Karnataka has set a target of doubling its millets export, hoping to build further on the Millets and Organics International Trade Fair being organised from January 5 to 7.

 

Disclosing this to mediapersons in Bengaluru on Tuesday, Agriculture Minister N. Cheluvarayaswamy said Karnataka had exported 7,764 tonnes of millets and their value based products, amounting to about ?36 crore during 2022-23.

 

Now, the State wanted to increase exports by a minimum of two folds in about a year, he said, while observing that there was a huge potential for Karnataka as the State accounted for nearly 40% of the country’s millet production.

 

The major export destinations included U.S., Australia, UAE, Canada, Qatar, Thailand and Singapore, he noted.

 

The major products that had been exported include sorghum, jowar, ragi and their value added products. They had been mostly sourced from the districts of Ballari, Koppal, Bengaluru Rural, Haveri and Chitradurga, the Minister said.

 

Karnataka had exported agri and allied produce to the tune of ?25,287 crore during 2022-23, he pointed out.

 

Purpose of fair

The Minister said the fair was being held for the fifth time by Karnataka mainly to provide marketing avenues for the millet and organic produce besides bringing all stakeholders under a common platform. The intention was to promote the use of these healthy millets on the one hand and to provide market for farmers on the other, he explained.

 

Karnataka State Agricultural Produce Processing and Export Corporation Limited is the nodal agency for organising the fair which is being held at Bengaluru Palace Grounds, in partnership with several national and international research institutes including Indian Institute of Millet Research and GIZ of Germany. A total of two lakh persons were estimated to participate in the fair which would have 300 stalls.

 

Companies and stakeholders from various countries including Germany, Australia, U.S., Oman, Spain, Indonasia, France, Vietnam, UK, UAE and Bangladesh had confirmed their participation in the fair, said the Minister. As many as 100 stalls have been reserved for Karnataka Pavilion in which FPOs, farmers’ groups, Universities and research organisations.

 

The fair would have an exhibition, buyer-seller-meets and international conferences. Farmres’ workshops would also be organised on methods of cultivation, packaging and certification, he said. The visitors can relish a variety of millet delicacies at the food court.

 

Countries ranging from large economies like Europe, and the UK to smaller ones, including Oman and Peru, want to have a free trade agreement with India due to the country's large and rapidly growing market, a report by economic think tank GTRI said. The Global Trade Research Initiative (GTRI) said that by implementing a trade deal (FTA) with India, countries can access the Indian market with less or no import duties on substantial trade.

 

This gives their companies an advantage over others in selling to the Indian market.

 

Additionally, since India currently does most of its importing (over 75 per cent) from countries it does not have FTAs with, these agreements are particularly appealing as they offer a significant new market opportunity in India.

 

'Everyone wants to do an FTA with India. Countries ranging from large economies like the US, Europe, Japan, and the UK to smaller ones like Oman, Peru, and Mauritius either already have or actively seeking an FTA with India. The main reason is India's high import duties, which make it difficult for these countries to access India's large and rapidly growing market,' it said.

 

However, it said that India may not see a big increase in exports from FTAs under negotiations.

 

The countries with which India is negotiating trade agreements already have low import duties.

 

'For example, the UK's duties are 4.1 per cent, Canada's 3.3 per cent, and the USA's 2.3 per cent. In contrast, India's import duties are higher at 12.6 per cent,' GTRI Co-Founder Ajay Srivastava said.

 

Also, a substantial share of imports from these nations are already happening at zero MFN (most favoured nation) duties, he said.

 

Canada's 70.8 per cent of imports are already happening at zero MFN duty. The same is the case with Switzerland (61 per cent), the US (58.7 per cent), the UK (52 per cent), EU (51.8 per cent).

 

'In contrast, in India only 6.1 per cent of global imports are undertaken at zero MFN duty. Given this, India might not see a big increase in exports after these FTAs because these countries already have low or no import duties,' Srivastava added.

 

On the other hand, countries like the UK and Canada could benefit more from the FTAs, as they will be able to sell their products in India without the high duties that India usually imposes.

 

The report suggested the government six steps while negotiating these deals and that includes creation of common exclusion list for merchandise trade negotiations; and focusing on obtaining real market access on the ground.

 

The other suggestions include doing sectoral agreements with poor and developing countries instead of trade deals involving goods, services, and investments; and negotiate new subject areas such as environment, labor, data governance, digital trade, gender, small and medium enterprises, anti-corruption, and sustainable food systems, carefully.

Chief Minister Thakur Sukhvinder Singh Sukhu said that the state government will offer quality horticulture equipment, fertilizers and pesticides at affordable rates through the Himachal Pradesh Horticulture Produce Marketing and Processing Corporation (HPMC) from January 1, 2024, said an official statement from the government of Himachal Pradesh.

 

Emphasizing the government's commitment, he said that HPMC has reduced its margin from 15 per cent to 9 per cent, enabling Apple growers to access quality products at more economical prices.

 

Furthermore, HPMC has inked 38 Memorandums of Understanding (MoUs) for direct purchases from original manufacturing companies, striving to offer farmers vital items at low rates. The Chief Minister said, 'Our government is committed to supporting apple growers and the decision to reduce margins reflects our dedication to uplifting the horticultural community and enhancing the economic well-being of apple growers in Himachal as our top priority.'

 

Highlighting the government's dedication to systemic revamp, he stated, 'The present government is working for 'Vyavastha Parivartan,' and every decision is being made for public welfare, ensuring that every section of the state can reap full benefits.'

 

The government aims to increase the income of the horticulturists in the state. The Horticulture department will suitably modify the existing schemes and make them more effective through appropriate restructuring, he added.

 

The government made provisions in its first budget for an online system to be established to facilitate procurement of horticulture produce at minimum support price by HPMC. This online facility will also be available for booking the CA stores of HPMC. Apart from sale of produce from home, the farmers will also be able to book farm equipment and materials sold by HPMC, he said.

 

Grading and packing houses, CA and cold stores will be set up in association with FPOs in Bhavanagar in Kinnaur, Sandasu near Chirgaon, Anu in Jubbal, Chopal in Shimla, Jabli of Solan district, Sundernagar in Mandi, Duttnagar near Rampur Bushehar and Kharapathar in Shimla, reiterated the CM.

 

The government successfully facilitated the sale of apples at a per-kilogram rate in the current year, fulfilling the long pending demands of the Apple growers, leading to increased profits for growers, said Sukhu.

 

Looking ahead, he assured that the sale of apples in the upcoming season will be streamlined into universal cartons. 

The government has allowed importing potatoes to increase supply of the daily essential commodity in the local market and keep its price stable.

 

Confirming the matter on Monday, commerce ministry Public Relations Officer Md Haidar Ali said interested importers are requested to apply to the ministry in this regard.

 

On 14 September, the government fixed the prices of eggs, potatoes and onions. 

 

Although the price of potatoes was set at Tk35-Tk36 per kg, it is being sold now for Tk60-Tk70 per kg.

The Finance Ministry expects the country’s GDP growth rate in 2023-24 to 'comfortably' exceed its earlier forecast of 6.5 per cent on the back of Q2 GDP growth performance that surprised on the upside at 7.6 per cent.

 

Already the country’s GDP grew 7.7 per cent in the first half this fiscal. The Union Budget for 2023-24 had pencilled in a nominal GDP of 10.5 per cent for current fiscal.

 

Without giving a revised projection for GDP growth rate (in real terms) for current fiscal, the Finance Ministry has in the latest half-yearly economic review report also highlighted that the headline inflation outlook is on a declining trend, notwithstanding temporary disruptions from food prices. 

 

The stable downward movement in core inflation and continuing deflation in fuel inflation is aiding this trend, it noted in the report.

 

The Reserve Bank of India has projected inflation to average at 5.4 per cent in FY24.

 

'The outlook for India’s external sector is promising, as seen in the November releases of trade balances for both services and merchandise. The relatively stable Indian rupee against the US dollar and other prominent currencies and adequate foreign exchange reserves add to the optimism (on growth outlook). 

 

This sanguinity is visible in the resurgence of foreign portfolio investments since November 2023 and in FY24 in general, compared to FY23. Foreign investment inflows are also helping the Indian stock market indices climb new heights, reflecting broad-based optimism on growth among domestic and foreign investors on growth prospects,' the Finance Ministry report noted.

 

The risks to growth and stability outlook mainly emanate from outside the country, it added.

 

India had recorded an economic growth of 7.2 per cent in 2022-23 and 9.1 per cent in 2021-22.

 

Post the release of the Q2 GDP data by the Statistics Ministry on November 30, the RBI has raised its growth forecast for 2023-24 by 50 basis points to 7 per cent.

 

Growth forecasts

Several multilateral institutions, rating agencies and global financial majors have immediately upped their growth forecasts for India. 

 

The International Monetary Fund (IMF) is now pegging India’s growth rate at 6.3 percent for 2023 and 2024 after an upward revision citing domestic consumption. IMF now expects India to become a $5-trillion economy by 2028. 

 

On the other hand, S&P Global Ratings expects India to become the third largest economy by 2030. It believes India will be fastest growing economy in the world for the next three years. 

 

JP Morgan, a global bank, expects India to become the third largest economy in the world by 2027. It expects the Indian economy to hit $7 trillion by 2030. 

 

Food inflation

Meanwhile, on food inflation, the Finance Ministry has in its latest report said that the 'relatively high food inflation…is a matter of concern'. However, it is important to mention that the present rate of increase in prices is a worldwide phenomenon, it added.

 

'While India recorded 6.6 per cent food inflation in October, the UK is still grappling with 10.1 per cent, Japan at 9.8 per cent, and South Africa at 9 per cent food inflation,' the finance ministry report said.

 

India’s food inflation rose to 8.7 per cent in November 2023, retail inflation data released on December 12 showed. 

British Prime Minister Rishi Sunak is keen to clinch a free trade agreement (FTA) with India in time for Easter, which falls at the end of March 2024, according to a UK media report.

The India-UK FTA talks began in January last year, aimed at significantly enhancing the GBP 36-billion bilateral trading partnership. A new round of negotiations, expected to be the last, is set to start early in the new year after the thirteenth round concluded on December 15.

 

Prime Minister Mr Sunak and India's premier Narendra Modi are said to be keen to get the deal wrapped up by April, reads a report in the Daily Express' newspaper updated on Saturday.

 

It is hoped a deal can be signed and sealed before India's general elections begin on April 1, it claims.

The newspaper quoted a source close to the trade talks on the UK side to say that a lot of progress has been made, but some of the hardest aspects remain pending.

We have made a lot of progress, but the last stuff to do is the hardest. We have negotiators out there most weeks going through the details, and we have a deadline of their elections, the source told the newspaper.

'Both Rishi Sunak and Modi remain keen, so it's just a case of seeing if we can get it over the line, the source added.

 

The UK hopes an FTA will open up its trade in Scotch whisky and cars to India, as well as services and investment opportunities. Meanwhile, India would seek better access to its manufactured goods and services and a deal on professional visas.

With both India and the UK heading into a general election year in 2024, signing off on a trade agreement has taken on particular urgency before leaders on both sides get into campaign mode.

A joint outcome statement released last week by the UK Department for Business and Trade (DBT) said: The thirteenth round of negotiations for the UK-India Free Trade Agreement took place from 18 September to 15 December. The round included sessions, both in person, in London and Delhi, and virtual talks.

 

'As with round 12, these negotiations focused on complex issues, including goods, services, and investment. The UK and India will continue to negotiate towards a comprehensive and ambitious Free Trade Agreement. The fourteenth round of negotiations will take place in January 2024, the statement said.

Under the format so far, the fourteenth round is likely to be hosted by London, with talks taking place between officials in a hybrid format both in person and virtually.

We have made substantial progress... I think both sides are very aware of the importance of the FTA and will make the utmost effort to get there. So, we have to take it as it happens, External Affairs Minister S Jaishankar told reporters after his meetings with Sunak and other senior Cabinet ministers during a UK visit last month.

 

There had been some speculation that cricket enthusiast Sunak would be following up his first India visit as British prime minister for the G20 Summit in September with some cricket diplomacy at the England versus India World Cup clash in Lucknow on October 29 when the highly anticipated FTA could be signed off.

However, the internal political turmoil of a Cabinet reshuffle within the Tory party and the Israel-Hamas conflict on the global front were said to have side-tracked focus.

We are very close We will finish when we finish, UK Business and Trade Secretary Kemi Badenoch told a House of Commons committee when last questioned about timelines.

 

Officially, the Sunak-led government has held a firm 'it's the deal, not the date' line to avoid setting firm timelines since former prime minister Boris Johnson's Diwali 2022 deadline for an India-UK FTA was missed.

India’s goods exports to Australia in April-November 2023 increased 14 per cent (year-on-year) to $5.87 billion, while the country’s overall merchandise exports declined, indicating that the India-Australia Economic Cooperation and Trade Agreement (ECTA) implemented in December last year may have started delivering, officials have said.

 

The increase in exports of items on which preferential tariffs have been offered by Australia have increased by a higher 17.8 per cent in April-October 2023 to $1.58 billion.

 

'...there are some early shoots that indicate that there has been growth in exports from both sides where preferential tariffs were given,' said Rajesh Agrawal, Additional Secretary, Department of Commerce, at a press briefing on Friday.

 

Imports down

India’s imports from Australia in the April-November 2023 period declined 19 per cent to $11.14 billion, although there has been increases in areas the country has been pushing for such as agriculture products.

 

'Agricultural exports to India are 50 per cent higher since the trade agreement came into force on December 29, 2022. This includes massive boosts in products like sheep meat, seafood, broad beans, citrus and almonds,' per a statement from the Australian government. 

 

From January 1, 2024, Australian exports to India will be even more competitive, with more tariff cuts on high quality Australian products such as seafood, cherries, sandalwood and wine, the statement added.

 

'In the year since this agreement came into effect, we have seen enormous gains for a range of Australian exporters, including our farmers, manufacturers, and our universities,' said Australian Trade Minister Don Farrell.

 

As part of the India-Australia ECTA, Australia eliminated tariffs on 98 per cent of its tariff lines when the agreement came into force at the end of 2022. It will eliminate tariffs on the remaining lines within five years. India eliminated tariffs on 40 per cent of its tariff lines and will eliminate tariffs on another 30 per cent of its tariff lines in a phased manner over the next seven years.

 

Full-fledged CECA

The two countries are now working on a full-fledged Comprehensive Economic Cooperation Agreement (CECA). 'This comprehensive trade agreement would allow us to go further in areas such as digital trade, and deliver commercially meaningful new market access for our exporters,' the Australian government’s statement pointed out.

 

There are, however, chances that the CECA may be put off till after India’s general elections in early 2024, an official told businessline.

 

'The CECA deals with sensitive areas including a greater number of agricultural products. It may be difficult for the government to take on commitments just before the elections. So there are chances that this may get put off,' the official said.

 

India and Australia hope to increase bilateral trade to $100 billion annually from $30 billion now after the CECA is implemented.

The Commerce and Industry Ministry has asked export promotion councils and other industry bodies to give specific inputs on measures to reduce regulatory compliances and streamline processes further and also share recommendations on decriminalisation, sources have said.

 

This is in line with the government’s stated policy of improving ease of doing business and working continuously to reduce compliance burden for a conducive business environment, a source tracking the matter told businessline.

 

'Inputs have been sought from export bodies on matters related to the Directorate General of Foreign Trade, Customs authorities, the RBI, the CBIC (Central Board of Indirect Taxes and Customs) and on the GST regime, sources tracking the matter told businessline.

 

Once the government receives inputs and processes them, the policies and the procedures will be modified accordingly, the source added.

 

'We are giving our suggestions on what processes can be further simplified. We are identifying areas where you can go for self-certification and where you can go for lesser documentation,' an official from an exporters’ body said.

 

Changes can also be made to the Foreign Trade Policy 2023 based on inputs as amending the policy is now a continuous process and not an annual one.

 

Key focus

The key focus of the government’s drive is simpli?cation of procedures related to applications, renewals, inspections, filing records, etc; rationalisation by repealing, amending or subsuming redundant laws; digitisation by creating online interfaces eliminating manual forms and records; and decriminalisation of minor technical or procedural defaults, Minister of State for Commerce Som Prakash recently said in a Parliament reply.

 

DPIIT, the industry arm of the Commerce and Industry Ministry, started an exercise some time back to assess the cost of regulations in states to provide insight into reforms that can be carried out to improve the business climate. A number of obsolete provisions have already been removed or simplified by DPIIT.

 

'Exporter bodies and other industry players have also been asked to give inputs for decriminalisation of provisions to be incorporated in the second edition of the Jan Vishwas Bill that the government is working on,' the official said.

 

The Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed in the Lok Sabha on June 27 and in the Rajya Sabha on August 2. The Bill sought to decriminalise about 180 minor offences in 42 legislations including some colonial era laws. 

Pulses imports are seen rebounding to a six-year high in the current financial year on shortfall in domestic output following deficit rainfall in growing areas. Trade estimates that pulses imports are likely to touch 3 million tonnes(mt) during the current financial year, an increase of around 31 per cent over last year’s 2.29 mt.

 

The shortfall in domestic output due to weather vagaries led to prices spiralling in recent months. The government, besides opening up imports of yellow peas till March 31, 2024, has extended the window for duty-free imports of pulses such as lentils (masur), tur (pigeon pea) and urad (black matpe) till March 2025, to boost the supplies and keep prices under check.

 

Lentils tops 1 mt?

'Chana output was good last year, while the moong bean production was not that encouraging this kharif as it was affected due to the dry spell in Rajasthan. We are still dependent on imports for the pulses varieties such as tur, urad and lentils. We will end up importing almost 3 mt of pulses this financial year' said Bimal Kothari, chairman, India Pulses and Grains Association (IPGA).

 

As per the DGCIS data, India has already imported over 1.96 mt of pulses during the April-October period of the current financial year, valued at over Rs.14,057 crore ($1.69 billion). Of this, the imports of lentils is reported to have crossed a million tonnes.

 

India had imported a record 6.5 million tonnes of pulses during 2017-18, when yellow peas were imported in large quantities. Imports declined in the subsequent years after restrictions were placed on varieties such as yellow peas, chick peas and moong.

 

Sowing down

As of December 29, the pulses acreages in the current rabi season was down at 142.49 lakh hectares (lh) over 153.22 lh a year ago. This was mainly on account of a dip in chana acreage at 97.05 lh over 105.80 lh a year ago. However, the area under lentils has seen a marginal increase at 18.68 lh (18.02 lh).

 

The trade expects chana output to be lower by 10-15 per cent on account of a drop in acreage, while the production of lentils is likely to increase with favourable weather in the key producing States of Madhya Pradesh and Uttar Pradesh.

 

India decisively withstood global headwinds in 2023 and is likely to remain as the world's fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the developed nations and the worsening geopolitical situation, India recorded a gross domestic product (GDP) expansion of 6.1 per cent in the March quarter. The growth moved up to 7.8 per cent in the June quarter and was 7.6 per cent in the September quarter.

 

For the first six months of this fiscal, the growth was 7.7 per cent.

 

The growth momentum is expected to sustain in the December quarter, making India the fastest-growing major economy in the world much ahead of China.

According to the latest growth projections of the Organization for Economic Cooperation and Development (OECD), which appear conservative, India will record a growth of 6.3 per cent in 2023, ahead of China and Brazil at 5.2 per cent and 3 per cent, respectively.

 

For 2024, the OECD expects India to grow at 6.1 per cent and China at 4.7 per cent.

 

On the other hand, major economies, including the US, UK and Japan, are likely to witness either deceleration or very nominal increase in economic growth rates in the coming year.

 

India's performance on the economic front in 2023 appears even better when viewed from a global perspective.

 

As per the International Monetary Fund's (IMF) World Economic Outlook, global growth is estimated to decelerate from 3.5 per cent in 2022 to 3 per cent in 2023 and further to 2.9 per cent in 2024.

 

Ashima Goyal, Member of the Reserve Bank of India's Monetary Policy Committee (MPC), said India's growth has 'shown great resilience despite many external shocks. This is due to increasing economic diversity and the role of policy in smoothing shocks'.

 

Equipping people with better skills and assets, she said, 'will add up to give India good growth in 2024 and beyond'.

 

Dharmakirti Joshi, Chief Economist at rating agency Crisil, said geopolitical developments will again test the resilience of India's domestic demand in the coming year.

 

'We expect the GDP to grow at 6.4 per cent in the coming fiscal year, a tad lower than the current one. The lagged impact of interest rate hikes and the global slowdown will be the key drags,' he noted.

 

A recent article on the state of the economy by the RBI said, 'Despite significant global headwinds, the Indian economy remained the fastest growing major economy in 2023. The outlook is one of cautious optimism as consumer confidence remains positive and perceptions about current income turned up in the RBI's latest survey of households in November 2023'.

 

RBI's dynamic Stochastic General Equilibrium (DSGE) model -- which is based on microeconomic foundations and rational expectations characterising the choices of agents, such as the representative consumer, producer and the central bank -- projects a growth rate of 6 per cent in the financial year 2024-25.

 

'After a couple of difficult years, the economic environment is turning more benign with inflation trending down and growth remaining robust. Most forecasts project that growth in 2024-25 would be close to but slightly lower than in 2023-24. The global slowdown and geopolitical uncertainty remain the biggest risks to growth,' MPC Member Jayanth R Varma said.

 

Retail inflation is on a downward trajectory after touching a peak of 7.44 per cent in July. This year began with retail inflation of 6.52 per cent in January, and it softened to 4.31 per cent in May before rising to 7.44 per cent in July.

 

In November, the retail inflation worked out to be 5.55 per cent, which was within RBI's comfort zone but some distance away from the mean rate of 4 per cent.

 

Aditi Nayar, Chief Economist at rating agency Icra, said inflation is likely to moderate, although a well-distributed monsoon will be crucial for quelling food inflation.

 

India's macros appear to be in a good place heading into 2024. The growth is expected at 6.5 per cent in FY2024 and 6.2 per cent in FY2025, she added.

 

As per the central bank's DSGE model, the retail inflation during the financial year 2024-25 is projected to decline to 4.8 per cent from 4.9 per cent estimated for the current fiscal.

 

Following the policy of remaining 'actively disinflationary', the RBI has kept the short-term interest rate or repo rate unchanged at 6.5 per cent since February.

 

RBI Governor Shaktikanta Das ended the rate hike cycle, which began in May 2022, by opting for the status quo in policy rate from April 2023. The stable interest rate regime has yielded good dividends and strengthened the twin balance sheets of banks and corporates.

 

It is likely that the Reserve Bank may go in for a rate cut during the course of 2024 if the retail inflation remains within the specified band of 2 to 6 per cent and the price of crude oil does not show any unexpected spike driven by geopolitical factors, including Russia-Ukraine war, Israel-Gaza conflict and blockade of Red Sea route.

 

'Overall, the forces are likely to balance out in calendar year 2024, giving us a comfortable growth rate in the range of 6.3 per cent to 6.6 per cent. The joker in the pack is geopolitics and conflict hotspots - the worsening or easing of the current conflicts will determine the landing bias of the growth rate to the lower or higher end, respectively,' opined Ranen Banerjee, Partner, Economic Advisory Services, PwC India.

 

The comforting factor for India in the midst of a worsening geopolitical climate and global economic slowdown is the foreign exchange reserves, which crossed the USD 600 billion mark in December after a gap of about four months.

 

Also on the external front, the current account deficit showed remarkable improvement, and it narrowed sharply to 1 per cent of GDP in the September 2023 quarter against 3.8 per cent in the year-ago period.