The government on Wednesday allowed the exports of broken rice on the basis of permission given by the government for shipments to other countries for meeting their food security needs, though the export of broken rice is banned in general.

 

'The export policy of broken rice is prohibited, however, export will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their government,' the Directorate General of Foreign Trade (DGFT) said in a notification.

 

India had banned the exports of broken rice and imposed a 20% duty on exports of various grades in September.

 

In December last year, it allowed the exports of organic non-Basmati rice including organic non-Basmati broken rice.

 

China is the largest importer of Indian broken rice at $418.29 million in FY23 followed by Senegal, Indonesia and Vietnam.

The Bangladesh Bank has permitted Sonali Bank and Eastern Bank Limited (EBL) to open nostro accounts in rupee with the State Bank of India and ICICI Bank.

 

Only the income earned in rupee from exports can be deposited into these accounts. And the money deposited in these accounts can only be used to meet the cost of goods and services imported from India.

 

Besides, in the case of imports, advance payments can be made from these accounts with approval from the Bangladesh Bank. Overdrafts and short-term loans can be taken against these accounts following the central bank's guidelines for forex transactions.

 

Sonali, EBL apply to open nostro accounts

 

Sonali Bank and EBL have already applied to the Reserve Bank of India for opening nostro accounts, according to officials of the two Bangladeshi banks.

 

A nostro account refers to an account that a bank holds in a foreign currency in another bank. nostros, a term derived from the Latin word for 'ours', is frequently used to facilitate foreign exchange and trade transactions.

 

Talking to The Business Standard, EBL Managing Director Ali Reza Iftekhar said, 'The Bangladesh Bank has given us the approval to open a nostro account in Indian banks.'

 

Accordingly, an application has been sent to the Reserve Bank of India for opening a nostro account in the State Bank of India, he added.

 

Amid the dollar crisis caused by the Russia-Ukraine war, there have been talks for months on settling parts of bilateral trade in local currencies, enabling Bangladeshi businessmen to sell goods or services to Indian counterparts for rupees.

 

Similarly, Indian businessmen will sell their goods and services to Bangladeshi businessmen for taka. 

 

It was discussed that Sonali Bank and EBL will open accounts with the State Bank of India and ICICI Bank. Both the Indian banks will also open similar accounts with the two Bangladeshi banks.

 

But at one stage of the discussions, the Indian side asked for transactions only in rupee and Bangladesh agreed.

 

Banks hope to be ready by June

 

Officials from the two banks concerned hope the banks of the two countries will be able to finish preparations for such transactions by next June. After that, the official announcement will be made regarding the opening of LCs under the initiative.

 

Banks other than Sonali Bank and EBL will be able to conduct transactions with India through these two banks in this manner.

 

'Initially we said the Indian banks will open vostro accounts in our banks. But now the Indian side says it will not be necessary. Transactions can be done without opening an account in Bangladesh,' Ali Reza said.

 

A vostro account is an account held by a foreign bank in domestic currency at our bank.

 

'Many transactions will not be possible in the beginning. You have to proceed step by step. As much as rupees will be available against Bangladesh's exports, the liabilities of import from India has to be paid with the same amount of rupees,' said Ali Reza Iftekhar.

 

In the fiscal 2021-22, Bangladesh's exports to India amounted to $2 billion, while imports from India to Bangladesh were approximately $13.69 billion. Over the past two years, Bangladesh's exports to India have increased, and it is expected that the volume will further increase.

 

Majbaul Haque, executive director and spokesperson of Bangladesh Bank, recently told TBS that the central bank of India had issued guidelines for direct transactions in rupees several months ago.

 

'Bangladesh has reviewed the matter in the light of this decision of the Reserve Bank of India and has taken a policy decision to conduct bilateral transactions in rupees.'

 

In a commerce minister-level meeting of the two countries held in New Delhi in December last year, the Indian side gave a verbal proposal to use their rupee in bilateral commercial transactions. Bangladesh then asked India to make a formal proposal.

 

RBI, the Indian central bank, in a circular on 11 July last year, has allowed international trade transactions to be settled in rupees. It is said that all import-export transactions will be in rupee. The exchange rate between the two countries will be market-based.

 

India trades in rupee with 18 countries 

 

In March, Indian Union Minister of State for Finance Bhagwat Krishnarao Karad told the Rajya Sabha that the Reserve Bank of India has already arranged for trade with 18 countries to be settled in rupees. 

 

This arrangement has already started with Malaysia. India wants to increase the value of the rupee in the international market. For this, the country has initiated discussions with several countries, including Russia, besides Bangladesh.

 

Bangladeshi businessmen and analysts, however, recommended proceeding with caution about this and said this arrangement may create dependency on rupee.

 

Besides, Bangladesh has a big trade deficit with India and therefore, it may be at risk in dealing in rupees.

 

Businessmen, bankers express apprehension

 

A businessman, on condition of anonymity, said he fears that at some point it will be seen that banks in India are not accepting LCs in any currency other than rupees. Then rupees have to be bought with dollars and in that case, the exchange rate may suffer losses.

 

A banker also thinks so. He said the raw materials of the products that are being exported to India are imported from other countries. 

 

'Where will the exporter get the money to import the raw material by exporting in rupees? There is doubt if any bank will be found in the country to buy dollars with rupees. As a result, such initiatives will take time to succeed.' 

 

And exports to India should increase, he added. 

 

Of late, there have been discussions in countries around the world about free trade agreements and currency swaps to increase bilateral trade. Asian Clearing Union (ACU) countries are negotiating payment of import duties in their own currencies.

 

Last year, Bangladesh Bank approved the opening of LCs in the Chinese currency yuan. Some banks including Uttara Bank have opened such LCs. Bangladesh is also working on signing a currency swap agreement with Russia.

 

Amid the rise in commodity prices due to the Russia-Ukraine war, several countries are facing a dollar crisis. Apart from this, due to geopolitical reasons, different countries around the world are becoming interested in doing transactions in their own currencies, avoiding the dollar. India also wants to increase international transactions in its currency.

 

The BRICS countries – India, Russia, China, Brazil and South Africa – have also started discussions on starting import and export in their own currencies, avoiding the dollar. Saudi Arabia has also decided to export fuel oil to China in yuan.

 

Economist advises proceeding with caution

 

Executive Director of South Asian Network on Economic Modeling (Sanem) Selim Raihan thinks the initiative to trade in other currencies other than the dollar is fine in the current foreign currency crisis. 

 

'And it is better if it can be done with a big trading partner like India. But we need to check how realistic it is for Bangladesh. Because the import of Bangladesh from India is about 15 billion dollars. And Bangladesh is exporting 2 billion dollars to India,' he said.

 

'Where will Bangladeshi traders or banks get enough rupees to pay the entire import bill from India? If rupees have to be bought with dollars, it needs to be reviewed,' he added.  

 

On the other hand, Indian currency is not an internationally convertible currency. Therefore, the rupees available against exports to India cannot be used to meet the liabilities of any other country.

 

For this reason, Selim Raihan says, Bangladesh should do the transaction in rupees as much as it will get from export to India. If the rupees earned by Bangladesh can be used to import from India, it will reduce the pressure on the dollar.

India will despatch around 1.05 million tonnes of food grains to Nepal, Indonesia, Senegal and Gambia as part of its economic diplomacy in the current financial year, waiving curbs on exports.

 

India banned wheat and broken rice exports and imposed a 20% export duty on non-basmati rice varieties last year to keep prices down.

 

In what is likely to add heft to India’s role in providing food security on the global stage, the department of food and public distribution has allowed exports of 300,000 tonnes wheat to Nepal; 200,000 tonnes of broken rice to Indonesia; 500,000 tonnes broken rice to Senegal, and 50,000 tonnes of broken rice to Gambia on a request by external affairs ministry. This comes despite low domestic wheat stocks.

 

The Food Corp of India (FCI) so far has procured a little over 26 MT wheat in the 2023-24 (October-March) rabi marketing year against a target of 34.5 MT. A hot February and heavy rains in March and April lowered wheat production to below the agriculture ministry’s second estimate of 112.2 MT. As per government officials, the amount procured so far will be enough to meet wheat requirement for the public distribution system (PDS). After ensuring 18.5 MT for PDS, there will be 8.7 MT available in the central pool, which will be more than sufficient for the open market sale scheme if required. Hence, there is no cause for concern, the government claims.

 

In the case of rice, the government had 26.5 MT rice in its central pool as of 1 May. Up to 21 May, FCI had procured 77.2 MT paddy in the ongoing 2022-23 (April-September) kharif marketing season and 3.2 MT paddy in the current 2023-24 rabi marketing season against an estimated target of 15.7 MT.

 

In response to Mint’s query, the Department of Food and Public Distribution said it deals with the 'import and export of only wheat and non-basmati rice from central pool stocks available with FCI. WTO norms inter-alia restrict the export of foodgrains from public stocks procured for domestic consumption through welfare schemes.

 

However, humanitarian assistance, fully in grant form under the reference of the Ministry of External Affairs, to the deserving countries, is only allowed. During the 2022-23 financial year, no quantity of wheat and rice was supplied or exported to any foreign countries from the department’s central pool stocks,' the official said. Queries sent to the external affairs ministry remained unanswered.

 

Wheat and non-basmati rice exported as humanitarian assistance from central pool stocks during FY15 to FY22 to countries like Sri Lanka, Afghanistan, Zimbabwe, Bhutan, Myanmar, Mozambique among others was 256,427 tonnes, the official disclosed.

 

'In the past two years, foodgrains have been provided to some countries as humanitarian aid on the recommendation of Ministry of External Affairs by DGFT. The data will be available with MEA or DGFT,' the official notified.

 

Emails sent to MEA, Embassy of Nepal on Friday containing queries remain unanswered till press time.

 

Last year, until 22 June of FY23, India shipped 1.8 MT wheat, including 33,000 tonnes of 50,000 tonnes committed to Afghanistan as part of humanitarian assistance, said then Food Secretary Sudhanshu Pandey. Other than Afghanistan, India also exported food grains to Bangladesh, Bhutan, Israel, Indonesia, Malaysia, Nepal, Oman, Philippines, Qatar, South Korea, Sri Lanka, Sudan, Switzerland, Thailand, UAE, Vietnam and Yemen during last financial year.

The Federation of Indian Export Organisation and the Ministry of Commerce, Government of India, will organise a capacity-building programme for local artisans and entrepreneurs for promotion of products with Geographical Indications tag, in the city on Friday.

 

The focus will be on export of agarbathi, silk, traditional paintings, sandalwood oil and soap, jasmine, betel leaf, rosewood inlay, Ganjifa paintings of Mysuru, and the sessions will be held in association with District Industries Centre and the Mysore Chamber of Commerce & Industry and MSME Development Institute.

 

The programme will be held at Hotel Pai Vista from 10.30 a.m. and the organisers said that the sessions will help create awareness among the entrepreneurs, start-ups, and business professionals about various opportunities available in the international market for GI products.

 

In addition, the participants will also be apprised of support and the facilitation being offered by both State and Centre governments under the GI tag initiative for promotion of exports.

 

Businessmen and merchants, manufacturers, entrepreneurs, start-ups involved in manufacture and export of GI products will participate and take advantage of the deliberations and interactions with experts.

 

Senior officials from the office of the Additional Director General of Foreign Trade, Bengaluru, DIC Mysore, Handicrafts Service Centre, MCCI, FIEO, MSMEDI will also interact with the participants.

The countries and economic blocks with which India is negotiating trade and economic agreements want to fast-track negotiations and reach a conclusion, commerce and industry minister Piyush Goyal said Wednesday. 'Everybody wants us to fast-track agreements. Free-trade part is separate. They want an agreement…,' he said at a CII’s Annual Conference.

 

India is at present negotiating such agreements with Canada, EFTA (European Free Trade Association), the UK, and the European Union (EU) among others.

 

'It shows the increased importance of India in the global order,' the minister said. 'We have to choose whether we are going to be bold, whether we are going to engage with confidence or are going to let this opportunity go by,' he said.

 

'FTAs are two way traffic… I feel very sad when I am being told sometimes that I (industry) want access to the EU market, but please do not allow them to come into our market.'

 

Goyal said that no other developing country in the world is in such a 'sweet spot' as India is.

 

'I believe this is a compelling case for investments, for growth and for expanding our international outreach, for bringing technology, for bringing innovation into the country,' he said, suggesting the industry should focus on quality, innovation and skilled manpower.

 

On exports, the minister said that India will achieve $2 trillion worth of goods and services exports by 2030.

He suggested the industry expand markets with an open mind, and engage with the world.

 

'Look at our import basket, the basket largely gets affected by oil, which will have its own trajectory, possibly a lowering trajectory or a downward trend in the years to come. Our export basket has all the things that the world wants,' he said.

 

He said the India has strong foreign exchange reserves and the country is in a comfortable position to meet all the requirements even in any worst-case scenario in the next five-six years.

 

India’s forex reserves jumped $3.553 billion to $599.529 billion for the week ended May 12, according to data released by the Reserve Bank of India.

The Eurasian Economic Union (EAEU) has decided to expedite the proposed free trade agreement with India that would give Indian companies market access to resource-rich Eurasia where China is making deep inroads.

 

The decision was taken at the EAEU meeting under Russia's presidency in Moscow on Wednesday and Thursday. The EAEU comprises Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.

 

The EAEU meet, which was attended by the presidents of Russia, Kazakhstan and Kyrgyzstan besides over 2,000 delegates, also discussed synergies between the grouping and Brics-SCO ahead of the Shanghai Cooperation Organisation summit in India in July and the Brics (Brazil, Russia, India and China) summit in South Africa in August.

 

Meanwhile Foreign Minister S Jaishankar met Russian Ambassador Denis Alipov here on Thursday evening. 'Discussed our bilateral cooperation, including in the IRIGC-TEC framework. Looking forward to taking that to a higher level. Also spoke about the forthcoming BRICS Foreign Ministers’ meeting in South Africa,' Jaishankar tweeted following the meeting.

 

During his visit to India last month, Russian deputy prime minister Denis Manturov had discussed the FTA in detail with external affairs minister S Jaishankar. During a dialogue hosted by Ficci, Manturov and Jaishankar had said that they had entered 'advanced negotiations' over the FTA.

 

'We pay special attention to the issues of mutual access of production to the markets of our countries. Together with the Eurasian Economic Commission, we are looking forward to intensifying negotiations on a free trade agreement with India,' Manturov had said, referring to the executive body of the EAEU.

 

Trade preferences and a mechanism that guarantees protection of investments 'will be in demand among Russian and Indian businessmen', according to Manturov.

 

Jaishankar had conveyed that the FTA talks between India and the Russian-led EAEU were hampered by the Covid pandemic. He said that the ministry of external affairs was in favour of resumption of talks because the proposed pact 'will make a real difference to trade relationship'.

 

Jaishankar had also mentioned how India and Russia have already met their bilateral trade target of $30 billion before the target year of 2025. He further stated that the two-way trade rose to $45 billion between April 2022 and February 2023.

 

Russian experts say an India-EAEU FTA makes better sense for India as there is a feeling that Russian companies are unlikely to compete in India as vigorously as the Chinese would do.

There is an urgent need to address World Trade Organisation (WTO) reforms on a top priority basis, said Anupriya Patel, Minister of State for Commerce and Industry.

 

India has been pitching for WTO reforms and also pressing for better dispute settlement mechanisms during G20 talks. The emphasis of these discussions would be on reaffirming WTO’s foundational principles, as embodied in the Marrakesh Agreement and its multilateral trade agreements, thus recognising the need for the open, fair, inclusive and transparent functioning of WTO.

 

The minister was speaking at the 2nd Trade and Investment Working Group meeting in Bengaluru on Wednesday.

 

Ms. Patel said the priorities pursued by G20 under India’s Presidency of the Trade and Investment Working Group were a mix of continuity from the previous Presidencies and these reflect upon the additional challenges which need global attention.

 

'There is an urgent need for addressing the World Trade Organisation reforms on a top priority basis as WTO assumes a vital role in ensuring fairness and transparency in global trade and forms the backbone of the multilateral trading system,’‘ she insisted.

 

In his remarks, Sunil Barthwal, Secretary, Department of Commerce said the process of WTO’s reformation necessitated inclusive efforts aimed at bolstering the multilateral trading system.

 

Som Parkash, Minister of State for Commerce and Industry, remarked that India was aiming to emerge as the global leader in the international trade landscape. The country was already set to become the second-largest e-commerce market globally.

 

'We have witnessed a remarkable transformation through embracing open markets and global integration. This has also been driven by a robust entrepreneurial spirit and steadfast government support,’‘ the minister noted.

The total foodgrain production in the country in 2022-23 is estimated to go up to a record 330.5 million tonnes (MT) from 315.6 MT with a record production of wheat, rice, maize, oilseeds and sugarcane, according to the third advance estimate of the Ministry of Agriculture & Farmers Welfare on Thursday.

 

The total production of wheat during 2022-23 is estimated at 112.7 MT, higher by 5 MT as compared to the previous year. The production of rice in the country is estimated at 135.5 MT which is higher by 6 MT as compared to the previous year's production.

 

The production of maize during 2022-23 is estimated at 35.9 MT, which is higher by 2.1 MT than the previous year's production.

 

While the production of nutri and coarse cereals is estimated at 54.7 MT, 3.6 MT higher than the previous year's production, that of sugarcane is estimated at 494.2 MT, 54.8 MT higher than last year.

 

The total production of pulses is estimated at 27.5 MT in 2022-23.

 

The production of soybean, rapeseed-mustard is estimated at 14.9 MT and 12.4 MT respectively, which is higher by 1.9 MT and 0.5 MT respectively than the production of the previous year.

 

The total oilseeds production in the country during 2022-23 is estimated at 40.9 MT.

 

The production of cotton is estimated at 34.3 million bales (of 170 kg each).

The FSSAI has issued a manual of methods of analysis of honey and sought comments from stakeholders on the same.  

 

The methods include determination of specific gravity, moisture, total reducing sugars, sucrose, fructose, total ash, acidity, hydroxyl methyl furfural, water insoluble matters and pollen and plant elements.  

 

According to the FSSAI, the test methods given in the manual are standardised / validated and were taken from national or international methods or recognised specifications, however it would be the responsibility of the respective testing laboratory to verify the performance of these methods onsite and ensure that it gives proper results before putting these methods in to use.

 

Meanwhile, the manual defines specific gravity as the ratio of the density of a substance to that of a standard substance. The determination of specific gravity shall be for all types of honey including carvia callosa and honey dew.  

 

The determination of Total Reducing Sugars, Sucrose and Fructose-Glucose Ratio (Titrimetric Method) looks for the difference in the concentrations of invert sugar multiplied by 0.95 to give the apparent sucrose content.

 

The free acidity is defined as the acidity titratable with sodium hydroxide up to the equivalence point.

 

And amongst other, diastase is defined as an enzyme that is found naturally in honey and degrades over time, especially when exposed to heat.

Ahead of the Kharif season, Prakritik Kheti Khushhal Kisan Yojana (PK3Y) in a bid to expansion is targeting to bring additional 30,000 Acre under natural farming in 2023-24 in Himachal Pradesh.

 

Agriculture Secretary Rakesh Kanwar on Wednesday asked the officials to engage with farmers to work on area expansion under natural farming ahead of Kharif season.

 

He said this should primarily include the existing farmers practicing natural farming, whose number has risen to 1.59 lakh farmers in the state.

 

 'The total area under natural farming in the state is around 50,000 Acre so far. The target is to bring additional 30,000 Acre under natural farming in 2023-24,' he said.

 

Chairing the review meeting of the Prakritik Kheti Khushhal Kisan Yojana here, Rakesh Kanwar asked the officials to reach out to the farmers with millet production plan as well for the kharif season and said they must do necessary arrangements for the same, including timely availability of seeds of millets to the farmers.

 

The officials must organize regular interaction of trained farmers with new farmers for experience sharing for awareness on the natural farming technique, he added.

 

He said the ATMA officials should identify some areas, where people are willing to go for natural farming on their own, and work out a strategy to declare them a natural village, panchayat or at any level.

 

The Secretary said the PK3Y should aim at assessing the production of the natural apples so that it could be well advertised in advance to see the response among buyers.

 

 'This would add to the marketing linkages for the natural produce,' he said.

 

State Project Director, PK3Y Naresh Thakur said around 52,000 farmers have so far been certified for natural produce through a self certification method devised under PK3Y.

 

He said there was a target to certify all the existing farmers.

 

Thakur asked the officials to devise a method so that the NGOs or Farmer Producer Organisations can also be brought under certification for agriculture and horticulture produce.

 

'A mechanism should also be there to certify the processed products like ghee of a desi cow, fruit jam etc for better marketing,' he said.