In FY2023, India's merchandise exports reached $451 billion as against $421 billion in FY2022. Coincidentally, both the products and the states contributing to it remained similar. The states which contributed to the major share of these were: Gujarat (33 per cent), Maharashtra (16 per cent), Tamil Nadu (9 per cent), Karnataka (6 per cent), and Uttar Pradesh (5 per cent).

 

A deeper analysis of the districts showed that just 10 districts constituting less than 1.5 per cent of the 766 districts across India are contributing to 41 per cent of the country’s exports. These include, in ascending order of contribution: Jamnagar, Surat, Mumbai, Mumbai Suburban, Kanchipuram, Pune, Bharuch, Gautam Budh Nagar, Ahmedabad, and Kachchh. This extremely high concentration of exporting districts is something to ponder about.

 

Policymakers need to focus on the ‘missing middle-export districts’. An analysis of the districts which have exports between $1 billion to $5 billion, shows that there are 59 districts or ‘missing middle-export districts’ which have the potential to ease the current high concentration in just 10 districts. This also amplifies the significant potential that exists to garner higher exports.

 

These 59 districts are spread across 20 states and union territories, and currently constitute 29 per cent of India’s exports in FY2023.

 

Such diversification will also bring in a holistic export growth paradigm while also helping various other districts in India to grow and develop.

 

Recently, India introduced the ODOP-DEH (One District One Product-Districts as Export Hubs), which was also mentioned in the new foreign trade policy. The initiative aims at fostering balanced regional development across the identified 734 districts under it, while promoting one product from each district.? The objective is to work with manufacturers and producers across districts along verticals like design, production, manufacturing, packaging, and market creation to boost sales both in the domestic as well as international markets.

 

What the government could do is roll out the ODOP-DEH across the 734 districts at a later stage after it has focused on the 59 ‘missing middle-export districts’, thereby reducing the current anomaly at the district level for exports.

 

In most cases, there is a significant synergy between the products identified under ODOP-DEH, though there also exists some divergences. For instance, the key exports worth $1.6 billion from Sonipat in Haryana include leather products, footwear, engineering goods, and plastic products. However, the ODOP-DEH mentions the focus to be on ‘industries’, without specification which one. This is contrary to the ODOP-DEH, which envisages capitalising on a unique product from each district, with the goal to uplift the local community, and create a multiplier effect on the local economy.

 

Another such example is Karnataka's Kolar district where the major export today is smartphones — which form about 89 per cent of its total exports. Under the ODOP-DEH initiative, Kolar has been identified with a diverse range of products, from mango, colour capsicums, millet ragi, mango pulp, processed pulses, spices, engineering, aerospace and defence components, automobiles, phones, apparel to many others. Concentrated attention may be the way forward here.

 

The crux towards having a successful ODOP-DEH would be when new export districts beyond the perennial ones are provided an opportunity in terms of new companies and greater capex being set up.

 

The ODOP-DEH can also learn from similar initiatives abroad. For instance, Japan's ‘One Village, One Product’ (OVOP) initiative underscores the importance of community involvement and the preservation of cultural heritage. Thailand's experience highlights the significance of sustainable growth and the incorporation of modern techniques while staying true to traditional skills. Mexico, the Philippines, and Ghana offer insights into creating an environment where local products become a source of pride and economic empowerment.

 

The ODOP-DEH’s possible focus on the identified 59 ‘missing middle-export districts’ in all probability will help to reduce the existing export concentration, while also augmenting India’s overall export share globally, which has been hovering around 2 per cent for a long time. Such efforts will build upon India’s ambition to have $1 trillion in merchandise exports by 2030.

 

A focus on these ‘missing middle-export districts’ would be a good step towards transforming India's diverse districts into thriving centres of excellence on the global stage. By further developing newer districts, India will be able to create more export hubs which would usher in a new growth story.

India and the United Arab Emirates are looking to identify and incorporate commodities to diversify trade between the two countries, UAE ambassador to India 8said in an interview. The diversification of traded commodities can broaden the scope of economic cooperation and make local currency transactions even more versatile, Alshaali said in an email interview. He added that India, Europe, and the Middle East MoU for the India-Middle East-Europe Economic Corridor (IMEC) could potentially reduce shipping costs and facilitate efficient trade in goods and services. On the recent approval of 75,000 tonnes of non-basmati white rice for export from India to the UAE, he stated that Indian rice has earned a reputation for its quality and flavour, making it a preferred choice in the UAE and many other countries.

 

Local currency trade is picking up between India and the UAE. Do you think this will help usher in a new era of trade ties between the two countries? What is the vision for this going forward?

 

Yes, the increasing trend of local currency trade between India and the UAE has the potential to usher in a new era of trade ties between the two nations. This development signifies a commitment to strengthening economic cooperation and reducing reliance on foreign currencies, which can streamline the trade processes and reduce transaction costs. The vision includes expanding the use of our respective national currencies, the UAE dirham and the Indian rupee, in various trade transactions. By promoting direct exchange rates, facilitating the settlement of trade transactions, and encouraging the use of local currencies, both countries aim to foster deeper economic integration. This move is expected to facilitate bilateral trade, encourage direct investment, and improve financial transfers, ultimately enhancing the robustness of our trade relations and contributing to economic growth and stability in both nations.

 

Currently, the local currency trade has begun with gold and oil. Are both countries discussing other commodities to add to these items?

 

The framework outlined in the MoUs signed by CBUAE and Reserve Bank of India (RBI) seeks to promote the use of the national currencies in commercial transactions, which would contribute to the development of the foreign exchange market, facilitate bilateral trade, encourage direct investment, and support economic growth and financial stability. The diversification of traded commodities can broaden the scope of economic cooperation and make local currency transactions more versatile. Discussions are ongoing to identify and incorporate commodities of mutual interest and benefit both nations.

 

Considering global trade is expected to shrink, what is the UAE’s strategy to better use the FTA and boost trade with India? India and the UAE are trying to push non-oil trade. Would this include the UAE increasing its imports from more sectors in India?

 

Coming into force on 1 May 2022, the UAE-India Comprehensive Economic Partnership Agreement (CEPA) is the UAE’s first CEPA and a cornerstone of our new foreign trade agenda. The agreement eliminated or reduced tariffs on more than 80% of product lines, created new platforms for SME collaboration and promoted mutual investment flows, particularly into priority sectors.

 

The signing of the CEPA has contributed to strengthening economic ties between India and the UAE. Both countries are committed to expanding their partnerships across various sectors, focusing on sustainable growth. The agreed UAE-India CEPA Council (UICC) will function as a B2B collaboration mechanism, with a focus on MSMEs and start-ups, for building greater economic linkages and optimising CEPA benefits. Integration of activities will take place under the CEPA council and established committees/sub-committees.

 

Initial figures indicate that from May 2022 to April 2023, the first 12 months of the CEPA, bilateral non-oil trade reached a value of US$50.5 billion, a 5.8% increase on the same period from the previous year. It is commendable to see the effectiveness of the CEPA in promoting trade and investment, and both countries are committed to building a mutually beneficial partnership that delivers long-term prosperity.

 

What ambitions does the UAE have for the newly announced India-Middle East-Europe Economic Corridor? How does it compare to existing connectivity initiatives?

 

India, Europe, and the Middle East MoU for the India-Middle East-Europe Economic Corridor (IMEC) is a significant initiative that aims to boost connectivity, trade, and sustainability among participating countries. The UAE’s involvement in IMEC is expected to be multifaceted, leveraging its strategic location, trade expertise, and commitment to environmental conservation to contribute positively to the success of the corridor and strengthen international partnerships.

 

IMEC represents a collaborative effort involving multiple countries, showcasing the willingness of nations to work together for mutual economic and environmental benefits.

 

The UAE’s strategic geographical location and well-developed infrastructure, particularly its ports and transportation networks, make it a key player in enhancing connectivity within the IMEC. The country can serve as a vital hub for the transit of goods and services.

 

The IMEC initiative aims to create an extensive economic corridor comprising two pathways - the east corridor, connecting India to the Arabian Gulf, and the northern corridor, connecting the Arabian Gulf to Europe. This will significantly enhance connectivity and integration between these regions, fostering economic growth, trade, and cooperation.

 

By reducing shipping costs and facilitating efficient trade in goods and services, IMEC has the potential to boost the economies of the participating countries. This corridor can serve as a crucial trade route, benefiting not only India, Europe, and the Middle East but also the global economy.

 

The UAE announced a $2 billion investment in India ‘food parks’ to tackle food security in South Asia and the Middle East, the UAE, India, the US, and Israel last year. What is the status of this project, and how has the progress been?

 

The UAE’s announcement to invest $2 billion to set up food parks across India is part of efforts by I2U2, to help tackle food insecurity in South Asia and the Middle East. The US and Israeli private sectors will be roped in for technologies to reduce food waste and spoilage, conserve fresh water, and employ renewable energy sources at the food parks.

 

We are currently working on this with all partners of the group to establish the parks, and several meetings have taken place for the next steps.

 

On 25 September, India allowed exports of 75,000 tonnes of non-basmati white rice to the UAE. Will it be sufficient for the country, or is it going to request more quantity as it prefers Indian rice more than other nations? How is the UAE coping after India’s non-basmati white rice export ban? Has the UAE asked India to remove the ban on non-basmati white rice?

 

There is a strong and cooperative relationship between India and the UAE in the realm of rice trade. The recent approval of 75,000 tonnes of non-basmati white rice for export from India to the UAE is a testament to the enduring partnership between our two nations. While this specific quantity of rice is significant, it is essential to recognise that both India and the UAE share a mutual interest in promoting bilateral trade and addressing food security concerns. Our governments remain committed to facilitating trade that benefits the populations of both countries.

 

Regarding the UAE’s preference for Indian rice, historical and cultural ties have fostered this preference. Indian rice has earned a reputation for its quality and flavour, making it a preferred choice in the UAE and many other countries. We value this preference and aim to meet the UAE’s rice needs to the best of our abilities.

 

As for India’s export ban on non-basmati white rice, it is essential to consider that these trade measures are taken in response to domestic factors, such as food inflation concerns and weather patterns affecting rice production. Both India and the UAE are committed to fostering a robust and harmonious trade relationship that addresses food security, promotes economic growth, and respects the preferences of our trading partners. We will continue to work closely together to ensure that our trade ties remain strong and mutually advantageous.

 

Recently, the climate change minister said in an interview that the UAE, through COP28, is trying to get $100 billion as far as climate financing is concerned and that the country would soon be sending the declaration draft on climate finance and food security. Has it been sent to the member countries yet?

 

In the context of COP28, the UAE is actively working towards making climate finance more affordable, available, and accessible. As part of these efforts, we are collaborating with international financial institutions (IFIs), multilateral development banks (MDBs), the International Monetary Fund (IMF), the World Bank, and GFANZ to leverage capital markets, standardize voluntary carbon markets, and incentivize private capital and finance for climate action. Additionally, we have engaged with the G20 High-Level Expert Group to design a modernised approach to climate finance. We emphasise the urgency of climate financing, and a call on donor countries is underway.

A committee of secretaries chaired by the cabinet secretary, on Thursday, took stock of the status of the ongoing talks under India-UK free trade agreement on issues such as rules of origin, tariffs and phasing out of duties to iron out the knotty areas.

 

According to people familiar with the development, the commerce department made a detailed presentation on the pending issues in the run-up to the finalisation of the trade pact, which is expected to be inked later this month in the presence of UK Prime Minister Rishi Sunak.

 

'Trade negotiations with the UK are happening at a fast pace. A committee of secretaries was briefed about the pact,' said an official.

 

Senior officials from the departments of agriculture, pharmaceuticals, food processing, finance and heavy industries took part in the meeting, a key step in the run up to inking of the trade pact.

 

Last week, senior commerce and industry ministry officials made a presentation to the Prime Minister's Office on the agreement and the two sides are engaged in hectic negotiations.

 

It will be New Delhi’s first such comprehensive deal with an industrialised nation that seeks to spur bilateral annual business beyond the current $20 billion.

 

The pact will have 26 chapters. Product-specific rules, value addition, change in the chapter heading, and certification are being discussed in the rules of origin chapter, where an in-principle agreement has been reached.

 

'Since the supply chains of the UK and EU are closely integrated, the UK is keen on liberal rules of origin and this is a sticking point,' said a trade expert.

 

India has sought assurance that the UK will not be used to route goods from other countries, as New Delhi is keen to check its burgeoning trade deficit that hit $263 billion in the 2022-23 financial year, up from $191 billion the year earlier.

Backed by good monsoon rains last year, output of both foodgrain and horticultural produce made a new record in 2022-23 with an estimated production of 330 million tonnes and 352 million tonnes, respectively.

 

While foodgrain production in 2022-23 recorded an increase of 14 million tonnes (over 4%) over 2021-22 as per the agriculture ministry's final estimate, the output of horticultural produce showed an increase of about 5 million tonnes (over 1%) compared to the previous year as per its second estimate. Both the estimates were released by the ministry on Wednesday.

 

In the foodgrains basket, paddy (rice) and wheat reported record production in the 2022-23 crop year (July-June cycle) at 135 million tonnes and 110 million tonnes, respectively.

 

Fruit production stood at 108 million tonnes in 2022-23 compared to 107 million tonnes in 2021-22 whereas the production of vegetables stood at 213 million tonnes in 2022-23 compared to 209 million tonnes in the previous year. As per the data, potato output was 60 million tonnes compared to 56 million tonnes in 2021-22.

 

Agriculture minister Narendra Singh Tomar attributed the record output of foodgrains and horticultural crops to the hard work of farmers, the efficiency of scientists and the farmer-friendly policies of the Narendra Modi government.

In a significant development, Australia and India are aiming to strengthen their economic ties with a more comprehensive pact expected to be finalised by the year’s end. Following the signing of India’s first free trade agreement with a developed country in over a decade, Canberra and New Delhi are now working towards an even more ambitious comprehensive economic co-operation agreement.

 

India’s High Commissioner to Australia, Manpreet Vohra, highlighted the deepening relationship, emphasising India’s commitment to expanding its presence in the Indo-Pacific region.

 

Speaking at an event hosted by the Australia-India Institute at Parliament House, he stressed the importance of democratic nations rejecting territorial claims, physical aggression, economic coercion, and political interference, in order to establish an open, free, peaceful, and rules-based region that respects sovereignty.

 

The High Commissioner underscored the mutual commitment between India and Australia to address shared challenges and explore new opportunities as natural partners, both being robust democracies and thriving economies.

 

New Delhi’s concerns regarding China’s escalating influence in the region and potential disruptions to maritime order have intensified due to border skirmishes, raising tensions between Beijing and New Delhi. Assistant Foreign Affairs Minister Tim Watts emphasised the growing significance of partnerships in the face of various challenges, such as military build-ups, climate change, and the ongoing repercussions of the pandemic.

 

Watts stressed the collective responsibility of nations to utilise their combined strength, diplomatic skills, and influence to minimise the risks of misunderstandings and miscalculations, thereby averting catastrophic conflicts. He affirmed the strong and trusted strategic partnership between Australia and India, emphasising its role in enhancing economic resilience and promoting strategic stability within the region.

 

The upcoming sixth Australia-India leadership dialogue is scheduled to convene in Melbourne in November, marking a significant event in the diplomatic relations between the two nations.

 

Under the Albanese government, Australian ministers have undertaken a total of 16 visits to India, a testament to the growing bilateral engagements. Among these visits, Prime Minister Anthony Albanese himself has made two trips, highlighting the importance attached to the relationship between the two democracies.

 

Australia hosts a substantial Indian diaspora, which has grown to approximately one million people, reflecting the vibrant cultural exchange and ties between the two countries.

 

Economically, the trade ties between India and Australia have flourished, with the two-way trade volume reaching a substantial $46.5 billion in 2022, underscoring the robust economic partnership between the nations.

India is exporting 295,000 metric tons of non-basmati white rice to the Philippines, the highest allocation it has given to a foreign country after lifting the restriction to specific nations.

 

The Indian government, through the Ministry of Commerce and Industry, issued a notification dated Oct. 18 that the Philippines together with Nepal, Cameroon, Cote d’ Ivore, Malaysia, Seychelles, and the Republic of Guinea are now eligible for the exports.

 

'It is with immense pleasure to inform you that the highest allocation of rice export was made to the Philippines,' the Indian Embassy in Manila said in a statement on Wednesday.

 

'Request made at the leadership level and the positive decision reflects the growing confidence in the bilateral relationship,' it added.

 

India, the world’s largest rice exporter, banned the export of non-basmati rice in July in a bid to allay rise in prices in its domestic market.

 

The Department of Agriculture has been in talks with the Indian government since August to allow the imports to the Philippines 'on humanitarian grounds' amid the high prices of rice.

Exporters of non-Basmati rice have requested the government to identify those firms who have consistently paid Minimum Support Price (MSP) to paddy farmers and declare them as the 'preferred counterparties' for export collaborations. The request has come after the Centre appointed the newly created National Cooperative Exports Ltd as the canalising agency for government-to-government deals.

 

In a letter to the Cooperation Ministry, The Rice Exporters Association (TREA) said that it appreciates the government’s initiative in promoting rice exports, which are under prohibition, through Cooperatives for other countries’ requirements. However, as millers and exporters have made significant investments in creating manufacturing facilities, they too want to be considered in execution of the overseas orders.

 

The association said it is ready to source rice from farmers’ producers organisation in view of the Centre’s objective of allowing NCEL to handle government-to-government deals. 

 

'We are eager to collaborate and actively participate in the execution of these overseas orders. If acceptable, we are open to signing back-to-back contracts with an overriding commission to cooperatives, similar to the practice with other state-run organisations,' TREA said in a letter to Union Cooperation Secretary Gyanesh Kumar.

 

The exporters’ body has proposed a joint meeting of related agencies/organisations such as APEDA and the Cooperation Ministry with its members to take the initiative forward. 'Such a meeting would provide an opportunity for open dialogue, collaboration, and establishment of a clear path forward that aligns with the goals of all stakeholders.' it said.

 

Highlighting that the exporters and millers employ thousands of workers in each major unit, the current ban on non-Basmati exports is impacting lakhs of workers. The government has allowed only parboiled rice in the non-Basmati category with 20 per cent export duty; which recently got extended until March 31, 2024.

 

The industry body has also said that its members have consistently exported an average of 10 million tonnes annually over the past five years, whereas cooperatives, collectively, have not achieved even 10,000 tonnes annually. 'For the efficient distribution of overseas orders, it seems logical and fair to consider past performance as the basis,' TREA President BV Krishna Rao said in the letter.

 

The share of non-Basmati rice in the overall rice exports from the country is about 80 per cent, TREA said, stressing that 18 million tonnes of non-Basmati rice are shipped to 165 countries with a 42 per cent market share in global trade. But, the rice trade is facing unprecedented challenges after the prohibition and restrictions on rice exports, it said.

 

India has been getting specific requests from different countries such as Singapore, Bhutan, Mauritius and the United Arab Emirates (UAE), and the government has been allowing the export of substantial quantities of white rice through the National Cooperative Export Ltd.

The government has extended restrictions on export of all varieties of sugar - raw, white, refined and organic - beyond October 31 owing to domestic production concerns on weak-monsoon worries. At present sugar is on the restricted list till October 31. However, the food ministry has been allowing the industry to export certain quantities depending upon availability.

 

However, these restrictions will not be applicable to sugar being exported to the European Union and the US under CXL and tariff rate quota (TRQ) concessions. A specified amount of sugar is exported to these regions at lower tariffs.

 

Non-basmati rice

 

India on Wednesday permitted the exports of 10,34,800 tonnes of non-basmati white rice to seven countries, including Nepal, Cameroon and Malaysia. The export is permitted through National Cooperative Exports Limited (NCEL), the Directorate General of Foreign Trade (DGFT) said in a notification.

As shifting economic conditions continue to drive changes in global trade flows, the Georgia Ports Authority (GPA) today said that its overall trade with India grew faster than its trade with any other country among the top 20 over the past fiscal year.

 

Not only is GPA expanding its trade with India, but it led its domestic peers in that trend, as well. No other U.S. port expanded India trade by more containers than the Port of Savannah, by a margin of 14,000 twenty-foot equivalent (TEU) container units, according to PIERS-Enterprise loaded cargo data.

 

By the numbers, import-export volumes between Savannah and India totaled 279,149 TEUs last fiscal year, for an increase of 18% or 43,333 TEUs. 

 

And the port says its trade with that nation is well balanced, with imports constituting 63% of GPA’s total India volumes in fiscal year 2023. Put another way, GPA imports from India over the past five years were up 52%, while its exports to India grew by 50% in FY23 vs FY22 and by nearly 80% in the past five years.

 

'Our growth trajectory with India is extremely strong and we are actively taking steps to increase our presence in the market,' Griff Lynch, GPA’s president and CEO said in a release. 'As production shifts to India and as demand in its economy rises, that trade increasingly favors the Port of Savannah’s strategic location over West Coast ports, due to time and cost.'

 

To support that increased trade lane, GPA now has weekly container services with three Indian ports: Nhava Sheva—India’s commercial and financial hub, and its largest port—Mundra and Pipavav. 

A committee of secretaries chaired by the cabinet secretary, on Thursday, took stock of the status of the ongoing talks under India-UK free trade agreement on issues such as rules of origin, tariffs and phasing out of duties to iron out the knotty areas.

 

According to people familiar with the development, the commerce department made a detailed presentation on the pending issues in the run-up to the finalisation of the trade pact, which is expected to be inked later this month in the presence of UK Prime Minister Rishi Sunak.

 

'Trade negotiations with the UK are happening at a fast pace. A committee of secretaries was briefed about the pact,' said an official.

 

Senior officials from the departments of agriculture, pharmaceuticals, food processing, finance and heavy industries took part in the meeting, a key step in the run up to inking of the trade pact.

 

Last week, senior commerce and industry ministry officials made a presentation to the Prime Minister's Office on the agreement and the two sides are engaged in hectic negotiations.

 

It will be New Delhi’s first such comprehensive deal with an industrialised nation that seeks to spur bilateral annual business beyond the current $20 billion.

 

The pact will have 26 chapters. Product-specific rules, value addition, change in the chapter heading, and certification are being discussed in the rules of origin chapter, where an in-principle agreement has been reached.

 

'Since the supply chains of the UK and EU are closely integrated, the UK is keen on liberal rules of origin and this is a sticking point,' said a trade expert.

 

India has sought assurance that the UK will not be used to route goods from other countries, as New Delhi is keen to check its burgeoning trade deficit that hit $263 billion in the 2022-23 financial year, up from $191 billion the year earlier.