supplies.
Any registered person who has received a minimum foreign inward remittance of 10 per cent of export turnover in the preceding financial year is eligible for availing himself of the facility of LUT provided that the amount received as foreign inward remittance is not less than ?1 crore, it has said in a recent circular.
The facility was earlier available only for manufacturer exporters.
The CBEC had on July 7 also issued clarifications to help exporters that relaxed norms for LUTs and allowed the Commissioner to waive the requirement for exporters to provide a bank guarantee of up to 15 per cent of the bond guarantee.
It is expected that this provision would be implemented liberally,” the CBEC has now instructed its officials, adding that Central tax officers must facilitate all exporters whether or not they were previously registered with the Central Government.
Under the new tax from July 1, exporters have to pay Integrated GST for exports, which is then refunded. But as this can lead to cash flow problems , exporters have the option to provide an LUT or bond.
However, procedural confusion at the ground level has been delaying shipments, especially in the case of small exporters.
The CBEC in its latest clarification has also said that officials should accept the documents submitted by exporters as proof of fulfilling the conditions of unless there is any evidence to the contrary.
Further, all relaxations are effective from July 1 and not the date of their issuing.
Exports to Nepal, Bhutan
For export of goods to Nepal, Bhutan or special economic zones, the LUT instead of bond can be provided in line with RBI norms, regardless of whether the payments were made in Indian currency or convertible foreign exchange.
While supply of services to SEZ developer or SEZ unit will also be permissible on the same lines, the CBEC has said that supply of services to Nepal or Bhutan will be deemed to be export of services only if the payment is in convertible foreign exchange.
Zero rating is not applicable to supplies to EOUs and there is no special dispensation for them, it has further said.
The pace of growth of India’s exports slowed to 3.94 per cent in July, which exporters have attributed to the slowdown on the appreciating value of rupee and the liquidity crunch after roll out of GST.
The Hindu Businessline
Britain pushes to retain customs union while negotiating new trade deals
Aug 16, 2017
The British government wants to remain part of the European Union customs union for a number of years, as part of transition arrangements, while still being able to negotiate trade deals with countries such as India.
A government paper published on Tuesday set out its ambitions around future relations with the customs union – the EU’s tariff free trading area – one of the trickiest issues in negotiations over Britain’s exit from the European Union.
As we leave the European Union and therefore the EU Customs Union, the Government seeks a new customs arrangement that facilitates the freest and most frictionless trade possible in goods between the UK and the EU, and allows us to forge new trade relationships with our partners in Europe and around the world, it states, arguing that it would be pushing for a highly streamlined customs arrangement that would remove the need for a UK-EU customs border.
One potential approach would involve the UK mirroring the EU’s requirements for imports from the rest of the world where their final destination is the EU, the report suggests.
The report also outlines Britain’s ambitions for an interim arrangement: a time-limited customs based on shared external tariffs and without customs processes and duties between Britain and the EU.
Controversially it will push for Britain to be able to begin negotiations with new trade partners, something that members of the customs union are not able to do.
The UK has been clear that, once it has left the EU, it intends to pursue new trade negotiations with others. However, the UK would not bring into effect any new arrangements with third countries which were not consistent with the terms of the interim agreement while the interim agreement was in place, says the report.
Our proposals are ambitious, and rightly so. They set out arrangements that would allow UK businesses to continue to trade with their European partners in the future, while expanding their markets beyond the EU, said Chancellor of the Exchequer Philip Hammond, who has long been pushing for a “softer” Brexit, and for whom Britain’s spelling out of ambitions for interim arrangements to smooth the process will be seen as a political victory.
The proposals were welcomed by business, albeit with caution.
It is encouraging to see that these papers propose a time-limited interim period and a customs system that is as barrier-free as possible… But the clock is ticking and what matters now is giving companies the confidence to continue investing as quickly as possible, said Confederation of British Industry Deputy Director-General Josh Hardie.
The European Commission also made clear that its focus remained on settling outstanding issues on Britain’s exit, before it could begin to discuss future relations.
The quicker #UK & EU27 agree on citizens, settling accounts and #Ireland, the quicker we can discuss customs & future relationship, tweeted Michel Barnier, the commission’s chief negotiator on Brexit, while the European Parliament’s outspoken negotiator on Brexit Guy Verhofstadt described plans of being in & out of the customs union and invisible borders as fantasy.
The Hindu Businessline
India’s RTC food mkt estimated to reach $382.06 million by end of 2017
Aug 16, 2017
Shagun Sachdeva Said George Bernard Shaw, There is no sincerer love than the love of food.
Indian cuisine a covers wide range of regional and traditional cuisines, and Indians seek ethnic tastes due to the emotional quotient involved.
Indian food is considered as diverse as its taste due to the culinary intricacies and diverse gastronomical needs of the Indian population. The cultural differences among Indians, coupled with the variety in local tastes, values and traditions, their temperaments and eating habits are the various factors that have led to the diversity in its cuisine.
The eating habits of Indian consumers vary from state to state. For instance, South Indian specialties include rasam rice, idli sambar, etc., while North Indian specialties include chole bhatura, parathas, etc.
However, these diverse Indian cuisines have common culinary threads that dictate ingredient pairings and cooking practices.
The Indian food industry has advanced over the decades, and presents many facets, ranging from the conventional labour-intensive food industry to the modern food processing activities.
The advancement of technology in food processing, along with the evolution in cooking practices and changing lifestyle (due to the impact of western culture), have resulted in altering food choices and consumers’ spending habits on food.
Gone are the days where the masala was made in the Indian kitchens. Blame it on the changing dynamics of the Indian economy in terms of socio-economic change, including urbanisation, growing working women population, increasing alternate career options, hectic work schedule wherein working women prefer to spend quality time with their families rather than spending time cooking in the kitchen, coupled with the significant role of the media in the knowledge explosion.
Also, the Indian demographic dividend, leading to higher per capita incomes, and a changing demographic trend, which is primarily dominated by a young population, have been driving the urban food consumption trend.
Today, increasing consumer indulgence, and their objective to own experiences and not things, has led to the trend of food adventurism and a greater preference for packaged food, which is more convenient, to traditional food.
The Indian consumer market is primarily dominated by the younger generation, which is sophisticated and brand conscious, and their purchase decisions reflect their lifestyles.
Talking about the Indian ready-to-cook (RTC) food market, which is decades old, several companies have tried their hands in this industry, but very few companies have emerged as major market players/brands. These include Nestle, Venky’s Chicken, MTR, Gits, Kitchens of India (ITC), Al Kabeer, Swadisht, Tasty Bite and Noble.
These are among those companies/brands which decoded the Indian consumer preferences and tastes better than their competitors.
Indian RTC meals are giving tough competition to their Italian and English counterparts, not only in India, but across the globe as well. This has led to the surge in the sales of RTC food in India.
The concept of RTC food was developed by the United States military to be consumed by the soldiers as on-the-go food items where organised food facilities were not available.
In order to meet the food demand of soldiers during the Kargil war in 1999, the Defence Food Research Laboratory (DFRL) floated tenders for processed food manufacturers to supply instant meals by using defence lab technology.
That adversity turned out to be an opportunity for processed food manufacturers, as they acquired the technical knowledge from the defence lab and used low-cost production methods to manufacture and distribute ready-to-eat (RTE) meals to the retail sector for the end consumers.
This initiative brought the change in consumers’ food habits across the globe, and with the introduction of convenience foods like two-minute noodles and others, that have leveraged on the market opportunity through brilliant and innovative marketing strategies, such as bringing in nostalgia factor, making the product exclusive, using celebrity marketing and continuous restructuring of strategies to endorse their product.
Nestle is the first recognised company that grabbed the opportunity to increase the popularity of RTC meals in India by introducing instant noodles.
After the success of instant noodles, Nestle launched packaged RTC soups, which did not meet the sales expectations of the company at that time.
However, today, the rising trends of readymade food items are finding product launches and developments in the diverse category of RTC meals.
Soups, frozen parathas, burgers, desserts and South and North Indian food items under the breakfast and snacks categories are commercially available as RTC food in the Indian market.
The Indian economy is primarily an agrarian economy, and has evolved a great deal in its agriculture and food sectors over the last few decades.
Ever since the introduction of the Green Revolution in the Indian agricultural sector, the Indian agriculture system has improved dramatically.
Also, the food sector has undergone massive improvement in terms of better food processing methods and advancement in food technology. As a result, the RTC food industry in India has been witnessing an impressive growth over the recent years, and it is projected to grow impressively in future.
According to Market Research Future (MRFR), the Indian RTC food market was worth $233.40 million in 2013, and is estimated to reach $382.06 million by the end of 2017. The market is projected to reach $754.82 million by the end of 2022, registering a substantial compounded annual growth rate (CAGR) of 14.59 per cent.
As per MRFR’s analysis, the Indian RTC market is segmented on the basis of region (such as north, south, west, east, central and the north-east), and the regional cuisines of India and diverse food choices have been taken into consideration.
The south region is estimated to retain its dominance throughout the forecast period of 2017-2022. It is estimated to be valued at $88.45 million by the end of 2017. This is attributable to the increasing urbanisation in the southern states and the impact of migration of South Indians to Middle-Eastern countries.
For instance, the Malayali diaspora in the Middle-East has led to the exchange of culture and values and impacted the food values in the south Indian state of Kerala.
These factors reflect the changing lifestyles of consumers and create a positive impact by creating lucrative opportunities for manufacturers to tap into the RTC food market.
The western part of India is estimated to grow at a maximum CAGR of 14.91 per cent during the forecast period (between 2017 and 2023).
This is primarily contributed by the massive industrial growth in Maharashtra. However, the north-eastern region is estimated to be sluggish throughout the forecast period.
The Indian RTC food market is anticipated to grow at a fast pace owing to various factors. The massive growth and strong performance of the organised retail industry over the last few decades is one of the factors responsible for its growth.
Social factors, such as lifestyle changes and absorption of western values into Indian culture and lifestyle, have influenced the dietary patterns of consumers and has made them highly experimentative.
The consumption basket of consumers act as their identity markers rather than reflecting a simple act of purchase.
Today, consumers are more inclined to buy the products from the hypermarkets and supermarkets rather than mom-and-pop shops, which is just a traditional model of retailing in India.
Nowadays, fast-moving consumer goods (FMCG) companies tend to promote their new products in various supermarkets in order to reach wider audience.
According to the Federation of Indian Chambers of Commerce and Industry (FICCI), India’s retail industry is estimated to reach $1.1 trillion by the end of 2020 with a CAGR of 12 per cent.
Also, the gradual increase in the middle-income population in India and the increasing per capita disposable income of the consumers has further intensified the overall demand of the RTC meals, and has created lucrative opportunities for RTC meal manufacturers to come up with new and innovative products to retain their competitive market share in India.
Understanding industry trends & govt initiatives
With the rise in demand, the supply chain for such meals have become a lot more efficient and prominent in urban areas of the country.
Based on these factors, quick service restaurants (QSR), ready-to-eat and home delivery are subjected to tremendous growth in India.
The supply chain of ready-to-eat (RTE) foods involves five major stages, ranging from production, procurement, processing to retailing and distribution.
Food processing units not only add value to the end product, but also increases the utility of end consumers.
Talking about the supply and value chain, food processing is one of the key value addition steps, which further involves the primary and secondary stages.
In the primary stage, the product undergoes basic processing, while the secondary stage includes value-added processing of food, wherein the products undergo a higher level of processing for its conversion to new, unique and modified products. This is estimated to account for between 35 and 40 per cent of the total processed food.
Manufacturers invest extensively in the research and development (R&D) sector in order to introduce unique flavouring ingredients, as well as by grading the raw material based on the quality check measures.
Product development is carried out under the surveillance of experts and gets approved by certified scientists or specialists.
Focus on R&D and product trials and tests has also resulted in quality food products with a longer shelf life, which is of great significance in the RTC food industry.
The storage of the raw materials and the development of the final product are to be done at low temperatures which involve the storage chain facilities.
In India, an estimated figure of cold chain storages is over 6,000. These are mostly temperature-controlled facilities, out of which 90-95 per cent are owned by private players. Also, the capacity of over 50 per cent of the total is below 1,000 metric tonne (MT).
The lack of cold storage facilities has been posing challenges in the growth trajectory of the Indian RTC food market.
The key players in the RTC food in India have dominated kitchens across the country for quite a few years now.
Some of the products which have gained popularity in India include RTC gulab jamun, pav bhaji mix, rava idli mix, chicken gravy mix and others.
The established players in the Indian RTC market include MTR Foods (Bengaluru), ITC Limited (Kolkata), Desai Brothers Ltd (Pune) and Gits Food Products Pvt Ltd (Pune).
ABT Foods Limited (Coimbatore) is one of the emerging brands in the RTC food market. These popular brands have always gained attention from the consumers, mainly because they keep involving innovations in their product line.
The wide variety attracts the consumers to keep experimenting with the range of products offered by them.
The increasing adoption of RTC food on a daily basis in India is found to have huge impact on this market.
The government of India is investing immensely in the food and beverage (F&B) sector of the country.
In 2017-18, Harsimrat Kaur Badal, minister for food processing industries, inaugurated the first mega international food park in Punjab, investing an amount of Rs 136 crore ($20 million).
In addition, to add value to the end product, the Food Safety and Standards Authority of India (FSSAI) has planned to invest around Rs 482 crore ($72.3 million) in order to strengthen the food testing infrastructure in India.
They have planned to upgrade 59 existing food testing laboratories and set up new mobile testing labs all across India.
The government has been funding initiatives such as the setting up/upgradation of quality control/food testing laboratories, R&D and promotional activity schemes, along with the technology upgrade/setting up/modernisation/expansion of food processing industries scheme, which will support the growth of the RTC market in India.
Based on the analysis, we could conclude that over the next decade, the demand for RTC food products will surge considerably.
There has been emergence of new brands and players in this space in the last few years, which is clear evidence of the active participation of consumers as well as investors in the growth of this sector.
The government’s support, coupled with various factors such as strong relationships with suppliers that drive innovation, collaboration with global retailers, expansion of the distribution network, advertising backed by product quality and supportive logistics infrastructure, will further boost the growth of this market.
All these put together will perhaps create a growth platform for industrial players to function smoothly.
Government to handhold farmers from seeds to markets: PM Narendra Modi
Aug 16, 2017
Prime Minister Narendra Modi on Tuesday said the government would handhold farmers right from procurement of seeds to access to the markets in order to improve their lives.
Unless we give them facilities from seed to the market, we cannot change their fate, Modi said in his speech here on the occasion of Independence Day.
Modi said the government had completed 21 irrigation schemes in the last three years and 50 more would be completed soon.
I have taken a resolve for 99 such big schemes to ensure that water reaches the fields of the farmers and they will all be completed before 2019, he said.
Modi said there would be an India by 2022 where farmers would be able to sleep without any worry and earn double than what they earn now.
Modi added that lakhs of crores worth of vegetables, fruits and crops rot due to lack of storage facilities and to change that, the government is encouraging Foreign Direct Investment in food processing and infrastructure creation.
The Prime Minister added that the government in India never had a culture of buying pulses from the farmers.
If at all, the government may have bought some thousands of tonnes of pulses in specific cases. But this time, when farmers produced record quantity if pulses, 16 lakh tonnes of it was bought by the government to encourage farmers to produce more, he said.
Modi added that number of farmers covered under crop insurance schemes had increased significantly in the last three years from 3.25 crore and would soon touch 5.75 crore figure.
The government will create facilities and infrastructure which will handhold farmers right from the seed to the market in order to bring change in their lives, he added.
The Economic Times
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Agricultural & Processed Food Products Export Development Authority
(Ministry of Commerce & Industry,
Govt. of India)
NCUI Building 3, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016
Phone : 91-11-26513204, 26514572, 26534186
Fax : 91-11-26526187