CBEC Customs procedure for export of cargo in containers and closed bodied trucks from ICDs/CFSs through Land Customs

CBEC Notification for Import Tariffs concessions under IK-CEPA

GST - Thirteenth Amendment in CGST Rules, 2017 (Table 6A, RFD01, RFD01A, Deemed export Rules etc) Manual filing and processing of refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger

e-seals - Postponement of mandatory implementation of e-sealing till 1st March 2018

REACH - Booklet / Practical Guide on REACH application for Indian Industries

Refund of IGST/Un-utilised ITC - Status / Feed-back on pending refunds related to export transactions.

lnputs on the specific technological needs and requirement of the Chemical Sector

DBK - Refund/Claim of Countervailing duty as Duty Drawback

GST Inter-State e-way Bill to be made compulsory from 1st of February, 2018

Inputs for 4th session of India-Egypt Joint Trade Committee Meeting (JTC)

Agenda Points for India-Oman Joint Commission Meeting (JCM)

India-Peru Trade Agreement Stakeholder consultation on Trade in Goods

India-Israel FTA Negotiations

GST Reminder - Revised GST Return Filling due dates / Due date of Filing of Form TRAN-I/ Revision

GST - Portal Webinar scheduled by GST Portal on 13th Dec 2017 at 02:30 PM IST on the topic Refund functionalities available at GST Portal in English Language

DGFT - New Appendices 5E and 5F under EPCG Scheme of FTP 2015-20

DGFT - Application fee for grant of import authorization

CBEC Clarification on Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

REACH - Questionnaire to collect information on awareness of the EU REACH Regulation

JNCH - Drawing of samples for the purpose of grant of drawback (Circular 47/2017-Customs dated 27.11.2017)

GST - Anti-profiteering Measures by the Government

MEIS - Amendments to Appendix 3B of Foreign Trade Policy 2015-20

Important - Highlights of Mid-Term Review of Foreign Trade Policy (2015-20)

E- Seals - Updated list of vendors for providing e-seals to exporters (as per Circular no. 26/2017, 36/2017, 37/2017, 41/2017 & 44/2017 of Customs)

India-Korea CEPA upgradation Priority Request lists from Korea for concessions

JNCH - List of IECs and Shipping Bills in which there is a mismatch in Accounts details that are rejected by PFMS

Union Commerce and Industry Minister Suresh Prabhu on Tuesday unveiled Mid-Term Review of Foreign Trade Policy 2015-20 by announcing a slew of incentives to boost country's exports. Prabhu said that mid-term review of FTP will leverage the long term advantages of GST in terms of reduced compliance and logistics costs.

Mid-term review of Foreign Trade Policy will focus on finding new markets and new products as well as increasing India's share in the traditional markets and products, the minister said. To achieve Prime Minister Narendra Modi's vision of doubling farmers' incomes, FTP will have a focused policy for agricultural exports.

"Mid-term review aims to promote exports by simplification of processes, enhancing support to high employment sectors, leveraging benefits of GST, promoting services exports,monitoring exports performance through state-of-the-art analytics," Suresh Prabhu added.

The minister said the Merchandise Exports from India Scheme (MEIS) incentive rate will be raised by 2 per cent across the board for labour intensive/MSME sectors. Services exports from India Scheme (SEIS) incentives for sectors such as education, health, hospitality, business, legal, accounting, architectural, engineering to be increased by 2 per cent.

The increase in annual incentive by 34 per cent to Rs 8,450 crore will benefit leather, handicraft, carpets, sports goods, agriculture, marine, electronic components and project exports, the minister said in a tweet.

The FTP will provide "additional annual incentive of Rs 749 crore for the leather sector, Rs 921 crore for hand-made carpets of silk, handloom, coir, jute products, Rs 1,354 crore for agri products, Rs 759 crore for marine products, Rs 369 crore for telecom, electronic components, Rs 193 crore for medical equipment," the ministry said in a tweet.

It further said MEIS incentives for two sub-sectors of textiles - ready-made garments and made-ups - have already been increased to 4 per cent from 2 per cent, with an additional annual incentive of Rs 2,743 crore.

Validity period of Duty Free Credit Scrips has already been increased from 18 to 24 months to enhance their utility in the GST framework. GST rate on sale/transfer of scrips has been reduced to zero, the ministry said.

A new Logistics Division has also been created in Department of Commerce for integrated development of the logistics sector. The move is likely to positively impact exports by lowering transaction cost, increasing speed & ease of goods movement, improving Logistics Performance Index.

Prabhu said introduction of the new tax regime "would be the catalyst for spurring growth in the export sector. The lower duty on most of items and reduction of cascading effect of various duties would lower the cost and make exports competitive".

He added that green shoots in export growth are distinctly visible now with positive export growth in 13 of the past 14 months.

The five-year FTP was announced on April 1, 2015, and set an ambitious target of India's goods and services exports at $900 billion by 2020. It also has a goal of increasing India's share of world exports to 3.5 per cent, from 2 per cent. FTP will continue to be reviewed and amended for addressing exporters concerns, simplification of procedures and for promotion of exports, Prabhu said. Finance Secretary HasmukhAdhia further stated that ITC and IGST refunds for exporters are being expedited and incentives have been increased for labour intensive MSME sectors.

The government also said that support to Export Credit Guarantee Corporation will be enhanced to provide increased insurance cover to exporters particularly MSMEs exploring new or difficult markets

FTP will also focus on 'Ease of Trading' across borders. A professional team will handhold, assist and support exporters in their export related problems, accessing export markets, meeting regulatory requirements, the ministry added.

(Source: http://www.businesstoday.in/current/economy-politics/mid-term-review-of-foreign-trade-policy-exporters-benefits-duty-trade-markets/story/265341.html dated 5th December-2017)

The government on Tuesday announced incentives worth ₹8,450 crore to boost exports of goods and services, mainly from labour-intensive segments and the Micro, Small and Medium Enterprises (MSME), as well as to increase employment generation and value-addition in the country.

The move comes at a time when India’s shipments had shrunk in October - the first after 14 consecutive months of positive growth - due to the impact of the Goods and Services Tax (GST).

The incentives were announced as part of the Mid-Term Review of the Foreign Trade Policy (FTP). “The FTP will continue to be reviewed and evaluated regularly for addressing concerns of the exporters, simplification of procedures and for promotion of exports,” an official statement said.

The FTP for the period 2015-2020 had set an ambitious target of $900 billion for India’s exports of goods and services by 2019-20. It also aimed to raise India’s share in world exports from 2% to 3.5%. Though the FTP Mid-Term Review was to be brought out before July 1, to be implemented along with the GST, it was postponed as the government wanted to consider feedback from exporters regarding GST.

Commerce and Industry Minister Suresh Prabhu, speaking on the occasion, referred to the GST-related challenges faced by the exporters and said, “Any new legislation can’t be made perfect in one go. For instance, the even Income Tax Act, which deals with direct tax and therefore far simpler compared to the GST (which subsumed /replaced several indirect taxes), was amended several times. We will regularly revisit and address all the operational issues relating to the GST.”

He asked exporters to look at the big business opportunities worldwide, adding that the government is keen to ensure that India is a “powerful export-oriented country.”

Finance Secretary HasmukhAdhia said the export (incentive) package was approved by the GST Council to resolve the exporters’ problem of blockage of working capital. He further stated that input tax credit and Integrated Goods and Services Tax (IGST) refunds for exporters are being expedited. He said the GST will be very beneficial for exporters in the long run, and added that the new regime will also curb tax evasion.

The highlights of the FTP Mid-Term Review included “restoring the benefits under the export promotion schemes of duty free imports under Advanced Authorisation, Export Promotion Capital Goods and 100% Export Oriented Units, thus resolving the problem of blocked working capital for exporters following the roll-out of GST.”

Export incentives under Merchandise Exports from India (MEIS) have been increased by 2% across the board for labour-intensive MSME sectors leading to additional annual incentive of ₹4,567 crore, the government said. This is in addition to the already announced increase in MEIS incentives from 2% to 4% for ready-made garments and madeups in the labour intensive textiles sector with an additional annual incentive of ₹2,743 crore.

Further, incentives under Services Exports from India Scheme (SEIS) have also been increased by 2%, leading to additional annual incentive of ₹1,140 crore. A new scheme of self-assessment based duty free procurement of inputs required for exports has been introduced. A state-of-the-art Trade Analytics division has been set up in Directorate General of Foreign Trade for data-based policy actions. The initiative envisages processing trade information for specific policy interventions. Besides, a new Logistics Division has been created in the Department of Commerce to develop and coordinate integrated development of the logistics sector.

Support to Export Credit Guarantee Corporation is also being enhanced to increase insurance cover to exporters, particularly MSMEs, for exploring new or difficult markets, an official statement said.

In addition, the validity period of Duty Credit Scrips has been increased from 18 to 24 months and GST rates on transfer/sale of scrips have been reduced to zero. Issue of gold availability for exporters has been resolved by allowing specified nominated agencies to import gold without payment of IGST.

(Source:-http://www.thehindu.com/business/Economy/foreign-trade-policy-government-announces-incentives-worth-8450-cr-to-boost-exports/article21268303.ece dated 5th December-2017)

NEW DELHI, DECEMBER 5:

The much-awaited review of the Foreign Trade Policy (FTP) will be announced shortly today by Commerce & Industry Minister Suresh Prabhu extending support to exporters, especially those from leather-intensive sectors, to help deal with implementation burden of the new Goods & Services Tax (GST) regime.

Exporters are looking forward to additional incentives under the Merchandise Export from India Scheme (MEIS), longer time-frame for meeting export obligations under various schemes and self-certification of documents wherever required.

"Most of the labour intensive sectors including leather, sports goods, marine products and textiles are likely to get a 2 per cent additional incentive under the Merchandise Export from India Scheme (MEIS),” a government official told BusinessLine.

MERCHANDISE EXPORT FROM INDIA SCHEME

The Commerce & Industry Ministry recently enhanced the rates of incentives under the Merchandise Export from India Scheme (MEIS) for garments and made-ups to 4 per cent from 2 per cent till June 2018 to help exporters struggling under the implementation burden of the new Goods & Services Tax (GST) regime.

“Most of the incentives for goods under the on-going five-year FTP are extended through the MEIS scheme. So in the review of the FTP, the additional sops will be given through this particular scheme,” the official said.

The MEIS is the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs including customs duties.

GST IMPLEMENTATION

The review of the FTP (2015-2020) was due earlier this year but got delayed due to the implementation of the GST in July and the problems faced by exporters under the new dispensation taking centerstage.

“After a series of meetings of the GST Council, a large number of implementation issues that the exporters were facing have been sorted out. The rest of the problems have also been identified and would be redressed over the next few months,” the official said.

With exports falling 1.1 per cent in the month of October 2017 to $ 23 billion the government does not want to wait any more to announce sops for at least the labour-intensive sectors.

“The announcement of the review of the FTP will not be the last package of incentives for exporters. We would come up with more announcements as and when required,” the official said.

INTERIM PACKAGE

Commerce & Industry Minister Suresh Prabhu has asked the NitiAayog to give inputs on an interim package to boost exports, which is expected soon.

The initial target set by the FTP of increasing exports of goods and services to $900 billion by 2020 is already out of the picture as external developments including unfavourable movement of commodity prices and fluctuating foreign exchange have hit performance, Commerce Secretary Rita Teaotia had earlier explained.

With exports of goods lower than $300 billion in the last two years, a target of $500 billion, too, would need substantial efforts from the government.

(Source:-http://www.thehindubusinessline.com/economy/policy/foreign-trade-policy-mid-term-review/article9982715.ece dated 5th December-2017)

Job creation and improving trade logistics are likely to be key focus areas in the mid-term Foreign Trade Policy review and may also seek to address GST- related concerns of exporters, government sources said.

Job creation and improving trade logistics are likely to be key focus areas in the mid-term Foreign Trade Policy review and may also seek to address GST- related concerns of exporters, government sources said. The FTP review, to be unveiled later today, may accord special priority to improving logistics for trade to help bring down the costs, sources told PTI. One key focus will be boosting employment creation in labour-intensive sectors like textiles and leather while addressing exporters’ concerns on GST-related issues, sources added. They further said the FTP review may build upon the GST related reforms, with the trade analytics division under the Directorate General of Foreign Trade (DGFT) helping with policy inputs. Exporters have been voicing concerns about challenges on account of the GST implementation, with some even suggesting that they should be kept out of the ambit of the new indirect tax regime and the drawback refund be expedited as it was blocking their working capital. The mid-term review was earlier supposed to be released before July 1, when the GST was introduced. However, it was put off as the government wanted to factor in exporters’ feedback regarding the GST.

Entering the negative terrain after more than a year, exports contracted by 1.12 per cent in October, primarily due to liquidity problems faced by exporters following the GST rollout. The five-year FTP was announced on April 1, 2015, and set an ambitious target of India’s goods and services exports touching USD 900 billion by 2020. It also aimed at increasing India’s share of world exports to 3.5 per cent, from 2 per cent.

(Source:-http://www.financialexpress.com/economy/foreign-trade-policy-may-focus-on-job-creation-improving-trade-logistics/961419/ dated 5th December 2017)

New Delhi, Dec 5 () Following are the highlights of the Mid-Term Review of the Foreign Trade Policy (FTP) 2015-20 released by Commerce and Industry Minister Suresh Prabhu here today:

1. Scope of Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) enhanced.
2. MEIS incentive raised for ready-made garments and made- ups by 2% (additional annual outgo Rs 2,743 crore).
3. Across-the-board increase of 2 per cent in existing MEIS for exports by MSMEs/labour incentive industries (Rs 4,567 crore).
4. Annual incentive increased by 34 per cent to Rs 8,450 crore.
5. SEIS incentives raised by 2 per cent with a view to boosting services sector exports (Rs 1,140 crore).
6. Validity of Duty Credit Scrips increased from 18 months to 24 months to enhance their utility in GST framework.
7. To focus on improving ease of trading across borders for exporters and importers.
8. Professional team to handhold, assist and support exporters in accessing markets, meeting regulatory norms.
9. New Logistics Division to promote integrated development of the logistics sector.
10. State-of-the-art trade analytics division in DGFT for data-based policy actions.
11. New agricultural exports policy to focus on increasing exports of value-added agri products.
12. New Services Division in DGFT to examine Exim policies and procedures to push services exports.
13. Supplies of goods and services to SEZs to be treated as zero rated under GST.
14. Import of second hand goods for repair/refurbishing/re- conditioning/re-engineering made free.
15. Increase focus on exploring new markets and products, raising share in traditional markets and products.
16. Promotion of exports by MSMEs and labour intensive sectors to increase employment opportunities for youth.
17. To enhance participation of Indian industry in global value chains.

Commerce and Industry Minister Suresh Prabhu said he will raise concerns of developing nations at the forthcoming ministerial meeting of the WTO beginning December 10 at Buenos Aires.

"Our entire team will be travelling to Buenos Aires tomorrow...We feel that concerns of developing countries should be promoted," he said while talking to reporters on the sidelines of the function to release the Mid-Term Review of the Foreign Trade Policy.

The 11th Ministerial Conference of the of the 164-member World Trade Organisation (WTO) will held at Buenos Aires, Argentina from December 10 to 13.

The minister said he would articulate India's stand on key issues like food security at WTO ministerial and work for preserving multilaterals.

"We...feel that food security is a very important issue. We also feel that the world markets will be opened for services, service trade facilitation and the import needs. So, we will take up so many issues but as you can always see that in one meeting you don't accomplish everything," the minister said.

India, he added, would continue to raise "old concerns but will also raise new ones and make sure that global markets .... Multilateral agreements, bilateral agreements help us promote our interests".

(Source:-http://www.moneycontrol.com/news/business/economy/will-raise-concerns-of-developing-nations-at-wto-suresh-prabhu-2455225.html dated 6th december-2017)

India’s five-year Foreign Trade Policy (FTP), announced on April 1, 2015, stated, “Change has been a constant in the global economy, not least in the international trading landscape.” But the framework—the endorsement of which was reaffirmed, after a mid-term review, by the government—is no precursor to any paradigm shift. The FTP laid an annual export target of $900 billion of goods and services by 2020, and talked about increasing India’s share in global exports to 3.5% from the current 2%. Going by the trends since, it seems the country may not even retain the paltry 2% share.

Since 2012, global trade has grown by only 3.1% annually, or at half the rate in the three preceding decade. However, India’s continued under-performance cannot be ascribed to the global slowdown. Its share in world merchandise exports fell in 2015 and 2016, while that of China, Vietnam and Bangladesh edged up. China commands a share in excess of 11%. India’s merchandise exports, at $274.6 billion, had grown an anaemic 4.7% in FY17—over FY16’s $262.2 billion. As RBI data revealed, India’s merchandise exports, having peaked at 17% of the GDP in FY14, dropped to around 12% in FY17, the lowest since FY06. Diversification of the export markets saw no traction.

At the FTP review, the government announced a slew of incentives, aggregating `8,450 crore It enhanced incentives under the Merchandise and Services Exports from India scheme, covering labour-intensive sectors such as leather and footwear (sops amounting to `749 crore), hand-made carpets (`971 crore), agriculture (`1,354 crore), marine products (`759 crore), besides telecom and electronics sector (`369 crore), among others, and services (`1,140 crore). Similar incentives doled out earlier for readymade garments amount to `2,743 crore.

Constraints before industry are deeply structural. The Indian enterprise’s future has hinged on state benedictions, even manipulations, from the days of the permit-quota raj. As commerce and industry minister Suresh Prabhu pointed out, “Export is a strategic part of economic policy and should be part of the foreign policy.” Policymakers may as well scan eminent global success stories for lessons—for instance, China.

As government forges regional trade agreements and free trade agreements, industry must gear itself for new standards and norms. Although external factors like sluggish global demand and falling commodity prices impact foreign trade, the crux of export promotion remains the supply-side. The economy needs to encourage optimisation of productivity, reliability and consistency in product development, manufacture, and delivery. Today, scale is important to be cost-effective. Much of India’s resources are currently trapped in small, low-productivity firms that neither grow nor exit. Cost-cutting is a constant quest worldwide. Transaction costs thus assume a critical importance. Expeditious transit of goods itself helps reduce inventories viewed as NPAs.

World exports could broadly be put in five categories: energy and resource-intensive goods such as fuels and mining products, iron and steel, paper, etc (about 30% of the $17.3 trillion total global exports in 2012); sun-rise industrial goods, e.g., electronics and telecom goods, accounting for about 25%; automotive products, machinery, chemicals, pharmaceuticles, etc, (another 25%); agricultural products (10%); and labour-intensivetradeables (another 10%). India’s exports remain confined to sectors which account for less than one-fourth of global exports. Its top five export sectors—petroleum products, cut and polished gem stones, gold jewellery, drug formulations and biologics, and ready-made garments largely bring in only value addition, dependent as they are, for example, on imports of crude oil, uncut gem stones, and gold. The country has remained only a peripheral player in sectors that command a lion’s share in global trade.

Even within the smaller segment, India secures less than 5% in world textile exports, and 2% in clothing (against China’s 33% and 38%, respectively), For garments, too, with exports of about $13 billion in overall global garment exports of around $450 billion, India trails far behind China, Bangladesh and Vietnam.

India will also need to ceaselessly focus on a few items amenable to country’s comparative advantage in terms of cost, quality, scale, supply lines and logistics. A strategic onslaught on value-added agricultural and horticultural exports will entail quality and scale in production, cold chain, and efficient supply chain. While India is ill-equipped to aspire for a meaningful share in the $220 billion, global top-100 luxury goods trade, it may well recreate the romance of heritage craft, integrating country’s legacy of exquisite craftsmanship with newer skills for labelling, packaging and presentation.

The FTP review referred to pursuing an export promotion mission. The concerned central government departments as well as state governments need to move in tandem for new export capacities to be generated. There appears enormous scope to tap resources in various states. Maharashtra and Gujarat together accounted for half of country’s total exports in 2014—27% and 22% of the total merchandise export, respectively—while Tamil Nadu and Karnataka together contributed another 18%.

Investment in R&D has been low, in addition to under-investment in human capital. Touted changes in labour laws remain unrealised. It is not rare that economies of scale are stifled, thereby eroding price-competitiveness. Transport and logistics costs pose a barrier at least as large, and frequently larger than, tariffs. Although the government claims to have substantially reduced the number of mandatory trade documents, procedures and processes continue to be labyrinthine, costly and time-consuming. Despite the crackle of initiatives like Customs Electronic Commerce Gateway, Risk Management System, On-site Post-Clearance Audit, 24X7 operations, etc, the World Bank’s Doing Business highlights India’s Logistics Performance woes.

How can Doing Business get easier when the department of commerce, like the rest of the bureaucracy, keeps adding numbers on its rolls as also in its burgeoning number of attached and subordinate offices, PSUs and EPCs? The need, instead, has always been of shedding the flab and trimming the layers—closing down the DGFT, DGS&D, etc. Much was expected of the Modi government on creating a climate of confidence for entrepreneurs, rationalising the panoply of laws and rules, freeing the labour laws of known rigidities, and, in PM Modi’s own words, generating a fervour for “skill, scale and speed”.

(Source:-http://www.financialexpress.com/opinion/mid-term-foreign-trade-policy-review-why-it-fell-short-of-real-export-promotion/965454/ dated 8th December-2017)

In a massive relief to Indian exporters, the government announced liberal incentives of Rs 8,450 crore ($1.3 billion) in its mid-term review of the five-year foreign trade policy (FTP) that was rolled out in 2015 and aimed at increasing the export of goods and services to $900 billion by 2020. Exports, meanwhile, declined from $468 billion to $437 billion between 2014-15 and 2016-17.

In fact, India's external trade performance has grown to be so acute that the current account deficit in the first quarter of the current fiscal year reached a four-year high of 2.6 percent.

What is more worrisome is that this trend is continuing despite favourable trade conditions in the global markets. Only domestic factors can explain the widening trade deficit. Clearly, the uncertainty surrounding the implementation of the Goods and Services tax (GST) has had a major role to play. Data due this month will show whether the situation has improved in the second quarter.

However, the chances of any significant improvement remain bleak as issues in processing of refunds to exporters under GST has been affecting trading activities. Therefore, the sops given in the mid-term review should help in pumping up exports to an extent.

Basically, labor-intensive sectors under the Merchandise Exports from India Scheme and Services Export from India Scheme, which were introduced in the FTP, were given an incentive raise of two percent each. Under the scheme, exporters are granted credit scrips based on the said percentage of the total value of their exports. These scrips can be used for payment of duties on procurement of further inputs. Additional incentives of two percent are expected to boost the subdued export activity of the last few quarters.

However, even though such an incentive was crucial in the short run given the circumstances, it always remains pertinent to ask if we are doing enough. After all, no country in history has sustained a growth rate of seven per cent without an export growth of 15 per cent or more and, according to World Bank data, Indian export growth of goods and services has not even crossed 10 per cent since 2011. Therefore, there seem to be larger structural issues at work that are impeding the growth of India’s external sector.

In order to further reinforce this fact, we can look into the long-term trends of India's leading export sectors -- gems and jewellery, leather and textile. It is quite disconcerting to realise that India's comparative advantage in all of these sectors is nowhere close to that at the turn of the century. Moreover, all of these sectors are highly labour-intensive and losing comparative advantage in them is quite inimical to the economy's employment-generating capacity.

A common argument made to improve India's trade competitiveness is that the rupee is strong and needs to be depreciated to make exports competitive in the world markets. However, this argument falls flat in the face of recent trends in both the exchange rate and the real effective exchange rate over the last few months. Both of these indices have remained stable in the last fiscal and, in fact, fell slightly in August while exports continued to show a downward trend. There was not much strength in the argument anyway, since export competitiveness is not defined by currency but by productivity of the workforce.

Indian policymakers need to recognise that the trade challenge for India is structural in nature and cannot be done away with quick-fix solutions. Cost incentives are an acceptable approach to deal with immediate challenges like the impact of GST, but they need to be supplemented with more long-term solutions. An effective measure could be to identify sectors where India has a comparative advantage and work towards making it competitive.

This implies helping them with action research for market development and providing R&D support. Such an approach will allow producers to innovate and beget productivity gains. Second, India's poor logistical network is also a factor of concern. Since India is over-dependent on its road networks, the logistics cost as a percentage of GDP amount to almost 13-14 per cent as compared to 7-8 per cent in developed countries.

Third, India's trade agreements with other nations are largely deficient in nature. The country's top exports face tariff and non-tariff barriers in developing economies and various kinds of non-tariff barriers in developed ones. Moreover, most of its free trade and preferential trade agreements are ill-conceived in nature

The India-Japan CEPA is a case in point. India has failed to make any gains out of it simply because it is too cumbersome. For instance, Japan allows duty-free import of Indian apparels only if the sourcing of raw materials is done from either of the two countries with an exception of seven per cent content by weight that can be sourced from a third country. The South Asian Free Trade Agreement, which was signed for geo-political reasons rather than commercial ones, is another example.

Multiple issues ail the export sector of the Indian economy, a lot of which go beyond the scope of the FTP. The government should now delve into these structural aspects of trade policy before India loses any more of its comparative advantage to world markets. Now that China is slowly losing its status as the world's manufacturing hub, the time has never been so ripe.

(Source:-https://economictimes.indiatimes.com/news/economy/foreign-trade/india-losing-comparative-advantage-in-leading-export-sectors/articleshow/61976096.cms dated 8th December-2017)

The International North-South Trade Corridor is finally online.

After 17 long years, since the inception of the International North-South Transport Corridor (INSTC) agreement between India, Iran, and Russia, the first consignment of goods is ready to be transported from Mumbai to St. Petersburg during mid-January 2018. The regular transport of the goods would start a few months later.

The ambitious INSTC project was conceived way back in September 2000 and later came into force in the year 2002 after being ratified by the three countries. Since then, 11 more nations joined the project: Armenia, Azerbaijan, Belarus, Bulgaria (observer status), Kazakhstan, Kyrgyzstan, Oman, Syria, Tajikistan, Turkey, and Ukraine.

Once fully operationalized, INSTC will cut down the transportation costs of goods as well the transportation time. While it currently takes more than 40 days for goods to travel from India to Russia, after the opening of INSTC, transportation would be completed in less than 25 days, thereby cutting down transportation time by 30-40 percent.

It is estimated that the corridor will facilitate carrying 20-30 million tonnes of goods per year. This will boost India’s economy, with Indian exports are expected to increase substantially during the next calendar year. Private companies, which till now have been overlooking Central Asia as a prospective market for their goods, would be looking to invest more in the region.

INSTC will help India to gain smooth access into Central Asia and beyond. With a hostile neighbor like Pakistan, which is situated between India and the Central Asian region, previously India was unable to extend its reach to Central Asia. No longer will Pakistan be an obstacle for India in this regard

Under India’s Connect Central Asia policy, the Central Asian region has already been given a lot of prominence. With the operationalization of INSTC, India-Central Asia relationship will only strengthen. The Central Asian region is part of India’s “extended neighborhood” and of great geostrategic value to India, especially as New Delhi is trying to balance China’s huge presence in the region. The importance of INSTC in expanding India’s trade and investment links with Central Asia has been highlighted in The Foreign Trade Policy of India, 2015-20 as well, signifying the importance India attaches to this region.

In addition, India-Russia trade relations will also get new energy with the help of INSTC. Russia has been India’s long-standing ally but Moscow’s recent inclinations toward Pakistan has raised the eyebrows of many Indian foreign policy analysts. With INSTC, the friendship between India and Russia is expected to grow stronger.

The INSTC is also being seen as New Delhi’s answer to China’s Belt and Road Initiative (BRI). China is not only India’s most powerful neighbor in the region but its competitor as well in the economic arena. India’s ambition to balance China will gain some traction with INSTC’s operationalization.

To sum up, the International North-South Transport Corridor is going to leave a deep impact on India’s engagement with Eurasia and the Central Asian region both geoeconomically and geostrategically, as India looks forward to foster deeper and stronger ties in both regions.

(Source:-https://thediplomat.com/2017/12/indias-eurasia-policy-gets-a-boost-with-long-awaited-trade-corridor/ dated 9th December-2017)

New Delhi, Dec 9 (KNN) With the 3rd phase of registration deadline fixed by ECHA for registration of chemical substances for quantities 1-100 tonnes /year under the EU REACH regulations, the Ministry of Commerce has invited for feedback from the chemical industry, especially the Micro, Small and Medium Enterprises to explore concerns.

REACH is the Regulation of the EU on registration, evaluation, authorisation and restriction of chemicals that was enacted on 1st June 2007, the third phase of registration is to close on 31st May 2018.

In line with the new norms, CHEMEXCIL under the aegis of Ministry of Commerce and Industry earlier organized a number of awareness seminars in various parts of the country to help the member exporters with registration process under REACH.

Responding to the reports of complications being faced by a chunk of stakeholders in the sector including the Micro, Small and Medium Enterprises, the body has urged the MSMEs to submit feedback and suggestions through a questionnaire rolled out by the department.

The department also wishes to explore the preparedness of Indian Chemical Industry comprising of a fair share of MSMEs for EU REACH Regulations, possible registration of their substances to the European Chemical Agency (ECHA) for export purposes to the European Union (EU).

Also the authority has asked the industry to fill in as to what the sector expects from the national authorities with regard to the implementation of the norm.

The questionnaire is made live and can be accessed using the following link:

https://chemexcil.in/circulars/reach---questionnaire-to-collect-information-on-awareness-of-the-eu-----reach-regulation/3097/fb3f69e8bb7f423e40a9ee9ae5459938.html

(Source:-http://knnindia.co.in/news/newsdetails/sectors/as-reach-fixes-deadline-for-3rd-phase-of-registration-govt-invites-whitepaper-from-chemical-msmes dated 9th December-2017)

The United States, European Union and Japan have united to tackle what they see as unfair or protectionist trade measures used by third countries, in what the U.S. media has described as a shot across the bows of China, the world’s biggest goods exporter.

In a joint declaration issued at a World Trade Organization (WTO) summit on Tuesday, the three parties attacked policies that they say distort international trade. They highlighted “severe excess capacity in key sectors” fueled by government support, market-distorting subsidies and state-owned enterprises. They also took aim at countries they claim force companies to transfer their technology in return for market access, and impose local-content requirements.

“We, to address this critical concern, agreed to enhance trilateral cooperation in the WTO and in other forums, as appropriate, to eliminate these and other unfair market distorting and protectionist practices by third countries,” the statement said. The document, which did not name any specific country, was signed by U.S. Trade Representative Robert E. Lighthizer, EU Trade Commissioner Cecilia Malmström and Japan’s Minister of Economy, Trade and Industry Hiroshige Seko.

Bloomberg News quoted trade officials at the summit in Buenos Aires as saying that the new alliance is designed to be a clear warning shot to China as it seeks to broaden its influence over global trade. The Wall Street Journal cited two people familiar with the statement said it was “aimed squarely at influencing policy in Beijing.”

Many developed countries have long accused the Chinese government of giving subsidies and other support to help exporters sell products abroad at prices below fair value — a practice known as dumping. They have also complained about Beijing’s rules to force foreign companies to transfer technology and use locally made products when investing and manufacturing in China.

Tougher stance

President Donald Trump has put tackling the U.S.’s growing trade deficit with China and boosting American firms’ access to its markets among his top priorities since coming to power. His administration has slapped anti-dumping tariffs on a range of Chinese imports, toughened its stance on Chinese investment in the U.S., and is considering an investigation into whether Chinese companies are stealing the intellectual property of U.S. companies.

The U.S. and the EU are also at loggerheads with China at the WTO over the issue of the country’s status as a market economy for the purposes of anti-dumping investigations. China agreed to being assessed as a non-market economy for 15 years when it joined the global trade body in 2001, but that designation should have ended on Dec. 11, 2016.

China says it should now be treated as a market economy but Washington and Brussels have opposed its demand and a dispute settlement case started by Beijing last year is now going through the WTO.

The U.S. and EU argue that China’s domestic prices are not market determined as the government still plays an overwhelming role in the economy through policies such as granting subsidies and giving preferential treatment to state-owned enterprises on issues such as market access and loans.

China has been the target — either solely or jointly with other countries — of 103 out of 156 anti-dumping and anti-subsidy investigations completed by the U.S. since 2002, and is named in 19 out of 38 active investigations, according to data from the Department of Commerce.

Among the 30 so-called “trade defense” probes currently being conducted by the EU against imports into the bloc, 20 cases involve China, figures from the European Commission show.

The U.S. and EU also blame China, which has been struggling to reduce excess domestic steel capacity, for flooding the global market with cheap steel products. They have slapped punitive tariffs on various steel products from China, including corrosion-resistant steel and stainless steel.

(Source:-https://www.caixinglobal.com/2017-12-13/us-eu-japan-unite-to-target-china-over-unfair-practices-101184665.html )

NEW DELHI—India has extended antidumping duties on imports of rubber chemicals PX13—a phenylenediamine antioxidant—from the European Union and accelerator MOR (morpholine) from China.

In a recent announcement, the Indian ministry of commerce said it was extending the duties for five years, with rates ranging up to $897 per metric ton on some European imports of PX13.

Anti-dumping rate for Chinese-imported MOR will be $213.82 per ton, the statement said.

The duties originally were imposed on rubber chemicals PX13, trimethyl-1,2dihydroquinoline (TDQ), MOR and mercaptobenzothiazoledisulphide (MBTS) imported from China and the EU in 2011.

In its latest review of injuries to domestic producers, the Indian government found that there was continued dumping of PX13 from the EU and MOR from China.

In the cases of antioxidant TDQ and rubber accelerator MBTS, the review found that there was no dumping from the EU or China and no injury to domestic industry.

(Source: http://www.rubbernews.com/article/20171213/NEWS/171219978/india-extends-anti-dumping-duties-on-rubber-chemicals-from-eu-china dated 13.12.2017)

Prime Minister, Narendra Modi, Wednesday exhorted corporate India to pledge itself to the creation of a New India - an India that fulfils the aspirations of the poor and needy, gives fillip to domestic industry, big and small, where Micro, Small and Medium Enterprises (MSMEs) are hand-held by large corporates to serve the requirements of the people in every nook and corner of the country.

PM said that FICCI has to play a key role in sectors such as food-processing, artificial intelligence, solar power, healthcare etc.

Addressing captains of trade and industry while inaugurating the 90th Annual General Meeting (AGM) of the Federation of Indian Chambers of Commerce and Industry (FICCI) at VigyanBhavan on Wednesday in New Delhi, the Prime Minister said it now devolves on industry leaders to turn their attention to minimising imports to fuel domestic production, which has a direct bearing on creation of jobs and domestic wealth creation.

Narendra Modi said that a lot has been achieved since independence, but several challenges have arisen as well. He said the poor seemed to be struggling against the existing system for things such as bank accounts, gas connections, scholarships, pensions etc. He said the Union Government is working to end this struggle, and to create a system that is transparent and sensitive. He said Jan DhanYojana is one example of this, and increasing "ease of living" has been the focus of the Union Government. He also mentioned the UjjwalaYojana, construction of toilets under Swachh Bharat Mission and Pradhan MantriAwasYojana.

The Prime Minister said that his Government was working to strengthen the banking system, while pointing out that, "the issue of NPAs is a legacy received by the current Government from the last government. It was open loot of people’s hard earned money", he added.

He said,rumours are now being spread about the Financial Regulation and Deposit Insurance (FRDI) Bill. He said the Government is working to protect the interests of the account holders, but rumours that are being spread are the exact opposite. He said organizations such as FICCI have a responsibility to generate awareness about such issues. He said, that industry has a big role also now in making GST more effective so that its benefits are passed on to the consumers.

PM said the Government's effort is to ensure that maximum businesses register for GST. He said the more formal the system becomes, the more it will benefit the poor. It will enable easier availability of credit from the banks and reduce cost of logistics, thereby enhancing competitiveness of businesses. "I hope FICCI has some plan to generate large-scale awareness among small traders".

The Prime Minister mentioned policy decisions taken in sectors such as urea, textile, civil aviation, and health and the benefits achieved from them. He also spoke of reforms in sectors such as defence, construction, food-processing etc. He said due to these measures, India's rank has risen from 142 to 100, in the World Bank "Ease of Doing Business" rankings. He also mentioned other indicators which point to the robust health of the economy while outlining the steps taken by the Government are also playing a key role in job creation.

The Prime Minister said orgainsations like FICCI have a key role to play in sectors such as food processing, start-ups, artificial intelligence, solar power, healthcare etc.

In his welcome address, Pankaj Patel, President, FICCI, said that the year 2017 has been a historic one with GST finally coming into force. Not just this, the steps taken to help business adjust to the new system, the user-feedback system, helping resolve bottlenecks, relaxing deadlines for filing returns and cut in tax rate are all indicative of the Government’s commitment to involve all stakeholders in its development agenda. ‘Sab kaSaath, Sab KaVikas’ is not just a slogan, but is now a reality.

The FICCI President said, "We expect the growth to cross 7% soon but the need of the hour is to grow 9-10% per year for the next 30 years. This is the imperative if we have to engage the poor in development, reduce inequality and most importantly to generate direct and indirect employment at the speed of 20 million jobs per year. To go from 7% to 9% plus growth, we need a booming export growth of over 25% per year."

Patel added, "We need to develop and execute our own alternative long term strategy to ensure export growth of 25% per annum and a 10% GDP growth per annum, over the next 30 years. FICCI has submitted an analysis on Export Development to the Ministry of Commerce earlier on developing our exports."

Rashesh Shah, President-elect, FICCI, said that the bold reforms undertaken by the Government of India with speed, scale and decisiveness have enthused FICCI. He added that Prime Minister’s vision of ‘New India’ energized, galvanized and inspired the industry. He assured that FICCI would steadfastly work towards making Prime Minister’s vision of ‘New India’ a reality and would redouble to promote its efforts in sectors such as MSME, start-ups and women entrepreneurship.

Dr. SanjayaBaru, Secretary General, FICCI at the outset welcomed the Prime Minister and the huge gathering of business leaders, Ambassadors and business delegates.

(Source:-http://www.smetimes.in/smetimes/news/top-stories/2017/Dec/14/pm-modi-urges-india-inc-to-help-msmes-start-ups14121707.html dated 14.12.2017)

The recent mid-term review of foreign trade policy (FTP) promises to scale up exports, as the government believes exports are the engine of growth, and if the country wants to grow at 7% then exports need to provide that extra stimulus.

The recent mid-term review of foreign trade policy (FTP) promises to scale up exports, as the government believes exports are the engine of growth, and if the country wants to grow at 7% then exports need to provide that extra stimulus. The review, aimed at mid-course correction, focuses on policy measures to boost exports of goods and services and increase employment generation and value-addition in the country. A first look suggests the government is sensitive towards the fact that the manufacturing sector needs considerable encouragement to perform well and better integrate with the global economy. The ‘missing middle’ appears to have been thought about and good sense has prevailed, which is reflected in this review, where the government has offered incremental sops to exporters of traditional manufacturing such as leather, textiles, processed food and agricultural sector.

The government is taking steps towards ease of doing business and this would help India’s attempts towards trade facilitation, which is a major focus of developing and developed economies in WTO negotiations. In this review, a major course correction is an additional 2% incentive for labour-intensive sectors under the Merchandise Exports from India Scheme and Services Export from India Scheme, which is in the form of freely transferable duty scrips that can be used by exporters to pay custom duties. This provision has been extended to 24 months from the existing 18 months. Duty credit scrip is one of the most important export promotion incentives offered by the government to exporters. This additional emphasis on scrips will perk up exports by giving tax incentives to exporters. The scrips will also help promote exports of certain goods to specific markets. Self-certification scheme for duty-free imports is another important incentive.

A new trade data analytics division under DGFT is a welcome move that will analyse real-time data to help fine-tune policy. This approach would form a matrix of products/markets dynamics that would help to focus on products that have a strong global market. Exporters are sometimes devoid of working capital and therefore bank on credit, which is available to them at a high cost, which, in turn, decreases their global competitiveness. To safeguard exporters, the government will provide them with incentives to the tune of Rs 8,450 crore. It’s apparent that the government’s intent towards promotion of exports as a viable medium for registering high growth rate and as a medium of global integration is clear. Of these incentives, Rs 749 crore is for leather and footwear, Rs 1,354 crore for agriculture and related items, Rs 759 crore for marine exports, Rs 369 crore for telecom and electronic items, Rs 921 crore for handmade carpets, Rs 193 crore for medical and surgical equipments, and Rs 1,140 crore for textiles and ready-made garments. On the whole, incentives for goods exports stand at Rs 4,567 crore, and for services exports at Rs 1,140 crore.

More than sops, exports need focus on issues such as availing lower transaction costs, less red tape in clearances, robust infrastructural development having state-of-the-art port, airport and superhighway facilities to augment domestic and external trade. Rational labour laws and provision of cheaper electricity to exporters, especially MSME, are the need of the hour. Exports, for the first time in a year, fell in October, owing to delays in refunds that resulted in lack of working capital for exporters because of GST. Now, with improvisation on that front to an extent in terms of establishing better network, exporters will be able to get refunds possibly faster. Such dynamics should encourage exporters to pursue with their vendors to file GST return, to be able to claim their own refunds.

As the government’s focus at the five-year term of FTP (2015-20) was to reach $900 billion worth of exports by 2020, a lot depends on what kind of favourable and liberalised export policies the government designs to make MSME sector globally more competitive. This, in turn, would generate employment, which is the main agenda of the government. Sustained growth in exports also depends on the pace of global recovery, and signs of recovery seem to be visible in the US, the EU and Japan.

(Source:-http://www.financialexpress.com/opinion/foreign-trade-policy-more-than-sops-promote-exports-as-growth-engine/974733/ dated 15.12.2017)

Mumbai, Dec 14 () As part of boosting exports, the top government body promoting foreign trade has urged the states to the come out their own export policy.

In spite of the continuing slowdown in the global economy we have been witnessing a positive trend in exports during the past 14 months, and enhancing our share in the global trade is the top priority of the DGFT, said a top official.

"Every state needs to come out with their own export promotion policy and Maharashtra will come out with its policy soon," additional director general foreign trade (DGFT) Sonia Sethi said here today.

On the pick up in shipments, she said "in spite of the slowdown in the world economy, we have been witnessing a positive trend in exports in the last 14 months, for which we have to complement our industries and liberalised government policies".

Addressing trade representatives at an open house, Sethi said enhancing our share in the world exports is our top priority and we will hold series of interactions with exporters to understand their concerns and grievances.

In the 2015 Foreign Trade Policy, the government had set an exports target of USD 900 billion and market share of 3.5 per cent by 2020.

Earlier this month, government offered additional incentives totallingRs 8,450 crore to help boost exports. It raised the incentive rate by 2 per cent under the most popular merchandise exports scheme and services exports scheme.

Exporters have been voicing concerns about challenges, with some even suggesting that they be kept out of GST and duty drawbacks be expedited as it was blocking their working capital

(Source:-https://timesofindia.indiatimes.com/business/india-business/dgft-official-urges-states-to-preapre-own-export-policies/articleshow/62088105.cms dated 15.12.2017)

New Delhi, December 18

United Kingdom’s exit from the European Union (EU) in March 2019 will not cast a shadow on bilateral trade ties with India, claims a senior visiting UK official.

Hugh Elliott, Director International Agreements at the UK Foreign and Commonwealth Office, is meeting industry, trade leaders, government officials and think tanks in Delhi currently to allay concerns arising out of the pending Brexit process.

“There is no reduction in our ambition to be an outward facing, global trading nation maintaining our strong security and foreign policy ties. UK will remain an open economy and there will be continuity for businesses, citizens and international agreements. Hence we are negotiating for a transition period,” said Hugh Elliott in a select media interaction.

UK happens to be the largest G20 investor and job creator through FDI in India. While UK has been the gateway to Europe for Indian investments. However possibilities of an India-UK Free Trade Agreement any time soon is less likely as the competence on trade lies currently with the 27 member EU Council.

UK can hammer out new bilateral trade agreements only post Brexit and subject to terms allowing it to do so with the start of the implementation period . ‘Complex time taking’ negotiations are on with UK pushing for an implementation period of atleast two years till 2021 to work out a smooth transition post Brexit.

Indian Commerce Minister Suresh Prabhu will, however, be in London to meet with UK’s trade minister in January 2018 for the annual consultations. The meeting is expected to discuss sectors that have most opportunities for the two countries once Brexit rolls out.

“We understand very well how business sees UK as a launch pad for Europe. We understand the future of international supply chains with some more complex than others. So things will depend on how we build that deep and special relationship with the EU,” said Elliott.

PM Modi at CHOGM

Prime Minister Narendra Modi is expected to attend the Commonwealth Heads of Government (CHOGM) meeting scheduled from April 18 to 20 in London next year. In 2013, then prime minister Manmohan Singh under political pressure boycotted the CHOGM summit held in Colombo following allegations of war crimes against the then Mahinda Rajapaksa government. In 2015, Sushma Swaraj represented India at the CHOGM in Malta. “We hope to receive Modi for the Commonwealth Summit next year. We will be happy to host him,” said Elliott stressing that India forms nearly sixty percent population of the 52-member Commonwealth grouping.

(Source:-http://www.tribuneindia.com/news/business/brexit-will-boost-trade-ties-with-india-uk-official/515257.html dated 18.12.2017)

Government is also increasing the focus to new emerging sectors under Make in India.

The ambitious ‘Make-in India’ initiative by the Government has led to a record inflow of foreign direct investment (FDI) of $60 billion in the financial year 2016-17, the Commerce Ministry said on Wednesday.

“The Make in India initiative was launched on September 25, 2014 with the objective of facilitating investment, fostering innovation, building best in class manufacturing infrastructure, making it easy to do business and enhancing skill development,” the Ministry said in a statement.

The Government is also increasing the focus to new emerging sectors under the Make in India initiative. These include biotechnology, aerospace and defence, new and renewable energy and information communication and telecom equipment manufacturing, it said.

There were 21 key sectors identified for specific actions in the areas of fiscal incentives, ease of doing business policy initiatives, infrastructure creation, skill development and innovation and R&D.

The Government has also shifting its focus on the export strategy. The recently revised Foreign Trade Policy (FTP), under the mid-term review on December 5, focuses on the goal of exploring new markets as well as new products.

The major emphasis of the revised FTP was on enhancing India’s share in traditional markets and products, leveraging the benefits of goods and services tax (GST) by exporters, to closely monitor export performances and also to take immediate corrective measures based on state-of-the-art data analysis, the statement said.

In addition, the FTP focuses on increasing ease of trading across borders; increasing the realisations from agriculture-based exports and promoting exports from MSMEs and labour intensive sectors to increase employment opportunities for youth, it added.

“Through FTP, the Government envisages employment creation in both manufacturing and services; production of zero defect products with a focus on quality and standards along with a focus on higher value addition and technology infusion,” the statement said.

(Source:-https://www.thedollarbusiness.com/news/makein-india-led-to-a-record-60-bn-fdi-inflow-in-fy17-comm-min/51548 dated 21.12.2017)

Even though the exports target of $900 billion by 2020 looks unrealistic, India can achieve significant exports growth if it implements the right mix of sustainable policies in a time-bound manner. There is no short cut to boosting exports and the phasing out of export subsidies is a reality

The Indian industry cheered the recently released mid-term review of the foreign trade policy (FTP 2015-20) by the ministry of commerce. The reason was obvious—the government offered additional export incentives amounting to Rs 8,450 crore under the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS). Out of this, Rs 4,567 crore has been allocated for MSME and labour-intensive sectors covering leather, agriculture, carpets, handicraft, marine, rubber, ceramics, sports goods, medical and scientific products, and telecommunication equipment. Textiles (ready-made garments and made-ups) will receive benefit of around Rs 2,743 crore from the above pool. The remaining Rs 1,140 crore has been allocated for SEIS benefits for export of notified services such as business, legal, accounting, architecture, engineering, education, hospital, and hotels and restaurants. Overall, industry tariff lines that will receive benefits under MEIS were increased to 7,914 from 4,914 in the FTP released in 2015.

Exports have grown at a dismal pace of -1.2% (average year-on-year growth since January 2014) for the past four years. There is no doubt that India has diversified its exports since the 1990s, both geographically and product wise. In terms of destination, India now exports over 50% of its export volumes to emerging and developing economies, surpassing the share of advance economies. In fact, the EU and the US now account for only 30% of India’s total exports compared to 45% in 2000. In terms of product mix also, there has been a gradual shift as the export sector has moved up the value chain, leading the way with high-value products like industrial machinery, automobiles and car parts, and refined petroleum products. The accompanying table shows that, over the years, there has been a significant increase in the share of petroleum and crude products and engineering products in the export basket.

The share of engineering goods in total exports almost doubled from 12.5% in FY92 to 23% in FY17, and the share of petroleum and crude products rose from a mere 2.3% to 11.4% over the same period. The latter can be attributed to increase in petroleum refining capacity in the country. The share of traditional exports like textiles, ready-made garments and leather products has nearly halved in the past decade. In fact, petroleum products and engineering goods together now account for almost 35% over India’s exports.

In light of the recently-released FTP review and incentives offered, the more fundamental question is whether export sops are the real solution to India’s trade woes? Thus, it is important to understand what drives India’s exports and why? Indian exports are sensitive to price changes, global demand and supply-side bottlenecks. The way India’s export basket has evolved over the past two decades, it has made them much more responsive to global demand as compared to price changes. This is because India now exports more income-sensitive items like engineering goods, petroleum, gems &jewellery and chemical products. According to the International Monetary Fund (IMF), “in the long-run, a 1% increase in India’s international relative export prices could reduce export volume growth by about 0.9% for all industries and by about 1.1% for the manufacturing sector.” The long-run coefficient on global demand is estimated to be slightly above 1.5, which suggests that India’s exports are more sensitive to changes in external demand than price changes. Thus, increase in global demand drives exports much more than price cuts.

Further, the IMF research suggests that binding supply-side constraints like energy shortages dampen price responsiveness of exports. In the case of industry with an energy share of about 4% in the gross value of its output (which is about the average share in manufacturing), a 1% relative price depreciation will result in export growth of 0.6%. However, in the same industry, in case of energy deficit of about 10%, the export growth will decline to 0.4%. This shows that tackling the issue of energy deficit can boost export performance considerably. Similarly, higher logistics costs have been a major impediment to export growth. The FTP review document admits that logistics cost in India is close to double of that in developed countries. The average logistics costs in India are about 15% of GDP, while such costs in developed countries are about 8%. Thus, improving ease of trading is a high priority area for the government as Indian exporters face high transaction costs, making them less competitive in the global market.

Moreover, the most critical issue is that Indian industry will need to adjust to eventual phasing out of export subsidy schemes, going forward. The FTP mid-term review hints at the same and highlights a move “towards more fundamental systemic measures rather than incentives and subsidies alone” as a future strategy to boost exports. This is because, as per WTO’s Agreement on Subsidies and Countervailing Measures (ASCM), any developing country which breaches $1,000 GNI per capita for three consecutive years will have to phase out its export subsidies gradually. India has breached this level for three consecutive years starting 2013 to 2015. Thus, the commerce ministry will have to do away with specific export subsidies or recalibrate existing subsidies to WTO-compatible subsidies (which does not allow specific export-based subsidies).

In this regard, one should not undermine the initiatives that the government intends to undertake to address the above issues. The document clearly states that India will have to fine-tune current export schemes (MEIS and SEIS) and move towards more fundamental export promotion strategies such as Trade Infrastructure for Export Scheme (TIES, for bridging gaps in export infrastructure) and Market Access Initiative (MAI, catalyst to promote exports on product-focus country approach) Scheme. Reviewing existing free trade agreements (FTAs) and negotiating future FTAs for greater market access will also be critical in such a situation.

A logistics division has been set up in the commerce ministry which proposes to create an effective IT backbone and get all major agencies like customs, Directorate General of Foreign Trade (DGFT), railways, ports, waterways, etc, on a single platform. The National Committee on Trade Facilitation (NCTF) has been set up, headed by the Cabinet Secretary, following ratification by India under the Trade Facilitation Agreement (TFA), and the National Trade Facilitation Action Plan has been prepared. According to WTO, full and accelerated implementation of TFA could boost developing countries’ exports by an additional 3.5% annually. Measures such as single-point contact for trade queries launched on the DGFT portal, setting up of a professional team to assist exporters in procedural clearances, 24/7 customs clearance facility extended to all bills of entry, etc, are steps in the right direction.

Even though the exports target of $900 billion by 2020 looks unrealistic, India can achieve significant exports growth if it implements the right mix of sustainable policies in a time-bound manner. It is high time we realise there is no short cut to boosting exports and the phasing out of export subsidies is a reality. Measures such as enhanced trade facilitation, export and production diversification, lower logistics costs, energy efficiency, lower cost of doing business—and not short-term fixes—will lead to sustainable exports recovery.

(Source:-http://www.financialexpress.com/opinion/how-to-boost-exports-not-by-resorting-to-short-term-fixes/985071/ dated 22nd December-2017)

Commerce and industry minister Suresh Prabhu will meet principal secretaries of states on Friday to take stock of states' export strategies and progress of a scheme launched in March designed to finance infrastructure creation to boost exports.

Issues related to inclusion of logistics and services are also likely to be taken up in the half-daylong deliberations.

While most states have identified their champion products and some new products with a high export potential, they are now required to improve their export logistics and infrastructure to give a push to identified products.

"With logistics coming under the purview of the department, we need to see how states can incorporate this in their export strategies," said an official in the know.

Promoting value addition in exports and organic farming too are on the agenda for discussion, which comes at a time when exports rose a sharp 30% in November.

The minister is also likely to do a status check on the projects implemented under the Trade Infrastructure for Export Scheme (TIES).

Implemented from April 1, TIES provides assistance for setting up and upgradation of infrastructure projects with export linkages such as border haats, land Customs stations, quality testing and certification labs, cold chains, trade promotion centres, dry ports, export warehousing and packaging, special economic zones, ports and airports.

"We also plan to discuss states' initiatives for standards and certification, and how they can best use geographical indicators to promote exports," the official added.

Recently, the government doled out incentives worth `8,450 crore to boost exports and employment in labour-intensive sectors hit hard by the goods and services tax (GST) roll out.

Incentives under the Merchandise Export from India Scheme were raised from 2% to 4% for leather, textiles, agriculture products and carpets as part of the mid-term review of the Foreign Trade Policy.

The official added that states will also share policy action and a strategy to promote services exports

(Source: https://economictimes.indiatimes.com/news/economy/foreign-trade/prabhu-to-take-stock-of-states-export-strategies/articleshow/62201075.cms dated 22.12.2017)

Bhubaneswar: The Centre has recognised Odisha as "champion state" for recording highest growth in exports during 2016-17.

The commerce ministry posted it on its Twitter handle after a review meeting on the export performance of states. "Glad that Odisha is recognised by Govt of India as Champion State in the country in exports growth. Our strategic efforts to ensure an ecosystem for medium and MSME sectors will further boost employment opportunities for the youth and consolidate," tweeted Naveen.

Odisha's export volume has been increased from Rs 19, 082 crores in 2015-16 to Rs 40,872 crore in 2016-17. The growth of exports has a direct positive impact on the enhancement of employment and livelihood opportunity, said an official statement.

Major sectors of exports are aluminium, aluminium products, iron ore, processed minerals, iron, steel, marine products, residual chemical and allied products, textiles and IT and IT-enabled service. Also, sectors like engineering, handicrafts, tourism, silver filigree and rubber are emerging as new items of exports.

"As part of the new export strategy, the state is going to enhance its focus on exports of pharma, plastic, spices, cereals and organic farm items," said MSME secretary L N Gupta.

The export turnover of the state was merely Rs 563 crore in 2001-02 that increased to Rs 8917 crore in 2005-07. The export turnover of the state was Rs 15,411 crore in 2008-09.

The state government expected further growth in export volume following commencement of exports from Multi-Model Logistic Parks (MMLP) at Jharsuguda, Inland Container Depot (ICD), Balasore and Port-side Container Terminal (PSCT) at Paradip.

(Source:-https://timesofindia.indiatimes.com/business/india-business/odisha-recognised-as-champion-state-in-exports-growth/articleshow/62224230.cms dated 23rd December-2017)

India has initiated an anti- dumping probe into alleged dumping of a chemical, used in industries such as pharma and food processing, from Russia following a complaint from domestic players.

India has initiated an anti-dumping probe into alleged dumping of a chemical, used in industries such as pharma and food processing, from Russia following a complaint from domestic players. Deepak Nitrite Ltd had filed the application before the Directorate General of Antidumping and Allied Duties (DGAD) for initiation of anti-dumping investigation and imposition of the duty on the imports of ‘Sodium Nitrite’ from Russia. According to the notification of the DGAD, it has prima facie found “sufficient evidence” of dumping of the chemical from Russia. It has stated that the evidences justify initiation of the investigations. DGAD is the commerce ministry’s investigation arm. “The authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry…to determine the existence, degree and effect of alleged dumping,” it added. If established that dumping has caused material injury to domestic players, the DGAD would recommend imposition of anti-dumping duty on imports of the chemical from Russia. The period of investigation covers October 2016 and September 2017 (12 months). However, for the purpose of injury investigation, the period will also cover the data of 2014-17. Sodium Nitrite is an inorganic chemical and is an oxidising and reducing agent. The product is a white crystalline powder mostly used in industries including pharmaceuticals, dye, lubricants and meat processing.

Imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a- vis foreign producers and exporters.

(Source:-http://www.financialexpress.com/india-news/india-plastics-export-poised-to-cross-8-billion-mark-in-fy-2018/987871/ dated 24th December 2017).

New Delhi, Dec 30 (KNN) Highlighting the steps taken in 2017, Commerce and Industry Minister Suresh Prabhu has written to chambers and micro, small and medium enterprises (MSMEs) passing wishes for the upcoming year.

Hailing the steps taken towards economy, the Minister said that India continues to march towards greater economic prosperity and constantly showing greenshoots of economic growth.

In the backdrop of government bold decisions such as the introduction o the Goods & Services Tax (GST), India continues display strong macroeconomic fundamentals with 3 year average of 7.5% GDP growth in real terms, forex reserves of over USD 400 billion, the highest since independence and exports valued at USD 26 billion in November 2017, a growth of almost 30% over November2016, the Minister said.

The year 2017 marked the positive change, as was reflected in the shift in manufacturing and export strategy. We worked tirelessly with all stakeholders to provide short term relief to exporters in the wake of GST implementation, Prabhu added.

Further, through the Mid term review of Foreign Trade Policy, annual incentives were increased by 2 per cent for all labour intensive/MSME sectors.

Additionally special relief packages were announced for Leather and Textiles sectors. The Policy aims to shift focus on exploring new markets, new products and on improve ‘Ease of Trading’ to spurt export growth. These are welcome changes, bound to bring bountiful results for the Indian economy.

Prabhu further mentioned about tje recently inaugurated International Exhibition-cum-Convention Centre (IECC) being built at the cost of Rs 2250 Crores.

This, when completed would be a new landmark for Delhi. The importance of such projects for propelling India into a new trajectory of growth and development, cannot be extolled enough, and is in line with the spirit of ‘New India’, he said.

The Government has also identified focus sectors which can boost employment generation and taken specific measures for ensuring the same. A case in point is the Cabinet approval of the special package for employment generation in leather and footwear sector namely "Indian Footwear, Leather &Accessories Development Program" with an approved expenditure of Rs.2600 Crore over the three financial years from 2017-18 to 2019-20. The Special Package has the potential to generate 3.24 lakhs new jobs in 3 years and assist in formalization of 2 lakh jobs as cumulative impact in Footwear, Leather & Accessories Sector.

Discussing the steps his ministry plans to take ahead, Prabhu informed that the ministry is committed to boost domestic manufacturing,increase exports, generate job while encouraging entrepreneurship and enabling us to break away from the pack and lead the race for growth.

In 2018, the government is to lay layered roadmap with focus on enhancing ease oftrading and promoting commodity and services led export growth, investment facilitation and promotion and job creation with a focus on entrepreneurship.

India’s Geographical Indication (GI) products to the world is underway which would lead to immense benefits flowing to rural artisans,farmers and producers in India.

A dedicated trade facilitation and promotion body, as a single point of information and grievance redressal platform is also being established for the same Prabhu added.

To enhance India’s competitiveness of exports, improvement in logistics infrastructure leading to reduced costs and reliably delivery is a key input. In this regard, we would be targeting to develop a comprehensive integrated logistics plan for the country which would facilitate infrastructure development in a structured, effective manner. We would also develop an integrated logistics portal to serve as a single window for approvals and transactions for all stakeholders.

Under the second focus area, formulating and structuring India’s New Industrial Policy to ensure that India not only consolidates but also captures the emerging opportunities is paramount.

With regard to inflow of investments, despite receiving a record USD 60billion of foreign direct investments in 2016-17,the target is to reach USD 100 bn by next year. An Investment War Room has been proposed, to provide a standardized tracking and escalation matrix for foreign and domestic investment projects.

Make in India 2.0 a Job- development initiative, with a focus on 8 future industries and Served by India, the manufacturing equivalent of services, to strengthen our services sector are two of our most exciting and promising initiatives in the upcoming year.

The Minister also mentioned about the key initiatives including Government e-market, Geographical Indication and moving towards digital India. (KNN/DA)

(Source:-http://knnindia.co.in/news/newsdetails/msme/highlighting-initiatives-taken-in-past-year-suresh-prabhu-wishes-chambers-msme-associations-for-2018 dated 30th December-2017)

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Highlighting initiatives taken in past year, Suresh Prabhu wishes Chambers - MSME associations for 2018