Ahead of Trump visit: India and US set to finalise $10-billion trade deal in February

Source: The Economic Times, Jan 29, 2019

NEW DELHI: India and the US are likely to finalise a mega trade deal pegged above $10 billion (more than Rs 71,000 crore) next month when United States Trade Representative (USTR) Robert Lighthizer visits New Delhi.

The deal, whose legal vetting is underway, will be signed during US President Donald Trump’s visit to India, and is a precursor to a free trade agreement between the two nations, officials in the know of the plans said.

Lighthizer and commerce and industry minister Piyush Goyal are likely to meet in the second week of February to finalise the terms of the deal. Trump is expected to be in India during February 24-25, his first visit here as head of state.

There were meetings on the planned deal in Davos during the World Economic Forum. A six-member team from the US administration was in Delhi over the weekend, meeting Goyal and the relevant line ministries to discuss the contours of the proposed pact.

Goyal had met Lighthizer in the US last year.

‘Medical Devices Issue Resolved’
“It is a fairly large deal,” said an official aware of the details. The issue of medical devices, which was a key obstacle in the trade talks between the two countries, is resolved, the official added.

India and the US have been entangled in a series of trade spats across various sectors. The deal could touch upon Washington’s demand of doing away with duty on American information and communication technology goods along with market access for its dairy products and duty cuts on Harley-Davidson motorcycles. The US is also keen to sell more almonds to India. New Delhi, on the other hand, had sought market access to its fruits including grapes.

“We expect the full deal to be signed this time and the longer-term idea is an FTA,” the official added.

India also wants restoration of benefits under the Generalized System of Preferences (GSP).

Under the GSP, certain products can enter the American market duty-free if the beneficiary developing country meets the eligibility criteria established by US Congress. The benefits to India were withdrawn from June 5, 2019, after the US dairy and medical devices industries alleged that Indian trade barriers affected their exports.

In 2018, India exported goods worth $6.3 billion (as per USTR figures) to the US under the GSP, accounting for around 12.1% of India’s total export to the US.

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Warehousing sector to add 40 million sq ft space across top 8 cities this year: Report

Source: Financial Express, Jan 26, 2019

As warehousing is fast becoming an integral part of integrated logistics network due to technological advancement and the reform-led policy measures, the sector is expected to add around 40 million sq ft space across the top eight cities this year, a recent survey said.

According to the study by global property consultant Savills, warehousing space absorption across eight cities like Mumbai, Pune, Chennai, Bengaluru, Hyderabad, Ahmedabad, Delhi and Kolkata, is expected rise to 35 million sq ft in 2020.

In 2019, the total supply of warehousing space was 37.94 million sq ft while the absorption stood at 33 million sq ft.

“Warehousing industry in India has come a long way and it’s going to continue to mature as a favourable real estate asset class. The sector has witnessed a massive participation from institutional investors and developers amid raising demand from across the sector like ecommerce, retail, FMCG, 3PL (third-party logistics) , cold storage, pharma and manufacturing,” Savills India Managing Director, Industrial Warehousing and Logistics Srinivas N said.

As per the study, Mumbai and Delhi are expected to see a significant addition of around 8 million sq ft each in 2020, followed by Bengaluru and Kolkata.

Last year, Mumbai witnessed an addition of 5.7 million sq ft while Delhi added 8.1 million sq ft.

“Delhi NCR, Bengaluru and Mumbai followed by Kolkata will be the front runners in absorbing majority of occupiers since these are sourcing and consumption hubs,” the report said.

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Swedish security solutions firm Gunnebo opens India Experience Centre in Bengaluru

Source: IBEF.org, Jan 28, 2019

Gunnebo, a 240-year-old Swedish security solutions provider, opened its first ‘India Experience Centre’ in Bengaluru. The company also introduced a range of physical security products.

The company will showcase its biometric access control Chubbsafes and other Hallmark range of safes under the Steelage brand designed specifically for the jewellery segment in India, particularly in the South through this experience centre, said the company.

Mr Sabyasachi Sengupta, Managing Director, Gunnebo India, said, “The experience centre in India, here in Bengaluru, will showcase physical security solutions that include ‘Safe Storage’, ‘Entrance Control’ and ‘Fire-Safe Products’. The company always buys back the safes to prevent misuse and asks customers to upgrade. These safes are also technologically advanced, and we have added innovations over the years. Some of Gunnebo’s products are 185 years old. Customisation is the company’s USP.”

The company’s portfolio consists of Safe Store Auto, which is a robotic locker solution that is claimed to offer 24/7, high security seamless access to its users. The Chubbsafes, a biometric access control safe, provides smart features like dual authentication, duress alarm and smart messaging with a durable battery backup support, making this an ideal solution for banks, NBFCs and corporates, said Gunnebo.

The company also manufactures high quality ATM safes for OEMs. The company has been in Indian market for more than eight decades and offers a part of its global range consisting of Chubbsafes, Steelage and Minimax, a well-known fire safety equipment brand in India.
 
The company manufactures safes, safe deposit lockers, vault and strong room doors, fire resistant records, filing cabinets and fire safety products at its Halol plant. These products are sold in the domestic market as well as exported.

The experience centre was inaugurated by Mr Raghavendra Auradkar, Director General of Police, Karnataka Police Housing Corporation.

“Considering the changing security scenario along with the growing number of Indian and multinational banks, retail chains and corporates in the city, it is essential for businesses to review and upgrade their physical security infrastructure on an ongoing basis”, said Mr Auradkar.

India’s mobile handset exports more than double

Source: Financial Express, Jan 27, 2019

Mobile handset exports from India have more than doubled in the first eight months of the current fiscal year. This is on top of a 132 per cent growth rate in the last fiscal as well. The overall exports of mobile handsets from India were USD 2.6 billion in FY19, which has reached nearly USD 3 billion till November in the current fiscal, according to the Department of Commerce. After getting a boost from Narendra Modi-led government’s flagship campaign – ‘Make in India’, the industry is expected to get further incentives to increase its productivity. IANS had reported that a special incentive scheme for the manufacture of mobile handsets and components may be unveiled in the upcoming budget. 

The government has already approved a special incentive package to promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector, which is called the Modified Special Incentive Package Scheme (M-SIPS). Under M-SIPS, the government aims to provide a subsidy of 20 per cent on capital investments in special economic zones (SEZs) and 25 per cent on capital investments in non-SEZs for individual companies.

Lucrative incentives and facilities in India have now been attracting premium mobile handset brands like Apple and One Plus, giving more value to the burgeoning sector. The production of mobile phones in India has shot up 8-folds in the last five years. Mobile phones worth $ 24.3 billion were manufactured in 2018-19, which was just $ 3.1 billion in 2014-15, according to the RBI annual report. 

Meanwhile, Phased Manufacturing Programme (PMP) for mobile handsets and its related sub-assemblies introduced in the Union Budget 2015-16 also led to a jump in mobile handset production in India as it involved countervailing duty on mobile phone imports and differential excise duty for domestic mobile phone manufacturing. It has gave exemption of parts, components, and accessories of mobile phones from basic customs duty to encourage domestic manufacturing of mobile phones.

Brazilian President Bolsonaro calls for investments by Indian companies

Source: Business Standard, Jan 28, 2019

New Delhi: Brazilian President Jair Bolsonaro on Monday called for greater investment by Indian conglomerates in the Latin American country’s infrastructure, railways, mining and energy sectors.

Addressing senior captains of industry, Bolsonaro, along with senior minister’s from the Brazilian government pitched for more investments from India. Brazil’s economy is broadly expected to slowly regain health in 2020, with gross domestic product growth estimated at 2.3 per cent by the country’s central bank.

Winning on a populist plank to eradicate poverty and clean up corruption, Bolsanaro has pushed for large scale foreign investment to tap the country’s vast natural resources, especially in the Amazon rainforest in the scarcely populated hinterland. Indian companies have invested about $ 6 billion in the country, and has significant footprint in multiple sectors sectors.

This includes Information Technology giants such as Tech Mahindra and Tata Consultancy Services which has about 1400 employees. In the mining sector, Sterlite Power has won 10 power transmission projects across 11 Brazilian states totalling 29 transmission lines and 34 substations while Birla Carbon, the world’s largest carbon black producer, completed 60 years of operations in Brazil in October 2018.

Pharmaceutical, Energy, engineering and automobile production were also sectors central to Indian business interests, sources said. Policymakers said that among that bilateral pacts to boost cooperation in oil and natural gas and bio-energy, that were signed over the weekend is expected to see significant Indian businesses entering Brazil.

Bolsanaro met with 23 Indian business leaders from companies including those from Sterlite Power, Apollo Hospital, Oyo Rooms, Tech Mahindra, Tata Consultancy Services, Zydus Cadila, and Transport Corporation of India Limited, among others.

Export boost
New Delhi however expects to use the country as a springboard to spread its export to difficult to access Latin American markets. At the same event, Commerce and Industry Minister Piyush Goyal on Monday suggested bilateral trade can reach up to $ 15 billion by 2022. Both nations are working to expand the India-MERCOSUR Preferential Trade Agreement (PTA), of which both nations are part

Exports to the country have risen for the 3rd-straight year till 2018-19, hitting $ 3.8 billion. Imports however, reduced to $5.4 billion, decreasing by a Billion dollars in the same year.

Back in mid-July, India had asked Brazil to fast track negotiations on New Delhi’s PTA with the Latin American economic bloc which also includes Argentina, Uruguay and Paraguay.

Signed in 2004, the PTA is the only major way India accesses the continents vast consumer market.

Goyal also urged that the India – Brazil Business Leader’s Forum may be activated and reconstituted to make it more relevant and contemporary to businesses in both countries.

He also pushed for the opening of the Brazilian market to Indian services in wellness sector like Yoga and Ayurveda. Brazil has an association of Ayurveda (ABRA), with offices in 9 states and in 2018, held the third International Congress on Ayurveda which saw the participation of 4000 delegates. Goyal also pitched for creation of value chains between India and Brazil where goods may be semi assembled in one country and finished in another. Business relations between India and LAC are mainly by way of investments, as conventional trade in goods has challenges on account of distance, time zone difference and business culture.

Lohia Group invests Rs 100 cr in aerospace and defence plant in Kanpur

Source: Business Standard, Jan 27, 2019

Lucknow: The Lohia Group has invested nearly Rs 100 crore in a greenfield aerospace and defence hardware plant in Kanpur.

The Group expects the commercial production to begin from March 2020, company’s director Anurag Lohia told Business Standard today.

“We will produce composite parts for the aerospace and defence manufacturers at our plant, which is spread over about 10 acres of land in Kanpur industrial area,” he informed.

The plant, which is an export-oriented unit, will be positioned to showcase the ‘Make in India’ capabilities of Uttar Pradesh, especially in the defence manufacturing sector.

Lohia has already signed an offset memorandum of understanding (MoU) with Israel’s largest defence company for sourcing of structural parts and components for Unmanned Aerial Vehicles (UAV) and cargo aircraft. It is also in ‘advanced’ talks with a European firm for supplying military-grade carbon composites.

“While commercial production will commence in March 2020, we are currently manufacturing components and hardware for display at the Defence Expo (DefExpo) in Lucknow next month,” Lohia added.

The 11th edition of DefExpo, India’s premier biennial land, naval and internal security exhibition being held between February 5 and 8, will cover the entire spectrum of the country’s aerospace, defence and security interests.

Top defence manufacturers from the US, Russia, Australia, Israel and Germany are expected to participate in the event, which is being organised in Lucknow at the initiative of defence minister Rajnath Singh, who represents the constituency in Lok Sabha.

In his recent visit to Lucknow, Singh had said this edition of Expo would be the largest in terms of the exhibition area and number of national and international participants, apart from the value of MoU likely to be signed.

India is the world’s largest military hardware importer and among the top military spenders.

For meeting modernisation needs of the armed forces, India will acquire equipment worth $250 billion by 2027, however, the current delivery capacity of the domestic defence sector is merely $75-80 billion annually, indicating huge potential for indigenous industry.

“We identified composites as the cutting-edge technology that we wanted to bring to India.

This critical and strategic technology is for the world of tomorrow and we wanted India future ready,” Lohia noted.

In February 2019, the Group had acquired Israel-based Light & Strong Limited, Israel’s largest private producer of aerospace focused carbon fibre composite components for Israel’s aerospace and defence industry.

“In this process, we became the first Indian company to acquire and own an international composites company,” he informed adding Lohia had hired an Israeli composites expert for 2 years for executing the technology transfer from Israel to India. Under the ‘Skill India’ initiative, the company has recruited 30 people from UP and sent them for training at its Israeli facility for six months.

To boost desi companies, curbs likely on tyre, furniture imports

Source: The Economic Times, Jan 27, 2019

New Delhi: The government is all set to clamp down on import of furniture and certain types of tyres, especially retreaded ones, amid concerns that cheap goods are flooding the market and pushing out domestic manufacturers.

An official decision is expected over the next few days with a detailed analysis on furniture imports having already been undertaken by the commerce department, sources told TOI. Separately, certain types of gems are also on the radar for import curbs.

In recent months, the government has stepped up its efforts to reduce “non-essential” imports as part of a strategy to boost the ‘Make in India’ initiative, which has been hit by companies holding up investments due to the slowdown. As reported in TOI on December 3, the Centre has identified over 350 “non-essential” imports, from toys and electronics, on which quality standards, higher duties and licensing are being worked out.