Trade between India and Malaysia can now be settled in Indian Rupee (INR) in addition to the current modes of settlement in other currencies. This follows the decision by the Reserve Bank of India in July 2022 to allow the settlement of international trade in Indian Rupee (INR). This initiative by RBI is aimed at facilitating the growth of global trade and supporting the interests of the global trading community in Indian Rupee (INR).

 

India International Bank of Malaysia (IIBM), based in Kuala Lumpur, has operationalised this mechanism by opening a Special Rupee Vostro Account through its Corresponding Bank in India i.e. Union Bank of India.

 

Economic and commercial relations are the mainstay of bilateral partnerships. With strengthening bilateral economic and commercial relations, Malaysia has emerged as 13th largest trading partner for India while India figures among the ten largest trading partners for Malaysia which is also our 3rd largest trading partner in ASEAN. A bilateral Comprehensive Economic Cooperation Agreement(CECA) covering goods, services and investment has come into effect from 1 July 2011.

 

India's major export items to Malaysia are mineral fuels, mineral oils; aluminum and articles thereof, meat and edible meat offal, iron and steel, copper and articles thereof, organic chemicals, nuclear reactors, boilers, machinery and mechanical appliances; electrical machinery and equipment; etc. India's major import items from Malaysia are palm oil, mineral fuels, mineral oils, electrical machinery and equipment; animal or vegetable fats and oils and their cleavage products; nuclear reactors, boilers, machinery and mechanical appliances; copper and articles thereof, wood; wood charcoal, aluminum, organic chemicals, iron and steel and miscellaneous chemical products

 

The first Indian joint venture, Godrej commenced operations in 1968, and in the seventies and early eighties, Malaysia hosted the largest number of Indian joint ventures in any country. Indian companies' present involvement in Malaysia is in palm oil refining, power, railways, information technology, biotechnology, manufacturing industrial goods, higher education, civil construction, and training.

 

As per official figures (DPIIT), Malaysia ranks as the 26th largest investor in India with FDI inflow of US$ 1.12 billion during the period April 2000 to September 2021.

 

Presently, there are more than 150 Indian companies, including 61 Indians are expected to be of the tune of US$7 billion. The highest joint ventures and 3 Indian Public Sector Undertakings operating in investment proposals have been in the telecommunications, Malaysia. Their areas of operation are manufacture of textiles and yarn, followed by fuels (power and oil refinery), roads and highways.

The European Commission (EC) has granted protected geographical indication (PGI) for India’s unique Kangra tea, which is grown in Himachal Pradesh’s Kangra district.

 

The EC notified granting PGI on March 22 and this will come into effect from April 11, 2023. 

 

The granting of PGI for Kangra tea comes at a time when the EC has been dragging its feet on granting a similar status to Basmati rice. India had filed for the GI tag in 2018 but the European Union (EU) wants India and Pakistan to hold talks so that the latter’s Basmati rice also gets due recognition. However, Islamabad is far off from meeting the requirements.

 

No ‘statement of opposition’

In its notification, the EC said it was granting the PGI as it had not received any 'statement of opposition' and hence it 'should therefore be entered in the register'.

 

Grown since the mid-19th Century, Kangra tea is known for its unique flavour and taste. It is available as black and green teas. 

 

 According to the Tea Board, Kangra tea is grown at an elevation ranging from 900 to 1,400 metres above sea level with the annual rainfall being 270-350 cm.  

 

Unique characteristics

'For Kangra, the ‘Valley of Gods’, nothing less than the majestic Dhauladhar mountain range could have served as the backdrop. And to toast its beauty, there is nothing finer than Kangra tea,' the Board says about one of India’s finest teas.  

 

The climate, the characteristic terrain and soil conditions, and the coolness of the snow-clad mountains in the Kangra region all play a role in crafting a delightfully distinct cup of quality tea. 

 

'Particularly the first flush with an aroma and flavour has an unmistakable tinge of fruitiness,' the Board says. 

 

The history of Kangra tea dates back to 1849 when Dr Jameson, then superintendent of the Botanical Tea Gardens, pronounced the region ideal for tea cultivation. 

 

Being one of India’s smallest tea regions makes Kangra green and black teas all the more exclusive. 

 

'While the black tea has a sweet lingering after-taste, the green tea has a delicate woody aroma. The demand for Kangra tea has been increasing steadily and much of it is bought by natives and exported to Kabul and Central Asia via Peshawar,' it says. Kangra tea is a registered Geographical Indication (GI).

 

According to the Tea Board, Kangra tea is a little milder than Darjeeling tea in terms of flavour and has more body and liquor.

The Centre has relaxed norms for procuring wheat in Madhya Pradesh with a rider that payment should be lower than the minimum support price (MSP) of Rs.2,125/quintal if the grain has a lustre loss of more than 10 per cent. No other State government has requested any relaxation in quality norms after unseasonal rains and hailstorms hit several parts of the wheat-growing States.

 

In a communication to the Principal Secretary (Food) in Madhya Pradesh, Viswajeet Haldar, a deputy commissioner in Food Ministry, said, 'In order to reduce the hardship of farmers and to avoid distress sale, it has been decided to procure wheat in Madhya Pradesh' with certain relaxations in Uniform Specifications during the 2023-24 marketing season (April-March).

 

The Ministry said there will be no 'value cut' for lustre loss of up to 10 per cent, and a flat 25 per cent reduction from 1 per cent of MSP on lustre loss10 to 80 per cent. Thus, for every quintal of wheat with more than 10 per cent lustre loss, the farmer in MP will receive Rs.5.31 lesser than the MSP.

 

Uniform specifications

According to the Uniform Specifications approved by the Food Ministry, wheat to be purchased should have natural size, shape, colour and lustre. It further said the grain should be sweet, clean, wholesome and free from obnoxious smells, discolouration, admixture of deleterious substances, including toxic weed seeds, and all other impurities, except to the extent provided separately.

 

For fair and average quality (FAQ) wheat, the maximum permissible limit for foreign matter is 0.75 per cent, other foodgrains 2 per cent, damaged grains 2 per cent, slightly damaged grains 4 per cent, shrivelled and broken grains 6 per cent, and moisture up to 12 per cent.

 

Meanwhile, official data shows wheat procurement in the State has touched 98,485 tonnes in three days since purchase under MSP started on March 28. On the other hand, arrivals between March 15 and March 30 stood at 7.81 lakh tonnes (lt). The average mandi prices are ruling between Rs.1,800/quintal and Rs.2,260/quintal, which traders attributed to higher than normal moisture.

 

The State aims to purchase 80 lt for the Central Pool this season. In the 2022-23 season, purchase dropped to 46.03 lt, against the target of 129 lt, whereas procurement was over 128 lt during 2021-22.

 

According to traders, a similar allowance for wheat procurement was made in 2002-03 by the Centre.

 

An amount of over Rs 3100 crore has been allocated to Jammu and Kashmir agriculture and allied sectors in order to increase farmer income, ensure food security and to accelerate the Union Territory’s economic growth, said an official release on Friday.

 

The announcement of the amount came days after the Parliament passed the ‘The Jammu and Kashmir Appropriation (No 2) Bill, 2023’ in the Union Budget.

 

'To create an enabling environment for transforming JandK agriculture and allied sectors in order to increase farmer income, ensure food security and accelerate UT’s economic growth, Rs 3156 crore has been allocated in Budget 2023-24,' said an official release from the Department of Information and Public Relation JK.

 

According to the release, a Holistic Agriculture Development plan (HADP) will be rolled out, with 29 proposed projects at an outlay of Rs 5012 crore over a period of the next five years.

 

Speaking on the initiative, an official said, 'The novel initiative will create additional job opportunities for 2,87,910 people in agriculture, horticulture and allied sectors besides 18,861 new business enterprises will be created over the period of next five years.'

 

'To empower the farmers to store their produce for better returns, the government will create 67000 Metric tons of Controlled Atmosphere (CA) storage capacity,' said the release.

 

As per the release, Jammu and Kashmir government is encouraging and aiding private players to set up cold storage (CA) facilities in order to reduce post-harvest losses by increasing the shelf life of various agriculture and horticulture products, as well as to address the issue of distressed crop sales by farmers.

 

The government has taken several concrete steps to increase agriculture and horticulture production, as well as to improve crop quality, with a special emphasis on post-harvesting management infrastructure, particularly in the private sector,' further read the release.

 

Highlighting the government’s initiative to promote beekeeping in the state, the release said, 'Jammu and Kashmir’s government has launched a Rs 46.65 crore for `Promotion of Beekeeping’ project to triple the honey production over the next five years.'

 

'Monitoring and traceability will be done through Governance Innovation (GI) labs. 20 Custom Hiring centres (CHCs) will be also established to extend pollination facilities. Jammu and Kashmir will have a full-fledged centre of excellence for constancy, capacity building, and post-harvest management,' the release said.

 

Under the project, the value addition of honey is also being envisioned coupled with efficient growth of the bee sector using native honey bees.

 

Informing about investment in fish farming, the release said, 'To make fish farming a prosperous sector, the UT government has approved Rs 176 crore project to boost fish production.'

 

'The project involves importing genetically improved fish seed, upgrading existing hatcheries and fish rearing units, introducing species diversity in aquaculture through RandD, and commercializing trout and carp fish production using modern technologies such as Recirculatory Aquaculture System (RAS) and Biofloc and is estimated to double trout and carp production over the next five years,' added the release.

 

Talking about the dairy sector, the release said, 'Dairy is the biggest component of livestock husbandry and plays a pivotal role in sustaining agriculture income and acts as a growth engine for agriculture, allied sectors in JandK.'

 

'The milk production is expected to reach 45 Lakh metric tons from 25 Lakh metric tons over the next five years and will be achieved through a range of measures, including the expansion of breeding coverage and increasing per-animal productivity,' added the release.

 

'One of the key elements of the dairy under the HADP project is to increase per-animal productivity from 2400 litres to 4300 litres, which is a significant increase. This will be achieved through various interventions, including the expansion of Artificial Insemination (AI) centres from 1389 to 2189,' added the release further.

The government will identify close to 100 districts across the country to turn them into export hubs by adopting a 'bottom-up approach', Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi said on Friday.

 

'Our idea is to involve more youngsters at the district level (like collectors) so that they see the initiative to boost export as a core function, and not a peripheral function,' Sarangi said.

 

The phase one of the plan will cover 75-100 districts, which could go up in the next leg.

 

It will focus on both goods and services exports, and will cover multiple products or services, unlike the One District One Product programme, Sarangi said.

 

AMNESTY FOR EXPORTERS

 

The special amnesty scheme for default in export obligations proposed in the new Foreign Trade Policy (FTP) will allow pending cases to be settled by exporters by paying customs duties that were exempted in proportion to their unfulfilled export obligation, the DGFT said.

 

No interest will be charged on the exempted portion of additional customs duty or the special additional customs duty.

 

Entities that were unable to meet their export obligation after importing inputs or capital goods at zero duty under the Advance Authorisation and the Export Promotion Capital Goods (EPCG) schemes will be able to tap this window. It will remain open for six months through September 2023.

 

The scheme is along the lines of the 'Vivad se Vishwas' initiative of the government, which sought to resolve tax disputes amicably.

 

CLEARING DUES TO EXPORTERS

 

The government will likely incur a 'notional saving' of Rs.7,000-8,000 crore from its allocation of Rs.56,027 crore announced in September 2021 to clear all the pending dues owed to exporters until FY21 under various schemes, Sarangi said.

 

The DGFT has already cleared about Rs.42,000 crore of dues so far. Arrears in respect of disputed cases are yet to be settled, while most other pending claims have been cleared, , he said.

 

The dues amount is being disbursed in the form of scrips. The exporters can use these scrips to pay import duties or can sell these to importers who, in turn, can use them to pay the customs duties. So, these are 'notional gains' for the government, the DGFT explained.

 

FTP'S GREEN PUSH

In a green push, electric vehicles, vertical farming equipment, waste water treatment, rain water harvesting systems, and green hydrogen will be eligible for reduced export obligation requirement under the EPCG scheme, as per the new Foreign Trade Policy.

Commerce and Industry Piyush Goyal on Friday exuded confidence that India's merchandise and services exports will cross USD 2 trillion by 2030 from the current level of USD 765 billion, as he unveiled a 'dynamic and responsive' foreign trade policy. He said that goods exports have witnessed good growth considering the current global scenario while services exports may see a quantum jump in the current fiscal.

 

'We have to meet our exports targets going forward,' said the minister, adding that 'we will need to work a bit harder' on goods exports.

 

'It shouldn't be that by 2030, services exports cross USD 1 trillion while you (merchandise exports) lag behind. I am confident that we will cross USD 2 trillion by 2030,' Goyal said.

 

The minister said he has asked the Department of Commerce to undertake a 'massive focused concentrated' outreach globally in the next 4-5 months sectorally as well as country-wise through Indian missions abroad with special focus on trade, technology, tourism and investment.

 

India's total exports growth decelerated to 13.4 per cent in 2022-23 annually from 36 per cent expansion in the previous financial year as global demand was affected following outbreak of Russia-Ukraine war in February 2022 and other geopolitical reasons.

 

'We will achieve exports of USD 1 trillion each in goods and services by 2030,' Goyal said.

 

The Foreign Trade Policy 2023 outlines a host of measures and incentives to boost exports from India.

 

'We always had the capacity to do more, but I feel it needed Prime Minister Narendra Modi to pump up our energies and enthusiasm and see the change witnessed thereafter,' Goyal said.

 

The WTO's global trade has forecast growth in world trade to slow down to 1 per cent in 2023 due to global uncertainties.

Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today launched the Foreign Trade Policy 2023 saying that it is dynamic and has been kept open ended to accommodate the emerging needs of the time. He stated that the policy had been under discussion for a long time and has been formulated after multiple stakeholder consultations. India's overall exports, including services and merchandise exports, has already crossed US$ 750 Billion and is expected to cross US$ 760 Billion this year, he said.

 

The Minister referred to the interaction that Prime Minister, Shri Narendra Modi with the exporters on 06th August, 2021 and encouraged them to increase exports and get more deeply involved in the global value chain. He lauded the vision and guidance of the Prime Minister who believed that given the size of the Indian economy and manufacturing & service sector base, the potential for the country to grow is manifold. He said that this vision is at the core of the policy.

 

The Minister noted that the remarkable achievement in the overall export figure of crossing US$ 760 Billion in these challenging times across the world has been the result of enthusiasm and encouragement pumped in by the Prime Minister. He said that this achievement is in sync with the target set in the roadmap in 2021 after the interaction with the Prime Minister.

 

He stressed that every opportunity for export must be captured and utilised effectively. He also mentioned that in the next 5 months during India’s G20 presidency there should be a massive concentrated outreach with the world both sector-wise and country-wise.

 

The release of the policy was also attended by Union Minister of State for Commerce & Industry, Smt. Anupriya Patel, Commerce Secretary, Shri Sunil Barthwal and Member Customs, Central Board of Indirect Taxes and Customs, Shri Rajiv Talwar. Director General of Foreign Trade, Shri Santosh Kumar Sarangi gave a detailed presentation on the policy.

 

The Key Approach to the policy is based on these 4 pillars: (i) Incentive to Remission,  (ii) Export promotion through collaboration - Exporters, States, Districts, Indian Missions, (iii) Ease of doing business, reduction in transaction cost and e-initiatives and (iv) Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining SCOMET policy.

 

Foreign Trade Policy (2023) is a policy document which is based on continuity of time-tested schemes facilitating exports as well as a document which is nimble and responsive to the requirements of trade. It is based on principles of ‘trust’ and ‘partnership’ with exporters. In the FTP 2015-20, changes were done subsequent to the initial release even without announcement of a new FTP responding dynamically to the emerging situations.Hereafter, the revisions of the FTP shall be done as and when required.Incorporating feedback from Trade and Industry would also be continuous to streamline processes and update FTP, from time to time.

 

The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing business for exporters. It also focuses on emerging areas like dual use high end technology items under SCOMET, facilitating e-commerce export, collaborating with States and Districts for export promotion.

 

The new FTP is introducing a one-time Amnesty Scheme for exporters to close the old pending authorizations and start afresh. 

 

The FTP 2023 encourages recognition of new towns through 'Towns of Export Excellence Scheme' and exporters through 'Status Holder Scheme'. The FTP 2023 is facilitating exports by streamlining the popular Advance Authorization and EPCG schemes, and enabling merchanting trade from India.

 

Process Re-Engineering and Automation

 

Greater faith is being reposed on exporters through automated IT systems with risk management system for various approvals in the new FTP. The policy emphasizes export promotion and development, moving away from an incentive regime to a regime which is facilitating, based on technology interface and principles of collaboration.Considering the effectiveness of some of the ongoing schemes like Advance Authorisation, EPCG etc. under FTP 2015-20, they will be continued along with substantial process re-engineering and technology enablement for facilitating the exporters. FTP 2023 codifies implementation mechanisms in a paperless, online environment, building on earlier 'ease of doing business' initiatives. Reduction in fee structures and IT-based schemes will make it easier for MSMEs and others to access export benefits.

 

Duty exemption schemes for export production will now be implemented through Regional Offices in a rule-based IT system environment, eliminating the need for manual interface. During the FY23-24, all processes under the Advance and EPCG Schemes, including issue, re-validation, and EO extension, will be covered in a phased manner. Cases identified under risk management framework will be scrutinized manually, while majority of the applicants are expected to be covered under the 'automatic' route initially.

 

Towns of Export Excellence

 

Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns. The TEEs will have priority access to export promotion funds under the MAI scheme and will be able to avail Common Service Provider (CSP) benefits for export fulfillment under the EPCG Scheme. This addition is expected to boost the exports of handlooms, handicrafts, and carpets.

 

Recognition of Exporters

 

Exporter firms recognized with 'status' based on export performance will now be partners in capacity-building initiatives on a best-endeavor basis. Similar to the 'each one teach one' initiative, 2-star and above status holders would be encouraged to provide trade-related training based on a model curriculum to interested individuals. This will help India build a skilled manpower pool capable of servicing a $5 Trillion economy before 2030. Status recognition norms have been re-calibrated to enable more exporting firms to achieve 4 and 5-star ratings, leading to better branding opportunities in export markets.

 

Promoting export from the districts

 

The FTP aims at building partnerships with State governments and taking forward the Districts as Export Hubs (DEH) initiative to promote exports at the district level and accelerate the development of grassroots trade ecosystem. Efforts to identify export worthy products & services and resolve concerns at the district level will be madethrough an institutional mechanism – State Export Promotion Committee and District Export Promotion Committee at the State and District level, respectively.District specific export action plans to be prepared for each district outlining the district specific strategy to promote export of identified products and services.

 

Streamlining SCOMET Policy

 

India is placing more emphasis on the 'export control' regime as its integration with export control regime countries strengthens. There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders, and the policy regime is being made more robust to implement international treaties and agreements entered into by India.A robust export control system in India would provide access of dual-use High end goods and technologies to Indian exporters while facilitating exports of controlled items/technologies under SCOMET from India.

 

Facilitating E-Commerce Exports

 

E-commerce exports are a promising category that requires distinct policy interventions from traditional offline trade. Various estimates suggest e-commerce export potential in the range of $200 to $300 billion by 2030. FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related elements such as payment reconciliation, book-keeping, returns policy, and export entitlements. As a starting point, the consignment wise cap on E-Commerce exports through courier has been raised from Rs.5Lakh to Rs.10 Lakh in the FTP 2023. Depending on the feedback of exporters, this cap will be further revised or eventually removed.Integration of Courier and Postal exports with ICEGATE will enable exporters to claim benefits under FTP. The comprehensive e-commerce policy addressing the export/import ecosystem would be elaborated soon, based on the recommendations of the working committee on e-commerce exports and inter-ministerial deliberations.Extensive outreach and training activities will be taken up to build capacity of artisans, weavers, garment manufacturers, gems and jewellery designers to onboard them on E-Commerce platforms and facilitate higher exports.

 

Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

 

The EPCG Scheme, which allows import of capital goods at zero Customs duty for export production, is being further rationalized. Some key changes being added are:

 

Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme has been added as an additional scheme eligible to claim benefits under CSP(Common Service Provider) Scheme of Export Promotion capital Goods Scheme(EPCG).

Dairy sector to be exempted from maintaining Average Export Obligation – to support dairy sector to upgrade the technology.

Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and Green Hydrogen are added to Green Technology products – will now be eligible for reduced Export Obligation requirement under EPCG Scheme

Facilitation under Advance authorization Scheme

 

Advance authorisation Scheme accessed by DTA units provides duty-free import of raw materials for manufacturing export items and is placed at a similar footing to EOU and SEZ Scheme. However, the DTA unit has the flexibility to work both for domestic as well as export production. Based on interactions with industry and Export Promotion councils, certain facilitation provisions have been added in the present FTP such as

 

Special Advance Authorisation Scheme extended to export of Apparel and Clothing sector under para 4.07 of HBP on self-declaration basis to facilitate prompt execution of export orders – Norms would be fixed within fixed timeframe.

Benefits of Self-Ratification Scheme for fixation of Input-Output Norms extended to 2 star and above status holders in addition to Authorised Economic Operators at present.

Merchanting trade

 

To develop India into a merchanting trade hub, the FTP 2023 has introduced provisions for merchanting trade. Merchanting trade of restricted and prohibited items under export policy would now be possible. Merchanting trade involves shipment of goods from one foreign country to another foreign country without touching Indian ports, involving an Indian intermediary. This will be subject to compliance with RBI guidelines, andwon’t be applicable for goods/items classified in the CITES and SCOMET list. In course of time, this will allow Indian entrepreneurs to convert certain places like GIFT city etc. into major merchanting hubs as seen in places like Dubai, Singapore and Hong Kong.

 

Amnesty Scheme

 

Finally, the government is strongly committed to reducing litigation and fostering trust-based relationships to help alleviate the issues faced by exporters. In line with 'Vivaad se Vishwaas' initiative, which sought to settle tax disputes amicably, the governmentis introducing a special one-time Amnesty Scheme under the FTP 2023to address default on Export Obligations. This scheme is intended to provide relief to exporters who have been unable to meet their obligations under EPCG and Advance Authorizations, and who are burdened by high duty and interest costs associated with pending cases.All pending cases of the default in meeting Export Obligation (EO) of authorizations mentioned can be regularized on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation.The interest payable is capped at 100% of these exempted duties under this scheme.  However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty and this is likely to provide relief to exporters as interest burden will come down substantially.It is hoped that this amnesty will give these exporters a fresh start and an opportunity to come into compliance.

India’s coffee exports for financial year ending March, 2023 scaled a new high at $1.126 billion on increase in global prices. The exports for the year are higher by about a tenth in dollar value terms over the previous year’s $1.027 billion and surpassed the target of $1.088 billion fixed by the Commerce Ministry.

 

In fact, the Indian coffee exports have clocked over a billion dollars for the second consecutive year during 2022-23. The export growth in rupee value terms is higher at around 18 per cent at Rs.9033.38 crore as compared to previous year’s Rs.7655.50 crore.

 

This growth in exports is despite a 3.6 per cent decline in volumes at 3.98 lakh tonnes over the previous year’s 4.13 lakh tonnes, as per the Coffee Board of India’s data based on the permits issued.

 

Higher realisations

'The increase in exports is due to higher realisations,' said Coffee Board CEO and Secretary K G Jagadeesha. The per unit realisation for Indian coffees was higher by 22 per cent at Rs.2.26 lakh per tonne during 2022-23 as compared to Rs.1.84 lakh per tonne during the previous year.

 

'The International Coffee Organisation’s composite index price last year was very high compared to the last 10 years,' Jagadeesha said. The ICO indicator price for ‘Other Milds’ a category under which the Indian coffees are classified, went up from around 185 US cents per pound last year to 226 US cents per pound.

 

Growth in value

'Our growth in value terms is much faster than in quantity. In terms of quantity, we are lagging behind when compared to last year as our production is limited. If the prices remain same during 2023-24, then we may exceed the billion dollar mark again,' Jagadeesha said. While India may not face problems in exports of value added instant coffees, as we import and re-export after value-addition, the green coffee shipments are all dependent on natural factors such as weather. 'If there is a favourable weather, we will have a good crop and good exports,' he added.

 

India exports about two thirds of the 3.6 lakh tonnes of green coffees produced in the country.

 

Decline in volumes

Ramesh Rajah, President, Coffee Exporters Association, said the higher value due to the gain in the international market has made up for the decline in volumes. 'We were expecting a 5 per cent decline in volumes,' Rajah said adding that it would be hard to sustain the exports during 2023-24. 'There could be a marginal decline in quantity terms and five per cent dip in value terms during 2023-24 as the order books are only 60 per cent of the normal, particularly for the Arabicas, which is a bit of concern,' Rajah said.

 

Factors such as higher Indian prices, compared to the terminal prices in New York and London, and in Europe, the largest destination for Indian coffees, where consumers hit by a recession are looking are cheaper coffees, have resulted in lower order-books, Rajah added.

Indian basmati farmers plan to increase the area under the fragrant rice crop in coming kharif season as they hope to receive really good prices after realising record prices last year for their produce. Experts, however, said prices will depend on export demand and geopolitical developments .

 

'I have already bought sufficient seeds from recent Pusa Kisan Mela as I plan to increase the area under basmati to 15 acres from 10 acres done last year,' said Ashok Dahiya of Sonipat district in Haryana, the largest basmati-producing State. He expects a similar price for basmati next year too after selling his crops (different varieties) at  Rs.3,800-4,000 per quintal last year.

 

'Though (expansion of acreage) not entirely on my own field, but definitely it is profitable even to take land on lease and go for basmati than any other crop,' he said, adding the costs of annual lease is more than Rs.35,000/acre depending on the location and conditions of land.

 

Echoing similar views

Whether its is Jind, Sirsa or Karnal, farmers in Haryana have echoed similar sentiments though the scale of expansion will vary depending on the land availability. India’s basmati rice production was estimated at 9 million tonnes (mt) from an area of 6.2 million hectares in 2022-23. Of this, Haryana produced 3.81 mt, Punjab 3.12 mt and Uttar Pradesh 1.79 mt. Due to Covid pandemic, no survey was undertaken in 2020 and 2021.

 

The current export price trend indicates an interesting insight into the demand-supply matrix. Kharif 2023 for basmati rice will be a crucial year in view of comprehensive and accelerated rice and agricultural demand outlook, said trade policy analyst S Chandrasekaran. 'The supplier-driven sentiments will redefine the realisation of prices,' he said.

 

Basmati rice shipments increased 41 per cent to $3.82 billion (Rs.30,514 crore) in the 10 months up to January in the current fiscal and the volume surged 18 per cent to 3.66 mt. The unit value realisation increased to $1,044 a tonne from $877/tonne a year ago.

 

Exporters term the increased demand in importing countries to high prices for basmati amid global uncertainties after the Ukraine-Russia conflict. Besides the partial restrictions on export of non-basmati rice — ban on broken variety and 20 per cent duty on non-parboiled rice — had some influence on basmati prices, exporters said.