Commerce and industry minister Piyush Goyal on Tuesday said that the current year shows some challenges with the geopolitical situation across the world, concerns around inflation and slowing growth which is impacting certain sectors such as petroleum, natural diamonds, readymade garments and chemicals.

 

At an event organised by the Federation of Indian Export Organisation (FIEO), he emphasised on value, volume and quality of exports and that India is trying to unlock newer markets through free trade pacts, collaboration work different countries, encouraging investments in modern technology, looking for digitalization and technology adaption.

 

'The current year does show some challenges with the geopolitical situation across the world with concerns around inflation slowing growth and the impact that we have seen in certain sectors,' Goyal said.

 

He said the target for 2030 is to have $1 trillion of goods exports and $1 trillion of service exports, and that India aspires to to become a $35 trillion economy by 2047.

 

The minister also met various export promotion councils earlier in the day where issues related to the EU’s Corporate Sustainability Due Diligence Directive, and Carbon Border Adjustment Mechanism were taken up.

 

'Issues related to high imports of gold and some chemicals but the low exports of gems and jewellery were discussed,' said an industry representative who participated in the meeting, adding that exporters assured the government of reaching $450 billion of goods exports in the next seven months.

 

Officials said that petroleum products, marine products and inorganic chemicals were among the 15 key product categories where export volumes rose but value fell in April-June FY24.

 

At the FIEO event, Goyal said that India’s space sector is not going to be restricted to the government alone.

 

'We have already formed IN-SPACE. And one thing on regulatory forbearance and regulatory simplification to allow the private sector to participate in this journey of space,' he said.

India has allowed traders to ship out their non-basmati white rice cargoes sitting at ports due to a sudden ban on exports of the category, a government order said late on Tuesday.

 

On July 20, India surprised buyers by banning exports of widely consumed non-basmati white rice to control rising domestic prices. The move followed a ban on broken rice exports last year.

 

The export ban trapped thousands of tonnes of non-basmati white rice at ports, leaving traders facing losses.

 

The Directorate General of Foreign Trade (DGFT), a unit of the trade ministry, in its latest order said it would allow shipments of trapped cargoes provided traders paid the export duty by July 20, when the ban was imposed.

 

Before the July ban on non-basmati white rice exports, overseas shipments of the grade would attract a 20% tax.

 

After the DGFT order, around 150,000 tonnes of non-basmati white rice cargoes would be shipped out of various ports, said Prem Garg, president of the Indian Rice Exporters Federation.

 

'Three ships were standing still at the Kandla port and a lot of containers were lying at different ports, causing a lot of problems for the rice industry,' he said.

 

India, which accounts for 40% of world rice exports, sells the staple to more than 150 countries, including a few poor and vulnerable countries in Africa and Asia.

 

New Delhi exported a record 22.2 million tons of rice in 2022.

 

After banning non-basmati white rice exports, India on Friday imposed a 20% tax on parboiled rice shipments and introduced a floor price for overseas sales of basmati rice, as part of efforts to keep a lid on local prices.

 

India's rice export curbs have put upward pressure on global rice prices.

 

'The permission to allow the cargoes stuck at ports will not only help Indian suppliers, it will also help consumers in some of the most needy countries,' Garg said.

 

Most of the trapped cargoes would go to East African and West African countries, he said.

Global rice prices continue to rise, pushing Thai rice prices to 12,000 baht per tonne after Myanmar followed India’s lead by implementing a two-month ban on rice exports.

 

India banned most rice exports on July 20, raising concerns that other rice-exporting countries might do the same, sparking volatility in the global rice market. Only 'basmati’ rice ' can be exported from India, though its government has opened channels to sell directly to other governments. Several countries have requested export quotas from India, leading to price fluctuations.

 

India is the largest rice exporter, accounting for around 40 percent of the global rice trade. It has a major impact on global rice prices. Other major exporters, like Thailand, Vietnam, Pakistan, and the United States, have been affected by India’s partial ban.

 

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the current rice-price situation makes it challenging for sellers to provide accurate prices. The recent ban on rice exports by Myanmar adds to the uncertainty.

 

Traders are closely watching India’s decision on which countries it will sell rice to, as this will impact global rice prices.

 

Vietnam, the third-largest rice exporter, has said it will not halt rice exports, but uncertainty remains about the future actions of other major rice-exporting nations, Chookiat said.

 

The goal of exporting 8 million tonnes of rice this year from Thailand remains, but it could fall short if major buyers like the Philippines and Indonesia succeed in purchasing rice from India, Chookiat said.

Shri Piyush Goyal, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, has said that the upcoming G20 Summit holds significant importance for global trade, for attracting investments to India and for enhancing India’s role in multi-lateral organizations. Shri Goyal said this while addressing the Northern Regional Export Excellence Award function of Federation of Indian Export Organisation (FIEO) in New Delhi today.

 

Expressing confidence that India’s presidency will be recognized and remembered for many years as an action oriented Summit where significant deliverables were offered to the world, Shri Goyal noted that the recent G20 Trade Ministers’ meet in Jaipur gave a Call of Action through which Indian MSME sector will get a significant access to information, which will help them become globally successful exporters. 'We are looking at mapping global value chains so that Indian traders can play a greater role in global value chains and we also focussed on digitisation of trade documentation,' he added. He noted that India will have almost 90 percent of global GDP being represented in New Delhi at the G20 Summit in a few days.

 

Shri Goyal said that after a long period of a stagnation in exports, India broke the ceiling and crossed 450 billion dollars of merchandise exports in 2022-23. Admitting that the current year does show some challenges with geopolitical situation and the impact of that which we are seeing in certain sectors like petroleum, gems and textiles, he expressed confidence that our exporters have the ability and agility to overcome adverse situations. He said that we are living in a nation full of pride, a nation full of talent, a nation which is being recognized across the world as the future engine of world economic growth. India has celebrated three major achievements in the recent days – Chandrayan mission, in sports in form of wins in javelin and chess and the successful engagements in Ministerial Meetings in G20, he said.

 

Shri Goyal quoted Prime Minister Shri Narendra Modi saying 'Business can transform potential into prosperity, obstacles into opportunity, aspirations into achievements, small or big, global or local, it can ensure progress for everyone.' This is truly a great vote of confidence in our business community, he said. 'You are being recognized and respected for the work that you do and your contribution in our journey towards become a developed nation is being recognized and applauded,' he added.

 

Commerce and Industry Minister said that India was one of the few nations who showed resilience and responsibility during the pandemic. 'We also showed sensitivity to the developing world by providing them vaccines, to many of them free of charge. We showed that under Prime Minister Modi’s astute leadership we will perform and lead global growth,' he said.

 

Shri Goyal said that Prime Minister Modi has described India as a nation of opportunities. For the next 30 years, India will continue to have a young population and we will add 30 trillion dollars to become a 35 trillion economy by 2047, he said, adding that our young, aspirational demography will create a demand for us. Now even the sky is not the limit for us, he said, alluding to India’s successful space mission.

 

'We are investing huge amounts of money on infrastructure so that we can get lower logistics cost, so that we can get seamless movement of goods and services and we are ensuring that we get corruption free environment,' Shri Goyal said, adding that 'no power can stop India’s growth now.' The target for 2030 is to have 1 trillion dollars of goods exports and 1 trillion dollars of service exports and this will be met with your hard work and contributions, Shri Goyal added. He informed the gathering that India is trying to unlock newer markets through FTAs, encouraging investments in modern technology, looking for digitalization and technology adaption to become more acceptable to the world for high quality goods and services so that the true potential of India can be harnessed.

 

'We should focus on quality, sustainability and innovation and if we keep these in our priority, the world is looking up to India wants to deal and trade with India and to partner with us in our growth story,' he concluded.

Following the G20 Trade and Investment Ministers Meeting (TIMM) at Jaipur, Commerce and Industry Minister, Piyush Goyal and the UK's Secretary of State for Trade, Kemi Badenoch had a stock-taking meeting in Delhi on August 26 to review the ongoing India UK Free Trade Agreement (FTA), informed Ministry of Commerce and Industry through an official release.

 

While expressing satisfaction over the last 12 rounds of negotiations wherein several chapters have been finalised, both exuded confidence that the next round of negotiations to be similarly successful. Both Chief Negotiators apprised the Ministers about the current state of play, issues outstanding for resolution and their continuous joint efforts to iron out the same.

 

While appreciating the efforts of both the CNs, the Ministers desired a good pace of exchanges to be continued with a better understanding of each other's aspirations and sensitivities. Both leaders expressed their unwavering commitment to reaching a conclusion on a fair, balanced, and mutually beneficial trade deal that will enhance economic cooperation between the two countries, according to the official release.

 

Minister Goyal thanked Badenoch for her support and constructive participation in the G20 TIMM at Jaipur. He also invited her to participate in B20 Summit India 2023 events. The meeting was also attended by Commerce Secretary Sunil Barthwal and DG Trade Negotiations Amanda Brooks. Teams are going to continue negotiations till the end of August 2023 which will be followed by stock-taking at a higher level, it added.

 

The G20 Trade and Investment Ministerial Meeting TIMM was held in Jaipur on August 24th and 25th. The meeting was preceded by the 4th and last Trade and Investment Working Group TIWG meeting under India's G20 Presidency which took place on August 21 and 22 in Jaipur.

 

The first three TIWG meetings were held in Mumbai, Bangalore and Kevadia respectively. Both meetings were attended by more than 300 delegates, including trade ministers/secretaries and heads of delegations from G20 member countries, invitee countries, regional groupings and international organisations.

 

The deliberations focused on building consensus on global trade and investment-related issues, along with accomplishing action-oriented proposals put forward by the Indian Presidency.

The world recognises Africa’s immense potential in terms of its enormous natural resource endowments (energy, minerals and agriculture) and large population. . India has enjoyed strong relationship with many of the nations in Africa (there are now 54 countries) for centuries.

 

Africa-India trade is currently valued at about $90 billion, but the potential for growth is huge. In particular, trade in agricultural commodities has been on a strong footing for years. Indian entrepreneurs have made investments in some of the African countries, helping create jobs and incomes there. Yet, considering the potential for growth, the business opportunities are rather under-explored.

 

There are several common features and challenges Africa and India face. Ensuring food and nutrition security to their large populations is the primary issue. Global warming and climate change are proving to be a formidable challenge for both. There is enormous scope for collaboration in building resilience against climate change.

 

There are many common issues as far as agriculture is concerned, and these include smallholder cultivation, low level of input usage, low productivity, inadequate mechanisation and inefficient supply chain. Agricultural infrastructure too needs rapid modernisation and investment so as to build supply chain efficiency.

 

Talking specifically of agri-business, India has a strong bilateral trade in agricultural commodities with many of the African countries. The major commodities India exports to Africa include rice, sugar, meat, dairy products, confectionery and beverages. From Africa, India imports pulses, oilseeds, spices, coffee, cotton and raw cashew. India enjoys strong trade ties with Tanzania, Mozambique, Malawi, Uganda, Kenya, Ethiopia, Nigeria and Ivory Coast among others.

 

To meet the domestic shortfall in pulses, India has signed a Memorandum of Understanding with Mozambique and Malawi for import of pigeon pea (tur/arhar). Interestingly, import from many of the African origins is allowed duty-free in India given their Least Developed Country (LDC) status. This helps promote trade and support Africa’s smallholders.

 

In a major development last year, India signed rupee payment agreements with as many as 18 countries around the world. Tanzania, Uganda, Kenya and Botswana figure in the list. As a result, invoicing and payment will be in rupees. The RBI issued a circular to that effect on July 11, 2022.

 

India has its own strengths in the agriculture sector and has made noteworthy progress in recent decades. Our farm R&D is arguably among the best in the world. Indian scientists’ domain expertise and skills can be utilised to strengthen African agriculture and related activities like livestock and fisheries.

 

Joint research in agricultural inputs — seeds, agrochemicals, fertiliser and water — to build higher levels of efficiency in input delivery and input utilisation is the need of the hour. Digitisation will help.

 

While two-way trade in agricultural commodities will continue, Africa and India can set up joint working groups to examine investment opportunities in processing and value addition. Investment in building agri-infrastructure — storage, logistics, electronic markets — is an area that provides opportunities.

 

Closer engagement between Africa and India will deliver benefits for stakeholders on both sides — growers, processors, consumers, traders and service providers.

 

Excerpts of keynote speech delivered by the author during the recently concluded Africa-India Agribusiness Summit in Dar es Salaam, Tanzania

The Centre imposed a 20 per cent export duty on parboiled rice with immediate effect to curb a surge in shipments since July 20 when it banned exports of (non-basmati) white rice.

 

According to a notification issued by the Ministry of Finance late on Friday night, the duty will be in force till October 15. The Government will also soon notify a minimum export price (MEP) for basmati to ensure that other varieties of rice are not exported in the garb of the fragrant rice. 

 

 Though the Finance Ministry said the export duty comes into  immediate effect, exporters who have contracted before the notification was issued are allowed to ship their consignments at zero duty until October 15, traders said. The October 15 date is seen as the time by which the Union Government will have a fair idea of the kharif rice production. 

 

'The Food Corporation of India (FCI) will begin rice procurement for the central pool from October 1 and by October 15, it will have a fair idea based on the arrivals. After that, the Centre could even ban parboiled rice exports,' said a trading source, who did not wish to identify.

 

Trade analyst S Chandrasekaran said following the 20% duty will lead to inflation in rice, particularly in South-East Asia. Indian parboiled rice is currently quoted at $500 a tonne. 

 

'If the 20 per cent duty is taken into account, then Indian parboiled will cost $600. Thailand parboiled is priced at $615 a tonne. If the rupee depreciation is factored, then the gap will be $20 and an arbitrage still exists,' he said.  The Indian duty on parboiled rice will further push up rice prices further, particularly Thailand. Global rice prices are currently ruling at a 15-year high. 

 

The Centre’s curbs on rice exports are seen as part of measures to control inflation as announced by Prime Minister Narendra Modi during his Independence Day address. The new measures on export of rice, a key staple for the majority of the population, will ensure higher domestic availability, officials said.

 

The Committee of Secretaries, headed by the Cabinet Secretary, decided to impose the MEP on basmati rice on August 21, sources said. However, unlike other commodities in which the Director-General of Foreign Trade notifies the MEP, in case of basmati, the agri-export promotion body Apeda will implement it, the sources said.  Basmati rice export is allowed only after registration of a contract with Apeda which issues certificates to exporters allowing shipments.

 

Though overall acreage of paddy in the current kharif season is 4 per cent higher than year-ago, per data released by the Agriculture Ministry on August 25, the condition of crops in Southern States is in 'bad shape', experts said, pointing to deficient rainfall in many parts. Karnataka, for instance, has received 75 per cent below normal rain during August 1-25, officials said.

 

On the other hand, trade sources said the Centre’s current objective is to delay shipments, sources said.

India's G20 Sherpa Amitabh Kant on Monday stressed on the need to boost crop productivity through adoption of new cutting-edge technologies and said the farm sector should be made smart and adaptive to climate change. Kant was speaking at the G20 India Agri-tech Summit 2023 held here.

 

For higher economic growth of India, he said, 'India needs to grow in the agriculture sector. Its productivity must enhance rapidly. That would mean that we will require a lot of new cutting-edge technologies'.

 

Digitisation of agriculture, the technological transformation and innovation in the farm sector has been the central priority pushed in the Indian presidency in the GCO this year, he added.

 

'Transforming the agriculture sector into a data-driven, smart and adaptive to climate change is integral to the transformation of the agriculture sector,' Kant said, adding that this would entail focus on aspects like open access agricultural data platforms and recognising them as global public goods.

 

He also emphasised on the need to co-opt startups and responsible investments from the private and public sectors for enhancing the welfare of farmers, especially small and marginal farmers.

 

Kant stressed on ensuring that farmers adopt these technologies.

 

Agriculture working group had four priorities this year -- food security and nutrition; sustainable agriculture with a climate smart approach; inclusive agri value chains and food systems; and digitisation for agricultural transformation, he informed.

 

All these G20 priorities of India have been set up in the backdrop of addressing the global hunger and malnutrition for achieving SDG of zero hunger by leveraging technological advancement, Kant said.

 

He noted that technological advancement in agriculture is really the key. This would translate into providing farmers with real-time data and creating crop production forecast model.

 

G20 members, being the major agricultural producers, consumers and exporters, have come together to take a collective responsibility towards transitioning to a sustainable and resilient agricultural food system.

 

'Fundamentally, our ambition should be to transform agriculture, the agri-food sector into a very attractive and lucrative modern business enterprise. This needs to be done by keeping the farmers at the core of this digital revolution, by facilitating affordable access to an inclusive digital infrastructure and by exploring digital tools that cater to the needs of the agri sector,' Kant said.

 

The event saw participation from the agriculture industry, farmer associations and FPO, delegates from seven G20 nations, agri-tech startups, international delegates and investors, the statement said.

The dry El Nino weather has begun to cast its shadow on the global rice market in a big way with Myanmar now joining India in curbing white rice exports. 

 

Trade sources said Myanmar will begin curbing white rice exports from September 1. 'The curbs will continue for 45-60 days until the military junta ruling there is convinced that the cereal’s prices will stabilise,' the sources said.

 

Myanmar, which accounts for two million tonnes (mt) of white rice exports in the global market, has seen demand increase for its rice after India banned white rice exports on July 20. The curbs are seen as measures to control rising food prices and ensure domestic food security like India has done by banning white rice and wheat exports. 

 

Local prices double

The neighbouring country exported 0.32 mt of white rice between April and July this year, a significant rise historically. This resulted in domestic prices increasing, another reason for the junta to curb shipments. 

 

Local reports said domestic prices of common rice have more than doubled due to lower production in 2022 and difficulties in transportation. The Food and Agricultural Organisation, an arm of the UN, said Myanmar’s rice production declined by eight per cent in 2022.  

 

One of the reasons is that Myanmar’s key paddy-growing regions of Sagaing and Magway — the third and fifth largest producers — are witnessing armed conflicts. This has resulted in many farmers getting internally displaced and they have been unable to return to work on their paddy fields due to fear of landmines and the military troops in some areas. 

 

Indifferent July

According to the Asian Food Security Information System — a project of ASEAN, China, Japan and Korea — planting of wet season rice has been slower this year due to less availability of rainfall and irrigation water — a fallout of the El Nino impact. 

 

In July, Myanmar experienced irregular rainfall and rising temperatures. 'It may impact the planting work of the wet season rice,' it said.  

 

Myanmar will fulfill its export obligations and not bar parboiled rice exports, but the curbs will likely heat up the global market further. 'Parboiled rice will be under pressure further in view of Myanmar’s curbs since world-over white rice shipments are under curbs,' said S Chandrasekaran, a Delhi-based trade analyst.

 

India’s ban on rice exports, including last year’s prohibition on broken rice shipments, havs resulted in the cereal’s prices soaring to a 15-year high. However, VR Vidya Sagar, Director, Bulk Logix, said parboiled prices for exports have begun to drop.  

 

Output may rise

'Currently, prices are around $490 a tonne free-on-board (f.o.b),' he said. In comparison, Thailand, India’s main rival in the market, is quoting between $612 and $615 f.o.b. Pakistan, another competitor, has run out of stocks. 

 

Data from Thai Rice Exporters Association show that barring Indian parboiled rice, almost all rice varieties are quoting above $600 a tonne.

 

According to the FAO’s Agricultural Market Information System, rice production will likely be 523.7 mt in 2023-24 (September-August) against 517.6 mt in 2022-23.

 

India banned white rice exports to face any supply shortage in view of rains damaging paddy crops in Punjab and Haryana, besides deficient rains affecting the sowing of paddy in Karnataka, West Bengal, Chhattisgarh, Tamil Nadu, and Andhra Pradesh. But Ministry of Agriculture data show that the area under paddy has increased by four per cent during the current kharif season.

 

Experts are, however, divided on the prospects of production in view of delay in transplantation of paddy.