Indian Prime Minister, Narendra Modi, has pledged to Bangladesh's Prime Minister, Sheikh Hasina, to alleviate export restrictions on essential commodities like sugar, onions, rice and wheat.

 

The decision follows a discussion between the two leaders on January 8. Factors such as the Ukraine-Russia and Israel-Hamas conflicts and the depreciation of the taka against the dollar have contributed to rising freight charges and commodity prices. The easing of export restrictions will specifically cover onions and several consumer goods crucial to Bangladesh.

 

Historically, sudden export halts from India, such as the 2019 onion export stoppage, have caused price surges in Bangladesh. Despite requests for advance notice of such bans, India has not complied. To maintain market stability, Bangladesh intends to continue regular imports from India and has requested an annual quota, including significant quantities of rice, wheat, sugar, onions, ginger and garlic.

 

Prime Minister Hasina has instructed ministers to stabilize the consumer goods market in anticipation of Ramadan. The government aims to ensure a regular supply of goods, mitigate potential inflation, and curb market manipulation, while enhancing trade transparency and holding price manipulators accountable.

Production Linked Incentive (PLI) Schemes witness over Rs. 1.03 lakh crore of investment till November 2023, which has led to production/ sales of Rs. 8.61 lakh crore and employment generation (direct & indirect) of over 6.78 lakhs. PLI Schemes have witnessed exports surpassing Rs. 3.20 lakh crore, with significant contributions from sectors such as Large-Scale Electronics Manufacturing, Pharmaceuticals, Food Processing, and Telecom & Networking products.

 

As on date, 746 applications have been approved in 14 Sectors with expected investment of over Rs. 3 lakh crore. 176 MSMEs are among the PLI beneficiaries in sectors such as Bulk Drugs, Medical Devices, Pharma, Telecom, White Goods, Food Processing, Textiles & Drones. Several MSMEs are serving as investment partners/ contract manufacturers for large Corporates.

 

Incentive amount of around Rs. 4,415 crore disbursed under PLI Schemes for 8 Sectors viz. Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing and Drones & Drone Components.

 

Manufacturing of various electronic components like battery, chargers, PCBA, PCB, camera modules, passive components and certain mechanics have been localized in the country. Green shoots in the component ecosystem wherein large companies such as TATAs have entered into component manufacturing. PLI beneficiaries account for ~ 20% of the market share only, however, have contributed to ~ 82% mobile phones exports during FY 2022-23. Production of mobile phones increased by more than 125% and export of Mobile Phones increased ~4 times since FY 2020-21. Foreign Direct Investment (FDI) increased by ~254% since the inception of the PLI scheme for LSEM.

 

Due to the PLI Scheme, there has been a significant reduction in imports of raw materials in the Pharma sector. Unique intermediate materials and bulk drugs are being manufactured in India including Penicillin-G. Production of 39 Medical Devices have commenced such as CT-Scan, Linear Accelerator (LINAC), Rotational Cobalt Machine, C-Arm, MRI, Cath Lab, Ultrasonography, Dialysis Machine, Heart Valves, Stents, etc.

 

Import substitution of 60% has been achieved in the Telecom sector and sales of Telecom & Networking Products by PLI beneficiary companies in FY 2023-24 increased by 370% vis-a-vis Base Year (FY 2019-20). Significant impact on investment in the Drone industry with a CAGR of 90.74%.

 

Under the PLI Scheme for Food Processing, sourcing of raw materials from India has seen significant increase which has positively impacted income of Indian farmers and MSMEs. Sales of Organic Products increased and Indian brand visibility enhanced in the international market through Branding & Marketing abroad. The Scheme has also led to increased Millet procurement – from 668 MT (FY 20-21) to 3,703 MT (FY 22-23).

 

Keeping in view India’s vision of becoming ‘Atmanirbhar’, PLI Schemes for 14 key sectors [with an incentive outlay of Rs. 1.97 lakh crore (over US$26 billion)] are under implementation to enhance India’s Manufacturing capabilities and Exports.

 

PLI Scheme across these key specific sectors has started to make Indian manufacturers globally competitive, attract investment in the areas of core competency and cutting-edge technology; ensure efficiencies; create economies of scale; enhance exports and make India an integral part of the global value chain.

 

PLI Schemes have transformed India’s exports basket from traditional commodities to high value-added products such as electronics & telecommunication goods, processed food products etc.

The Indian economy is expected to grow 7 per cent in fiscal 2024-25, said the Reserve Bank of India's governor Shakatikanta Das at the World Economic Forum (WEF) Annual Meeting 2024 in Davos.

 

Speaking at a CII session on 'High growth, low risk: The India story' here during the World Economic Forum Annual Meeting, Das said, with strong domestic demand, India remains fastest growing major economy. 'Real GDP growth is expected at 7.2 per cent this fiscal,' he added.

 

Das said, amid a challenging global macroeconomic environment, India presents a picture of growth and stability.

 

In addition to this the RBI guv said that headline inflation has substantially eased from the highs of summer 2022 and this shows monetary policy action is working.

 

'Structural reforms undertaken by government in recent years boosted medium, long term growth prospects of Indian economy,' he added.

 

Earlier the RBI chief had said, inflation in India is moderating and steadily approaching the central bank's 4% target while growth prospects remain robust.

 

'Inflation has come under control and is within the band we have, which is 2% to 6%. Target is 4%,' Das had said in a fireside chat at Davos organised by Invest India, the country's national investment promotion and facilitation agency.

 

Annual retail inflation rose the fastest in four months in December but core inflation, which strips out volatile food and energy prices, dropped to a four-year low of 3.8% to 3.89% from 4.05% to 4.2% in November.

An egg crisis in Russia may present an opportunity for Namakkal in Tamil Nadu.

Since the escalation of the Russia-Ukraine war in 2022, India became one of the largest importers of crude oil from Russia.

 

Now, if negotiations between both the countries are successful, Namakkal may well be an answer to the ongoing shortage of eggs in Russia. According to traders, Namakkal is the ‘Egg City’ and reportedly exports 95 per cent of India’s table eggs. Talks are already on with Russia for export of eggs.

This comes at a time when Russian President Vladimir Putin issued a rare apology last month regarding the price hike and shortage of eggs.

'I apologise for this, but this is a failure of the government's work... I promise that the situation will be corrected in the near future,' Putin said, according to a Reuters report. 

A combination of high inflation and sanctions imposed by the West has led to the egg crisis in Russia. This resulted in prices going up by 42 per cent in the last 12 months.

'Russia is going through a huge shortage and has asked for eggs. We need government intervention. If it works out, Russia will be a huge market for us,' said Vangili Subramaniam, president of Tamil Nadu Egg Poultry Farmers Marketing Society. Currently, Oman, Sri Lanka, Maldives, Qatar and UAE are the top five countries to which India exports eggs.

'Russia is not yet open. It is just an early stage and will be a huge opportunity. We are requesting the government to speed up the process of tying up with Russia. Only dialogue is going on now,' said Valsan Parameswaran, secretary of All India Poultry Products Exporters’ Association (AIPPEA). He added that going by the demand in that country, the requirement for Russia may be over 50 containers a month.

India exported eggs worth $110,000 to Russia during April-October 2023 compared to $10,000 a year ago, commerce department data showed. India's total egg exports nearly doubled to $53.37 million during the first seven months of the current financial year.

 

However, experts feel that export of eggs to Russia may not be easy for India.

A senior government official said that when it comes to human health, countries, especially western nations, are sensitive about the quality of products they import. These include items such as eggs, milk, fruits or vegetables, among others. In the case of eggs, there aren’t any export restrictions imposed by India.

'For instance, if countries intend to import a particular food item, they generally reach out to the concerned government department. They put up a request to check Indian facilities and we will see if import-related standards are met,' the official said. 'They also raise queries, if required,' the person added.

Standards vary, depending on the product and the country of export.

Commerce and Industry minister Piyush Goyal on Tuesday chaired the second meeting of the reconstituted Board of Trade (BoT) that focused on reviewing India’s export performance to achieve the $2 trillion export target by 2030.

The minister urged the industry to leverage the free trade agreements (FTAs) signed by India to its benefit. 

There were also discussions on the priorities identified in the Foreign Trade Policy (FTP) 2023 and the strategies and measures to be adopted in order to take forward the export growth.

'The reconstituted BoT provides an opportunity to have regular discussions and consultations with trade and industry and advises the Government on policy measures connected with the Foreign Trade Policy in order to achieve the objectives of boosting India’s trade,' an official statement said.

 

The meeting that saw participants from the Centre, states, and industry, took place at a time when global trade has been witnessing challenges over last four years, starting with the Covid 19 pandemic, Russia Ukraine conflict, recessionary trends in major economies, followed by Israel-Hamas conflict and Red Sea crisis. 

Over the next three-four months, the government will launch an intermediary platform–Trade Connect ePlatform–to help Indian exporters and entrepreneurs get information on various regulations to access markets, sectors, export trends, as well as easy access of benefits under FTAs, the minister said. He also asked the industry to share data on non-tariff trade barriers faced by them in other countries.

 

During the meeting, presentations were made on India's import/export performance and state export performance, Gati Shakti national master plan leveraging FTAs for boosting export growth, intervention to boost pharma exports, among others.

During the meeting, Federation of Indian Export Organisations (FIEO) urged the government to launch a planned scheme to address the infrastructure gaps through centre-state funding, which will help in exponential growth in exports from the districts.

EEPC India said that the government could consider connecting waterways with sea ports as it will significantly reduce transportation costs for moving cargo locally.

More and more districts need to be integrated with export initiatives to help boost the country's outbound shipments, a senior official said on Wednesday.

Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi also said that an increase in exports helps in enhancing per capita income.

 

He said that four states - Gujarat, Maharashtra, Karnataka and Tamil Nadu - account for 65 per cent of India's exports and they also have a high per capita income.

The DGFT also noted that only 62 districts out of over 760 in the country contribute about 80 per cent of India's exports.

 

'So there is a need to integrate more and more districts in our export initiatives. Imagine if another 700 districts get involved in export activities, then our export potential will multiply,' Sarangi said here while inaugurating the Federation of Indian Export Organisations' (FIEO) 'Sourcex India' exhibition.

The three-day show will end on January 19 here.

'There is a very positive correlation between exports and increase in per capita income. It's not only exporters who get benefited but the whole value chain associated with exports get benefits,' he said.

Speaking at the event, FIEO President (Officiate) Israr Ahmed said that this event is a testament to our commitment to showcasing Indian brands on the global stage.

 

'It is not merely an exhibition, but a platform designed to facilitate the global launch of Indian brands. Sourcex India 2024 transcends being just an exhibition. In the upcoming three days, B2B meetings, knowledge-sharing sessions and interactive workshops will unfold, providing invaluable insights into global market trends and enabling Indian companies to better understand the preferences of international buyers,' Ahmed said.

The government is seeking to import 4.5 million tonnes of rice and wheat from India through the quota system. Official discussions have commenced to secure food grains from India, driven by concerns over domestic price hikes and the global supply crisis.

 

It’s worth noting that India has halted the export of rice (atap) and wheat to stabilise supply and prices within its own markets. Nevertheless, they continue to provide essential commodities to certain countries under the quota system.

 

According to sources from the Ministry of Food and the Ministry of Commerce, Bangladesh is seeking the opportunity to import 1.8 million tonnes of rice under the quota system. Out of this, the government aims to bring in 800,000 tonnes, while 1 million tonnes are earmarked for the private sector. Additionally, requests have been made for the import of 2.7 million tonnes of wheat, with the government aiming for 700,000 tonnes and the private sector targeting 2 million tonnes.

 

It’s worth noting that in December 2022, quotas were already sought from India for the import of six essential commodities, including rice and wheat. However, the recent emphasis on this matter suggests a renewed focus. Sources indicate that discussions at the highest levels of both countries took place after the 7 January election.

 

Commerce Secretary Tapan Kanti Ghosh informed Prothom Alo on Tuesday, stating, 'Last year, we initiated discussions regarding the import of certain products, including rice and wheat, through quota from India. A draft Memorandum of Understanding (MoU) on this matter has been sent to India. Following the recent election, discussions have resumed, and I am optimistic about swift progress between the two countries.'

 

This renewed discussion on the import of rice and wheat comes at a critical time when the prices of these essential grains are on the rise in the country. At the outset of the year, the wholesale price of rice has witnessed an increase of Tk 4-5 per kg. Simultaneously, the price of packaged flour has also seen a rise of Tk 5 per kg.

 

According to the government agency Trading Corporation of Bangladesh (TCB), coarse rice is currently priced at Tk 50 to Tk 52 per kilogram in the Dhaka market, reflecting an increase of Tk 2 per kg. Similarly, medium rice has seen a price hike of Tk 1 to Tk 2 per kg, now ranging from Tk 52 to Tk 56, and fine rice has experienced a rise of Tk 2, reaching a price range of Tk 62 to Tk 75 per kg.

 

Furthermore, the cost of a one-kilogram packet of flour has surged by Tk 5, now being sold at Tk 60 to Tk 65 in the market.

 

The Food Ministry convened a meeting with rice mill owners and traders on Wednesday to address the sudden surge in rice prices. During the meeting held in the conference room of the Ministry of Food, concerns were raised about the escalating rice prices despite an ample supply, prompting the ministry to inquire into the reasons behind the increase.

 

Subsequently, Food Minister Sadhan Chandra Majumder urged the traders to restore the rice prices to their previous levels within four days. He remarked, 'It is unwarranted to increase the price by leaps and bounds,' and emphasised, 'The way you increased the price in four days, bring it down the same way. Whether you agree or disagree, state your position.'

 

During this discussion, some businessmen responded affirmatively, saying, 'Yes, sir.'

 

Initiatives to import from India

According to the Bangladesh Bureau of Statistics (BBS), the country produced 39.1 million tonnes of rice in the fiscal year 2022-23, significantly surpassing the domestic demand. However, government officials have raised concerns about the accuracy of production and demand calculations. Notably, the government occasionally resorts to rice imports when prices spike. Conversely, the demand for wheat heavily relies on imports, ranging from 5 to 6 million tonnes annually.

 

India serves as the primary source for rice and wheat imports into Bangladesh. However, India imposed a ban on wheat exports in May 2022 to stabilise its own market. Subsequently, restrictions were placed on the export of atap rice, and a 20 per cent duty was imposed on the export of parboiled rice.

 

Bangladesh faces challenges if India imposes export bans on essential commodities. Consequently, Bangladesh sought quotas for six daily commodities during the Bangladesh-India commerce minister level meeting in New Delhi in December 2022, with a formal letter subsequently submitted. The six products include rice, wheat, onion, sugar, ginger, and garlic, and India has been known to grant such quotas to some neighbouring countries.

 

Importing from India proves cost-effective due to lower prices within the country and the ease of transportation. Currently, there are approximately 1.6 million tonnes of rice and wheat in government warehouses. However, the possibility of increased open market sales (OMS) in response to rising prices poses a risk of diminishing rice stocks. Again, there is a continuous need for wheat imports, driving the initiative to import from India.

 

Food Secretary Ismail Hossain informed Prothom Alo on Tuesday that discussions aimed at reaching an agreement on the emergency import of rice through a quota system are advancing positively.

 

Additionally, the import of food grains entails a substantial amount of foreign exchange. In July of the previous year, trade between Bangladesh and India was inaugurated in rupees instead of the US dollar. Advancing this form of trade was among the topics discussed during the meeting between Indian Ambassador Pranay Verma and Foreign Minister Hasan Mahmud last Monday.

 

Prices and figures

The government is actively working to curb inflation, a priority highlighted in the Awami League's election manifesto. The Bangladesh Bank has implemented measures in the new monetary policy to address inflation, including adjustments in the prices of 13 products, such as rice and wheat, at the beginning of the year. The increase in rice prices often contributes to inflation.

 

In response to this, the Food Ministry convened a meeting Wednesday, attended by rice mill owners, wholesale and retail traders, and importers. The meeting, chaired by Sakhawat Hussain, the Director-General of the Food Directorate, also had the participation of Food Secretary Ismail Hossain and Additional Director-General Abdullah Al Mamun. The aim of the meeting was likely to discuss strategies and measures to manage and control rice prices in the context of inflation.

 

Food Minister Sadhan Chandra Majumder expressed his dissatisfaction with the rise in rice prices, questioning why a Tk 2 increase at the millgate translates into a Tk 6 hike in the wholesale market.

 

He emphasised that those involved in illegal hoarding or unjustified price increases are not above the law and must be held accountable. The minister issued a warning, stating that individuals stockpiling rice without proper licensing will face consequences.

 

Directing his message to traders, the food minister emphasised the importance of releasing rice into the market, asserting that there is an abundant supply and no shortage.

 

Nirod Baran Saha Chandan, President of the Naogaon Paddy and Rice Owners' Association, countered accusations against mill owners, suggesting that corporate companies are responsible for artificially inflating the prices of paddy and rice in the market.

 

In response, representatives of corporate companies asserted that their influence in the rice market is minimal, and they lack the capacity to control market dynamics.

 

Abdur Rashid, President of the Bangladesh Auto Major Husking Mill Owners Association, emphasized that mill owners operate within a competitive business environment and don't have the opportunity to form syndicates. He acknowledged that while prices did increase, they have now begun to decrease in the market.

 

Rice trader Farid Uddin has raised concerns about the accuracy of the information provided by the Department of Agricultural Extension regarding rice production. He suggested that the data should be verified for its accuracy.

 

According to the Ministry of Agriculture's information, there is a surplus of rice in the country, but Farid Uddin expressed that this surplus is not apparent in reality. He specifically mentioned discrepancies in the data related to paddy production.

 

Kamruzzaman Kamal, Director (Marketing) of PRAN-RFL Group, added that the lack of precise data on the demand and supply of rice is hindering an accurate reflection of the market. He also commented that the government's plan is not functioning as intended due to these data discrepancies.

The Ministry of Agriculture & Farmers Welfare, Government of India, is leveraging cutting-edge Artificial Intelligence (AI) technologies for the benefit of farmers and to increase overall productivity. As a pioneering force in the integration of AI, the Ministry is setting a precedent for leveraging advanced technologies to address the challenges faced by the farmers in India. It is championing the India Digital Ecosystem Architecture (InDEA) 2.0's network approach, designed by the Ministry of Electronics & IT, Government of India.

 

A significant milestone in this journey is the development of 'Kisan e-Mitra,' an AI-powered chatbot addressing farmers' queries about the PM Kisan Samman Nidhi scheme. This comprehensive solution, available in Hindi, Tamil, Odia, Bangla, and English, is evolving to support other government programs and has been accessed by more than 21 lakh farmers within 2 months.

 

Additionally, the Ministry is developing a National Pest Surveillance System in collaboration with the private sector. AI and Machine Learning (ML) models detect crop issues, offering timely information to farmers for swift action. This initiative is expected to result in healthier crops, potentially boosting yields and improving farmers' livelihoods.

 

On 17th January 2024, a Tripartite Memorandum of Understanding (MoU) was signed between the National Farmers’ Welfare Programme Implementation Society, IndiaAI under Digital India Corporation, and Wadhwani Foundation. The MoU was signed in the presence of Shri Manoj Ahuja, Secretary, Dr. P.K. Meherda, Additional Secretary, Ms. Ruchika Gupta, Advisor(Digital), Shri Samuel Praveen Kumar, Joint Secretary(Extn.), Shri Muktanand Agrawal, Director (Digital), other senior officials from Ministry of Agriculture and Farmers Welfare and Ministry of Electronics & IT and Shri Prakash Kumar, CEO, Wadhwani Institute of Technology and Policy.

 

Shri Manoj Ahuja emphasized AI's game-changing role, citing capabilities in advisories, feedback collection, crop monitoring, yield prediction, pest control, and resource optimization. Shri Prakash Kumar expressed delight in embarking on a groundbreaking journey with the Ministry, sowing the seeds of innovation and knowledge for a more prosperous and food-secure future.

 

Per the MoU, Wadhwani Foundation will provide critical support in formulating and executing an AI strategy. The Foundation commits to assisting the Ministry in establishing India as a global leader in AI-driven digital agriculture transformation, aligning with the MeitY’s National Plan for AI. This collaboration marks a pivotal moment in India's agricultural landscape, where Ministry has institutionalized the use of AI in transforming digital agriculture through the creation of an AI cell within the Ministry.

The Indian Food Ministry is considering a reduction in the reserve price of rice sold through e-auction under the open market sale scheme (OMSS) to boost offtake and reduce market rates of the grain at retailer levels so that common people get the benefit. The proposal, if approved by the committee of ministers, will be implemented from the auction to be held next week, sources said.

 

Trade sources said the reserve price may be cut to about Rs.2,600/quintal from the current Rs.2,900/quintal. The government had last cut the reserve price from Rs.3,100/quintal in mid-August to improve offtake. Recently, the bidders were allowed to bid as low as 1 tonne per auction, against 10 tonnes minimum specification earlier. Also, the maximum quantity to be purchased in an auction by one trader/miller has been doubled to 2,000 tonnes.

 

Still, the offtake was 7,000 tonnes on January 10 out of 1.85 lakh tonnes (lt) offered by the Food Corporation of India (FCI). So far, FCI has sold 1.55 lt of rice under OMSS since the weekly e-auction started on July 5.

 

No cause for concern

FCI’s Chairman and Managing Director Ashok Kumar Meena recently said there was no cause for concern about the availability of rice. The rice stock with Central Pool on January 1 this year was 508.47 lt against the buffer norm of 76.10 lt. The annual requirement of rice under all welfare schemes of the Centre is 400-410 lt.

 

Rice procurement in the first three months since the season began on October 1 and had dropped 14 per cent to 299.3 lt from 347.9 lt in the year ago period. FCI is hopeful of reaching near target of 521 lt.

 

FCI is the central nodal agency that buys rice and wheat to ensure MSP to the farmers and distributes the grains for free to 81 crore poor via ration shops. It also uses surplus grain through the OMSS scheme to boost domestic availability and check prices. The concern about rice stems from about a 13 per cent rise (y-o-y) in retail inflation in rice whereas it is negative for wheat.

 

The Centre has also been considering a proposal to launch 'Bharat' brand rice, similar to Bharat atta and Bharat Dal. The government has been selling 'Bharat Dal' (gram dal) at Rs.60/kg and 'Bharat atta' at Rs.275/10 kg through cooperatives NAFED, NCCF and Kendriya Bhandar.

 

The Indian government on Tuesday extended lower import duty on edible oil by a year, till March 2025. The lower import duty structure on crude palm oil, crude sunflower oil, and crude soy oil was originally set to expire in March, this year.

 

India is the world's biggest importer of vegetable oil. The basic import duty on refined soyabean oil and sunflower oil was cut to 12.5% from 17.5%, in June last year. India imports palm oil mainly from Indonesia and Malaysia, and a small quantity of crude soft oil, including soybean from Argentina. Sunflower oil is imported from Ukraine and Russia.

 

'The decision was expected as the government is keen to keep prices in check ahead of elections,' Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage told news agency Reuters. 'The notification is not changing the current duty structure. So, there won't be any impact on local prices or import patterns,' Bajoria said.

 

The government also imposed a 50% duty on exports of molasses, a by-product of sugarcane used as raw material for alcohol production, with effect from January 18. A finance ministry notification said molasses resulting from the extraction or refining of sugar will attract a 50% export duty.

 

According to industry data issued on Friday, India's edible oil imports fell 16 per cent on an annual basis in December to 13.07 lakh tonnes as a result of decreased shipments of crude and refined palm oils. According to data from the Solvent Extractors' Association of India (SEA), edible oil imports decreased from 15,55,780 tonnes in December of the previous year to 13,07,686 tonnes.

 

Within the edible oil category, imports of crude palm oil fell to 6,20,020 tonnes from 8,43,849 tonnes, while inbound shipments of RBD Palmolein (Refined Bleached Deodorised) dipped slightly to 2,51,667 tonnes from 2,56,398 tonnes.