Ahead of the historic US visit of Prime Minister Narendra Modi, the two countries have launched a strategic trade dialogue here during which officials reviewed the ongoing cooperation in multilateral export control regimes and agreed to share the best practices to further the bilateral ties. At the inaugural India-US Strategic Trade Dialogue (IUSSTD), the Indian delegation was led by Foreign Secretary Vinay Mohan Kwatra. The US delegation was co-led by Alan Estevez, Under Secretary for Industry and Security in the US Department of Commerce and Ambassador Victoria Nuland, Under Secretary of State for Political Affairs in the US Department of State.

 

The dialogue is a key mechanism to take forward the strategic technology and trade collaborations envisaged under the India-US initiative on Critical and Emerging Technologies (iCET).

 

The meeting took place ahead of Prime Minister Modi's maiden state visit to the US at the invitation of President Joe Biden. Modi will be visiting the US from June 21 to 24.

 

It focused on ways in which both governments can facilitate the development and trade of technologies in critical domains such as semiconductors, space, telecom, quantum, AI, defence, bio-tech and others, a media release from the Indian embassy here said.

 

During the meeting, the two sides reviewed the relevant bilateral export control regulations with the objective of building and diversifying resilient supply chains for these strategic technologies.

 

They reviewed ongoing cooperation in multilateral export control regimes and agreed to share the best practices.

 

Both sides agreed to enhance awareness among the industry, academia and other stakeholders about the export control regimes through workshops and other activities.

 

'They acknowledged that the dialogue would be instrumental to enabling co-production, co-development and enhanced industrial collaborations in critical technologies,' the statement said.

 

'They agreed to set up a regular monitoring group which will review progress in deepening cooperation in the bilateral high-tech trade and technology partnership. The co-chairs agreed to continue the dialogue with the objective of strengthening the India-US Comprehensive Global Strategic Partnership,' the statement said.

India is rising in the ranks of global trade. Between 2010 and 2020, its global export share stagnated below 1.8%. But since 2021, its goods exports have held up much better than other economies in Asia. Its global export share has reached 2.6%, much higher than Vietnam's 1.5%, and only slightly below South Korea's 2.7%. Although it is still trailing far behind China, India is beginning to punch its weight in global exports.

 

So, what's happening? There are five structural shifts:

 

Geopolitics: Since the US-China trade war, MNCs have intensified their search for manufacturing alternatives to China. China's share in US imports has slid by 2.5 percentage points to 15.5% since end-2019. Its Asian peers, including India, have benefited from this shift. India's share of US imports has risen from 2.3% to 2.7% over the same period. In absolute terms, India's share is still small. But there is considerable room to grow, given the large scale of production that India offers.

 

Some other economies, like Vietnam, have already won a larger share of the shifting supply chains. This is partly due to long-standing preferential access that Vietnam enjoys in the US market - it signed a free trade deal way back in 2000 - which India does not.

 

Offshoring of services: India already has an established business model for (offshored) IT service exports. The surge in labour costs in developed markets and a global push to digitisation during the pandemic meant a host of other services - financial, business, research, consulting, etc - are increasingly being offshored to India.

 

In FY2021 and FY2022, combined fixed FDI into financial and business services rose to $45.6 billion, much higher than the $25.6 billion into manufacturing. This surge in investment has led to a rapid expansion of global capability centres (GCCs), a market expected to reach $85 billion from an estimated $40 billion currently. This also marks a welcome diversification in India's service export basket. Business services, for example, have had a stronger run than IT services in recent quarters, keeping aggregate services exports resilient.

 

Make in India: GoI has focused on infrastructure build-up via record budgetary allocations to capex, alongside production-linked incentive (PLI) schemes to boost manufacturing and exports. Some of it is already yielding results. India's mobile phone exports, for example, have spiked in the last two years.

 

Exchange rate management: RBI has probably actively pursued a depreciated nominal effective exchange rate (NEER) to support manufacturing and exports. This is evident from the continuous decline in NEER in recent years, simultaneous to the rise in forex reserves. In fact, RBI has not allowed the rupee to appreciate, although external headwinds that led to the currency's decline in 2022 have receded.

 

This shift in RBI's forex policy is not surprising. Policymakers have considered stable, undervalued exchange rates as necessary (if not sufficient) tools in the policy arsenal to support manufacturing and exports in the early phases of growth and industrial development.

 

Trade deals: Unlike the four other structural forces already playing out, a greater focus on trade deals, which will lead to greater gains in the medium term, may not be showing up in the data yet. But it will be a vital cog in the wheel.

 

For about a decade since 2011, India did not negotiate a single trade deal with any major economy. It is also the same period when its share of global exports stagnated. Preferential market access is undoubtedly vital to export ambitions. New Delhi has made a good start with the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and the India-Australia Economic Cooperation and Trade Agreement (ECTA) coming into force last year. It still needs to put a lot of diplomatic effort in this direction.

 

For perspective, Vietnam's numerous trade deals bestow it preferential access to more than 80% of global GDP. For India, this metric is only about 20-25%. India has much lower labour costs than other major Asian economies and, more importantly, offers scale with its large labour force. In the past, these were insufficient to attract MNCs into export-oriented investments. But the structural forces discussed above have cast India in a new light.

 

The structural boosts to exports are still at a nascent stage and have a considerable way to go. Take the supply chain diversification out of China. For every 1% gain in US import share, India can add an estimated $30-40 billion to its annual exports. Thanks to 'Make in India', global electronics giant Apple is looking to increase India's production share to 40-45% by 2027, up from less than 5% currently. For perspective, Apple's iPhone sales in 2022 reaped $206 billion in revenues.

 

For India to emerge as the new export powerhouse, it needs to enhance the whole foreign trade ecosystem. Isolated boosts won't cut it. It needs increased preferential access via free trade deals with more countries, stable and competitive exchange rates, improving infrastructure and policy support for manufacturing, and continued supply of inputs like labour with required skills will all be indispensable. From here on, much depends on whether policymakers can maintain the momentum.

The Directorate General of Foreign Trade (DGFT) on Thursday said that the imports of watermelon seeds up to October 31 this year would not exceed 35,000 metric tonnes and will be allowed on an actual user basis only.

 

The DGFT laid out a procedure for imports up to October 31, 2023 and has invited fresh applications for licenses for the imports till June 15.

 

'The applications shall be considered on actual user basis to processors only, based upon their own processing capacity is required to be provided,' the DGFT said in a public notice, adding that the quantity of the imports for each applicant would be decided by the Exim Facilitation Committee.

 

In June last year, the government partially eased the norms for the import of these seeds.

In the fest, different varieties of mangoes including Sundarja, Kesar, Chosa, Langda and Dussehri, produced from the different NABARD-supported Wadi projects in the state will be exhibited and put on sale. The mangoes will be directly sourced from the farmers’ fields and no chemicals are used for ripening of the produce.

 

In this scheme, fruit production is not the only objective, but it also includes sanitation, soil and water conservation, making barren land cultivable and empowering women.

 

Mango stalls will be set up at NABARD Regional Office, Bittan Market. All the city dwellers can visit here for chemical free mangoes. These stalls will open on June 08 from 11.00 am and will remain open till June 12.

 

Since, the year 2023 is being celebrated as International year of Millet (IYOM) hence in addition to mangoes, products of millets from the Wadis and NTFP products are also available to the residents of Bhopal city.

A district food safety team on Wednesday held a millet theme-based workshop in collaboration with entrepreneur Shreya Maini on the occasion of World Food Safety Day. Maini showcased her millet-based sweet delicacies made without sugar, flour, maida or preservatives.

 

Different types of millet-based cookies were also on display to make people aware of the health benefits of the grain. The workshop was held here under the supervision of Civil Surgeon Dr Raman Sharma. A lecture was also delivered highlighting the benefits of adding millets in diet. District Health Officer Dr Reema Jammu said Maini was also a part of the G20 Summit held in Amritsar this year where she had showcased her recipes before foreign delegates.

Considering huge demand in national and international markets, AP State Organic Products Certification Authority (APSOPCA) will soon set up an integrated export park to promote exports of organic produce.

 

Agriculture minister Kakani Govardhan Reddy attended a workshop on export opportunities for agricultural, horticultural and processed food products conducted by APSOPCA in the city on Tuesday and discussed key issues relating to organic farming. The minister stressed that many farmers were facing losses due to huge investment on pesticides, chemical fertilisers and hybrid variety seeds and organic farming is the only alternative to get better profits.

 

'Farmers are running behind traditional farming and spending huge amount on pest management and others. Despite huge investment they are earning poor price. Many countries are opposing the products cultivated in traditional way considering residues of pesticides. We are eyeing to encourage organic farming in a big was as it involves less investment. Farmers can generate better profits with organic farming as organic produce has huge demand in national and international markets,' Govardhan Reddy said.

 

He added that many traders were coming forward to offer much higher price to organic produce than the minimum support price (MSP) fixed by the government.

Farmers’ organisations protest, demand MSP in tune with rising costs of inputs including fertiliser and irrigation

 

The Centre has set the Minimum Support Price (MSP) for paddy sown in the kharif or monsoon season at ?2,183 per quintal, a hike of ?143 per quintal in comparison to last year. The 2023-24 MSPs for 17 kharif crops and variants were approved at a meeting of the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, .

 

The sowing of the crops, mainly paddy, has started in most States. While the Centre said that its aim was to ensure reasonably fair remuneration for the farmers and to encourage crop diversification, several farmers’ organisations said that the increase was not in tune with rising input costs.

 

Highest increase’

 

Food Minister Piyush Goyal told reporters after the CCEA meeting that farmers will benefit from the increase in the MSP at a time when the retail inflation is declining. 'In agriculture, we have been fixing MSP from time to time based on the recommendations of Commission for Agricultural Costs and Prices (CACP). The increase in MSP of the kharif crops for this year is highest compared to the previous years,' he said.

 

Apart from paddy, new MSPs have been set for major pulses. The MSP for moong is ?8,558 per quintal, an increase of ?803 from last year, one of the highest increases among kharif crops. The MSP for tur or arhar has been set at ?7,000 per quintal, which is estimated to be 58% above the cost of production. This is in keeping with the Centre’s promise to set MSPs which are at least one and a half times the all-India weighted average cost of production.

 

Bajra, tur margins high

 

'The expected margin to farmers over their cost of production are estimated to be highest in case of bajra (82%) followed by tur (58%), soybean (52%) and urad (51%). For the rest of the crops, the margin to farmers over their cost of production is estimated to be at least 50%,' said an official statement.

 

The MSP of ‘A’ grade variety of paddy has been increased to ?2,203 per quintal from ?2,060. For jowar (hybrid) and jowar (maldandi) the rates are ?3,180 and ?3,225 per quintal respectively. Last season, it was ?2,970 and ?2,990. For maize, the increase is ?128 per quintal and the new rate will be ?2,090. For ragi, this year’s MSP will be ?3,846 per quintal, which is an increase of ?268.

 

Among oilseeds, the MSP for sesamum is ?8,635 per quintal, ?6,377 for groundnut, and ?4,600 for soybean. In the case of niger seed, the new MSP is ?7,734 per quintal, and for sunflower seed, it is ?6,760. For cotton (long stable) and cotton (medium stable), the MSPs are at ?7,020 per quintal and ?6,620 per quintal respectively.

 

‘Faulty production estimates’

 

The Samyukt Kisan Morcha, a platform of about 500 farm outfits, questioned the Centre’s claims and said that the new MSPs were not linked to the real expenses of farming. Senior SKM leader Ashok Dhawale said that the MSP for kharif crops is nowhere near the C2+50% formula proposed by the Swaminathan Commission.

 

'The cost of production estimates given by the government are themselves extremely faulty and underrated, and thus the MSP figures are also very unsatisfactory. The SKM and All India Kisan Sabha express anger at the constant short-changing of farmers by the BJP regime led by Narendra Modi, and vow to intensify their struggle for a fair and just MSP, which can only be won by changing the current BJP government in the general elections next year,' he said in a statement.

 

Senior farm leader Hannan Mollah said that the Centre has not taken into account the increase in irrigation costs and fertiliser costs. 'The government has betrayed the farmers by announcing MSP far below C2+50%. It has not put up the ‘Report on Price Policy of Kharif Crops for 2023-24 Season’ by the CACP yet,' he added.

 

In a press release on Monday, the Ministry of Agriculture stated that the government of Bangladesh has approved the import of 280,800 tons of onions. Earlier, Agriculture Minister Md. Abdur Razzaque told reporters that the Ministry of Agriculture will give permission or IP to import onions from Monday. The ministry has taken this decision to protect the interests of all consumers, including mitigating the suffering of the working people and the limited income people due to the abnormal increase in onion prices.

 

The price of onion fell to Tk 75 per kg after the announcement of the imports from India. In the wholesale market of Khatunganj, onions that sold above Tk 90 to 95, have been offered for sale at Tk 75 per kg at the beginning of the day on Monday. However, buyers are hard to find.

 

Retail traders do not want to buy onions from the market due to the fear that the price will fall further. As a result, no matter what price is given, buyers are not found in the wholesale market. Because onion is mainly bought by retail traders.

At 26.2 million tonnes currently, wheat procurement has surpassed last year’s total procurement of 18.8 million tonnes

 

As wheat procurement for the current season draws to a close, the Government is optimistic that there is enough stock available with farmers and traders to meet domestic demand and there will unlikely be a need for imports.

 

'As of date, the need for import has not been felt. Production has been good. Since there is a prohibition in force, that means there is adequate stock with farmers and traders. The FCI (Food Corporation of India) also has adequate stocks,' Santosh Sarangi, Director General of Foreign Trade (DGFT), told businessline.

 

Wheat procurement in the current rabi season was at 26.2 million tonnes (mt) as of June 6, which has already surpassed last year’s total procurement of 18.8 mt. The wheat stock with the Food Corporation of India (FCI) has improved to 31.2 mt as of May 30 from 29.03 mt as of May 1, whereas the annual requirement of the government for public distribution and other welfare schemes is 18.4 mt.

 

Despite untimely rains, major contributing factors to healthy procurement this year have been the grant of relaxation by the government in quality specifications of wheat affected by rains, opening of procurement centres at village and panchayat level, carrying out procurement through co-operative societies, gram panchayats, and arhatias, and permission to engage FPOs for procurement operations, the Food Ministry said last week in a statement.

 

However, looking at the mandi prices prevailing in Uttar Pradesh and Bihar during the current procurement season, where normally farmers used to sell below minimum support price (MSP), many traders are sceptical about the government’s estimate of record production of nearly 112 mt. The Roller Flour Millers Association of India, which hired a private agency, has pegged the production close to 103 mt.

 

Some traders may be spreading rumours about a possible shortage of wheat and the need to import as they want a rate increase for the wheat stock they have aggregated, another official tracking the matter said.

 

'It is difficult to believe that any stockist will buy at a higher price. Had the production been at record, prices could not have gone above MSP when exports are banned, and there is no possibility of opening the window this year,' said a trader. With current duty of 40 per cent at $290/tonne free-on-board, wheat is unlikely to be imported even in southern ports, the trader said. Any decision on import has to be at zero duty, and it may help cool the sentiments, he added.

 

The all-India average retail price of wheat has softened from a peak of ?33.21/kg in February to ?31.27/kg in May, but it is still higher by 6.5 per cent from a year ago (May 2022). Atta (wheat flour) prices were higher by 10.5 per cent at ?36.42/kg last month from a year ago, though down from a record ?37.8/kg in February this year, consumer affairs ministry data show.

 

The new dialogue mechanism was launched during commerce secretary Gina Raimondo’s visit to New Delhi in March

 

Foreign secretary Vinay Mohan Kwatra meets US Under Secretary of State for Political Affairs Victoria Nuland and Under Secretary for Industry and Security Alan Estevez at the first meeting of the India-US Strategic Trade Dialogue (IUSSTD), in Washington on Tuesday. (Victoria Nuland Twitter)

 

Washington Two weeks before Prime Minister Narendra Modi’s State visit, India and the US held the first Strategic Trade Dialogue with a focused agenda of reviewing existing US export control regulations that affect the development of strategic trade in emerging and critical technologies in Washington DC on Tuesday.

 

Foreign secretary Vinay Mohan Kwatra led the Indian delegation while State department’s undersecretary for political affairs Victoria Nuland and Commerce department’s undersecretary for industry and security Alan Estevez led the US side during the talks. The new dialogue mechanism was launched during commerce secretary Gina Raimondo’s visit to New Delhi in March and represents a key institutional innovation to unlock the potential of high-tech trade between the two countries envisaged as a part of the initiative on critical and emerging technologies (ICET).

 

In a statement after the talks, the Indian side said that the dialogue 'focused on ways in which both governments can facilitate the development and trade of technologies in critical domains such as semiconductors, space, telecom, quantum, AI, defence, biotech and others'.