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22 Aug, 2023 News Image India s ban on white rice exports: Singapore seeks exemption.
The Singapore Food Agency (SFA) has said it is in contact with Indian authorities seeking an exemption from the ban on exports of (non-basmati) white rice.
 
In a statement to the media, SFA said through its forward looking strategies such as the Rice Stockpile Scheme, 'our overall supply of rice is currently stable and there is enough rice for everyone if everyone buys what we need'.
 
Under the Rice Stockpile Scheme, rice importers are required to hold an inventory equivalent to twice their monthly imports. This will ensure adequate supply of rice in the market. 
 
India’s share in imports
'We review the inventory buffers regularly and stand ready to work closely with the industry, if any adjustments are needed,' the statement said.
 
India accounted for 40 per cent of Singapore’s rice imports, 'Only the import of non-basmati (rice) is affected by the ban,' it said.  Shipments of non-basmati rice make up 17 per cent of the total rice imports. 
 
Nevertheless, there could be supply disruption and the Singapore Government will do 'what we can to minimise the impact'. 'We will not be able to completely mitigate disruptions to our food supply,' the SFA said. 
 
The agency said consumers 'are encouraged to be flexible and adaptable' by switching to other varieties of rice, or other sources of carbohydrates 'in the event of disruption'. 
 
Imports from 30 nations
 Singapore has a multi-pronged strategy of import diversifications and stockpiling to manage supply chain disruptions to rice imports, it said. The island-nation imports rice from over 30 countries.
 
The statement comes in the wake of India’s July 20 ban on exports of white rice and prices of rice soaring in the global market above $600 a tonne. Indian parboiled rice and Thailand’s 25 per cent broken are the only varieties ruling below $600. 
 
The Indian government banned exports of white rice as part of its efforts to control rising foodgrain prices in a crucial year ahead of the 2024 Parliament elections. The move was a measure to overcome any supply shortage in view of rains damaging paddy crops in Punjab and Haryana, besides deficient rains affecting the sowing of paddy in Karnataka, West Bengal, Chhattisgarh, Tamil Nadu, and Andhra Pradesh.

 Source:  thehindubusinessline.com
22 Aug, 2023 News Image India s exports to FTA countries contract at a faster rate.
Most of the free trade agreements that India has entered into over the years are not delivering the expected benefits. Giving a starker view of this, a recent analysis has showed that exports to the countries with which India has no bilateral trade pacts are holding up better in the current scenario, as compared to the shipments to the FTA partner countries.
 
In the first six months (January-June) of 2023 merchandise exports to FTA partners declined 18.2% on year while the overall decline in shipments during the period was only 8.1%, according to the analysis by trade policy think tank Global Trade Research Initiative.
 
The decline in exports to FTA partners brought down their share in overall exports to 26.8% in the Jan-June 2023 from 30.1% in the same period last year. The FTA partners with the biggest decline in exports are South Asia Free Trade Area AFTA (33.2%), South Korea (30%), Australia (25.4%), Japan (15.6%) and ASEAN (13.4%), according to GTRI.
 
While overall imports from FTA partners have also declined during the six months by 11%.Overall exports to FTA countries were $ 58.6 billion in the first half of 2023, down from $71.6 billion in the year ago periodr. Imports during Jan-June declined to $ 88.6 billion from $ 99.5 billion in the year ago.
 
The trade deficit with FTA partners also increased to $ 30 billion in January-June this year from $ 27.9 billion the same period last year.More than half of this deficit or $ 16.1 billion is accounted for by Asean alone which explains the insistence of India on review of Asean-India Trade in Goods. Last year the deficit during the same period was $ 19.3 billion.
Only with SAFTA is India running a surplus of $ 10.3 billion on exports of $ 12.7 billion and imports $ 2.4 billion. Last year’s surplus with Safta which includes Afghanistan,Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka was $ 16.7 billion.
 
Deficit with Australia ($ 4.2 b), Japan ($6.2 b), Korea ($ 6.7b), UAE ($7.2b). Overall India’s merchandise exports in Jan-June were $ 218.7 billion, down 8.1% from last year. Imports during the period were at $ 325 billion, down 8.3% on year. Services imports touched US$ 89.8 billion during January-June 2023, exhibiting a growth of 8.1 % over the same period last year (Jan-June 2022). Services exports reached a turnover of $166.7 billion during January-June 2023, exhibiting a healthy growth of 17.7 % over the same period last year .Services imports touched$ 89.8 billion during in the first half of 2023, exhibiting a growth of 8.1 % over last year.
 
India’s foreign trade – Exports and Imports of Merchandise and Services – reached$ 800.6 billion during January-June 2023.

 Source:  financialexpress.com
22 Aug, 2023 News Image GI tag a boon for makhana farmers .
Thanks to its nutritional value, makhana is fast becoming a popular food product across the world. As Bihar is the largest producer of makhana, the state agriculture department has taken several steps to help farmers engaged in its production. State agriculture department secretary Sanjay Agarwal tells TOI’s Sheezan Nezami about steps being taken by the government to boost makhana production in the state. Excerpts:
Where does the state stand in the production of makhana?
At around 80%, Bihar accounts for the highest production of makhana in the country. Makhana is mainly produced in 10 districts in the state – Darbhanga, Madhubani, Sitamarhi, Purnia, Katihar, Saharsa, Supaul, Madhepura, Araria and Kishanganj. The area of makhana cultivation is expanding in the state every year. Farmers are shifting towards this crop, as profit per acre is almost double compared to paddy or other crops.
How has geographical indication (GI) tag for makhana helped farmers?
The government of India awarded the GI tag to ‘Mithila Makhana’ on August 16 last year, in a bid to help farmers get maximum price for their produce. This has helped this unique product in getting more recognition in the international markets.
What initiatives are being taken by the state agriculture department to promote makhana production in Bihar?
Various steps are being taken, right from pre-production to the post-production. We have the Makhana Vikas Yojana scheme for facilitating farmers. With the support of Bhola Paswan Shastri Agriculture College, Purnia and National Research Centre for Makhana in Darbhanga, seed production of high yield varieties is being done as well as distributed among the farmers. Our department also organises demonstrations on makhana cultivation in farmers’ fields or ponds, using the best method. In fact, a Centre of Excellence for Makhana is being established in Purnia district.
 
What are the challenges before makhana farmers?
Storage is a real challenge for them, as it needs a lot of space and dry surroundings. Small farmers usually sell their produce immediately. From this financial year, we have started providing hermetic storage bags to farmers in which they can store their produce safely for more than six months. We are also planning to extend assistance for constructing dedicated storage infrastructure for this produce in makhana-growing districts.
Tell us about makhana export
It is being exported to various countries, including the US, United Arab Emirates, Nepal, Canada and Australia. Annually, nearly 200 metric tonne of makhana is exported and we have around 85% of the share. Apart from other countries, we are also tapping the markets in other states, especially in metro cities.

 Source:  timesofindia.indiatimes.com
21 Aug, 2023 News Image FTA talks: Investment treaty to figure prominently during UK's high-level team visit to India this week.
Issues pertaining to the proposed bilateral investment treaty being negotiated between India and the UK along with a free trade agreement will figure prominently during the visit of a high-level team from Britain here, an official said. UK Secretary of State for Business and Trade Kemi Badenoch and Director General for Trade Negotiations at the Department for Business and Trade (DBT) Amanda Brooks are visiting India this week.
 
Besides participating in the G20 Trade and Investment Ministerial Meeting in Jaipur on August 24-25, the UK minister will hold bilateral talks with Commerce and Industry Minister Piyush Goyal on August 26 here and review the progress of talks on the free trade agreement.
 
The UK minister is also expected to meet Finance Minister Nirmala Sitharaman on various issues, including the bilateral investment treaty.
 
Brooks would also meet senior officials of the department of economic affairs in the finance ministry, which is leading the negotiations on the investment treaty.
 
These meetings assume significance as negotiations for the free trade agreement have reached a final stage. Investment treaty is being negotiated as a separate agreement between India and the UK and the two countries are looking at signing both the agreements simultaneously.
 
Though talks for most of the chapters have been closed, both sides have intensified negotiations to iron out differences on issues including rules of origin, intellectual property rights and the investment pact.
 
Sources said that at present the investment treaty is a hurdle in the conclusion of both the agreements simultaneously, however, negotiations are going on to bridge the differences.
 
These investment treaties help in promoting and protecting investments in each other's countries. The main point of contention involved in this pact is about the mechanism for the settlement of disputes.
 
India has proposed to first utilise all local judicial remedies for settlement of disputes before initiating an international arbitration.
 
India has earlier lost two international arbitration cases against British telecom giant Vodafone and Cairn Energy plc of the UK over the retrospective levy of taxes.
 
On automobiles and whiskey, an important demand of the UK, India has agreed to give duty concessions to British industry. Popular British whiskey brands include Johnnie Walker, Black Label and Chivas Regal.
 
To provide duty concessions in the automobile sector, several rounds of consultations have been held with the domestic players in India. According to an expert, the UK-based auto makers like JLR, Bentley, Rolls-Royce, and Aston Martin, cater to the luxury segment, while Indian manufacturers are mostly in the mass segment.
 
The 12th round of talks between India and the UK is in progress here. Out of the total 26 chapters in the proposed FTA, 19 have been closed. Investment is being negotiated as a separate agreement (bilateral investment treaty) between India and the UK.
 
The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duties.
 
On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, and certain confectionary items.
 
Britain is also looking for more opportunities for UK services in Indian markets in segments such as telecommunications, legal and financial services like banking. The bilateral trade between the countries increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22.

 Source:  economictimes.indiatimes.com
21 Aug, 2023 News Image GI tag a boon for makhana farmers .
Thanks to its nutritional value, makhana is fast becoming a popular food product across the world. As Bihar is the largest producer of makhana, the state agriculture department has taken several steps to help farmers engaged in its production. State agriculture department secretary Sanjay Agarwal tells TOI’s Sheezan Nezami about steps being taken by the government to boost makhana production in the state. Excerpts:
Where does the state stand in the production of makhana?
At around 80%, Bihar accounts for the highest production of makhana in the country. Makhana is mainly produced in 10 districts in the state – Darbhanga, Madhubani, Sitamarhi, Purnia, Katihar, Saharsa, Supaul, Madhepura, Araria and Kishanganj. The area of makhana cultivation is expanding in the state every year. Farmers are shifting towards this crop, as profit per acre is almost double compared to paddy or other crops.
How has geographical indication (GI) tag for makhana helped farmers?
The government of India awarded the GI tag to ‘Mithila Makhana’ on August 16 last year, in a bid to help farmers get maximum price for their produce. This has helped this unique product in getting more recognition in the international markets.
What initiatives are being taken by the state agriculture department to promote makhana production in Bihar?
Various steps are being taken, right from pre-production to the post-production. We have the Makhana Vikas Yojana scheme for facilitating farmers. With the support of Bhola Paswan Shastri Agriculture College, Purnia and National Research Centre for Makhana in Darbhanga, seed production of high yield varieties is being done as well as distributed among the farmers. Our department also organises demonstrations on makhana cultivation in farmers’ fields or ponds, using the best method. In fact, a Centre of Excellence for Makhana is being established in Purnia district.
 
What are the challenges before makhana farmers?
Storage is a real challenge for them, as it needs a lot of space and dry surroundings. Small farmers usually sell their produce immediately. From this financial year, we have started providing hermetic storage bags to farmers in which they can store their produce safely for more than six months. We are also planning to extend assistance for constructing dedicated storage infrastructure for this produce in makhana-growing districts.
Tell us about makhana export
It is being exported to various countries, including the US, United Arab Emirates, Nepal, Canada and Australia. Annually, nearly 200 metric tonne of makhana is exported and we have around 85% of the share. Apart from other countries, we are also tapping the markets in other states, especially in metro cities.

 Source:  timesofindia.indiatimes.com
21 Aug, 2023 News Image Rice sowing area stood at 360.79 lakh hectares.

The Department of Agriculture & Farmers’ Welfare has released progress of area coverage under kharif crops as on 18th August 2023.

Area: In lakh hectare

S.

No.

 

Crop

Area Sown

          2023

         2022

1

Rice

 360.79

345.79

2

Pulses

 114.93

126.52

a

Arhar

           40.92

43.72

b

Urd bean

           30.19

35.62

c

Moong bean

          30.39

33.07

d

Kulthi

           0.25

          0.22

e

Other pulses

           13.18

13.89

3

Shri Anna cum Coarse cereals

176.39

173.60

a

Jowar

            13.75

14.83

b

Bajra

          69.70

68.94

c

Ragi

          7.04

         5.98

pib.gov.in

21 Aug, 2023 News Image After UN body, 3 nations ask India to resume rice exports.
Singapore, Indonesia and the Philippines, key diplomatic partners of India, have appealed to New Delhi to resume rice exports to their nations following India’s decision to suspend non-basmati shipments to check prices.
 
Singapore has requested around 110,000 tonnes of rice from India. In June, Indonesia announced plans to import 1 million tonnes (mt) of rice from India to protect against disruptions caused by the El Nino weather pattern. The Philippines also relies on India for rice supplies.
 
Recently, the UN World Food Programme sought 200,000 tonnes of Indian rice for its humanitarian operations amid what it called 'catastrophic levels' of global food insecurity, triggered by the covid-19 pandemic and the Ukraine war, two people aware of the development said. Bangladesh is also in talks with India for supplies of some agricultural commodities, including rice.
 
Amid a surge in retail inflation to a 15-month high, India has taken various measures, including export curbs, to control escalating food prices. In his Independence Day speech to the nation, Prime Minister Narendra Modi pledged to bring down inflation as he readies to fight general elections, due by May, for a third term in office.
 
Queries mailed to the Singapore high commission in New Delhi, the embassies of Indonesia and the Philippines, and India’s department of food and public distribution remained unanswered. The Singapore Food Agency (SFA) recently announced that it was in talks with India for the resumption of rice exports. 'SFA is working closely with importers to increase the import of different varieties of rice from various sources. Singapore is also in close contact with the Indian authorities to seek exemption from the ban,' read a press release from the agency.
 
'We diversify and import rice from over 30 countries. In 2022, India accounted for approximately 40% of Singapore’s rice imports. Only the import of non-basmati rice is affected by the ban. The import of non-basmati rice from India makes up approximately 17% of Singapore’s rice import,' it added.
 
India is the world’s biggest rice exporter, accounting for about 40% of the global rice trade. The 20 July-move to curb exports of non-basmati white rice has put pressure on rice prices in global markets. Neighbouring countries, including Bangladesh and Nepal, are heavily dependent on Indian rice, while some African countries are purchasers of broken rice.
 
'To ensure adequate availability of non-basmati white rice in the Indian market and to allay the rise in prices in the domestic market, the government of India has amended the export policy of the above variety from ‘free with export duty of 20%’ to ‘prohibited’ with immediate effect,' the government announced in July.
 
'But there is no change in the export policy of non-basmati rice (parboiled rice) and basmati rice, which form the bulk of rice exports. This will ensure that the farmers continue to get the benefit of remunerative prices in the international market,' read a press release by the ministry of consumer affairs, food and public distribution.
 
Food and beverages inflation, as measured by the Consumer Food Price Index, which accounts for 45.86% of the overall consumer price basket (CPI), rose to 10.57% in July against 4.63% (revised) in the preceding month. In the case of cereals and products, retail inflation quickened to 13.04% in July from 12.65% in June.
 
Economists predict that the food price surge is likely to persist for the next few weeks, which will likely keep the CPI inflation elevated till the third quarter of the current fiscal and expect the headline CPI inflation to stay above the 6.5% mark in August, before cooling off in September.

 Source:  livemint.com
21 Aug, 2023 News Image India, Asean decision on review of free trade agreement in goods expected tomorrow.
A decision on a long pending issue of initiating a review of the existing free trade agreement on goods between India and the 10-nation Asean bloc may be taken up during a meeting in Indonesia on Monday, an official said. The issue will come up for discussion and decision during the India-Asean economic ministers meeting on Monday. The meeting is being held on the sidelines of the ongoing meeting of the Economic ministers of ASEAN.
 
An Indian delegation is already there for the deliberations.
 
India has asked for the review of the agreement with an aim to eliminate barriers and misuse of the ASEAN India Trade in Goods Agreement, which came into effect on January 1, 2010.
 
'The agenda will come up for discussion and decision tomorrow during the India-Asean (Association of Southeast Asian Nations) economic ministers meeting,' the official said.
 
Members of the Asean include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
 
In general, such review exercise includes matters like implementation issues, rules of origin; verification process and release of consignments; customs procedures; further liberalisation of trade in goods; and sharing and exchange of trade data.
 
India on several platforms has asked for a review of the agreement.
 
A trade expert said that the trade arrangement has to be reciprocal, mutually beneficial and should balance the aspirations of all the partners.
 
'Once the decision on the launch of the Asean-India Trade in Goods Agreement (AITGA) review is taken, formal negotiations for the review will start,' the official said, adding that 'AITGA review has been under consideration for a number of years. Joint committee on review has been constituted. Joint committee has done two meetings virtually so far on the issue'.
 
The AITGA entered into force on January 1, 2010, which created one of the world's largest free trade areas. This was followed up by the ASEAN-India Trade in Services Agreement and another pact on investments both of which were implemented in 2015.
 
Recently, Commerce and Industry Minister Piyush Goyal had stated that the India-Asean trade agreement is the 'most ill-conceived' one.
 
Trade experts said that the review demand is there because India's exports to Asean have been affected due to non-reciprocity in FTA concessions, non-tariff barriers, import regulations and quotas.
 
Concerns have also been raised about the routing of goods from third countries in India through Asean members by taking the duty advantages of the agreement. Asean has a much deeper economic engagement with China through the Asean China Trade and Goods Agreement.
 
During 2010-11, India's exports to ASEAN increased to USD 25.7 billion from USD 18.11 billion in 2009-10. However, imports in 2010-11 rose to USD 30.6 billion from USD 25.8 billion in 2009-10.
 
Similarly, during 2022-23, India's exports to ASEAN increased to USD 44 billion from USD 42.32 billion in 2021-22. However, imports jumped to USD 87.57 billion in 2022-23 as against USD 68 billion in 2021-22.
 
The trade deficit has widened to USD 43.57 billion in the last fiscal from USD 25.76 billion in 2021-22. It was just USD 5 billion in 2010-11.

 Source:  economictimes.indiatimes.com
21 Aug, 2023 News Image India s trade policy is working great for Vietnam.
The printed circuit board assembly, the camera module, the touch-screen display and the glass cover.
 
Together, they account for three-fourths of the bill-of-materials cost of a smartphone. Vietnam, the world’s second-biggest exporter of handsets after China, sources these and most other components at zero tariffs from free-trade partners. But India, which has few such accords of its own but is still keen to emulate the manufacturing powerhouse in its neighborhood, has customs duties as high as 22%.
 
The result? Making mobile phones in the world’s most-populous nation now comes embedded with a cost disadvantage of 4%, says the 2023 edition of a comparative study of tariffs by India Cellular & Electronics Association, an industry body.
 
This extra burden is something India has deliberately imposed on assemblers even as it began remunerating them for its many existing cost disabilities, especially poor infrastructure and red tape. The so-called production-linked incentives, or PLI, promise to pay firms as much as 4% to 6% of their incremental sales for five years.
 
One way to think about this is that India is first damaging its competitiveness, and then compensating firms to set up factories in the country. Another perspective is that the handouts are being 'supported through indirect revenue from increased indirect taxes from the same sector,' as the ICEA report says.
 
Policymakers are convinced that their strategy is a masterstroke. The PLI program, which kicked in for mobile phones in October 2020, is being touted as a success. Annual production has surged more than 60% to $42
billion. Of this, $11 billion is exported, compared with virtually nothing when Prime Minister Narendra Modi came to power in 2014. From being a net importer, India has become a net exporter of handheld devices.
 
Elsewhere in Asia, the contest is about semiconductors, the high-value heart of communication, transportation, artificial intelligence, and a lot else besides. From Thailand to Singapore and Malaysia, several countries are now in the fray to shift the locus of front-end chip manufacturing from East to Southeast and South Asia. India is trying to
step on that ladder via packaging and testing. While those plans are yet to bear fruit, cheap labor has already made the nation an upcoming rival to Vietnam in a low-value-added activity like assembling electronics parts.
 
The pandemic and President Xi Jinping’s souring relations with the West have changed the thinking of multinationals. A Foxconn Technology Group plant in the southern Indian state of Tamil Nadu is preparing to deliver
iPhone 15s only weeks after they start shipping from factories in China, Bloomberg News reported on Wednesday. The likes of Apple Inc. are reluctant to rely too heavily on the People's Republic to feed global demand. Their quest for a China+1 strategy has presented India with a once-in-a-generation chance to storm the supply chain. Vietnam’s phone exports last year were six times the South Asian nation’s thanks to Samsung Electronics Co. It is this gap that New Delhi wants to close. However, conflating correlation with causation could jeopardize this goal.
 
Just because an apparent change in the country’s fortunes has occurred despite a lurch toward protectionism, government ministers are angrily dismissing critics who dare to question the wisdom of the tariff-subsidy combo. The official view is that as long as exporters can claim back the duties on imported components, they won’t grumble about India’s cost disadvantage against Vietnam — not when they’re being paid generous PLI incentives.
 
Following up on this thinking, the Modi government in 2018 announced a 'calibrated departure' from more than two decades of greater trade openness, and raised import duties on mobile phones to 20% from 15%. That project has continued unabated. In 2020, the duty on printed circuit board assembly and display was raised by 11 percentage points. This year’s government budget cut the duty on camera lenses to zero.
 
That hasn’t made much difference. As the ICEA study shows, the accumulated increase from three years of changes still works out to nearly 5.6% of the bill of materials, or 3.6% of a phone’s total cost. Add the impact from the rupee’s 11% slide against the dollar since the start of last year — double the decline in the Vietnamese dong — and Indian-made phones would be uncompetitive by more than 4%, the ICEA says.
 
This cost may not be showing up in export performance because it is being borne by India’s 1.4 billion consumers. Costlier imports are hurting local demand amid high inflation. Component manufacturers have no incentive to become globally competitive if they can hawk whatever they make in their home market at an inflated price, shielded by tariffs.
 
Exporters, meanwhile, have every reason to keep importing components — and claim duty drawbacks. Self-reliance, the slogan under which the program is being sold to the public, may be an illusion. Raghuram Rajan, a University of Chicago economist and a former governor of the Indian central bank, has shown that after adding major parts that go into phones, the country may have become a bigger net importer than before.
 
The PLI incentives are on incremental production, but the tariffs are on total costs. When the handouts eventually end, the elevated duties would bite. India’s own history is littered with cautionary tales of excessive state control. Erecting protectionist walls didn’t work in the past. High tariffs and a newly imposed license requirement on imported computers, laptops and tablets — a measure that smacks of bureaucratic desperation, as my colleague Tim Culpan has written — may not help make India the next factory to the world even now.

 Source:  economictimes.indiatimes.com
21 Aug, 2023 News Image Centre imposes 40% duty on onion exports till December 31 to control rising prices.

The government on Saturday imposed an export duty of 40% on onions with immediate effect to check price rise and improve supplies in the domestic market. This export duty is valid till December 31, 2023.


 Source:  economictimes.indiatimes.com

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