The Commerce and Industry Ministry has asked export promotion councils and other industry bodies to give specific inputs on measures to reduce regulatory compliances and streamline processes further and also share recommendations on decriminalisation, sources have said.

 

This is in line with the government’s stated policy of improving ease of doing business and working continuously to reduce compliance burden for a conducive business environment, a source tracking the matter told businessline.

 

'Inputs have been sought from export bodies on matters related to the Directorate General of Foreign Trade, Customs authorities, the RBI, the CBIC (Central Board of Indirect Taxes and Customs) and on the GST regime, sources tracking the matter told businessline.

 

Once the government receives inputs and processes them, the policies and the procedures will be modified accordingly, the source added.

 

'We are giving our suggestions on what processes can be further simplified. We are identifying areas where you can go for self-certification and where you can go for lesser documentation,' an official from an exporters’ body said.

 

Changes can also be made to the Foreign Trade Policy 2023 based on inputs as amending the policy is now a continuous process and not an annual one.

 

Key focus

The key focus of the government’s drive is simpli?cation of procedures related to applications, renewals, inspections, filing records, etc; rationalisation by repealing, amending or subsuming redundant laws; digitisation by creating online interfaces eliminating manual forms and records; and decriminalisation of minor technical or procedural defaults, Minister of State for Commerce Som Prakash recently said in a Parliament reply.

 

DPIIT, the industry arm of the Commerce and Industry Ministry, started an exercise some time back to assess the cost of regulations in states to provide insight into reforms that can be carried out to improve the business climate. A number of obsolete provisions have already been removed or simplified by DPIIT.

 

'Exporter bodies and other industry players have also been asked to give inputs for decriminalisation of provisions to be incorporated in the second edition of the Jan Vishwas Bill that the government is working on,' the official said.

 

The Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed in the Lok Sabha on June 27 and in the Rajya Sabha on August 2. The Bill sought to decriminalise about 180 minor offences in 42 legislations including some colonial era laws. 

India’s goods exports to Australia in April-November 2023 increased 14 per cent (year-on-year) to $5.87 billion, while the country’s overall merchandise exports declined, indicating that the India-Australia Economic Cooperation and Trade Agreement (ECTA) implemented in December last year may have started delivering, officials have said.

 

The increase in exports of items on which preferential tariffs have been offered by Australia have increased by a higher 17.8 per cent in April-October 2023 to $1.58 billion.

 

'...there are some early shoots that indicate that there has been growth in exports from both sides where preferential tariffs were given,' said Rajesh Agrawal, Additional Secretary, Department of Commerce, at a press briefing on Friday.

 

Imports down

India’s imports from Australia in the April-November 2023 period declined 19 per cent to $11.14 billion, although there has been increases in areas the country has been pushing for such as agriculture products.

 

'Agricultural exports to India are 50 per cent higher since the trade agreement came into force on December 29, 2022. This includes massive boosts in products like sheep meat, seafood, broad beans, citrus and almonds,' per a statement from the Australian government. 

 

From January 1, 2024, Australian exports to India will be even more competitive, with more tariff cuts on high quality Australian products such as seafood, cherries, sandalwood and wine, the statement added.

 

'In the year since this agreement came into effect, we have seen enormous gains for a range of Australian exporters, including our farmers, manufacturers, and our universities,' said Australian Trade Minister Don Farrell.

 

As part of the India-Australia ECTA, Australia eliminated tariffs on 98 per cent of its tariff lines when the agreement came into force at the end of 2022. It will eliminate tariffs on the remaining lines within five years. India eliminated tariffs on 40 per cent of its tariff lines and will eliminate tariffs on another 30 per cent of its tariff lines in a phased manner over the next seven years.

 

Full-fledged CECA

The two countries are now working on a full-fledged Comprehensive Economic Cooperation Agreement (CECA). 'This comprehensive trade agreement would allow us to go further in areas such as digital trade, and deliver commercially meaningful new market access for our exporters,' the Australian government’s statement pointed out.

 

There are, however, chances that the CECA may be put off till after India’s general elections in early 2024, an official told businessline.

 

'The CECA deals with sensitive areas including a greater number of agricultural products. It may be difficult for the government to take on commitments just before the elections. So there are chances that this may get put off,' the official said.

 

India and Australia hope to increase bilateral trade to $100 billion annually from $30 billion now after the CECA is implemented.

British Prime Minister Rishi Sunak is keen to clinch a free trade agreement (FTA) with India in time for Easter, which falls at the end of March 2024, according to a UK media report.

The India-UK FTA talks began in January last year, aimed at significantly enhancing the GBP 36-billion bilateral trading partnership. A new round of negotiations, expected to be the last, is set to start early in the new year after the thirteenth round concluded on December 15.

 

Prime Minister Mr Sunak and India's premier Narendra Modi are said to be keen to get the deal wrapped up by April, reads a report in the Daily Express' newspaper updated on Saturday.

 

It is hoped a deal can be signed and sealed before India's general elections begin on April 1, it claims.

The newspaper quoted a source close to the trade talks on the UK side to say that a lot of progress has been made, but some of the hardest aspects remain pending.

We have made a lot of progress, but the last stuff to do is the hardest. We have negotiators out there most weeks going through the details, and we have a deadline of their elections, the source told the newspaper.

'Both Rishi Sunak and Modi remain keen, so it's just a case of seeing if we can get it over the line, the source added.

 

The UK hopes an FTA will open up its trade in Scotch whisky and cars to India, as well as services and investment opportunities. Meanwhile, India would seek better access to its manufactured goods and services and a deal on professional visas.

With both India and the UK heading into a general election year in 2024, signing off on a trade agreement has taken on particular urgency before leaders on both sides get into campaign mode.

A joint outcome statement released last week by the UK Department for Business and Trade (DBT) said: The thirteenth round of negotiations for the UK-India Free Trade Agreement took place from 18 September to 15 December. The round included sessions, both in person, in London and Delhi, and virtual talks.

 

'As with round 12, these negotiations focused on complex issues, including goods, services, and investment. The UK and India will continue to negotiate towards a comprehensive and ambitious Free Trade Agreement. The fourteenth round of negotiations will take place in January 2024, the statement said.

Under the format so far, the fourteenth round is likely to be hosted by London, with talks taking place between officials in a hybrid format both in person and virtually.

We have made substantial progress... I think both sides are very aware of the importance of the FTA and will make the utmost effort to get there. So, we have to take it as it happens, External Affairs Minister S Jaishankar told reporters after his meetings with Sunak and other senior Cabinet ministers during a UK visit last month.

 

There had been some speculation that cricket enthusiast Sunak would be following up his first India visit as British prime minister for the G20 Summit in September with some cricket diplomacy at the England versus India World Cup clash in Lucknow on October 29 when the highly anticipated FTA could be signed off.

However, the internal political turmoil of a Cabinet reshuffle within the Tory party and the Israel-Hamas conflict on the global front were said to have side-tracked focus.

We are very close We will finish when we finish, UK Business and Trade Secretary Kemi Badenoch told a House of Commons committee when last questioned about timelines.

 

Officially, the Sunak-led government has held a firm 'it's the deal, not the date' line to avoid setting firm timelines since former prime minister Boris Johnson's Diwali 2022 deadline for an India-UK FTA was missed.

The Finance Ministry expects the country’s GDP growth rate in 2023-24 to 'comfortably' exceed its earlier forecast of 6.5 per cent on the back of Q2 GDP growth performance that surprised on the upside at 7.6 per cent.

 

Already the country’s GDP grew 7.7 per cent in the first half this fiscal. The Union Budget for 2023-24 had pencilled in a nominal GDP of 10.5 per cent for current fiscal.

 

Without giving a revised projection for GDP growth rate (in real terms) for current fiscal, the Finance Ministry has in the latest half-yearly economic review report also highlighted that the headline inflation outlook is on a declining trend, notwithstanding temporary disruptions from food prices. 

 

The stable downward movement in core inflation and continuing deflation in fuel inflation is aiding this trend, it noted in the report.

 

The Reserve Bank of India has projected inflation to average at 5.4 per cent in FY24.

 

'The outlook for India’s external sector is promising, as seen in the November releases of trade balances for both services and merchandise. The relatively stable Indian rupee against the US dollar and other prominent currencies and adequate foreign exchange reserves add to the optimism (on growth outlook). 

 

This sanguinity is visible in the resurgence of foreign portfolio investments since November 2023 and in FY24 in general, compared to FY23. Foreign investment inflows are also helping the Indian stock market indices climb new heights, reflecting broad-based optimism on growth among domestic and foreign investors on growth prospects,' the Finance Ministry report noted.

 

The risks to growth and stability outlook mainly emanate from outside the country, it added.

 

India had recorded an economic growth of 7.2 per cent in 2022-23 and 9.1 per cent in 2021-22.

 

Post the release of the Q2 GDP data by the Statistics Ministry on November 30, the RBI has raised its growth forecast for 2023-24 by 50 basis points to 7 per cent.

 

Growth forecasts

Several multilateral institutions, rating agencies and global financial majors have immediately upped their growth forecasts for India. 

 

The International Monetary Fund (IMF) is now pegging India’s growth rate at 6.3 percent for 2023 and 2024 after an upward revision citing domestic consumption. IMF now expects India to become a $5-trillion economy by 2028. 

 

On the other hand, S&P Global Ratings expects India to become the third largest economy by 2030. It believes India will be fastest growing economy in the world for the next three years. 

 

JP Morgan, a global bank, expects India to become the third largest economy in the world by 2027. It expects the Indian economy to hit $7 trillion by 2030. 

 

Food inflation

Meanwhile, on food inflation, the Finance Ministry has in its latest report said that the 'relatively high food inflation…is a matter of concern'. However, it is important to mention that the present rate of increase in prices is a worldwide phenomenon, it added.

 

'While India recorded 6.6 per cent food inflation in October, the UK is still grappling with 10.1 per cent, Japan at 9.8 per cent, and South Africa at 9 per cent food inflation,' the finance ministry report said.

 

India’s food inflation rose to 8.7 per cent in November 2023, retail inflation data released on December 12 showed. 

The government has allowed importing potatoes to increase supply of the daily essential commodity in the local market and keep its price stable.

 

Confirming the matter on Monday, commerce ministry Public Relations Officer Md Haidar Ali said interested importers are requested to apply to the ministry in this regard.

 

On 14 September, the government fixed the prices of eggs, potatoes and onions. 

 

Although the price of potatoes was set at Tk35-Tk36 per kg, it is being sold now for Tk60-Tk70 per kg.

Chief Minister Thakur Sukhvinder Singh Sukhu said that the state government will offer quality horticulture equipment, fertilizers and pesticides at affordable rates through the Himachal Pradesh Horticulture Produce Marketing and Processing Corporation (HPMC) from January 1, 2024, said an official statement from the government of Himachal Pradesh.

 

Emphasizing the government's commitment, he said that HPMC has reduced its margin from 15 per cent to 9 per cent, enabling Apple growers to access quality products at more economical prices.

 

Furthermore, HPMC has inked 38 Memorandums of Understanding (MoUs) for direct purchases from original manufacturing companies, striving to offer farmers vital items at low rates. The Chief Minister said, 'Our government is committed to supporting apple growers and the decision to reduce margins reflects our dedication to uplifting the horticultural community and enhancing the economic well-being of apple growers in Himachal as our top priority.'

 

Highlighting the government's dedication to systemic revamp, he stated, 'The present government is working for 'Vyavastha Parivartan,' and every decision is being made for public welfare, ensuring that every section of the state can reap full benefits.'

 

The government aims to increase the income of the horticulturists in the state. The Horticulture department will suitably modify the existing schemes and make them more effective through appropriate restructuring, he added.

 

The government made provisions in its first budget for an online system to be established to facilitate procurement of horticulture produce at minimum support price by HPMC. This online facility will also be available for booking the CA stores of HPMC. Apart from sale of produce from home, the farmers will also be able to book farm equipment and materials sold by HPMC, he said.

 

Grading and packing houses, CA and cold stores will be set up in association with FPOs in Bhavanagar in Kinnaur, Sandasu near Chirgaon, Anu in Jubbal, Chopal in Shimla, Jabli of Solan district, Sundernagar in Mandi, Duttnagar near Rampur Bushehar and Kharapathar in Shimla, reiterated the CM.

 

The government successfully facilitated the sale of apples at a per-kilogram rate in the current year, fulfilling the long pending demands of the Apple growers, leading to increased profits for growers, said Sukhu.

 

Looking ahead, he assured that the sale of apples in the upcoming season will be streamlined into universal cartons. 

Litchi, the sweet and juicy fruit of India’s hot summers, is no longer restricted to Muzaffarpur in Bihar. It is now being cultivated across 19 Indian states, an official has told this reporter.

 

'It may sound ambitious but is true. Litchi cultivation for commercial purposes is going on in 19 states. We are providing technical help, plants and training to farmers with the sole aim of expanding the fruit's cultivation across India,' Muzaffarpur-based National Research Centre on Litchi (NRCL) director Bikash Das told this reporter. 

 

He said farmers in other states have been taking the lead to cultivate litchi for commercial production. This was not the case a few years ago. 'NRCL scientists are visiting farmers and boosting their confidence to go ahead with litchi cultivation. This is resulting in the expansion of litchi cultivation,' Das said.

 

Litchi cultivation for commercial production has started in Andhra Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, Himachal Pradesh, Madhya Pradesh, Odisha, Manipur, Assam, Punjab, Maharashtra, Jammu and Kashmir, Gujarat, Arunachal Pradesh, Rajasthan and Mizoram. More than 0.1 million hectares of land are under litchi cultivation in India as per latest official data.

 

The NRCL is preparing thousands of litchi saplings at its nursery each year. It is doing so to supply them to farmers in different states. The centre provides saplings of its famous Shahi litchi, besides popular varieties like China, Gandki Lalima, Gandki Sampada and Gandki Yogita, to farmers in other states.

 

Das said the litchi cultivation expansion plan was based on a scientific study that found suitable soil and climate for the fruit’s cultivation in other states.

 

NRCL scientists pointed out that litchi is considered to be a very sensitive fruit as far as temperature, rainfall and humidity are concerned. Besides, it require soil suitability as well. Variations in temperature and unfriendly climatic conditions have badly hit litchi crops in recent years as the fruit can crack, becoming smaller in size and less sweet and juicy.

 

Litchi cultivation may have expanded. But it will take some time for this to transform into fullscale commercial production, Das said. Saplings planted in orchards take a few years to bear fruit.

 

The fruit mainly grows in the foothills of the Himalayas in Uttarakhand, Bihar, West Bengal and Jharkhand. Litchi cultivation is spread across over 32,000 hectares in Bihar alone. This accounts for nearly 40 per cent of India’s litchi production. Bihar is followed by West Bengal (12 per cent of the total) and Jharkhand (10 per cent).

 

Litch was sporadically cultivated earlier in Odisha, Chhattishgarh, Madhya Pradesh and Assam. But this was not for commercial production. NRCL scientists introduced litchi cultivation on a small scale in a few pockets of Karnataka and Kerala some years back. But it was not expanded on a large scale. In Karnataka, litchi hatvest takes place in the winter, unlike summer in north India.

Duty concessions on Scotch whisky and electric vehicles and mobility of skilled workers are yet to be resolved in the proposed trade pact between India and the UK, and are likely to be taken up in the next round of talks in January, an official said on Friday.

 

India is also considering discussing longer transition period and tax restoration for its exporters once the UK's carbon border tax on imported goods kicks in from 2027, as part of the trade pact.

 

Yet, New Delhi remains hopeful of closing three trade pacts - with the UK, Oman and the European Free Trade Association (EFTA) - early next year, the official said.

 

Iceland, Liechtenstein, Norway, and Switzerland comprise the EFTA. In the negotiations with the UK, the two sides have resolved most of the issues related to rules of origin and intellectual property rights chapters, the official said.

 

The pact has 26 chapters.

 

The UK's demand for liberalisation of norms in services sectors like banking, insurance, and legal, and India's ask for easy movement of professionals are some of the unresolved issues.

 

'A few issues are also pending in the proposed bilateral investment treaty,' the official said. India is considering tariff rate quotas to meet the UK's demand for a reduction in import duties on its EVs as part of the proposed trade deal. The UK has also sought easier value addition norms for its EVs.

 

The government is working on boosting domestic manufacturing and increasing exports to USD 500 billion by 2030 from 10-11 sectors, including automobiles, pharma, textiles, medical devices and chemicals, a senior official said on Thursday. These issues were discussed during a meeting called by the Commerce and Industry Ministry on Thursday.

 

The meeting was convened by the Department of Promotion of Industry and Internal Trade (DPIIT) in collaboration with Invest India and SCALE (Steering Committee for Advancing Local Value-Add and Exports) Committee to unveil outcomes and recommendations made during the Chintan Shivir for Manufacturing, held on October 12 at Bharat Mandapam here.

 

The 11 sectors are auto components, automobiles (including EVs), capital goods, chemicals, drones, medical devices, aerospace and defence, leather and footwear, textiles, and space.

 

'We are looking at investments in these sectors. We will drill down to each of the areas to see how to promote manufacturing and we have kept a target to increase exports in these 10-11 sectors from USD 160 billion to USD 500 billion by 2030,' the official added.

 

Overall, the ministry is looking at taking the country's goods and services exports to USD 2 trillion by 2030.

 

The Chintan Shivir witnessed the participation of industry leaders, knowledge partners, and government officials from focus sectors.

 

The deliberations centred on the current scenario, challenges and recommendations tailored to stimulate the country's manufacturing landscape.

 

The meeting was presided over by Commerce and Industry Minister Piyush Goyal, Chemicals and Fertilisers Minister Mansukh Mandaviya and Heavy Industries Minister Mahendra Nath Pandey.

 

When asked about the government's plan to come out with a policy for the electric vehicles (EVs) sector, the official said: 'We have to get all the countries on board such as Germany, Korea and Italy. We should invite everybody'.

 

The government on Friday said there are 'strictly' no plans to impose the minimum export price (MEP) on all agricultural products. Additional Secretary in the Department of Commerce Rajesh Agrawal said that there is no such intention of the government to look into exports of all agri products.

 

'Just want to clarify that the government has no intention to put in MEP on all agri products or review all agri products from the export perspective. There is no such decision. The government has strictly no such plans,' he told reporters here.

 

An inter-ministerial committee, which looks into MEP on onion, has recently decided on basmati rice.

 

He said that the committee getting a wider mandate does not mean that 'the committee is there to look into each agri product and start recommending MEP for that'.

 

He informed that despite banning exports of non-basmati white rice, India has allocated 13 lakh tonnes of rice for exports to over 14 countries for their food security issues.