Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles Shri Piyush Goyal met the Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation in Foreign Office, Government of Italy, H.E. Mr. Antonio Tajani yesterday to review the entire gamut of bilateral trade and economic relations. Shri Goyal arrived in Rome yesterday for his two-day visit to Italy.

 

The Ministers exchanged views on how the India-Italy trade & economic partnership can be leveraged for growth across diverse sectors. During the meeting, both Ministers expressed happiness over elevation of the bilateral relations to the level of Strategic Partnership following the recent state visit of the Prime Minister of Italy, Ms. Giorgia Meloni to India.  Mr. Tajani suggested the formation of a Joint Working Group in the strategic areas such as space, technology, defence, agriculture, etc. to follow up on the important developments under these areas. 

 

Both Ministers further expressed satisfaction at the high growth in bilateral trade between India and Italy, which has reached around US$ 16 Billion in 2022 and resolved to expand it further. Shri Goyal briefed Mr. Tajani on the progress made on India-EU FTA negotiation. The Ministers underlined the importance of achieving a free, balanced and fair Free Trade Agreement and hoped that it would be concluded soon. They also agreed to the convening of the next session of the Joint Commission on Economic Cooperation (JCEC) in Rome in the last week of September 2023. 

 

Mr. Tajani suggested strengthening the Parliamentary friendship group diplomacy between the Parliaments of the two countries and exploring scope for having a cyber dialogue. Shri Goyal briefed Mr. Tajani about India’s G-20 priorities and extended an invitation to him for the G20 Trade Ministers Meeting in India in August 2023. Mr. Tajani  assured of his full support to make India’s G20 Presidency successful.

 

Shri Goyal emphasized on enhancing the bilateral cooperation in the field of clean energy to achieve sustainability  to mitigate the negative impact of climate change. He stated that  developed countries make the low cost climate financing and technology available to the developing countries to deal with the climate change issue effectively. 

 

Mr. Tajani gave the guided tour to Shri Goyal of the art gallery of Farnesina, the office of Foreign Ministry, Government of Italy.

Trade ministers of India and France have held discussions related to the ongoing talks for a free trade agreement between India and the European Union, the commerce ministry said on Wednesday. Commerce and Industry Minister Piyush Goyal was in Paris to attend India-France Business Summit and CEOs roundtable meet. He held bilateral meetings with several CEOs and French minister for Foreign Trade, Economic Attractiveness and French Nationals Abroad Olivier Becht.

 

'The ministers discussed priority areas related to India - EU FTA (free trade agreement) negotiations where issues related to market access were deliberated,' it said.

 

Goyal also said India is looking to buy 2,000 commercial aircraft in the next 10 years and there is a huge opportunity to make commercial aircraft in India to meet domestic and international demand.

 

With the purchase of Rafale and the recent Airbus order, more value has been added to this partnership, he added.

 

In January last year, India and the EU resumed negotiations for a free trade agreement, investment protection and Geographical Indications (GI).

 

Becht mentioned that bilateral trade was USD 15.1 billion in 2021-22, doubled in the last decade; and foreign direct investment (FDI) has been USD 10 billion from France which is a top foreign investor in India.

 

There is a will from French companies to invest in India, he added.

 

Goyal highlighted that by breaking language barriers trade can further be expanded. He also invited the French minister to India along with the French community on the sidelines of G20 Trade Ministers meet in August 2023.

 

Goyal also addressed a CEOs roundtable meet on April 11.

 

More than 50 CEOs from Indian and French companies participated at the roundtable. Sectors such as agriculture, tourism, defence, manufacturing, pharmaceuticals, textiles, aerospace were represented at the meet.

 

Along with both the ministers, perspectives were shared by Ambassador of India to France Jawed Ashraf; Vice-President, CII and Chairman & Managing Director, ITC Sanjiv Puri; Executive Director, International Energy Agency Faith Birol; and CEO, Danone Antoine de Saint-Affrique.

On Wednesday, the Secretary of the Department of Consumer Affairs, Rohit Kumar Singh, reviewed the stock disclosure status of tur and urad with major pulses producing and consuming states.

 

Senior officials from Andhra Pradesh, Delhi, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, and Uttar Pradesh attended the meeting.

 

According to an official statement, the registered entities and disclosed stock quantities were reviewed individually with the States, and areas requiring attention were identified to ensure that entities like importers, millers, stockists, and traders disclose their stocks.

 

While the number of entities registered in the stock disclosure portal has increased, it was observed that the actual number of stakeholders in certain States could be higher. The quantity of tur stocks disclosed as compared to production and consumption has also been found to be low in certain States.

 

To widen the coverage of market players, State governments were asked to look into the data pertaining to FSSAI licences, APMC registration, GST registration, warehouses and custom bonded warehouses, the statement said.

 

Last month, following a firming trend in prices of tur and urad, the Centre had directed the pulses trade to declare stock availability in a routine transparent manner. The imports of tur and urad are kept open till March 2024 to boost domestic supplies as output of these pulses during kharif 2022 was impacted due to erratic weather.

 

The States informed that they are intensifying surveillance and shared the steps taken to ensure mandatory registration and disclosure of stocks on the stock disclosure portal.

 

The States were directed to conduct verification of stocks held by various entities and take strict action on undisclosed stocks under relevant sections of the Essential Commodities Act, 1955 and the Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980.

 

In order to assess the situation on the ground, the Department of Consumer Affairs has also deputed 12 senior officers to different State Capitals and Districts across major tur producing and trading centres to obtain ground level feedback from various market players, millers and storage operators.

 

Cumbum grapes just received the Geographical Indication (GI) label. This is the famous Cumbum Panneer Thratchai from Tamil Nadu, commonly known as Cumbum grapes. Additionally, Malai Poondu from Kodaikanal, Srivilliputtur Palkova and Palani Panchamirtham have also been awarded the GI tag.

 

The Cumbum valley, located in Tamil Nadu's Western Ghats, is regarded as the "Grapes City of South India" and grows the Panneer Thratchai. This variety, sometimes known as Muscat Hamburg, accounts for over 85% of the grape-growing areas in Tamil Nadu.

 

Theni district is one of Panneer Thratchai's highest grape-producing locations. However, the 'Panneer' type is most closely linked with Cumbum Valley, where the agricultural area spans over 2,000 acres across ten villages. The Cumbum region's agroclimate and soil conditions are ideal for the cultivation of the Muscat varietal.

 

This cultivar is well-known for its rapid development and maturity. This ensures that the produce is available on the market nearly all year. The land's rich soil and water are considered to enhance the flavour of the natural fruit.

 

Grape bunches range in size from medium to large and are compact in nature. The grapes grown can be used to make wine, spirits, jams, canned grape juice, and raisins.

 

A French monk brought the Panneer grapes to Tamil Nadu in 1832. These grapes are high in vitamins, tartaric acid, and antioxidants, and they help to lower the risk of some chronic diseases. Apart from their purplish-brown color, they are also noted for their exceptional taste.

Madhya Pradesh’s popular Sharbati wheat, also called The Golden Grain, has bagged the Geographical Indication (GI) tag. Efforts were on to get it the GI tag for a very long time. While Sehore district is the largest producer of Sharbati wheat in the country, Madhya Pradesh is its largest producer and exporter.

 

Flour made from Sharbati wheat  is considered to be of the highest quality in the country. Farmers also get the highest level of prices for the most productive sharbati wheat in the district.

 

As the name suggests, Sharbati variety wheat is slightly sweeter in taste probably due to the presence of slightly more amount of simple sugars like glucose and sucrose as compared to other wheat varieties. 

 

MP's handicrafts get GI Tag

 

Recently, several handicraft products of Madhya Pradesh received the GI tags, including wrought iron crafts of Dindori, batik print of Ujjain, handmade carpet of Gwalior, stone craft of Bhedaghat in Jabalpur and handloom sarees and fabrics of Waraseoni.

The Centre, after receiving inputs from its own team on the quality of wheat crop arriving in mandis/ procurement centres, has decided to relax the norms for Punjab, Haryana and Rajasthan with a nominal value cut, while a similar decision for Uttar Pradesh is expected in a day or two.

 

Unseasonal rains and hailstorms in north west India during the second half of March has damaged the crop. The decision to relax norms is seen in the context of meeting the government’s own procurement target of 34.15 million tonnes (mt). Besides, it also helps the government thwart any political controversy after the Punjab cabinet passed a resolution urging the Centre to announce an immediate relaxation.

 

'There was no other alternative as it was already done for Madhya Pradesh, and any rejection of wheat citing non-conformance with standards, could have created unrest among farmers. Moreover, the government also wants to procure at least 29-30 mt of wheat,' said an official source.

 

According to the Food Ministry’s three separate orders for Punjab, Haryana and Rajasthan, wheat should be procured at a relaxed norm with a value cut of Rs 5.31/quintal, from the minimum support price of Rs 2,125/quintal, if the grain has lustre loss of more than 10 per cent and within 80 per cent. There will be no value cut and MSP has to be paid in case lustre loss is up to 10 per cent.

 

The Centre has also allowed relaxation for shrivelled and broken grains up to 18 per cent, with a value cut of up to Rs 32/quintal, against the current specification of 6 per cent in all the three states.

 

'Wheat having shrivelled and broken grains up to 6 per cent will be procured without a value cut. But for a subsequent increase of 2 per cent each in shrivelled and broken grains, the value cut will be Rs 5.31/quintal,' said an official.

 

For instance, if shrivelled and broken grains make up 10 per cent of a 100 kg bag, a farmer will receive Rs 10.62/ quintal less than MSP, and in case it is 18 per cent, he will receive Rs 31.87/quintal lower.

 

Haryana Chief Minister Manohar Lal Khattar and Deputy Chief Minister Dushyant Chautala have welcomed the Centre’s decision to relax the uniform specifications of wheat, but have requested the Centre to reconsider the value cut. The state government has also said that till the Centre takes a decision, Haryana will bear the amount of the value cut and farmers will receive the full MSP.

 

The Haryana Bharatiya Kisan Union (Charuni) President, Gurnam Singh Charuni, had earlier demanded withdrawal of the value cut decision.

 

The Punjab government has also welcomed the decision on relaxation. But unlike Haryana, it did not announce any relief on its own to compensate farmers on value cut. Punjab Food Minister Lal Chand Kataruchak was not available for comment.

The central government has scrapped export duty of 20% on rice of seed quality in the husk (paddy or rough).

 

Officials said the duty was scrapped after review of rice stocks. The exemption will be effective from April 11.

 

The centre in September, 2022 had imposed an export duty of 20% on Rice in Husk (Paddy or Rough), Husked (Brown Rice) and Semi-milled or Wholly milled Rice.

 

This was done to lower prices of rice and to make stocks available for the domestic market.

 

The measures did not affect export of basmati or parboiled rice.

 

Finance Ministry had said that changes in India’s rice-export rules have helped keep a check on domestic prices without reducing the availability for exports.

Food processing sector is sub-sector for the Indian Agriculture. India holds the number one position for producing spices, pulses, in milk productions & number two position for growing food grains such as wheat, rice, dryfruits, fruits, and vegetables.

 

However, when it comes to the value addition and processing then we are far behind even in comparison with the small countries in the world.

 

This sector is vital for the developing countries for job creation, reduce wastage, increase global trade, curb migration and most significantly providing better price realisation to farmers.

 

Likewise any other sector, there were serious impacts of Covid-19 on food processing sector. The complete value chain was disturbed due to lockdown in many parts of the country.  On the other hand, people have become more conscious about health, eating habits and products.

 

They are also conscious about sugar, salt, adhesive, nutrition in the products. There is significant growth for natural ingredient products made from haldi, tulsi and other medicinal plants.  There are no doubts that the trend will continue for next few years.

 

Job creation in food processing industry: Ideally the growth in the food sector should directly help job creation. Small processing units setup in the rural part of India are helping generate jobs and lower migration to urban cities. As per 'Human resource & skill gap requirement report', 13.4 Lakhs job will be generated by the food processing industry from FY 2020 to FY 2023.

 

The maximum jobs are created by a few sub-sector such as milling, dairy and aquaculture.

 

Big organisations have a strong focus on automation processes. This is the reason that more than 60% of employment is generated by the medium and small enterprises in the food sector.

 

    • Ready-To-Eat (RTE)- food market in India is projected to grow by $751.43 million during 2022-2026, progressing at a CAGR of 18.63% during the forecast period. The market is driven by the growing preference for convenience food products in working population and expanding retail chain market in India. Both ready to eat and ready to cook have significant growth rate for next 5 years.

 

Indian frozen foods market size has reached Rs 144.3 billion in 2022. Looking forward, the frozen food market will reach Rs 353.3 billion by 2028. The growth rate (CAGR) of 16% during 2023-2028. This segment is dominated the frozen vegetables and frozen meat.

 

The Indian soup market is primarily driven by the urban consumer. This sector is projected to grow from Rs 7,230.8 million in 2019 to Rs 9,023.2 million in 2024 at a compound annual growth rate of 4.5%, says Global Data, a leading data and analytics company.

 

Opportunities in Millet Products Development: United Nation has declared year 2023 Millet Year. India is world leader in millets production in the world with share of around 41% of total world production in 2020. India produces around 12 million MT of millets annually, according to Ministry of Agriculture and Farmers Welfare data.

 

There are 3C benefits from the millets i.e  a) Cultivation b) Consumer c) Climate Change.

 

Looking from the consumer point of view, people are becoming aware of the health benefits of millets. It has opened up opportunities to develop different products from millets.

 

Government Schemes & Subsidy: Government is aware about the importance and potential of the food sector. Considering it, they have already allowed 100% FDI permitted for food processing, 100% FDI under Government approval route for trading, including the same through e-commerce, with respect to food products manufactured and/or produced in India. There is flagship scheme under the Central Government umbrella with the total outlay of Rs 4,600 crore will continue till March 2026.

    • Integrated Cold Chain and Value Addition Infrastructure

    • Agro -Processing Cluster

    • Creation/Expansion of Food Processing/Preservation Capacities

    • Operation Greens

    • Scheme for setting-up/ up-gradation of Food Testing Laboratories

Apart from Ministry of Food Processing and Industry, National Bank for Rural Development & Agriculture Processed Food Product Export Development Authority also has a number of schemes for the food processing sector and exporters. This incudes on-farm and off-farm projects such as for agri-infrastructure development, and dairy sector.

 

Benefits of Free Trade Agreement (FTA): India has recently signed Free Trade Agreement with a couple of countries. This will help exporter to get more duty benefits and identify new market for products. However, its also important to identify competitors in the international market and follow labelling/packaging norms of the importing countries to avoid rejections.

 

Action Plan –

    • Government should give more incentive to FPOs & SHG groups for setting up the small & medium processing units.

    • More collaboration is needed between industry & academic / research institution’s

    • Federation of FPOs should get more subsidy & credit guarantee from financial institutions

    • Synergies between State Governments & Central Government schemes

 

All these measures can help to boost the sector.

The export market has driven chilli prices in retail market northwards. The price per quintal is hovering between Rs 25,000 and Rs 30,000.

 

Sources said there is huge demand for chilli from China, Bangladesh, Indonesia and the UAE. Exports to these nations have gone up steadily for the past two years but the demand has surged unprecedentedly in the current season. Sources said reports about crop damage in chilli producing states including AP, Telangana, Maharashtra, and Karnataka due to unseasonal rains too have triggered market sentiments prompting traders to offer high prices to farmers.

 

The farmers are hopeful of recovering losses incurred due to crop damage. About 10 to 20 per cent crop was damaged due to unseasonal rains in chilli producing areas last month. 'There is massive demand from China, Bangladesh, Indonesia and the UAE. We believe that early onset of Ramzan has triggered sales. Special eateries were opened during Ramzan across the globe to facilitate fasting devotees,' said Sanjay Jain, a leading chilli exporter.

 

Local traders involved in powder making had waited for the price to fall but joined the race when they realised that the markets are on a bull run. This has led to increase in prices as it became a procurement tussle between local traders and exporters. Chilli oil firms which estimated prices to come down at least by April were left red faced and started offering higher prices. 'It is a dream season for farmers and those who have picked up the stocks in advance.

 

Majority of the traders did not anticipate the massive jump in prices and joined the price war only out of compulsion,' said Venkateswara Rao, another chilli exporter. While export quality brands like Teja and Byadigi fetch nearly `30,000 per quintal, even common varieties too have ended with over `22,000 to `25,000 per quintal.

 

The prices were around `8,000 to `14,000 per quintal during the last season. The arrival of stock in the biggest market place for chilli trade in Asia, Guntur Agriculture Market Yard, have come down in the last three weeks as agents of traders went to fields to pick up leftover stocks from farmers. Merchants are lifting stocks directly from farms and shifting to cold storages without bringing to the market yard.

Non-basmati rice exports during the April-February period of the 2022-23 fiscal were up nearly three per cent at 16.09 million tonnes (mt), but the shipments were lower in February by nearly six per cent.

 

But the underlying fact is that the Indian government stands to gain good revenue to the tune of a billion dollars in view of the export duty on the shipments as the global market has accepted the duty, besides India’s market share remaining intact.

 

According to data from the Agricultural and Processed Food Products Export Development Authority (APEDA), exports in the first 11 months of the 2022–23 fiscal were up compared with the 15.64 mt shipped out in the same period of 2021–22. In terms of value, exports fetched $5.72 billion, against $5.56 billion in the year-ago period.

 

Two factors to consider

However, there are two factors to consider in the data, exporters and traders say. One, shipments seemed to have been dragged a tad since September 2022 due to the Centre announcing export curbs, including imposing a 20 per cent duty on non-basmati consignments and banning fully broken rice shipments.

 

For example, exports in February were 1.53 lakh tonnes (lt) compared with 1.63 lt in the year-ago period. But earnings were higher at $563.88 million against $552.02 million. 

 

The second factor is that India holds on to its leadership in the market, with importers absorbing the duty hike.

 

'India will get an additional billion dollar revenue from the exports by imposing duty. With the country enjoying 45 per cent market share,  the global rice market has absorbed the impact of the Indian duty,' said BV Krishna Rao, President, The Rice Exporters Association (TREA).

 

In terms of rupee, rice exports should now be able to fetch the Indian government Rs.8,000 crore, he said. 

 

Demand still strong

According to available data, rice exports region-wise in the April-February period of 2022–23 were mixed. Shipments to Bangladesh, Nepal, and South-East Asia dropped. But exports to Africa, the European Union, the Americas, and Gulf countries increased. 

 

According to the Foreign Agricultural Service (FAS) New Delhi Post of the US Department of Agriculture, despite Indian imposing curbs on exports, demand for Indian rice in the global market remains strong. 'Global rice prices have risen to absorb the export tax,' it said. 

 

The USDA’s FAS Post said Indian domestic supplies are forecast to be ample and the government is unlikely to impose additional export restrictions in the near term. 

 

No problem till kharif

At the same time, the Government will be reluctant to relax existing restrictions out of fears of food inflation. 'While India’s export restrictions have not dampened export demand, they have generated an additional source of tax revenue for the government,' it said. 

 

Rao said rice exports should have no problem until November-December this year, before the new crop from competing nations such as Thailand, Vietnam, and Pakistan enter the market. 

 

'Pakistan might not face the problems it faced last year due to its worst flood in 61 years. Our kharif could be arriving by then. The Centre can review its export curbs based on market conditions then,' he said.

 

Though the Centre has banned exports of fully broken rice, it is permitting its shipments on a case-by-case basis. Recently, it permitted 3.5 lakh tonnes of consignments to Gambia and Senegal based on the Ministry of External Affairs’ recommendations. 

 

Improving competitiveness

'We have to see if there is a shift to white rice in a small way or other alternative before reviewing the decision on duty. But we are still improving our hold on the market despite the duty,' Rao said. 

 

The USDA’s FAS Post sees the export duty on Indian rice exports continuing in the near future. 

 

Meanwhile, India’s competitiveness in the global market has improved again over Vietnam, Thailand, and Pakistan. From being competitive by around $10 a tonne a month ago, it has improved by over $25 now. The competitiveness has improved as Indian prices have been lowered, while countries such as Vietnam and Thailand have raised their offer rates. (See table)

 

Rice exports are likely to be boosted by projections of a record high production of 130.83 mt this crop year, despite kharif output being affected due to a deficient monsoon in eastern parts of the country.