India's bilateral trade with Senegal has touched a record USD 1.65 billion in 2021-22 despite the coronavirus pandemic, Vice President M Venkaiah Naidu has said, expressing hope that the figure grow significantly in the coming years.

 

Naidu, who is in Dakar on the second leg of his three-nation tour to Gabon, Senegal and Qatar, on Friday, addressed an India-Senegal business event. 'The Vice President noted that despite the pandemic, there was a welcome growth in economic and trade ties between the two countries and bilateral trade has crossed a record high of USD 1.65 billion in 2021-22,' his office tweeted, adding that he hoped that the trade would grow significantly in the coming years.

 

As to the bilateral trade basket, major items of export from India include textiles, food items, automobiles and pharmaceuticals. The main items of import from Senegal are phosphoric acid and raw cashew.

 

‘Natural partner’

Naidu earlier on Friday termed Senegal as India’s 'natural development partner,' and appreciated the African nation for its democratic ethos, as he held delegation-level talks with the President of the National Assembly of Senegal Moustapha Niasse.

 

Naidu, who is also the Chairman of the Rajya Sabha, emphasised the important role of legislature in the life of a nation, and said that a strong, effective & responsive parliament lies at the core of good governance.

 

He also appreciated Senegal’s democratic ethos, making it India’s 'natural development partner,' his office tweeted.

 

India and Senegal are celebrating the 60th anniversary of the establishment of diplomatic relations this year.

The Standing Committee for Promotion of Exports (Shipping) held its 51st Session on June 3, 2022 at Udyog Bhawan, New Delhi. It was chaired by the Special Secretary of the Logistics Division, DPIIT and witnessed a proactive participation from industry associations and organisations such as INSA, FFFAI, CFSAI AMTOI, IPA, FICCI, CBIC, and FIEO. The forum also saw representation of senior officials from CBIC, DGFT, MoPSW and representatives from all major ports of India who were present together on a single platform to address concerns of industry associations.

 

Since the launch of PM GatiShakti on 13 October 2021, the focus on resolving user issues by overcoming departmental silos has been an essential commitment of the government. To achieve such improvement in regulatory interfaces and reduce gaps in regulatory architecture, the existing institutional mechanism of SCOPE is being utilised to overcome any procedural, policy, or performance bottlenecks that may hinder the export potential of the country. Today, the forum not only marked its first session after the COVID-19 pandemic but also its first meeting after India had successfully surpassed the US$ 400 billion dollar target for exports in FY 2021-22.

 

Acknowledging the importance of the shipping community towards realising India’s EXIM targets and the promotion of Make In India, the Chairperson highlighted the need for a ‘whole of government’ approach to address the new-age concerns of trade in the country. Furthermore, the role of technology in order to mediate, facilitate, and overcome procedural delays in shipping was also highlighted by the government. In accordance with the commitments made under PM GatiShakti, the Chairperson expressed a further need for government institutions to break their operational silos and work together with the private sector to create national infrastructure that can further improve shipping in India, and at the same time, reduce the cost of logistics for Indian goods.

 

In the session, all issues received from the industry associations were categorised into three major cohorts - i) Procedural issues; ii) Issues impacting logistics costs; and, iii) Technology related issues to enhance EXIM efficiency. Under procedural issues, the industry associations suggested

 

several positive alterations in some key processes, such as allowing the efficient use of existing Container Freight Stations (CFSs) by converting them into MMLP and increasing the date of filing departure manifests to expand the scope of transshipment through India. Receiving the suggestions on a positive note, the senior representatives from Department of Revenue and MoPSW assured industry associations to re-examine any procedural issues that may hinder India’s EXIM efficiency and to further reach out to concerned industry associations and government stakeholders with workshops and video conferences to clarify any procedural ambiguities within the next quarter.

 

Since logistics costs comprise a critical component of India’s trade competitiveness, issues such as port charges and charging of security deposits by private shipping companies to traders were mutually deliberated in the forum. Reiterating the commitment of PM GatiShakti, the Chairperson advised the shipping associations to implement uniform best practices across the country to make Indian exports more competitive in the global markets. Government agencies present in the forum also agreed to examine issues of trade associations on a case-to-case basis to further reduce logistics costs wherever feasible to make Indian exports more competitive globally.

 

The forum was in broad agreement that wider adoption of technology solutions, such as the Port Community Systems, can reduce the turnaround time of Indian ports. It is also expected to further reduce logistics costs for Indian traders, and at the same time, improve India’s competitiveness globally. Capacity building workshops by concerned government stakeholders to promote the use of technology platforms in shipping were recommended by the forum. For efficient registration and monitoring of authorised stakeholder issues, along with seamless coordination among concerned Ministries/Departments, a user interaction dashboard is also under-development by the Logistics Division of DPIIT. Such a digital platform is expected to enable the industry to highlight points of discussion to the government through a single window system throughout the year in a transparent manner.

After a gap of about nine years, India and the EU will likely resume the much-awaited negotiations for a proposed free trade agreement (FTA) from June 27, as both the sides eye a deal by next fiscal, sources told FE.

 

Before the negotiations begin, commerce and industry minister Piyush Goyal may visit Brussels later this month — either ahead of the next ministerial of the World Trade Organization starting June 12, or after that — to set the stage for the talks, one of the sources said. 'The EU team will visit India after that to formally resume the negotiations,' he added.

 

Sources last week said both the sides would first take stock of the progress made so far and discuss how to proceed further. 'It makes sense to focus on points of convergence first before moving on to the contentious matters,' one of the sources had said.

 

Formal negotiations between the two sides for the FTA were stuck over stark differences after 16 rounds of talks between 2007 and 2013. The EU insisted that India scrap or slash hefty import duties on sensitive products such as automobiles, alcoholic beverages and dairy products, and open up legal services.

 

Similarly, India’s demand included greater access to the EU market for its skilled professionals, among others. However, both the sides have now decided to take the negotiations to their logical conclusion.

 

The EU, even after the Brexit, continued to be India’s largest export destination (as a bloc) in FY22, although it has lost some appeal. The country’s outbound shipments to the EU jumped 57% on-year in FY22 to $65 billion, albeit on a contracted base. Similarly, its imports from the EU jumped 29.4% last fiscal to $51.4 billion.

 

In April, the EU and India decided to set up a trade and technology council to boost bilateral ties, as the bloc’s president Ursula von der Leyen met Prime Minister Narendra Modi here. This move underscored growing co-operation between New Delhi and Brussels, as the US is the only other country that has a technical agreement with the EU, along the lines of the one signed with India now. The council is aimed at providing political-level oversight of the entire spectrum of the India-EU ties and to ensure closer coordination.

 

India signed an FTA with the UAE in February, New Delhi’s first such pact with any economy in a decade, and sealed another trade deal with Australia in April. Currently, it is also negotiating FTAs with the UK and Canada. The Gulf Cooperation Council, too, has evinced to sign an FTA with India.

 

The negotiations are a part of India’s broader strategy to forge 'fair and balanced' trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after India pulled out of the China-dominated RCEP talks in November 2019.

India has put a precondition that wheat exported at a government-to-government level should be used for domestic consumption only and not exported to third countries, Commerce and Industry Minister Piyush Goyal said on Friday.

 

'We are insisting that any country that wants wheat from us should ask only for its local population and commit that it will not allow a re-export. Our concern was that traders, speculators and hoarders should not get a control of this valuable wheat and then charge exorbitant prices from poor and vulnerable nations, causing distress to the people of the world. We want to support the less developed, friendly and neighbouring countries to the extent that we can,' Goyal said.

 

Business Standard on May 26 reported that India had received special requests from the UAE, South Korea, Oman and Yemen for wheat after the government banned exports on May 13.

 

Goyal said an inter-ministerial committee comprising representatives from agriculture, food, foreign affairs examine and approve requests from friendly nations who have asked for wheat from India, depending on their population size.

 

While imposing the export ban, the commerce ministry said export will be allowed on the basis of permission granted by the Government of India to other countries to meet their food security needs and based on the request of their governments.

 

The government also allowed a wheat consignment of 61,500 Mt for Egypt after the export ban. It was already under loading at the Kandla port.

 

Goyal said India had asked the World Trade Organisation (WTO) to allow a relaxation of rules so that whenever some country needs support on a government-to-government basis, India can supply wheat to the country from the government procured stock. 'It will be a matter of discussion when I go to the WTO’s upcoming 12th Ministerial,' he added.

 

If farmers lost out due to the wheat exports ban by the government, Goyal said farmers had already sold their produce. 'This is evident from the fact that after the wheat ban was introduced, we only got 600,000 tonnes through government procurement. Having sold their produce, if traders would have indiscriminately exported it at high profit, beyond a point it would have been harmful for our own food security and our own requirement and prices could have sky-rocketed,' he added.

 

Goyal said as of now he doesn’t see chances of putting restrictions on export of any other agriculture products. 'Those are decisions which we don’t disclose before we take the decisions. In the course of the monitoring, estimates of agri production are taken from time to time wherever required. As of now, we don’t see the need to do it on any other product,' he added.

Turkey may emerge as the gateway of agricultural exports, mainly wheat, held up in the Black Sea region as Russian President Vladimir Putin has  'in principle' agreed to allow the Recep Tayyip Erdogan government to move shipments from the Odesa Sea Port, taken over Kremlin in the Ukraine war. 

 

Putin agreed to allow Turkey to clear the shipments in return for Ankara clearing the sea mines in the Black Sea region. The Erdogan government will create a naval corridor and escort wheat-laden ships to the Bosphorus Strait, an international waterway in north-western Turkey, going by preliminary discussions with the back of the US. 

 

This will create a potential sea corridor for agricultural exports, especially from Ukraine, with Russia ensuring free movement with Turkey playing as the coordinator.

 

Further talks

'This is an in-principle clearance given on Monday (May 30). Anything can happen until the mines are cleared and the ships begin moving out. But Russia will likely use this opportunity to export its wheat and fertiliser,' said S Chandrasekaran, a trade analyst in the know of the developments. 

 

Putin and Erdogan agreed that Russian Foreign Minister Sergey Lavrov will discuss the issue further next week. Turkish Foreign Minister Mevlut Cavusoglu said Lavrov will arrive in Ankara with a defence delegation on June 8 when the safe shipment issue will be discussed, Reuters reported. 

 

Turkey has come into the picture after Russia declined offers from the UK and Italy to clear the sea mines in the Black Sea. 'There will be a lot of distrust on both sides over the demining operations. Ukraine could suspect a Russian attack, while Kremlin could fear the shipping of weapons to Kyiv. It will take at least a month before the protocol could be put down in writing,' he said. 

 

But once this happens, then Turkey traders would take advantage and buy these products. In turn, they could turn suppliers for other countries, the analyst said.

 

Ukraine problems

The development comes at a time when Ukraine is finding it difficult to send wheat consignments to Europe and other nations by railway rakes through Poland, Hungary, Romania and Slovakia. Basically, Turkey will facilitate safe exports of Ukraine’s agricultural products, mainly wheat and corn (maize). 

 

 'The problem is that the Ukraine railway gauge and Europe’s gauge are incompatible. The wheat has to be unloaded from one wagon and loaded onto another or they have to send it by container, which will have to be physically lifted from one train to another,' he said. 

 

Some 467 wagons were handled in the four European nations and the incompatibility resulted in a delay in shipments as they had to handle them physically, the analyst said. 'A Ukraine railway rake can handle only 1,900 tonnes, whereas an Indian railway rake can transport 2,400 tonnes,' he said.

 

On the other hand, Ukraine is also facing hurdles in sending wheat on barges through the Danube river with delays ranging from four to 10 days at the borders. Currently, trucks have queued up for over 20 km as only seven barges are being cleared each day on the Danube. 

 

Truckers’ woes

'There are logistical problems. Unless the inspection capacity is raised and technical snags are resolved, the volume of Ukraine wheat, in particular, being sent will not increase,' Chandrasekaran said. 

 

There are other problems too for moving the wheat by road. Private trucks are reluctant to move agricultural consignments as insurance firms are not covering the risk of Russian bombing or strafing. 'As a result, a convoy of six barges moves on the river totally transporting 18,000 tonnes,' he said. 

 

Russia’s move to allow a safe passage for the shipments is seen as one trying to portray Ukraine as a culprit and comes at a time when the United Nationals World Food Program is fighting to feed millions of vulnerable sections.

 

Chandrasekaran said Turkey’s offer is backed by the 1936 Montreux Convention in which it was the arbiter for in and out of the Black Sea. 'Since the US is backing the agreement, NATO will not impose sanctions on it. Any party involved in removing the sea mines has to spend at least a fortnight,' he said. 

 

Indian wheat rejection

The analyst said this could also have been a reason for Turkey to reject an Indian Durum wheat shipment. The 56,877-tonne shipment was rejected on phytosanitary grounds that Rubella disease was present on the wheat. 

 

However, the Indian seller, ITC Ltd, and the buyer, a Dutch trading house, have both received payments from the Turkish firm that bought the consignment from them, indicating that there could be more than what meets the eye. 

 

The Russian-Turkey talks are crucial for controlling inflation, particularly in food commodities such as wheat, corn and oilseeds. Ever since the Russia-Ukraine conflict broke out on February 24, prices of these commodities have surged resulting in inflation soaring. 

 

The latest development has seen benchmark wheat prices drop by over 7 per cent to a four-week low of $10.56 a bushel ($388 a tonne) on the Chicago Board of Trade (CBOT). Benchmark corn prices on CBOT have declined by about 5 per cent to $7.29 a bushel ($287 a tonne). 

The Indian Council for Research on International Economic Relations (ICRIER) study on ‘wine trade under India Australia CECA (comprehensive economic cooperation agreement)' suggested phased tariff liberalisation for wine imports to gain market access for its exporters.

 

'India cannot sign trade agreements with its key export markets without reducing tariffs for alcoholic beverages and must offer phased tariff liberalisation in high growth areas like wine to gain market access for its exporters,' ICRIER has said.

 

The report titled, 'Liberalisation of Wine Trade under the India-Australia CECA' by Arpita Mukherjee and Drishti Vishwanath, published by Academic Foundation, focuses on the scope for liberalisation of tariffs in wines and removal of non-tariff barriers under the India-Australia comprehensive agreement (CECA), due to be signed in December 2022.

 

'While Indian consumers’ want access to quality wines at cheaper rates, the threshold price of bottled wine that has been liberalised under the ECTA is over US$5 and US$15 CIF. Thus, the duty reduction benefits only the upper end of wine imports and high income consumers. The rest of wine imported from Australia – about 98%, which is consumed by middle income consumers - continues to attract a duty of 150%. The report proposed a maximum threshold of USD25 per case of 9 litre/12 bottles of 750 mil / (FOB), which benefits the wine industry in both countries, reduces prices for middle-class consumers and enables the Indian hotel and tourism industry to grow,' the study report says.

 

Among alcoholic beverages, tariffs were the highest for wine, with the price of imported wine ranging at between 200 and 400% of the global average price. For more than two decades, countries such as Australia and the USA have expressed concerns about the high import duties, which act as a major disincentive for wine exporters from these countries/regions to India.

 

The report was released by Manpreet Vohra, high commissioner, High Commission of India, Canberra, Australia, Sarah Storey, deputy high commissioner, Australian High Commission, India, Kuntal Sensarma, economic advisor - MoFPI, GoI,  Anil Wadhwa, former ambassador; distinguished fellow, Vivekananda International Foundation (VIF), and Dr. Deepak Mishra, director & CE, ICRIER in New Delhi.

 

The release was followed by a panel discussion on 'Enhancing Trade and Collaborations in Wines under the India-Australia CECA'.

India attaches great importance to its relations with Gabon, Vice President M. Venkaiah Naidu said on Tuesday, as he met the central African country's top leadership and reiterated the Indian government's commitment to be Gabon's reliable partner in its development journey.

 

Mr. Naidu arrived in Libreville on Monday on the first leg of his three-nation tour of Gabon, Senegal and Qatar. While Mr. Naidu's visit is the first by any Indian vice president to all three countries, it marks the first-ever high-level visit from India to Gabon and Senegal. 

 

The Vice President met President Ali Bongo Ondimba, and during the meeting he said, 'India attaches great importance to its relations with Gabon and reiterated the commitment of the Government of India to be Gabon’s reliable partner in its development journey,' according to a tweet by the Vice President's Office.

 

He also met Foreign Minister Moussa-Adamo and they discussed measures for 're-energising' the India-Gabon partnership, Ministry of External Affairs Spokesperson Arindam Bagchi tweeted.

 

The Vice President also had a joint meeting with the President of Gabon's National Assembly Faustin Boukoubi and Senate President Lucie Milebou Aubusson.

 

Mr. Naidu gifted them replicas of the original Indian Constitution and emphasised the importance of shared values of democracy and pluralism in India-Gabon ties, the Vice President's Office tweeted.

 

He is also expected to interact with the business community in Gabon and address the Indian diaspora.

India has achieved monthly value of merchandise export in May 2022 amounting USD 37.29 billion, an increase of 15.46% over USD 32.30 billion in May 2021. India’s merchandise export in April -May 2022-23 was USD 77.08 billion with an increase of 22.26% over USD 63.05 billion in April -May 2021-22.

 

Value of non-petroleum exports in May 2022 was 29.18 USD billion, registering a positive growth of 8.13% over non-petroleum exports of USD 26.99 billion in May 2021. The cumulative value of non-petroleum exports in April -May 2022-23 was USD 61.09 billion, an increase of 12.9% over USD 54.11 billion in April -May 2021-22.

 

Value of non-petroleum and non-gems and jewellery exports in May 2022 was USD 26.08 billion, registering a positive growth of 8.57% over non-petroleum and non-gems and jewellery exports of USD 24.02 billion in May 2021. The cumulative value of non-petroleum and non-gems and jewellery exports in April -May 2022-23 was USD 54.52 billion, an increase of 14.15% over cumulative value of non-petroleum and non-gems and jewellery exports of USD 47.76 billion in April -May 2021-22.

 

Petroleum products (52.71%), Electronic goods (41.46%) and RMG of all Textiles (22.94%) led the way in high increase in exports during May 2022.

 

India’s merchandise import in May 2022 was USD 60.62 billion, an increase of 56.14% over USD 38.83 billion in May 2021. India’s merchandise imports in April -May 2022-23 was USD 120.81 billion with an increase of 42.35% over USD 84.87 billion in April -May 2021-22.

 

Value of non-petroleum imports was USD 42.48 billion in May 2022 with a positive growth of 44.7% over non-petroleum imports of USD 29.36 billion in May 2021. The cumulative value of non-petroleum imports in April -May 2022-23 was USD 82.55 billion, showing an increase of 27.72% compared to non-oil imports of USD 64.63 billion in April -May 2021-22.

 

Value of non-oil, non-GJ (gold, silver & Precious metals) imports was USD 33.61 billion in May 2022 with a positive growth of 27.2% over non-oil and non-GJ imports of USD 26.42 billion in May 2021. Non-oil, non-GJ (Gold, Silver & Precious Metals) imports in April -May 2022-23 was USD 69.25 billion, recording a positive growth of 30.71%, as compared to non-oil and non-GJ imports of USD 52.97 billion in April -May 2021-22.

 

The trade deficit in May 2022 was USD 23.33 billion, while it was 43.73 billion USD during April -May 2022-23.

The bilateral trade between India and Korea grew 40 per cent to USD 23.7 billion in 2021, according to Korea Trade-Investment Promotion Agency (KOTRA). In 2020, the value of bilateral trade between the two countries was at USD 16.9 billion.

 

KOTRA is the economic division of the Embassy of the Republic of Korea in India.

 

According to KOTRA, the information on trade was disclosed by the Ambassador of the Republic of Korea to India Chang Jae-bok while inaugurating the 4th edition of Korea Fair in India (KFI) 2022 in New Delhi on Wednesday.

 

'Korea and India have a strong economic partnership and that is rapidly expanding. Bilateral trade between the two countries reached USD 23.7 billion in 2021. This was the highest-ever trade volume between the two countries, a 40 per cent increase over USD 16.9 billion (in 2020),' KOTRA said in a statement on Thursday quoting the ambassador.

 

As per KOTRA, Korea made record imports of USD 8.06 billion from India in 2021. During the year, all major imported items from India including iron ore (215.5 per cent) and aluminum (143.6 per cent) imports have shown a significant increase.

Amid reports of Turkey rejecting an Indian wheat consignment on quality concerns, Food Secretary Sudhanshu Pandey on Thursday said the government has sought details from the Turkish authorities on the matter as the concerned exporter ITC Ltd NSE 0.11 % has claimed that the shipment of 60,000 tonnes had all the required clearances. Meanwhile, after India banned wheat exports on May 13, the secretary said five-six countries have requested for Indian wheat and the government has formed a committee to clear the grain for export to such nations.

 

'Some decisions have happened,' he added.

 

He also said retail wheat prices are showing a declining trend after the export restrictions were imposed.

 

Asked about Turkey rejecting the Indian wheat consignment on phytosanitary concerns, Pandey told reporters: 'We checked up on this report. It was ITC and it met all the requirement of the quality.'

 

The consignment had around 60,000 tonnes of wheat, he said.

 

ITC, a major wheat exporter, has informed the government that it had sold the wheat to a Geneva-based company, which further sold the commodity to a Turkish firm. All financial transactions had happened, Pandey said.

 

'Before payment, all local clearances must have been done. Quarantine had happened in India also. This is what the company has told us. ...Their financial transaction...including Turkish importer was complete,' he added.

 

The secretary further said the Agriculture Department and agri-export promotion body APEDA have got in touch with the Turkish quarantine authorities on this issue.

 

'They have not heard anything from them. There is no formal communication as yet,' he noted.

 

India banned wheat exports on May 13 to keep local prices under control amid a slight estimated fall in domestic output. However, it allowed shipment of those consignments which were registered before the ban came into force.