India’s Niti Aayog recently said as most portals that help exporters access information now offer incomplete or outdated information, a single such portal is needed to promote ecommerce exports and improve access to finance, especially for micro, small and medium enterprises (MSMEs). Such a portal will answer all queries from exporters on market tariffs, required paperwork, sources of finance, service providers, available incentives and potential customers. "Therefore, creating a one-stop information data intelligence portal, using an Al [artificial intelligence]-based interface will be essential to impart information to MSMEs," the government think tank said in a report, titled 'Boosting Exports from MSMEs'. The think tank also suggested introducing an annual financial reconciliation process for ecommerce exporters, exemption of import duties on rejects or returns, granting exemption on reconciliation requirements for shipments up to $1,000 and creating a green channel clearance for e-commerce exports. "To boost e-commerce exports, it is essential to create a distinction between exporter on record (EOR) and seller on record (SOR) and allow a reduction in invoice value without any percentage ceiling for all e-commerce exports," it said. Access to finance is regularly seen as a key bottleneck for MSMEs and towards this end, the promotion of Export Credit Guarantee can help improve working capital availability for MSMEs, the report noted. "The current uptake of ECGC [Export Credit Guarantee Corporation of India Limited] schemes is only 10 per cent and the government must create an incentive package to increase it to 50 per cent or more," it added. The NITI Aayog has also suggested relaxations for MSMEs from certain compliance requirements for a period, while putting in place a process for time-bound disbursement of incentives so that working capital is not blocked for them.
Source: Business Standard
The majority of difficult matters in India-UK FTA negotiations are moving towards resolution, and both sides are actively engaged for a fair and equitable deal, commerce ministry officials said on Friday. India and the UK launched talks for an FTA in January 2022 to boost economic ties between the two nations. ADVERTISEMENT There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. Commerce Secretary Sunil Barthwal said both sides are actively engaged in talks, and both of them "want a fair, equitable deal". He was replying to media queries after the ministry released trade data for February. The 14th round of negotiations was held in January. Chapter-wise textual negotiations are near close, and the schedule on goods and services is at an advanced state of negotiations, commerce ministry officials said. The bilateraltrade between India and the UK increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22. On the proposed free trade agreement (FTA) between India and Oman, Secretary Barthwal said this is one trade pact, which will be concluded very soon When asked whether coming into force of Model Code of Conduct with the announcement of General Elections on Saturday would impact the pace of negotiations or signing of a new FTA till the new government assumes office, the official said, there is no restraint on ongoing projects. India's 10 export destinations during April-February 2023-24 were UAE, Singapore, Netherlands, China, the UK, Saudi Arabia, South Africa, Germany and Bangladesh. ADVERTISEMENT The top import sources were Russia, Switzerland, China, South Korea, Singapore, Iraq, Indonesia, UAE, Saudi Arabia, and the US. On smartphone shipments, the commerce ministry data showed that the US is India's top exporting destination with a share of 34.4 per cent from April-January 2023-24. The decline in the exports of smartphones to the US was also observed from the world along with China, Hongkong and Vietnam. India's overall exports (merchandise and services combined) in April-February . Overall imports in April-February 2023-24 were USD 782.05 billion, registering a contraction of 4.64 per cent over the corresponding period of the last fiscal.
Source: Economic Times
Increase in costs of shipping (40-60 per cent) and insurance (15-20 per cent) and delayed arrival of shipments (by up to 20 days or more) arising out of the Red Sea crisis will continue to disrupt global value chains, squeeze margins and make exports of many lowmargin products unviable from current locations, according to the Global Trade Research Initiative (GTRI). Added to the problem is potential cargo loss from piracy and attacks. The Red Sea crisis started on October 19 last year when Iran-backed Houthi rebels in Yemen launched attacks on cargo ships apparently linked to Israel near their coast. Countries in Europe, Asia and Africa will face the most disruption across industries and the crisis will adversely affect trade volumes in substantial ways this year, the Indian think tank noted in a recent report. The disruption is significantly affecting Indian trade, especially with the Middle East, Africa and Europe, the report said. Textile and leather companies, which operate on thin margins, are renegotiating shipping costs with buyers, affecting earnings, GTRI founder Ajay Srivastav said. The GTRI report called for financial support and insurance schemes to Indian companies hit by these trade disruptions. "The crisis also underscores the importance of exploring alternative maritime and land based trade routes. This includes potential investment in the Northern Sea Route and expanded land transport infrastructure," said the report. The India-Middle East-Europe Economic Corridor (IMEC) assumes importance in this context, Srivastava added.
Source: Business Standard
Air freight from India to key destinations like the US, Canada and Europe has more than doubled in the last three months due to disruption in global shipping following the Red Sea crisis. This is affecting sectors like leather, textile, pharma and food. Three months ago, air freight from Chennai to Munich used to be ₹96 per kg but has increased to around ₹250 now. Similarly, air freight to the US and Canada has increased to ₹400 per kg as against ₹170 to ₹190 three months ago, said Israr Ahmed, Director at Farida Group, a leading exporter of leather products from Chennai. Further, as the air freights are high to the US, the airlines are less willing to take on board cargo for transshipment hubs like Hong Kong or Singapore as the freight is as low as ₹38 or ₹40 per kg. They are giving priority to destinations in the US, Canada or Europe, said Ahmed, who is also the Vice President of FIEO. Disruption in the Red Sea is causing a huge supply chain problem, and some of the time bound and high value cargo is getting diverted from sea to air, he told businessline. J Krishnan of S Natesa Iyer Logistics LLP, a leading freight forwarder, agreeing with Ahmed said there is a huge capacity crunch in the airlines carrying cargo. While most of the cargo is carried in the belly, some of the airlines like Singapore Airlines, Cathay Pacific, Lufthansa and Qatar Airlines, do operate freighters. However, the demand is outstripping the supply, he said. Most orders are planned by sea but disruptions change the mode of shipment, he added. Complicating things further, huge consignment of garments from Bangladesh is arriving at Delhi for air evacuation to global destinations. There is capacity crunch on both modes out of Bangladesh, which is one of the leading exporters of garments. India has a trade agreement for sealed export cargo from Dhaka to directly arrive at Delhi Airport with minimal border checks, he said. “The current situation is one more stark example of the problem of Indian trade, due to lack of national capacity,” he added. An official with an airline on the increase said it is about demand and supply, and the fare drops or increases accordingly.
Source: he Hindu Business Line
Union Finance Minister Nirmala Sitharaman on Saturday said India currently needs economic freedom to achieve developed nation status by 2047 and assured that the country would move to the third spot in the world economy from the current fifth position shortly. Criticising those who compared India with China, Sitharaman said that certain things could not be replicated from them. "India should attain self-sufficiency in economic matters. It should become an economic power. The country has come from 10th position to 5th in global rankings and a few years down the line we will achieve the third spot", Sitharaman said, after unveiling a bust of Mahatma Gandhi at Shrimati Indira Gandhi College.
Developed Nation By 2047
Appealing to the students gathered at the venue to contribute to the progress of the nation, she said, "It is through the efforts of students like you that our country will become a developed nation by 2047." Referring to people talking about how China has progressed and comparisons with India, Sitharaman recalled that the two countries were at the same level 30 years ago. "They have progressed because of various reasons which cannot be followed here. For example, (in China) there is no democracy at all. But we have civil liberty, freedom of speech is here and we have values in our system. And to become a developed nation, we should think positively," she said. Observing that India was a rich country about 400 years ago, she said that even today there are references to Indian connections in Indonesia and other East Asian countries. "Cholas had gone to Indonesia and set up a kingdom there. Even today there are references to that. So, what I am trying to say is that today, on this day when we remember Mahatma Gandhi, we should attain economic freedom and we should be free from imperial forces. That is why Prime Minister Narendra Modi speaks about the Atmanirbhar Bharat (campaign) in his speeches to attain a developed nation with all your contribution", she said.
India Traditionally Rich In Culture
Maintaining that India is traditionally rich in culture, she said there were many people who have praised the country for its legacy. "About 20 years ago, many countries were commenting that India is a culturally rich country. But today most of the world's nations are looking in awe on several fronts including how we have progressed by using the digital technology infrastructure. They showcase India as an example in tapping digital technology," she said. Even a top minister from Brazil which has taken the Presidency from India for hosting the G20 Summit this year has raised doubts about matching the digital technology infrastructure in their own country, she said. In her address to the students, Sitharaman said digital technology in India does not refer to the payment mechanism, but it was also about the revolution during the COVID-19 pandemic when digital certificates on vaccination status were issued through mobile phones. "You were able to receive the time, date, place, what was the vaccine that you were administered along with the certificate in your mobile phone." she said, adding that today's schools and colleges were able to link to educational institutions or to teachers through digital channels. "We have been using digital in every section, not only for making payments but also in education and healthcare. Like this many developmental programmes have been launched
in India in the last 10 years," she said.
Digital Technology:
The Finance Minister said women in rural areas were tapping digital technology by operating drones for the development of their farmlands. "While her brother operates the tractor in the fields, the woman spreads fertilisers using drones. Not only that, they can also sell their produce to global markets from their phone," she said. Sitharaman said that Prime Minister Narendra Modi was keen on developing every part of the country and used to tell his cabinet colleagues that India does not mean only Delhi. "That is why the G20 Summit was conducted in every state in our country last year. He (Modi) wanted every state to gain the experience of hosting a G20 Summit and that it should not rest in Delhi alone. He used to request to take all the benefits across the country to every district. Even those districts which were economically backward needs to be developed and that is how we have announced the aspirational districts scheme. Even in Tamil Nadu, we have announced that Ramanathapuram and Virudhunagar will be developed under this scheme," she revealed.
Source: Business Standard
Path to becoming a $30 trn economy: India is aiming to lead the pack among G20 developing nations with a target of achieving a robust $30 trillion economy by 2047, according to India Ratings and Research (Ind-Ra). As the economy gears up to touch $3.6 trillion in FY24, this ambitious goal relies on multiple factors such as real GDP growth, inflation dynamics, and currency exchange rates. Sunil Kumar Sinha, Senior Director and Principal Economist at Ind-Ra suggested that India could reach the upper-middle-income bracket and hit the $15 trillion milestone by FY47. "Under different scenarios, we anticipate India's economy to vault into the upper-middle-income category over FY33– FY36, eventually surging to a $15 trillion mark by FY43-FY47," Sinha said. Advertisement India's trajectory towards the $30 trillion target is driven by a crucial energy transition and a shift towards low-carbon manufacturing. The country's commitment to renewable energy, epitomised by ambitious targets like 500GW of renewable energy capacity by 2030 and a net-zero status by 2070, is Ind-Ra highlights the middle-income class as one of the most crucial drivers of India's economic ascent. With projections indicating a substantial expansion to 1.02 billion by 2046-47, the evolving consumption patterns and investment preferences of this demographic cohort are expected to shape India's economic growth significantly. Advertisement According to the report, India's per capita income is poised for a substantial rise, estimated to reach $9,218 to $9,920 by FY47.
Source: Republic World
The near-13-year high services trade surplus in February has prompted economists to scale down their projections of India’s current account deficit (CAD) for the current financial year. Many economists now expect CAD to come in at 0.8-0.9% of the GDP during the entire FY24, as compared to their previous forecast of 1.1-1.2%. “The services trade surplus has consistently risen since November 2023, narrowing the gap with the merchandise trade deficit, giving a fillip to the current account balance,” said Barclays economists in a note. India’s overall trade deficit during February was meagre $2billion, lower than $4.2 billion in January. During February, the country’s services trade surplus came in at $16.8 billion – the highest since April 2011 – as against $16.2 billion in January. This was due to the record-high services exports, which stood at $32.2 billion in February as compared to $31 billion in January. Services imports, meanwhile, stood at $15.4 billion as against $14.9 billion. Services trade surplus since the past three months has stayed consecutively above the $16-billion-mark, while goods trade deficit has remained contained below $20-billion, leading to sharp decline in the country’s overall trade deficit. In April-February, merchandise trade deficit has lowered 8.4% on year, while services trade surplus has soared by 17.8%. IDFC FIRST Bank Economist Gaura Sen Gupta said that the pick-up in services surplus is led by rise in software services and professional services exports. “Post Covid-19 there has been a sustained rise in professional services surplus, reflecting the rise of global capability centres (GCCs),” she said. On the goods front, economists say that concerns over “adverse spillover” impact from the ongoing disturbance in the Red Sea region continues to evade India’s official trade statistics. “This hitherto suggests either better demand conditions, or the fulfilment of past contractual trade orders (or a combination of both),” said QuantEco Research in a note. The agency has cut its FY24 CAD estimate by 50 bps to 0.8% of GDP in the assumption of range-bound commodity price movement. In a press-conference on Friday, Commerce Secretary Sunil Bhartwal said that the country has been able to withstand difficult times. “Projections for world trade for 2024 are much better. For next year (FY25), we are quite optimistic,” he said. A jump in exports during February, led to the overall exports – including goods and services – to rise 0.8% on year in the first 11 months of the current fiscal. If this trend is sustained in March, net exports could turn positive in Q1FY24 after several quarters, pushing up the gross domestic product (GDP). For FY25, economists expect the positive growth in exports to continue, and therefore, most have pegged their estimates at 1-1.2% of the GDP, down from 1.5-1.6% projected earlier. “Positive momentum for non-IT services may be felt in FY25 as well, while goods and core IT exports could see slower growth. With Brent at $85 per barrel, FY25E CAD could stay comfortable at 1.1-1.2% of GDP,” said Madhavi Arora, lead economist, Emkay Global.
Source: Money Control
l India will continue the ongoing negotiations for free-trade agreements (FTAs) with countries like the United Kingdom (UK) and Oman even after the model code of conduct for the general elections kicks in from Saturday. The Election Commission of India (ECI) is set to announce the schedule for the 2024 Lok Sabha election Saturday. Following the announcement, the model code of conduct will be enforced in the entire country until the announcement of results. “Model code of conduct doesn’t restrain any ongoing projects. These are ongoing negotiations, these are not new negotiations. So (FTA) negotiations will continue at the same pace,” Sunil Barthwal, commerce secretary, told reporters. When asked whether the government would sign an FTA when the model code of conduct is in force, Barthwal said “that call we will take when the time comes. That is not a concern at the moment. Negotiations are going on. At what point we are going to sign it, we will take that call at that point.” On the ongoing FTA negotiations with the UK, Barthwal said both sides were “very actively” engaged in the negotiations. “Both sides are quite committed to the fact that there should be a commercially meaningful, fair, and equitable trade deal between the two countries. Sensitivities of both the countries should be respected as well as the strengths should be reflected in the trade deal. Negotiations are going on even today. It is a very (very) complex deal. Both the countries want an ambitious deal. We are waiting for negotiations to conclude,” he added. Prime Minister Narendra Modi on Tuesday held a telephonic conversation with his UK counterpart Rishi Sunak. “The leaders reaffirmed their commitment to continue to strengthen the bilateral Comprehensive Strategic partnership. They assessed positively the progress made towards early conclusion of a mutually beneficial Free Trade Agreement,” a statement from the Ministry of External Affairs said. India-UK FTA negotiations, launched in January 2022, have had 13 rounds of talks so far. “Chapterwise textual negotiations are nearly closed and schedules on goods and services are at an advanced stage of negotiations. Recently, the UK team visited India (March 5-7) for negotiations on outstanding issues. Teams have made good progress. Majority of difficult issues are towards resolution. A couple of key priority issues to seal the deal are being ironed out to have a balanced outcome,” the commerce department said in a presentation. On the status of the FTA with Oman, Barthwal said it was pretty close. “Whenever we do these FTAs, we look into not only the trade issues but national interest and geo-strategic interest. This is an FTA which will be concluded very soon,” he said. On the ongoing FTA negotiations with the European Union, the commerce department said during the seventh round of negotiations from February 16-27, both sides focused on important policy areas where there was divergence. “At the end of Round 7, there are gaps in our respective positions in many chapters, especially in some new policy areas such as sustainable development, ERM (Energy and Raw Materials), capital movements, etc. and also some traditional chapters such as IPR (intellectual property right), trade remedies, disputes settlement etc. Both sides have agreed to meet inter-sessionally through virtual modes on many chapters, before the commencement of the 8th round, which is being planned in June 2024 in Brussels,” the secretary said.
Source: Business Standard
India's goods exports rose 11.9% to $41.4 billion, highest in 20 months. Imports increased, resulting in a trade deficit of $18.7 billion. Various sectors like engineering goods and electronic goods showed significant growth. "If you look at the 11 months period of the financial year this is the highest export growth which we have achieved, both merchandise as well as overall. This is very heartening," commerce secretary Sunil Barthwal told reporters. The numbers have also given govt the confidence that last year's level will be scaled.
New Delhi: India's goods exports clocked the fastest growth in 20 months, rising 11.9% to $41.4 billion, the highest value of shipments since last March. Imports grew 12.1% to top $60 billion, resulting in a trade deficit of $18.7 billion. "If you look at the 11 months period of the financial year this is the highest export growth which we have achieved, both merchandise as well as overall. This is very heartening," commerce secretary Sunil Barthwal told reporters. The numbers have also given govt the confidence that last year's level will be scaled. Economists too sounded upbeat. "The surprise to our estimate came from a better-thanexpected goods export performance. This suggests that the disruptions to the Red Sea trade route, while requiring some re-routing of India exports, have not materially altered the trend in exports," Barclays said in a note. Services exports in Feb hit a record of $32.1 billion, 17.3% higher than a year ago, while trade surplus also hit a monthly high of $16.7 billion. On the goods side, engineering goods, the country's largest export item, was a key driver in Feb, growing 15.9% to $9.9 billion. "In the past few months, there has been a revival in various commodity groups, especially iron and steel. Also, demand from various markets such as Australia, UAE, and Russia has been reasonably good and the trend is expected to continue... We are optimistic that FTAs with the UK, Oman, and the EU would be signed sooner than later," EEPC India chairman Arun Kumar Garodia said. Electronic goods, largely mobile phones, saw a 55% jump to almost $3 billion. While sectors such as gems and jewellery were impacted by weak demand overseas, petroleum (5% rise to $8.2 billion) and readymade garments (4.9% increase to $1.5 billion), adding to the overall increase. "Such an impressive increase in overall exports growth, despite the Red Sea crisis, tight monetary stance by the developed world and falling commodity prices posing challenge, not only portrays the dedication and commitment of the sector but also the resilience of the exporting community, who have continuously been braving such odds since RussiaUkraine war," Fieo president Aswani Kumar said. On the import front, gold shipments soared 2.3 times to $6.1 billion in February, silver surged to over $1.7 billion in February, compared with $13 million a year ago. The yellow metal has been flirting with new highs in recent weeks, both in the domestic and international market. Crude petroleum, however, remained flat at $16.9 billion.
Source: Times of India
The global supply chain transformation under way is likely to deepen, driven by intensifying geopolitical rivalries, emerging technologies, concerns over supply chain resilience and the search for efficiency, according to UBS. While this process is potentially disruptive, it also presents an opportunity to improve the sustainability profile of companies’ supply chains, UBS noted. The Switzerland-based investment bank and financial services company feels this is due not just to the benefits that accrue from improved sustainability, like lower transition, reputational, and legal risks, or improved employee retention and morale. It is also about future-proofing supply chains against a tightening regulatory environment and growing consumer demands for sustainability in companies’ operations, it said. Sustainability-linked regulatory changes being considered would likely require new tools and investment, and a shift from a ‘least cost’ to a ‘least risk’ mindset, it said. UBS has suggested a four-pillar framework to improve supply chain sustainability: evaluate, optimise, collaborate and develop. Improving a supply chain starts with understanding the individual links in the chain. Visibility within supply chains remains low, meaning many companies simply do not know who they are ultimately reliant on, beyond their direct suppliers, to produce their products and services. Even when they are aware, the emissions and other impacts incurred by those suppliers may not be measured; if they are measured, they may not be disclosed; if they are disclosed, they may not be accurate; and if they are accurate, divergent metrics and methods may make comparability across companies and industries difficult or impossible, UBS observed. Balancing of several factors is required: replacing links whose sustainability practices fall unacceptably short; looking at supply chain length, and the potential for reducing it; optimising supply chain logistics via the deployment and utilisation of emerging technology solutions to better match supply with demand, maximise efficiency and minimise waste. System-level improvements require not just avoiding risk, but proactively seeking to improve the performance of less sustainable supply chain partners. Collaboration is a key part of this. Developing refers to actions and investments made to grow a supply chain’s sustainability capabilities. It can take multiple forms, including sharing expertise; financing new capabilities, like new product lines or supply links; and promoting circularity, UBS added.
Source: Fibre2fashion
Near-term world growth prospects have improved, with Fitch Ratings raising its 2024 global gross domestic product (GDP) growth forecast by 0.3 percentage point (pp) to 2.4 per cent in its latest Global Economic Outlook (GEO). This reflects a sharp upward revision to the US growth forecast to 2.1 per cent from 1.2 per cent in the December 2023 GEO. The revision to the US outweighs a marginal cut to the rating agency’s China growth forecast for this year—to 4.5 per cent from 4.6 per cent—and a small revision to its eurozone forecast—to 0.6 per cent from 0.7 per cent. The growth forecast for emerging markets excluding China has been revised by 0.1 pp to 3.2 per cent, with projections raised for India, Russia and Brazil. Fitch expects world growth in 2025 to edge up to 2.5 per cent (unchanged from before) as the eurozone finally recovers on a pick-up in real wages and consumption, but US growth slows. The eurozone continues to stagnate, with Germany’s recession weighing on France and the rest of the bloc. China’s property collapse continues unabated. US core inflation momentum has recently picked up and we have raised Fitch’s end-2024 US consumer price index (CPI)-based inflation forecast by 0.3 pp to 2.9 per cent. Better progress has been made in reducing core inflation in the Eurozone. The jump in shipping costs is adding upside risks to core goods inflation, Fitch added.
Source: Fibre2fashion
Ambassador Iwama Kiminori of Japan to Bangladesh emphasised recently the pivotal role of the Economic Partnership Agreement (EPA) and the Public Private Economic Dialogues (PPED) in advancing the business landscape between the two nations in the foreseeable future even as he underscored the importance of continual dialogue between the governments to foster a conducive business environment. Speaking as the chief guest at the inauguration of HmAC’s new office, Iwama Kiminori highlighted the significance of the ongoing collaboration in shaping Bangladesh’s business landscape. He also unveiled the ‘Taxation Handbook for Investors in Bangladesh’ prepared by Howlader Maria & Co. Japan acknowledged Bangladesh’s pivotal role in regional development and business opportunities, recognising the country’s evolving economic landscape. As more companies turn their attention towards Bangladesh, organisations like the Japan Bangladesh Chambers & Commerce of Industry (JBCCI) and JETRO Bangladesh provide essential guidance to navigate the intricacies of the Bangladeshi market. The collaborative efforts between the Japanese Business Circle and the Embassy of Japan demonstrate a concerted endeavour to establish a robust support framework for companies entering Bangladesh. This synergy aims to offer comprehensive assistance, facilitating a smooth transition for businesses venturing into the Bangladeshi market. Ambassador Iwama Kiminori’s remarks underline Japan’s commitment to fostering bilateral economic ties and supporting Bangladesh’s economic growth. Through initiatives like the EPA and PPED, along with collaborative efforts between business circles and diplomatic missions, both nations aim to create an environment conducive to sustainable business growth and mutual prosperity.
Source: Fibre2fashion
