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As India tries to improve ease of doing business, important to allow entry of perishables through express courier
Apr 24, 2019
The Customs, in Mumbai airport, cited the Courier Imports and Exports (Electronic Data and Processing) Regulations, 2010, to ban all perishables through the courier or fast-track route in December 2018. This led to a sudden stop in clearances of blood samples for testing, access to key medicines for patients, exports and imports of food samples for test marketing and display in exhibitions, to name a few. After complaints by the industry and review of the adverse impact, the Customs, in February 2019, allowed courier companies to transport blood samples, subject to requisite clearances by other government departments. Such measures have not only resulted in India’s low rank in the World Bank’s Logistics Performance Index compared with countries like China, it has led to huge business losses also. The Indian express and courier industry employed around 1.6 million workers and contributed close to Rs 3,000 crore to the exchequer in FY18.
India is a signatory to the WTO’s Agreement on Trade Facilitation. Article 7, Section 8 of that agreement on Expedited Shipments calls for member states to adopt or maintain procedures allowing for the expedited release of at least those goods entered through air cargo facilities. Thus, the ban seems to be against India’s position in the WTO. Further, while Mumbai airport maintained the restrictions on perishable cargo, the same was getting cleared in Delhi airport, showing a lack of uniformity in the clearance processes.
The root cause of this confusion and restrictions on perishable cargo clearance through the fast track route is that laws governing the movement of goods through the air cargo route were initially governed by the Courier Exports and Imports (Clearance) Regulations, 1998. Back then, airports lacked the basic infrastructure to support the handling and storing of perishables and therefore the movement of perishables via the air cargo route was banned. However, today Indian airports have the requisite infrastructure. The Courier Imports and Exports (Electronic Data and Processing) Regulations, 2010 (an amendment to the 1998 regulation) continues to ban the movement of perishables via the air cargo route, which was an oversight at that time by both the industry and regulator. The issue received attention when the Office of the Commissioner of Customs (at the Mumbai Airport Special Cargo Commissionerate) issued a standing order banning the movement of perishables, based on a definition which is doesn’t correspond with any globally approved definition of perishables. The order stated that goods classified as perishables require testing and clearances by the requisite government bodies such as the Food Safety and Standards Authority of India (FSSAI). Therefore, their import should not be allowed as gifts or samples through the courier mode. The FSSAI’s Import Regulation, 2017, clearly lays down the process of food import for both commercial and non-commercial use, exhibition, research purposes, etc, and once the requirements are adhered to, there should not be any discrimination across the different modes through which the product is transported, i.e, logistics air cargo versus express air cargo.
India extends ban on import of Chinese milk products, chocolates
Apr 24, 2019
The government Tuesday extended the ban on import of milk and its products, including chocolates, from China till laboratories at ports for testing presence of toxic chemical melamine are upgraded.
Food regulator FSSAI had recommended extending the ban until all labs at ports are modernised to test the chemical.
The ban was first imposed in September 2008 and extended subsequently from time to time. The latest ban imposed by the government ended Tuesday.
"Prohibition on import of milk, milk products (including chocolates, chocolate products, candies/confectionary/ food preparations with milk or milk solids as an ingredient) from China is extended until the capacity of all laboratories at ports of entry have been suitably upgraded for testing melamine," the Directorate General of Foreign Trade (DGFT) said in a notification.
However, it has not mentioned any timeline for upgradation of that capacity of all laboratories.
The ban was imposed on apprehensions of presence of melamine in some milk consignments from China. Melamine is a toxic chemical used for making plastics and fertilisers.
Egypt invites India Inc to invest in Suez Canal Economic Zone
Apr 24, 2019
Egypt is rolling out the red carpet for India Inc to invest in the Suez Canal Economic Zone, as it expects the bilateral trade to nearly double to USD 8 billion by 2022.
The Arab nation is also in talks with New Delhi to establish an India Economic Zone at the Suez Canal Economic Zone, on the models of the ones established by Russia and China and is looking at asset-light industries like food processing, packaging and IT, Egyptian ambassador Heba Salaheldin Elmarassi said here Tuesday.
India Inc led by over 50 companies have already invested over USD 3 billion across Egypt, she said, adding while companies from there have invested around USD 150 million here.
Indian companies are welcome to explore emerging investment opportunities in the economic zone, especially in sectors like chemicals, petrochemicals, pharma, textiles, and auto & auto components among others, Elmarassi said at an event organized by the industry lobby CII.
Companies from agricultural and agri-processing, IT, telecom, power, renewables are also welcome to explore investment opportunities in the economic zone, she added.
Government likely to raise wheat import duty to 40%
Apr 24, 2019
The government is likely to raise the import duty on wheat from the current 30% to 40% to rule out any possibility of cheaper imports amid the harvesting of the new crop.
The import duty increase will force flour millers to buy wheat from FCI, which is set to offload stocks rather than source the grain from other countries.
The Election Commission (EC) is likely to clear the proposal soon to increase the import duty on wheat to 40% after the plan was approved by a panel of secretaries last week, sources said. The Centre is expecting to buy 38-40 million tonne of wheat this year, after which the stock with FCI may reach to about 58 million tonne by end of May.
India had imported 5.75 million tonne (mt) of wheat in FY2016-17, against 518,000 tonne in 2015-16. The wheat import was 1.2 mt during 2017-18, while the increase in duty last year helped the country to check any import in 2018-19, officials said. India’s wheat production is estimated at record 99.12 mt in 2018-19 crop year (July-June).
Also read: Falling birth rate bigger worry than overpopulation, says study
There is no import happening now and the situation is unlikely to change after the increase, a flour miller from Karnataka said. Normally, millers from the southern states import a few thousand tonnes due to better quality mainly to meet the requirement of some specific wheat-based products. However, everything depends on price, he said, adding that the international price was not that cheaper.
India’s Foreign Trade: Need for accelerating pace
Apr 24, 2019
At the very outset let us have a quick look at what is recently happening in the foreign trade sector.
Exports from India increased 11.02 percent from a year earlier to USD 32.55 billion in March 2019, boosted by sales of organic and inorganic chemicals (16.98 percent), engineering goods (16.27 percent), RMG of all textiles (15.13 percent), drugs and pharmaceuticals (13.59 percent), and petroleum products (6.55 percent). Considering April to March 2018-19, exports rose 9.06 per cent to USD 331.02 billion from USD 303.53 billion in the same period of the previous fiscal year. Exports in India averaged 5520.43 USD Million from 1957 until 2019, reaching an all-time high of 32550 USD Million in March of 2019 and a record low of 59.01 USD Million in June of 1958.
Naturally, the challenge is to create exportable surplus (trade surplus referring to an excess of export receipts over import payments as compared against trade deficit which means an excess of import expenditures over export receipts measured on the current account and also known as merchandize trade deficit) and at the same time producing goods/ rendering services at the least comparative cost – so as to get a strong foothold on the international market in the face of intense competition.
Policy not bad, but just – satisfactory- implementation requires a closer look
IBEF nicely opined: India is presently known as one of the most important players in the global economic landscape. Its trade policies, government reforms and inherent economic strengths have attributed to its standing as one of the most sought after destinations for foreign investments in the world. Also, technological and infrastructural developments being carried out throughout the country augur well for the trade and economic sector in the years to come.
A close look at latest FTP [2015-20] will reflect its internal strength, practical nature and solid base in as much as it has touched virtually all of the vital wings. At this stage, the crying need is a close supervision so that some better things could still be done during the pendency.
Highlights of the Foreign Trade Policy 2015-20
* Increase exports to USD 900 billion by 2019-20, from USD 466 billion in 2013-14
* Raise India’s share in world exports from 2 percent to 3.5 percent
* Merchandise Export from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) launched
* Higher level of rewards under MEIS for export items with High domestic content and value addition
* Chapter-3 incentives extended to units located in SEZs
* Export obligation under EPCG scheme reduced to 75% to Promote domestic capital goods manufacturing
* FTP to be aligned to Make in India, Digital India and Skills India initiatives.
Pulses import falls to 2.5 mln tonnes from 6.6 mn tonnes two years ago
Apr 24, 2019
After falling to 2.5 million tonnes in FY19 from a peak of 6.6 million tonnes two years ago, imports of pulses are again expected to fall below 10 million tonnes in FY20. When the price of pulses skyrocketed a few years back, imports jumped to a record high of 6.6 million tonnes in FY17.
The opportunity to grow more pulses in India boomeranged as imports flooded the country along with the Indian crop and prices went below the minimum support prices. However, after several restrictions were placed, imports started falling.
Data compiled by the Agricultural and Processed Food Products Export Development Authority (Apeda) showed India’s total pulses import at 2.23 million tonnes for the period between April ‘18 and February ’19. In FY19, the total import of pulses in India is estimated at around 2.5 million tonnes.
India’s import of pulses is likely to decline by 68 per cent in FY20 due to estimates of an increase in domestic output following the forecast of normal rainfall this monsoon season.
Uncertainty looms over basmati, tea exports after Iran sanctions
Apr 24, 2019
Uncertainty looms over tea and basmati rice exports from India as the US intends to fully clamp down on Iran oil exports, say companies and trade association. Industry is concerned as India is an importer of crude oil from Iran and any sanction on Iran can impact trade of other commodities India export. India annually exports 30 million kg of tea and one million tonnes of basmati rice to Iran.
Iranian demand for orthodox Indian teas was very strong from the beginning of the new season that kicks off in April. Similarly, basmati trading companies were sending shiploads of rice since December and were expecting a peak season till June.
We will be completing the current orders for Iran and after that will wait for a government notification on the way ahead, said Aman Gupta, MD, Shiv Shakti Inter Globe Export, one of the largest basmati rice exporters to Iran. Gupta said contracts have been signed with Iranian buyers but he was worried if he will get payments on time.
Officials at UCO Bank have told us that they will entertain export documents and payments till May 4, which is the last date of exemptions for importing Iranian petroleum after US sanctions. Post that, there is no clarity, added Gupta.
Pragmatic approach can improve China-India ties
Apr 24, 2019
The leaders of about 40 foreign governments will attend the second Belt and Road Forum (BRF), which will begin in Beijing on Thursday, but India is likely to boycott the meeting. India's possible absence is not surprising, and there is no need to read too much into it.
The relationship of the world's two most populous countries is more complex than many other bilateral relationships, such as those of India and most of its other neighbors. Collaboration and competition both contribute to establishing comprehensive ties between the two emerging economies, and coordination on the Belt and Road Initiative (BRI) is just a small part.
India is much stronger than years before, but it seems to have become more sensitive to changes in South Asia. The BRI that touches upon areas where the Indian people most feel vulnerable - Kashmir-related issues - deserves attention to avoid allowing the initiative to become a bottleneck in China-India relations.
Bilateral trade and investment between China and India have been on an uptrend. Many possibilities lie ahead for the two countries. So why focus on negative sentiment toward the BRI?
The China-India relationship has passed through the most difficult times. The linchpin is finding the proper solutions to a range of practical problems. It's impossible to solve every problem overnight, especially a lack of strategic mutual trust, but small achievements from revolving practical issues will add up, elevating the bilateral relationship steadily to a higher level.
India has for long been worried about its large trade deficit with the world's second-largest economy. China is willing to grant more market access to Indian exporters in a bid to explore India's export potential in fields such as agriculture, film, tourism and labor-intensive industries.
Economic statistics have offered some positive signals as media reports said India cut its trade deficit with China by $10 billion to $53 billion in the financial year ended March 31, the most in more than ten years.
Kazakhstan sets up coordinating council to attract Indian investments
Apr 24, 2019
Central Asia's biggest and resource-rich Kazakhstan has set up Coordinating Council for attracting foreign investments including from India.
The Kazakh government on Monday held a session to discuss the issues of attracting investments under the chairmanship of the Prime Minister of Kazakhstan Askar Mamin.
New approaches to improve investment in Kazakhstan were discussed in the course of the meeting.
In order to coordinate and efficiently interact with investors, as well as provide solutions to current problems, it was decided to lay the functions of Investment Ombudsman under the Prime Minister of Kazakhstan. Also, a Coordinating Council for attracting foreign investment will be created and chaired by the head of government.
The first President of the Republic of Kazakhstan, Leader of the Nation, Nursultan Nazarbayev, has tasked us with ensuring sustainable economic growth rates, which will require us to increase the volume of investment in fixed assets in the medium term to 30% of GDP. The main driver should be foreign direct investment, noted Mamin.
The meeting identified the Astana International Financial Centre as a Unified Center for the coordination of work on investment and promotion of the investment image of Kazakhstan (Regional Investment Hub), with the provision of services for investors on the principles of a single window and the formation of a single pool investment projects.
Maharashtra gears up for new kharif season with 2.25-crore BT cotton seed packs
Apr 24, 2019
As the BT variety continues to account for over 96% of cotton crop in the country, the Maharashtra government has managed to supply at least 2.25 crore packs of BT cotton seeds to farmers this kharif.
Though fears are being expressed about farmers possibly shifting to soyabean and maize as options, the state government has planned for a possible kharif crop of 40-41 lakh hectares. Experts said farmers had been getting good prices and therefore crop estimates for the new season may be retained.
The Cotton Association of India (CAI ) had trimmed the crop estimate for the fibre crop to 321 lakh bales (170 kg each), which is about 7 lakh bales lower than its previous month’s estimate last month. The crop is likely to be the lowest since the 305 lakh bales recorded in 2009-10 (as per Cotton Advisory Board estimates).
The main reason for reduction in cotton crop during this year is the scarcity of water in some states and the fact that farmers uprooted their cotton plants in about 70-80% area without waiting for the third and fourth pickings.
According to MG Shembekar, member, National Seeds Association of India, cotton prices have been high this season and the Pink Bollworm situation had been also contained to a great extent in Maharashtra and therefore the crop position is expected to be good this kharif as well.
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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