The commerce ministry is likely to further extend the existing foreign trade policy (FTP) beyond March 31 this year, an official said. Last year in September, the government extended the Foreign Trade Policy 2015-20 till March 31, 2022, due to the COVID-19 pandemic. The present policy came into force on April 1, 2015.

 

The policy provides guidelines related to imports and exports in India. The ministry announces the policy every five years.

 

As part of the consultative process to formulate a new policy, various meetings with stakeholders were held by the ministry, the official said.

 

A separate foreign trade policy cell was created to coordinate with various officials in the formulation of the policy under the supervision of an officer of the level of joint secretary to the Government of India.

A delegation of the newly-formed Plant Based Foods Industry Association (PBFIA) met Shri Prahlad Singh Patel, Minister of State For M/o Food Processing Industries, in New Delhi.

 

The delegation, led by the Association’s Executive Director, Shri Sanjay Sethi, briefed the Union Minister on the state of the nascent but rapidly expanding plant - based food sector in India. Noting that the sector was poised for explosive growth, Shri Sethi sought the Union Minister’s guidance and support to turn it into a major industry catering to both domestic and global markets through policy changes, capacity building, enabling ease of business and other interventions. The global plant-based food market is expected to reach 77.8 billion U.S. dollars in 2025.

 

The Minister of State for M/o Food Processing Industries, Shri Prahlad Singh Patel asked PBFIA to have a special meeting with the Ministry to discuss Cold Chain logistics and explore what can be done to smoothen daily parcel operations between major cities for the industry. Shri Patel asked Shri Gaurav Sishodia, AVP, Invest India, who was also present at the meeting, to collaborate with PBFIA for its various initiatives.

 

Shri Sethi said that he is delighted that the Minister has sought the PBFIA's assistance to organise two major events, one involving all the Indian stakeholders in the plant based ecosystem, and another where international players would be invited as well, in order to understand and address all the challenges faced by the industry. The Minister also appreciated the youthful energy and enthusiasm of the PBFIA delegation.

Food grain and dal milling and processing machinery makers from countries such as China, Japan and Turkey among others will be displaying their latest technologies at a three-day exhibition in Indore starting March 24.

 

The All India Dal Mills Association is organising the three day expo in which about 100 companies — including domestic food grain processing machinery manufacturers — are expected to display and providing a live demonstration of their latest equipment and technology.

 

'The exhibition from March 24-26 will be a good opportunity for dal and grain millers looking for technology upgradation,' said Suresh Agrawal, President, All India Dal Mills Association. 'Besides the milling machinery makers, we also have companies that offer allied solutions such as packaging and energy efficient motors among others.'

 

There are four-five companies from China, one each from South Korea, Turkey and Japan, besides a host of machinery makers from Chennai, Bengaluru, Ahmedabad, Rajkot, Sonepat and Faridabad participating in the event, he said.

An international cargo terminal facility at the Srinagar International Airport, Kashmir was inaugurated on Friday. The new facility is aimed at providing a major boost to exports of horticulture produce, handicrafts and other goods from Kashmir.

 

An Airports Authority of India (AAI) official called the day of the inauguration, March 10, 2022.

 

He said, 'On this day, the Government of India acting through the Commissioner of Customs has notified us as custodian for the import and export of goods from abroad at our cargo terminal,'

 

Officials said that the Government of India, acting through the commissioner of customs, has notified the Srinagar airport as custodian for the import and export of goods from abroad at the airport’s cargo terminal.

 

The officer invited all the airlines to make full use of this facility and commence their cargo operations from Srinagar airport.

 

Business community of Kashmir has welcomed the decision, but sought an enhanced direct connectivity between Srinagar and other international airports like Jeddah and Sharjah.

Finance Ministry on Tuesday said that the Indian economy is well prepared to absorb any upcoming external shock in terms of capital outflow induced by an uncertain geo-political environment, however inflation remains a concern.

 

The report said India has adequate forex reserves to absorb any upcoming external shock.

 

'Notwithstanding global developments, India’s forex reserves also stood at record high and large enough to finance more than 12 months of import,' The report added.

 

The report said despite the challenges, India’s external sector exhibits signs of resilience with robust growth in merchandise exports, which increased to $374.8 billion during April 2021 – February 2022.

 

However it warned that high energy and commodity prices may pose upside risk to the inflation outlook in the near- medium term.

 

For the coming fiscal year 2022-23 RBI has projected CPI inflation at 4.5%. The report says that this requires close monitoring.

 

'Recent increase in prices of food and energy commodities and metals warrants continued vigil on the inflation front,' the monthly economic report said.

 

Going forward the ministry added that the various economic indicators suggest that India will continue to grow in the next financial year and enhanced capital expenditure will further boost the growth and employment through multiplier effect.

 

'The sustained rise in Capex is expected to pump prime private investment and demand. This is evident from capacity utilisation recovering to 68.3 per cent in Q2:2021-22, as compared to 60.0 per cent in the previous quarter,' report said.

 

Capital expenditure increased by 22.0 per cent YoY during April 2021-January 2022 and stood at Rs. 4.4 lakh crore in April-January 2021-22 compared to Rs. 3.6 lakh crore in the corresponding period last year.

 

The report said despite global geopolitical headwinds, recovering consumption demand has catalyzed a healthy investment scenario in the economy. The second Advance Estimates of GDP for 2021-22 has projected consumption to surpass the level in the pre-pandemic year of 2019-20.

 

Recently Moody’s Investors Service has upgraded India's GDP growth estimate to 8.4% for 2022-23, while Fitch Ratings has projected the growth at 10.3% for 2022-23.

 

However, the ministry cautions that high oil prices may dampen these growth estimates.

 

'Recent sharp increase in the price of crude oil, if sustained well into the new financial year, will pose downside risk to these growth estimates,' the monthly economic report by the Finance Ministry said, suggesting close monitoring on the inflation front.

 

Finance ministry expects oil prices to cool down.

 

'Given the inherently unsustainable nature of high prices, international commodity prices are expected to level off early with an increase in supplies outside the crisis zone,' the report said.

 

Some key observations:

 

Forex reserve enough to finance over 12 months of import

high energy and commodity prices may pose upside risk

Energy and metals warrants continued vigil on inflation

Spiking crude oil will pose downside risk to growth in FY2022-23

International commodity prices are expected to level off early

Capex is expected to pump prime private investment and demand

India is rolling out ambitious measures over the coming weeks to try to establish the country as a dominant exporter of high-quality wheat as importers scramble for supplies following Russia's invasion of Ukraine, two government sources said.

 

The measures, which should be implemented over the course of around two weeks, include ensuring government-approved laboratories test the quality of wheat for export, making extra rail wagons available for transport and working with port authorities to give priority to wheat exports.

 

India, the world's biggest wheat producer after China, has been pursuing deals to export wheat and take advantage of surplus stocks at home and a sharp rise in global prices.

 

It sees the disruption caused by the conflict involving Russia, the world's largest wheat exporter and Ukraine, another leading supplier, as an opportunity to sell its wheat on the world market.

 

Despite surplus wheat stocks, logistical bottlenecks and quality concerns have previously stymied India's efforts to sell large volumes on the world market.

 

Exports picked up last year to reach 6.12 million tonnes of wheat from 1.12 million tonnes a year earlier.

 

The government sources told Reuters the new measures could result in the export of 10 million tonnes of wheat after the new season harvest begins later this month.

 

They said the changes follow extensive consultations with ministries, state governments, port and railway authorities, export promotion bodies and big export houses.

 

Prime Minister Narendra Modi's administration is keen to help farmers and traders export higher-quality grain to show global buyers that India can provide a steady supply of high-protein wheat, the sources said, asking not to be named as they are not authorised to talk to the media.

 

Modi's administration has recruited 213 government-approved laboratories to test the quality of wheat for export and has also asked the state-run Bureau of Indian Standards to monitor quality, the sources said.

 

They said extra warehousing capacity was being created near ports to ensure faster turnaround times for railway wagons that transport grain from major wheat-producing states.

 

India exports wheat primarily through two ports on the west coast, but the country will soon be able to use other ports, especially in the east to handle wheat cargoes, the sources said.

 

In addition to raising farmers' incomes, higher exports from India would reduce the amount the government spends on domestic wheat, which it buys to support local growers.

As per RBI’s Master Directions dated 04.09.2020, all food & agro- processing activities have been included as eligible under Priority Sector Lending (PSL). The list of eligible activities under PSL is attached as ANNEX.

 

A special fund of Rs.2000 crore has been set up in National Bank for Agriculture and Rural Development (NABARD) to provide credit at affordable rates to boost food processing sector. Under this fund, loan is extended to individual entrepreneurs, cooperatives, farmers producer organizations, corporates, joint ventures, Special Purpose Vehicle and entities promoted by the Government for setting up, modernization, expansion of food processing units and development of infrastructure in designated food parks. Apart from Mega Food Parks of the Ministry of Food Processing Industries, other designated Food Parks (DFPs) notified by the Ministry in different States have also been included. Till 31.1.2022, term loan of Rs. 466.26 crore has been disbursed from the Fund.

 

The Production Linked Incentive Scheme of Food Processing Industry (PLISFPI) has been formulated by the Ministry as part of 'AatmaNirbhar Bharat Abhiyaan' for enhancing India's manufacturing capabilities and enhancing exports. The scheme has three broad components. The first component relates to incentivizing manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) including millet-based foods, Processed Fruits & Vegetables, Marine Products and Mozzarella Cheese. The second component is intended for incentivizing innovative/ organic products of SMEs across all the above four food product segments including Free Range - Eggs, Poultry Meat and Egg Products. The third component relates to support for branding and marketing abroad to incentivize the emergence of strong Indian brands.

A surge in wheat and corn prices is boosting demand for low-grade rice in animal rations across Asia, pushing up prices of the world's most important staple at a time when global food inflation is already hovering near record highs.

 

Global crop importers are scrambling for supplies after Russia's invasion of Ukraine severed grain shipments from the two countries, which together account for around 25% of world wheat and 16% of world corn exports.

 

Chicago wheat futures hit a record high last week while corn climbed to its highest in a decade after war-torn Ukraine shut its ports and Western sanctions hit Russian exports.

 

The price spikes in wheat and corn in turn pushed buyers to seek alternatives, including in China, by far the world's largest feed market. Importers there are in talks to buy extra volumes of broken rice - inferior rice where the grains have been fractured during the milling process - to fatten hogs and other animals, traders and analysts said.

 

Rice typically trades at a steep premium to wheat, but wheat's blistering 50% price surge from a month ago has sharply cut the difference between the two grains, and even made wheat more expensive than some lower grades of rice.

 

Benchmark food-grade rice from Thai exporters made its biggest weekly gain since October 2020 last week on the back of firmer food and feed demand, climbing 5% to around $421.50 a tonne.

 

That's the highest since last June, and sources say prices may keep rising if the disruption to Black Sea flows persists. Export prices from Vietnam and India have also climbed.

 

'There could be greater interest in broken rice for animal feed if the strength currently dominating wheat and corn markets persists,' said Rome-based FAO rice economist Shirley Mustafa.

 

'It is not just animal feed, there could also be a substitution in other use sectors, such as more people turning to rice for their meals.'

 

CORN CUT

 

China had booked up to two million tonnes of Ukrainian corn imports for this year, but most of those shipments are now in jeopardy given the disruption to Ukraine's logistics chains.

 

To replace those lost volumes, China is expected to import around three million tonnes of broken rice, up from about two million tonnes annually in the past two years, said a Beijing-based rice trader.

 

One importer in Guangdong is looking to buy broken rice from Thailand, while others have recently bought Indian broken rice for feed, according to another source briefed on the matter.

 

'Demand for Indian broken rice has gone up because of higher corn prices. Feed makers are trying to replace corn with rice,' B.V. Krishna Rao, president of India's Rice Exporters Association, told Reuters.

 

Prices of 100% Indian broken rice have moved up to $320 per tonne this month from $290 in February, he added.

 

Further underpinning rice prices, feed makers in Thailand are also looking at using more broken rice to replace corn, pushing up domestic prices across the country, said Bangkok-based traders.

 

'There is tremendous increase in demand for lower quality rice from Thailand's animal feed industry,' said one trader in Bangkok. 'In fact, much of Thailand's broken rice is likely to be consumed in the domestic market.'

 

FOOD FEARS

 

Global rice prices could rise further in the second quarter if wheat consumers in India - the second largest rice user after China - switch to rice due to record high domestic wheat prices , which would accelerate any decline in rice inventories, said Chookiat Ophaswongse, honorary president of Thai Rice Exporters Association.

 

While global rice inventories are set to hit a record 190 million tonnes this year, according to the U.S. Department of Agriculture, global rice output is expected to exceed world consumption by less than 5 million tonnes in 2022, so a sudden climb in worldwide demand could quickly start to deplete those inventories and reinforce bullish sentiment in the market.

 

In turn, an increase in rice prices will intensify food security worries for some of the poorest nations in Africa and Asia, where millions rely on cheap availability of the staple.

 

'As of now, broken rice is mainly for the feed sector, but as the war gets prolonged and buyers are not able to get hold of adequate wheat, then it comes to food security,' said one Singapore-based grains trader.

 

'Buyers will do whatever they can to replace expensive wheat with rice or other alternatives.'

Ministry of Food Processing industries (MoFPI) has been implementing Central Sector Umbrella Scheme - Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) since 2016-17 for overall growth and development of food processing sector including setting up of Food Processing Industries. Under the component schemes of PMKSY, special concessions are provided for setting up of such industries and Mega Food Parks in North Eastern States (including Sikkim) and difficult areas like Himalayan States/UTs, State notified Integrated Tribal Development Project (ITDP) areas and Islands. These concessions include lower eligibility threshold during evaluation and higher rate of grants for selected projects. The details of higher grants in such areas under relevant component schemes of PMKSY including Mega Food Parksare placed at Annexure.

Promotion of exports of agricultural products is a continuous process. To promote agricultural exports, the Government has taken several steps at State/District levels. State specific Action Plans have been prepared by some states and State Level Monitoring Committees (SLMCs), Nodal Agencies for agricultural exports and Cluster Level Committees have been formed in a number of States. Country and product-specific action plans have also been formulated to promote exports. It has also been decided that the institutional framework created under the ‘District as Export Hub’ Initiative of the Department of Commerce would be utilized to achieve the objectives of Agriculture Export Policy.           

A Farmer Connect Portals has been set up for providing a platform for farmers, Farmer-Producer Organizations (FPOs) and cooperatives to interact with exporters, Buyer-Seller Meets (BSMs) have been organized in the clusters to provide export-market linkages. Regular interactions, through video conferences, have been held with the Indian Missions abroad, to assess and exploit export opportunities. Country specific BSMs, through Indian Missions, have also been organized.

 

The Government has also introduced a Central Sector Scheme –Transport and Marketing Assistance for Specified Agriculture Products’ –for providing assistance for the international component of freight to mitigate the freight disadvantage for the export of agriculture products.

 

The Department of Commerce provides assistance through several other schemes, to promote exports, including exports of agricultural products viz. Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme etc. In addition, assistance to the exporters of agricultural products is also available under the Export Promotion Schemes of Agricultural & Processed Food Products Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), Tobacco Board, Tea Board, Coffee Board, Rubber Board and Spices Board.

 

Besides, Product specific Export Promotion Forums (EPF) for eight high potential agri products i.e. Grapes, Mango, Banana, Onion, Rice, Nutri-Cereals, Pomegranate, Floriculture & Plant material have been created at the insistence of Department of Agriculture & Farmers Welfare (DA&FW) under the auspices of APEDA which will work on promoting the export of identified products in a focused manner.