EAM Jaishankar and USTR Katherine Tai took stock of India-U.S. trade ties, discussed the implications of the Russia-Ukraine war on global trade and the Indo-Pacific Economic Framework

Continuing his engagement with the Biden administration , following Monday’s ‘2+2’ event, External Affairs Minister S. Jaishankar had meetings with U.S. Trade Representative (USTR) Katherine Tai and Commerce Secretary Gina Raimondo.

 

According to the U.S. Government readout, Mr. Jaishankar and Ms. Tai took stock of India-U.S. trade ties, discussed the implications of the Russia-Ukraine war on global trade and the Indo-Pacific Economic Framework (a framework, proposed by the Biden administration, for economic cooperation in the region, on issues such as emerging technologies and supply chains).

 

The two Ministers agreed that the Trade Policy Forum — which was re-launched after a gap of four years in November 2021 — held “substantial promise” for reducing trade barriers, including in agricultural goods. Last year’s forum resulted in Indian mangoes and pomegranates getting market access to the U.S., and American pork, pork products, alfalfa hay and cherries getting access to Indian markets.

Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal took a comprehensive review on the progress of the National Industrial Corridor Development Program.

 

The meeting was attended by senior officials of Department for Promotion of Industry and Internal Trade (DPIIT) and NICDC. The Minister was briefed about the substantial progress of the Industrial Corridor Program. The Government has over the past few years further enhanced the National Corridor Network to 11 integrated industrial and economic corridors with 32 Projects to be developed in four phases, thus enabling connectivity to all key economic nodes in the country.

 

He was further apprised that the National Industrial Corridor projects are getting developed on the overall framework of PM GatiShakti - National Master Plan to provide a systematic, multi modal connectivity to various economic zones for a seamless movement of people, goods and services resulting in efficient conduct of logistics and economic activities.

 

He was informed that world class ‘Plug n Play’ infrastructure at plot level has been developed in the 4 cities of Dholera (Gujarat), Shendra Bidkin (Maharashtra), Vikram Udyogpuri (M.P.), Integrated Industrial Township (Greater Noida, U.P.) where land allotment is currently underway.

 

A total of 173 Plots (851 Acre) have been allotted in these 4 cities attracting investments from companies of South Korea, Russia, China, UK, Japan as well as from India including MSME`s with an investment mobilization to the tune of approximately Rs. 16,760 Cr. generating approx. 21,000 employment opportunities.

 

With the availability of additional developed land of approx. 5000 Acre, the Minister directed the officials to expedite the land allotment to industrial, commercial and residential sectors in these developed cities through rigorous marketing activities including road shows and attractive and conducive land allotment policies.

 

The Minister further directed that regular interactions be made with the plot allottees so as to handhold them in resolving issues that they must be facing in starting the construction of their factories or commercial production. He further directed to expedite activities with respect to other projects where land can be made available to industries.

 

The Minister instructed that in order to bring complete transparency in the land allotment system, e-land management system (e-LMS) should be implemented across all the projects and continuous monitoring should be done through an integrated dashboard.

 

The Minister expressed that “the National Industrial Corridor Program is a pan India initiative and development of plug and play infrastructure will boost manufacturing ecosystem in the country and shall have a domino effect on the development of the Nation as a whole and has full potential of realizing the vision of Hon’ble Prime Minister for AtmaNirbhar Bharat”. “NICDC should work in close coordination with the respective state governments to expedite the project development activities for developing a world-class manufacturing and investment infrastructure to boost competitiveness and job creation.” the Minister added.

This year’s output is pegged at 111.32 million tonnes making it the sixth season in a row producing surplus grains. 

 

Bumper harvests and overflowing grain bins will help India to meet wheat import needs of the world's top buyers as Russia's Ukraine invasion hits supplies from the Black Sea region, a top government official said.

 

India, the world's second biggest wheat producer, is prepared to meet any demand from buyers in south Asia and Southeast Asia, and also from countries further afield in Europe, West Asia and North Africa. Ukraine is a major producer of grains but exports have been disrupted since the Russian invasion in February.

 

'The Indian market has sufficient stocks, and India is in a comfortable position to meet requests from wheat importing countries,' Sudhanshu Pandey, the most senior official at the Ministry of Consumer Affairs, Food and Public Distribution, said.

 

India's new season wheat harvest is underway, with this year's production pegged at a record 111.32 million tonnes - making it the sixth season in a row that the country has produced a surplus.

 

PDS supplies

 

India needs at least 25 million tonnes of wheat each year to run a food welfare programme.

 

Last year, the government bought a record 43.34 million tonnes of wheat from domestic farmers, substantially higher than the amount it needs for the welfare programme.

 

This year government purchases are likely to fall because private traders are offering farmers a higher price for wheat than the government's price of ?20,150 a tonne, leaving a bigger surplus for export

 

'We have to meet our own requirement for the PDS and then the rest is available for global exports,' Pandey said referring to the public distribution system, that supplies around 25 millions tonnes of subsidised wheat to the poor.

 

Pandey said if there is enough wheat for the poor, the Centre is 'happy' to see farmers getting attractive prices from private traders who have been actively buying from growers to meet rising global demand.

 

Wheat stocks at government warehouses totalled 19 million tonnes on April 1, he said, significantly higher than a target of 7.46 million tonnes.

 

Pandey said the government was encouraging wheat exports by asking port and railway authorities to give priority to outbound cargoes.

 

India's wheat exports hit 7.85 million tonnes in the fiscal year to March, an all-time high and a sharp increase from 2.1 million tonnes in the previous year.

 

Sugar surplus

 

Pandey said India's sugar exports are expected at a record 8.2 million tonnes in the current 2021-22 season, higher than last year's 7.2 million tonnes.

 

Indian sugar mills have already contracted to export around 7 million tonnes in 2021-22, he said.

 

Still, India's sugar inventories on Oct. 1, 2022, when the next season begins, are expected at around 7 million tonnes, Pandey said, against 8.2 million tonnes on Oct. 1, 2021.

 

'This year's (sugar) production is at a record of almost 35 million tonnes, and our domestic requirement is about 26-26.5 million tonnes, so you can very clearly see that we have a surplus from the current year's production. And then we have stocks of 8.2 million tonnes from last year,' Pandey said.

 

Explaining Centre's efforts to cut its reliance on expensive vegetable oil imports, Pandey said the long-term solution lies in raising India's domestic output, and the government is working on a plan to encourage farmers to grow more oilseeds.

Finance Minister Nirmala Sitharaman on Tuesday met an EU delegation led by Member of the European Parliament (MEP) Bernd Lange and discussed issues of mutual interests, including the India-EU trade pact. As two of the largest open market economies and pluralistic societies, India and the EU can work towards a partnership that promotes international rule-based order in the post-pandemic period, the finance ministry said in a tweet.

 

"Finance Minister Smt @nsitharaman and Mr @berndlange agreed that there is keenness to move ahead on India-EU negotiations with Bilateral Investment Treaty, Free Trade Agreement and Geographical Indications Agreement," the ministry said in another tweet.

 

Both sides underlined that synergised cooperation between India and the EU can harness opportunities to deliver on strong global value chains with transparent, viable, inclusive and rules-based inter-linkages, it said.

 

There has not been much forward movement on the FTA with the EU.

 

The Bilateral Trade and Investment Agreement (BTIA) has been held up since May 2013 as both sides are yet to bridge substantial gaps on crucial issues.

 

Launched in June 2007, the negotiations for the proposed BTIA have witnessed many hurdles, with both sides having major differences on key issues like intellectual property rights, duty cut in automobiles and spirits, and a liberal visa regime.

 

The two sides have to iron out differences related to the movement of professionals. DP BAL

But container shortage, high freight rates act as dampeners

 

Demand for onion exports has re-emerged with domestic prices falling, but exporters continue to be affected by containers shortage and high freight rates. 

 

Demand for onion exports has re-emerged with domestic prices falling, but exporters continue to be affected by containers shortage and high freight rates. 

 

'Exports are on the rise as domestic prices are ruling lower. But we are unable to fulfill our orders as containers are not available and freight charges are high,' said Ajit Shah, President, Horticulture Produce Exporters Association (HPEA). 

 

Lower than a year ago

 

'The feasibility of exporting onion is low due to high freight rates, though prices of all onions - from Bellary Rose to sambhar- dropping sharply,' said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). 

 

Bellary Rose onions are delivered from Karnataka to Tamil Nadu at around ?1,300 a quintal. Big or the normal grade onions cost is around ?1,000 a quintal, he said.

 

The onion modal price or rate at which most trades took place at the Lasalgaon agricultural produce marketing committee (APMC) yard, Asia’s largest, was ?600 a quintal on Tuesday for the late Kharif arrival. Prices are about ?100 a quintal lower than the year-ago period. 

 

Record output

 

'Onion prices are ruling lower due to excess production,' said Prakash. 

 

According to the Ministry of Agriculture and Farmers Welfare’s first advance estimate of horticulture crops, onion production this season (July 2021-June 2022) is estimated at a record 31.13 million tonnes compared with 26.64 mt last season. The higher production is in view of the area under onion increasing this season to 19.14 lakh hectares from 16.24 lakh hectares a year ago. 

 

The decline in prices has resulted in Mahrashtra growers demanding that onion be procured by the National Agricultural Cooperative Federation for buffer stocks at a higher price. The Centre has a scheme in place to procure up to two lakh tonnes of onion.

 

Buffer stocks are built to help farmers to get better prices when they plunge. On the other hand, they can be used to curb prices rise due to shortage or fears of a lower crop.

 

‘Lack of parity’

 

HREA’s Shah said Indian onion was quoted lower than $200 (?15,225) a tonne. He said exporters were carrying out 'one type of trade battle' as freight rates are less for some countries. 

 

'We have not done any shipment recently as there is a lack of parity,' said ACEA’s Prakash.

 

A major reason is that charges for reefer containers have increased by over six times to $10,000 currently from $1,500 for a 40-foot container. 

 

'Also, it is taking more time to get the cargoes to destinations in South-East Asia,' he said. For example, it took 15-20 days to reach Klang port in east Malaysia earlier. Now, it takes about 40 days.

 

Weak Pakistan currency

 

Prakash said Pakistan continued to quote competitively as its currency has dropped sharply against the dollar. The Pakistani rupee is quoted at 183.50 to the dollar, while the Indian rupee is ruling at 76.10 to the greenback. 

 

'Pakistan does not have any cargo to export now. Its new crop will arrive only after two months,' Shah said. 

 

Despite odds, exports have picked up and are showing improvement, he said.

 

The rise in exports is significant after India lost ground in 2019 and 2020 following crop failure due to unseasonal rains. Then, India imposed a minimum export price and then clamped a ban to rein in the prices. 

 

This caused problems in overseas markets for exporters with Pakistani and Iranian onions filling the void. The Indian government also took steps to increase the area under onion, particularly in non-traditional States. One of the objectives was to ensure stable prices throughout the year. 

 

The initiative has yielded good results with production rising by 5 million tonnes and exports increasing. 

On Friday, Additional Secretary of the Union Ministry of Agriculture and Farmers Welfare Abhilaksh Likhi visited the Banana Cluster at Karnapudiki village in Anantapur district. He said that the Ministry has identified 53 horticulture crop clusters in the country for the development of specific crops under the Cluster Development Programme in a comprehensive manner.

 

The main objective of the programme is to leverage the geographic specialisation of horticulture clusters for promoting integrated and market-led development of pre-production, production, post-harvest, logistics, branding and marketing activities, besides laying emphasis on holistic growth and development of horticulture clusters for making them globally competitive.

 

Initially, the programme has been rolled out on a pilot basis in 12 clusters in 11 States in the country. In Andhra Pradesh, Anantapur, Kadapa and Kurnool districts have been selected for the launch of Banana Crop clusters on a pilot basis. The project is expected to export more than 75,000 tons of bananas a year from Anantapur Cluster.

Agricultural officers from seven different states of India are on a fifteen-day tour of Israel to learn about new approaches and technologies in the sector that can add more value to the farmers.

 

The 18 agricultural officers from Indo-Israel Centers of Excellence (CoE) are taking part in an extensive state course, 'Managing Centres of Excellence: Developing value for farmers', organised by Mashav Agricultural Training Centre (MATC) in Israel under the Indo-Israel Agricultural Project (IIAP), a press release said.

 

The programme looks to introduce the agricultural officers from partnering states to the organisation, management and challenges of Israel's unique model of regional agricultural Research and Development.

 

 

'The course aims to create a framework for discussion and analysis of the current work plans of the CoEs. It will also evaluate the possibilities of implementation and adaptation of new strategies, approaches and technologies, taking into consideration the needs and challenges in the agriculture sector,' the release said.

 

The participants have been visiting model CoEs in Israel and learning more about irrigation, fertigation and advanced agricultural technologies since their arrival on March 29th.

 

The delegation is being led by Israel's Agricultural Attache in New Delhi, Yair Eshel.

 

'Glad to see Indian officers in Israel learning about Israeli agro-technology. This course will serve as a sustainable platform for sharing Israel's advanced agricultural knowledge. We hope to continue conducting many such courses in the future that will benefit the farmers of India,' he said.

 

 

MASHAV, Israel's Agency for International Development Cooperation working with the Foreign Ministry, looks at providing developing countries with the best of Israel's experience in development and planning and has served as an important arm of the ministry's diplomatic outreach programme.

 

MASHAV, Israel's Agency for International Development Cooperation working with the Foreign Ministry, looks at providing developing countries with the best of Israel's experience in development and planning and has served as an important arm of the ministry's diplomatic outreach programme.

 

 

'As we mark 30 years of India-Israel diplomatic relations, we are happy to see the resumption of physical activities of Indian officers in Israel in the field of agriculture after a long absence due to the pandemic,' Rony Yedidia Clein, Deputy Chief of Mission at Embassy of Israel in India was quoted in the release as saying.

 

'Sharing agricultural technologies is an important element of the partnership between Israel and India. This will provide more scope for both nations to boost our bilateral relations,' she added.

 

There are currently 29 fully operational Centres of Excellence in India providing vital information on emerging technologies in the agriculture sector to boost farmers' yield.

The current tender, floated on March 30 and opened on Monday, saw the lowest bid from Indian firm Bagadia Brothers, offering the wheat at $399.19 a tonne, said Rajesh Paharia Jain, a Delhi-based exporter. 

 

Swiss Singapore Overseas made the second-lowest bid at $399.69 a tonne and Intra Business Pte Ltd, Singapore, offered wheat at $409.38 a tonne. 

Asserting that it follows a uniform and non-discriminatory procurement policy, the Centre on Monday said the Telangana government was told much in advance that the Food Corporation of India cannot procure surplus parboiled rice due to sufficient stocks coupled with limited PDS demand for the grain.

 

Union Food Secretary Sudhanshu Pandey clarified the Centre's position on the procurement of parboiled rice after Telangana Chief Minister K Chandrashekar Roa staged a protest in the National Capital and threatened that he would intensify the stir if the state's demand on the purchase of parboiled rice is not met within 24 hours.

 

Addressing reporters, Pandey said the Centre does not procure paddy from any state. It only buys raw rice and very less parboiled rice as per the PDS demand. So, there is a uniform and non-discriminatory policy in place for all states.

 

'Considering the availability of surplus parboiled stocks with FCI equivalent to the requirement of 3-4 years at that time, it was impressed upon all states delivering surplus parboiled rice, as early as in December 2020 to limit the same,' he said.

 

Again in August last year, it was decided in a meeting of food secretaries that no parboiled rice will be accepted from any state for the central pool during the 2021-22 Kharif marketing season (KMS) in view of burgeoning parboiled stock with FCI.

 

As of April 1, 2022, FCI had a stock of about 40 lakh tonnes of parboiled rice, which may be sufficient for the requirement of about two years, he said, adding that the Telangana government had given in writing that it will not supply parboiled rice to FCI.

 

Also, surplus parboiled stock cannot be procured from states as there is no demand for such grain under the Public Distribution System (PDS), he said.

 

In the last few years, Pandey said production in the parboiled consuming states like Jharkhand, Kerala and Tamil Nadu has increased resulting in lesser movement of parboiled rice to the deficit states. Due to increased production in parboiled consuming states, the volume of movement has decreased over a period.

 

'From Punjab too, where the procurement of rice is maximum, we have not procured any parboiled rice.'

 

Currently, about 20 lakh tonnes of parboiled rice is consumed annually from FCI stocks for fulfilling the requirements under National Food Security Act in parboiled deficit states, he said.

 

Whereas Telangana is a surplus parboiled producing region and does not consume parboiled rice, but only produces which is always surplus and delivered to FCI, he added.

 

According to the Secretary, FCI's total parboiled rice procurement stood at 88.37 lakh tonnes for Kharif and Rabi combined in 2020-21. Out of this, 48.85 lakh tonne was procured from Telangana alone, which is more than 50 per cent of the total procurement of parboiled rice.

 

The second-highest was Odisha (17.7 lakh tonne), Chhattisgarh (15.95 lakh tonne), West Bengal and Andhra Pradesh, he said.

 

Pandey further said the FCI had initially procured 24.5 lakh tonnes of parboiled rice from Telangana last year but later upon the request of the state government additional quantities were purchased by FCI.

 

'When this special exemption was given, the state government gave in writing that it will supply rice as per the FCI requirement and will not supply parboiled rice,' he added.

 

For undertaking procurement of rabi raw rice in 2021-22, the Secretary said the Telangana government was asked to provide its procurement and packaging estimate in February 2022 itself. However, the state government has not yet submitted the proposals despite several reminders.

 

Explaining the process of procurement, FCI Chairman and Managing Director Atish Chandra said the FCI has an agreement signed with every state for the procurement of raw rice.

 

Telangana, which is a decentralised procurement state (DCP), has a further agreement with millers for converting paddy into raw rice and parboiled rice.

 

The Telangana government can easily get raw rice converted instead of parboiled rice from millers and supply it to the central pool, he said and added FCI bears the milling charges and has no problem in taking raw rice.

 

Joint Secretary in the Union Food Ministry Subodh Kumar said Andhra Pradesh also has the same agro-climatic condition but it does not have the problem in supplying raw rice to the central pool.

 

In fact, procurement of parboiled rice from Andhra Pradesh was just about 4.29 lakh tonnes last year, he said adding that Telangana has to make a slight change at the milling stage to convert it into raw rice and it is doable.

Goyal said a separate India and Australia investment agreement is possible, but the same will be negotiated by the Union finance ministry.

 

The recently signed interim free trade agreement between India and Australia may become the base for enhanced cooperation in investments and other strategic engagements such as rare-earth materials and uranium supply, besides immediately opening up an over ?6 lakh crore market for Indian automobiles, apparels, pharmaceuticals, furniture, toys and plastic goods, people aware of the development said.

 

Speaking about taking forward the interim but comprehensive India-Australia Economic Cooperation and Trade Agreement (ECTA), Australian trade, tourism and investment minister Dan Tehan said: 'It [the pact] will evolve over time… There are many opportunities that will spring out of this agreement.' Without elaborating on the specifics, he said ECTA may lead to enhanced 'geostrategic cooperation' between the two countries for a safer and more democratic Indo-Pacific region.