The EU-India Trade and Technology Council: opportunities and challenges ahead, 24 February 2023

The EU and India have launched a Trade and Technology Council (TTC), a bilateral forum to prioritise their partnership through cooperation in digital governance, green and clean energy technologies, and resilient value chains, trade and investment. The Council is a response to increasing great-power competition and a desire on both sides to bolster their respective strategic autonomies, with the potential to have a significant impact on the EU’s ambitions in the political, economic and technology spheres.

In a context of increasing great-power competition, the EU and India are aiming to mutually bolster their respective strategic autonomies. Ten months after its announcement in April 2022, Brussels and New Delhi have launched the Trade and Technology Council (TTC), highlighting their joint commitment to prioritise their partnership through a strategic engagement in trade and technology. The bilateral forum includes three working groups on cooperation in digital governance and connectivity, green and clean energy technologies, and resilient value chains, trade and investment.

The EU-India TTC opens up a new avenue for cooperation, and in turn entails a number of challenges and opportunities. At a time when the global governance of technology is being shaped by means of ad hoc coalitions and platforms for dialogue –but not yet through international organisations, with the particular exception to some extent of the ITU, the UN agency devoted to ICT governance–, this mechanism is the second of its kind initiated by the EU, the EU-US TTC being the first. It joins the growing list of regional-based initiatives that the EU is launching to address the impact of technology on security, economic(s) and values, such as the Digital Partnerships with Japan, the Republic of Korea and Singapore, the Joint Commitment to Digital Transformation in the EU-Africa Joint Vision for 2030, and the upcoming EU-LAC Digital Alliance, among others. It falls back on the goals envisioned by the first-ever approach to EU digital diplomacy, released a bare six months ago.

On the Indian side, the TTC is not the first institutionalised platform either. The Quad Initiative, formed by Australia, India, Japan and the US, is the main multilateral group addressing the strategic orientation of trade and technology in the Indo-Pacific. Furthermore, the Biden Administration recently launched a number of cooperation initiatives, including quantum computing, artificial intelligence, 5G wireless networks and semiconductors. The Initiative on Critical and Emerging Technologies is the latest move by the US to create alignments and to counter China.

The China factor in the EU-India TTC
It is the China factor that explains the EU’s impetus to cooperate with partners on a bilateral basis and not tri-laterally or multilaterally. The EU-US TTC’s work has so far focused mostly on information sharing, joint mapping, defining best practices, identifying risks and exploring options for closer cooperation. One of the main US goals at the early stage was to leverage the TTC as a space for dialogue on a common view vis-à-vis China, while for the EU the TTC is not about China.

That is why the EU has entered a new phase of bilateral cooperation with India on trade and technology. The key underlying motives behind a reignited cooperation between the two is the mirror effect from Sino-Russian alignment: while the EU seeks to decrease its reliance on China (although without an anti-China impulse), India aims to reduce its dependence on Russia and China.

The COVID-19 pandemic, the war in Ukraine and the structural competition between the US and China have further driven the EU to look at the world through a geopolitical lens, particularly on trade, and it is now applying a more realist(ic) assessment of weaponised interdependence. The EU’s open strategic autonomy is an expression of the shift in the thinking behind European policies. That is the reason why we are witnessing the EU arming itself with a toolbox that is expanding by the day in order to tackle economic distortions and security disruptions to supply chains and strategic technologies from China –but not only–.

On the other hand, while working on reducing its dependence on Russia from the military point of view, India has not yet condemned in overtly explicit terms the invasion of Ukraine. However, with China posing a military challenge at its borders and an undesirable military dependence on Russia, New Delhi is not in the most comfortable of situations. Such a quandary only provides a further incentive for India to increase its engagement with the EU.

Given the general trend towards reducing dependence on China in critical sectors, India has conducted several technology crackdowns on the country since at least 2020. It has either banned Chinese apps and services or subjected Chinese manufacturers to investigations from India’s Enforcement Directorate, which has seized bank accounts or accused many companies of tax evasion. Section 69 of the Indian Information Technology Act enables the Indian central government to block access –by invoking emergency powers– to any domain or app that is deemed to be a threat to national security.

Also, due to US sanctions and tighter export control regimes on Chinese semiconductors and other critical technologies, India has presented itself as the alternative for the location of multinationals such as Apple and Samsung, to diversify its supply chains away from China. India has been investing in its homegrown technology sector to build up its own economic and security statecraft thanks to both governmental support and public-private schemes in frontier-technology development.

Opportunities and the future ahead
In general, Europe still has a low awareness of the threat China poses for India and, more importantly, the dynamics of Sino-Indian relations. The greater the channels of cooperation with India, the greater the EU’s understanding of the Indian position and the opportunities to be had by engaging more broadly in the Indo-Pacific region.

Furthermore, there are a variety of attitudes and positions across the EU as to how to approach China, technology and trade policy from a security and geopolitical perspective. The Netherlands’ potential decision to join the US semiconductor export controls on China, alongside Japan, prove the extent to which there is a need for the EU as a bloc to agree on common views on critical issues. This will be paramount for the first and third working groups of the EU-India TTC, the former focusing on areas of mutual interest such as AI, 5G/6G, high performance and quantum computing, semiconductors, cloud systems, and cybersecurity, and the latter on efforts to supply chain resilience, access to critical components, and trade barrier and global trade challenge resolution.

However, there are several opportunities for the EU-India TTC. First, the forum’s institutionalisation will help both sides to bolster a strategic level of cooperation by combining long-term policy initiatives with short-term urgent responses when deemed necessary.

Ministerial meetings will take place at least once a year –the first is planned to be held in spring 2023–.

Second, it is likely for the EU to aim to keep the TTCs with the US and India as separate forums, but it will be important to keep an eye on possible cross-alignments at the working and policy levels –not so much at the political and diplomatic levels, given the different intensities and narratives vis-à-vis China–.

Third, the EU-India TTC might lead to the diversification of partners in the Indo-Pacific region. While the EU has separate digital external policy agendas with Japan, the Republic of Korea and Singapore by means of bilateral Digital Partnership Agreements, it is true that the sum of these initiatives might lead to some rapprochement, at least at the working level of information sharing, joint mapping and the definition of best practices, as is already the case with the EU-US TTC.

India possesses all the ingredients to have a significant impact on the EU’s scope to increase and strengthen its political, economic and technology ambitions. The extent of the impact will depend on how work proceeds at the TTC and how it will translate into the EU-India Free Trade Agreement, whose negotiations were relaunched last year after a nine-year hiatus. This means it will need to proceed with two types of deliverables: low-hanging fruits, but also ambitious ideas that support each side’s goals in the TTC.

The TTC takes the discussion on stronger EU-India relations to a further level, where the concept of strategic autonomy in a rapidly volatile geopolitical environment acquires a transcendental meaning for both sides in the years ahead. They will seek to enhance their respective strategic autonomies and economic resilience in light of decoupling narratives that alter the world economic system and underscore a growing strategic alignment.

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Budget 2023: Govt reduces customs duty on number of products for marine sector

Source: Economic Times, 05 February 2023

The government has reduced import duty on a number of raw materials such as fish lipid oil, krill meal and algal prime used in the marine sector, to promote domestic production and exports from the segment. The duty on fish lipid oil and algal prime (flour), used in manufacture of aquatic feed, has been reduced to 15 per cent from 30 per cent.

Similarly, the duty on fish meal and krill meal, used in making aquatic feed, was cut to 5 per cent from 15 per cent in the Budget, presented by Finance Minister Nirmala Sitharaman on February 1.

The levy on mineral and vitamin premixes, which are also used in the feed, has been reduced to 5 per cent from 15 per cent earlier, according to Budget documents.

The basic customs duty on fish feed too has been reduced to 5 per cent from 15 per cent with a view to promoting local production of shrimps.

Fish meal is high in protein and a good source of calcium, phosphorus, and other minerals. It is used extensively by the marine industry.

Imports of fish lipid oil stood at USD 7.13 million during April-November 2022. It was about USD 14 billion in 2021-22. It is mainly imported from China, Japan, and the US. Imports of algal prime (flour) was USD 0.91 million during the eight-month period. It was about USD 4.5 billion in 2021-22. It is mainly imported from Brazil, Thailand and Malaysia.

Imports of fish and krill meal stood at USD 7.68 million during April-November 2022. It was USD 19.6 billion in 2021-22. It is mainly imported from Norway, Gambia and the UAE.

Imports of mineral and vitamin premixes were USD 207.75 million during April-November 2022. It was USD 305.12 billion in 2021-22. It is mainly imported from China, Belgium, Greece, the Netherland, Singapore and Thailand.

The finance minister also announced launch of sub-scheme of PM Matsya Sampada Yojana with a targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors, and micro and small enterprises, improve value-chain efficiencies, and expand the market.

Exports of marine products rose 30.26 per cent to USD 7.76 billion during 2021-22. Frozen shrimp remained the major export item in terms of quantity and value. The segment accounts for 75.11 per cent of the total dollar earnings.

The US is the largest market of frozen shrimp, followed by China, the European Union, South East Asia, Japan, and the Middle East. Frozen fish, frozen squid and frozen cuttlefish, are also major items for exports.

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said the reduction in duty will boost marine exports as cost of production is expected to come down by 5 per cent, providing competitive edge.

Yogesh Gupta, Regional Chairman, FIEO – Eastern Region, said although “we are facing a strong headwind due to Ecuador shrimp growth, reduction in duty on fish feed will support the farmers in a big way, and we may see some greater production of shrimps, leading to higher volumes”.

“This is a good move, but for larger exports, interest equalisation rate must be brought up to 5 per cent,” he added.

In India-UK trade deal, focus on what is acceptable to both countries, says Piyush Goyal

Source: Financial Express, 24 January 2023

Commerce and Industry Minister Piyush Goyal has said that in the talks for the proposed free trade agreement between India and the UK, the focus is on what is acceptable to both countries and not allow sensitive issues to scuttle the discussions. He also said that student visas are never part of a free trade agreement (FTA).

India has recently concluded the sixth round of talks with the UK and the next round will be held soon. Negotiations with the UK started on January 13 last year with an aim to boost bilateral trade and investments. The bilateral trade between the two countries increased to USD 17.5 billion in 2021-22 compared to USD 13.2 billion in 2020-21. India’s exports stood at USD 10.5 billion in 2021-22, while imports were USD 7 billion.

“With UK , our approach is let’s focus on what is acceptable to both the countries and let us not allow sensitive issues to scuttle our discussions,” Goyal told reporters here. When asked about a statement of a UK official that granting more students visas for India is not part of this agreement, Goyal said: “Have you ever heard of student visas being part of FTA? How many students go there (UK) to study? It’s never a part of an FTA”.

British trade minister Kemi Badenoch, who is in-charge of the negotiations, recently stated that the trade agreement is expected to be clinched this year but it won’t involve any boost of free movement visa offers for Indians. In an interview with ‘The Times’ recently, the UK Secretary of State for Trade also ruled out any major similarities between the FTA the UK struck with Australia post Brexit and the proposed deal with India.

Goyal said FTAs are never negotiated either in newspaper articles, news conferences or in public functions, and these agreements are “serious” functions that happened amongst officials and at higher political levels also discussed when required. “That’s hardcore negotiations and it has to be a win-win for both countries,” he added.

Talking about the proposed trade deal with Canada, the commerce minister said that with Canada, India is looking at an early harvest agreement, which is called an early progress trade agreement. In this, “we are hoping to capture the low hanging fruits, so that the businesses can start enjoying the fruits faster and when people start seeing the benefits,” he added.

Replying to a query on India’s decision to opt out from the trade pillar of the 14-member Indo-Pacific Economic Framework (IPEF), Goyal said if India would find it in the interest of the country, it will be happy to join that pillar.India opted out from the trade pillar “because we do not know the final contours, we don’t know whether there are any binding commitments, we don’t know whether there will be any restrictions which can hurt our manufacturing or hurt our economy.”So until we see exactly what are the contours that are there and what are the benefits that are there, until that time we have said, we will observe what you (13 members of the IPEF) all are doing ,” he said.India has not yet opted for it, as it is waiting to see what would be the final contours of this trade pillar and what it will get, he added.

The IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23 in Tokyo. The 14 IPEF partners represent 40 per cent of global GDP and 28 per cent of global goods and services trade.The framework is structured around four pillars relating to trade, supply chains, clean economy, and fair economy. India has joined three pillars – supply chains, clean economy, and fair economy.

India will host the next special negotiation round of the Indo-Pacific Economic Framework for Prosperity (IPEF) from February 8-11 next year.On the PM Gati Shakti initiative, the minister said that besides efficient planning of roads and railways, PM Gati Shakti portal is being used for unique ideas.Citing examples, he said the portal is helpful in finalising locations for the proposed PM Mitra (Mega Integrated Textile Region and Apparel) parks.

It is also used to match the BIS (Bureau of Indian Standards) and FSSAI (Food Safety and Standards Authority of India) labs with the industries.“We have mapped all the labs of the country on the PM Gati Shakti platform…So if the cement industry is in one place, cement testing should be there, and not 500 km away,” he said adding the platform is helping social sectors also.

He added that give lakh fair price shops have also been mapped and now “we are mapping” number of transactions on each shop, “so we will be able to know which are the shops where nobody goes, we can remove some of them and which are the shops which are over loaded”. Goyal was here to participate in the inaugural session of the B20 India Inception Meeting here, organised by industry chamber CII.

India-US trade policy forum meet on January 11

Source: Economic Times, 08 January 2023

The India-US Trade Policy Forum (TPF), set up to resolve trade and investment issues between the two countries, will hold a meeting in Washington on January 11, the commerce ministry said on Sunday.

The TPF has five focus groups, on agriculture, investment, innovation and creativity (intellectual property rights), services, and tariff and non-tariff barriers. The meeting will be co-chaired by commerce and industry minister Piyush Goyal and US trade representative Katherine Tai. Goyal will be on an official visit to New York and Washington DC from January 9-11, the ministry said.

The 12th TPF meeting was held in Delhi on November 23, 2021, after a gap of four years.

“Working groups were reactivated after the last ministerial,” said the ministry. “TPF is a platform for continuous engagement between two countries in the area of trade and to further the trade and investment relations between the two countries. Both countries are looking forward to the meeting and confident of making progress on the trade issues.”

The meeting was deferred earlier in November.

S Jaishankar holds talks with Austrian counterpart; inks number of pacts

Source: Business Standards, 02 January 2023

External Affairs Minister S Jaishankar Monday held “open and productive” discussions with his Austrian counterpart Alexander Schallenberg on a range of regional and global situations and the two sides inked a number of agreements, including one on migration and mobility for Indian students and professionals.

Jaishankar, who arrived here from Cyprus on the second leg of his two-nation tour, also said his extensive conversation with Austrian leaders, including President Alexander Van der Bellen and Chancellor Karl Nehammer, was very valuable in understanding Austria’s viewpoint, both “about our relationship as well as on current global issues.”

“We had open and productive discussions on a range of regional and global situations. By and large, I would say, our approaches are similar, though obviously we are located in different regions…I appreciate the exchanges we have had both today and yesterday on Ukraine, on the Middle East, on South Asia and the Indo-Pacific. They have brought out the significant convergences in our thinking,” he said while addressing a joint press conference with his Austrian counterpart Alexander Schallenberg here.

Noting that the two sides have concluded a number of agreements, Jaishankar said that a particularly noteworthy one is the initialling of the Comprehensive Migration and Mobility Partnership Agreement.

“It will enable demands for skills and talents to be synchronized with their availability. Similar agreements have been recently concluded by India with Germany, France, Portugal, UK and Denmark, amongst others. It will help us to cooperatively expand our economic opportunities and meet the requirements of the global knowledge economy,” he said. “We want a fair, legal and equal opportunity to demonstrate the contributions of Indian skills and talents.”

Jaishankar on Sunday said one agreement on ‘Working Holiday’ programme will enable Indian students in Austria to work for six months.

On his part, Foreign Minister Schallenberg said that just an initial agreement on a comprehensive migration and mobility partnership has been signed which is of strategic importance for his country.

“It’s a sign of a very intensified cooperation in a matter which is of high importance…because last year, we experienced the highest number ever of asylum seekers in Austria over 100,000. And we had an explosion,” he said.

He said the numbers of Indians coming in illegally via Serbia to Austria reached 18,000 last year from 600 asylum applications from Indian citizens in 2021.

“The problem is not migration to be very clear. We want that we need them. The problem is illegal immigration,” he said. “We need immigration, but immigration controlled by states and not by organised crime by human traffickers.”

He said this migration mobility agreement was exemplary because on the one hand India would take back people come in illegally and on the other side, Austria would make mobility and migration more easy.

Jaishankar said India views Austria as a “serious and consequential partner” when it comes to bilateral cooperation.

“You have experiences and capabilities that are relevant to India’s modernisation and progress. These are guided by government policies but ultimately, implemented through business transactions. Our commitment today is to take both aspects forward in tandem and I look forward to concrete initiatives,” he said.

The two countries have currently trade turnover of approximately USD 2.5 billion. More than 150 Australian companies are present in India. “We would like those numbers also to grow,” he said.

“There are many Austrian companies who can more actively contribute to our national priorities. Similarly, our enterprises too can generate value and employment when located in Austria. Our responsibility as ministers is to make sure that such partnerships happen,” he said.

He said that in the manufacturing domain, the post-Covid world is seeking greater resilience and reliability of supply chains. Similarly, the digital world is putting a greater emphasis on trust and transparency. “We believe that India is part of both solutions.”

The minister said that Austria is an important partner for India in the European Union at a time when it seeks to upgrade its relationship. “We appreciate its strong support for the negotiations underway on the FTA, the investment agreement and the geographical indicators agreement. Their conclusion will obviously have a positive impact on our bilateral economic partnership as well.”

He said the two sides have a strong meeting of minds on the challenges confronting the international community.

“Whether it is pandemics or climate change, terrorism or cyber security, our interests are indeed very convergent,” he added.

This is the first EAM-level visit from India to Austria in the last 27 years, and it takes place against the backdrop of 75 years of diplomatic relations between the two countries in 2023.

How cross-border business trade solutions help scale your business

Source: Economic Times, 21 November 2022

With the COVID-19 pandemic and its resultant acceleration in digital adoption by businesses, more and more entrepreneurs and brands are realising the value of expansion into newer markets and the opportunities presented by cross-border trade in driving increased revenue and acquisition of customers.

According to the Forrester report, cross-border shopping globally will comprise about 20% of all the e-commerce transactions in 2022 with a total transaction value of $627 billion. In fact, cross-border shopping has more than doubled in the past decade and today makes up for over 22% of the total online trade. According to a Payoneer report, India is among the top 10 countries for cross-border e-commerce growth. Besides generating revenue through inroads into newer markets, cross-border trade is an effective way for business expansion and brand awareness across the global market.

Despite the obvious benefits of cross-border trade like enabling businesses to scale up and acquiring new customers there are several other challenges that an exporter/importer has to overcome to secure a foothold into new markets.

1 Understanding the market and establishing your business: The biggest challenge that businesses face while tapping into newer markets is to understand the dynamics of that market. This entails studying the local laws and regulations applicable on new business ventures including its overall operations or dealings with local customers to ensure familiarity with the local culture and consumer habits.

Coordinating with partners who have already helped businesses establish their cross-border trade operations across different countries is critical. Through the Cross-Border Business Trade solutions offered by such partners, businesses can navigate the laws and regulations of different markets with ease and understand market-specific preferences and nuances, among others. Setting up a digital presence is also crucial as is ensuring that your website is set up with the multilingual option.

Regulatory compliances and paperwork: Once you expand your business operations and go global, you’ll have to deal with customers and merchants who are located in different parts of the world, which usually means familiarising yourself with different policies. Keeping track of different paperwork requirements, regulations, compliances, etc. for each market is crucial and the significance magnifies when multiple markets are involved. Cross-Border Business Trade Solutions and Services provided by banks like ICICI Bank can help a business execute their cross-border trade transactions with ease. By leveraging solutions like ICICI Bank’s Export Bill Regularisation, businesses can regularise their export bills online without any hassle and ensure that the eBRC is issued on time by the banks. This will also enable the exporter to claim incentives, if any, on the product exported on time. Export Bill Regularisation is a process where the export proceeds (Inward Remittances) received are mapped against the individual shipping bills (shipments) thereby, regularising the export transaction on the RBI portal known as EDPMS.

Benefits of Export Bill Regularisaton from ICICI Bank are :
Raise Transaction Requests digitally without a visit to the branch
Handle courier and postal shipping bill regularisation in association with logistics partners
Handle large volumes in the digital format through the Bulk Export Bill Regularisation facility
Free and automated FIRS issuance to exporters, reducing TAT.

2 Logistics and supply chain: With international shipping, it is of utmost importance to track orders and meet the committed timelines for shipments. It can also be difficult to communicate with the on ground logistics partners in other countries. Managing the paperwork related to supply chain and logistics management is also a challenging process. Digital solutions such as multi-carrier software platforms help businesses find the most appropriate shipping partner and plan routes for maximum efficiency. Having a local partner can also help you in communicating with local logistical partners

3 Financing: An issue faced by all MSMEs is financing. It is critical to ensure regular financial inflow and support while venturing into the global market. This will help businesses purchase or manufacture goods on time and reduce any financial strain that might crop up in the gap between selling the product and receiving its payment. Partnering with an institution like ICICI Bank can help a business get access to both pre and post shipment finances. ICICI Bank also ensures that finances for businesses dealing with exports are more accessible, flexible, efficient and convenient.

4 Ensuring product quality & return policy: In today’s competitive environment, it is very important to have superior quality products at the right price. Also, consumers expect to have a fair and transparent return policy (especially from e-commerce businesses). This builds confidence for the product and the entity across the global market.

5. Payment method: Understanding the payment mechanism for each country and the various charges/costs associated with wire transfer is important. It is also recommended to route all cross-border payments through an Authorised Dealer in foreign exchange. Also, e-commerce exporters/importers may explore the OPGSP route as well to receive/ send cross-border payments.

As digital access and e-commerce continues to grow, it has become a necessity for businesses to establish an e-commerce platform/presence, if they want to scale and sustain their business. According to the Trade Promotion Council of India, cross-border e-commerce can actually play a key role in pushing India to its $1 trillion export vision. There is no doubt that moving into the global market can be very useful to businesses, especially MSMEs. However, it also comes with its array of challenges, small businesses should choose partners to help facilitate smooth expansion beyond their home markets.

India, GCC group to launch free trade pact negotiations on Nov 24

Source: Business Standards, 17 November 2022

India and the Gulf Cooperation Council (GCC) are expected to launch negotiations for a free trade agreement on November 24 with an aim to boost economic ties between the two regions, an official said.

GCC is a union of six countries in the Gulf region — Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain.

“The FTA will be launched on November 24. GCC officials will be here to launch the talks,” the official said.

India has already implemented a free trade pact with the UAE in May this year.

Commerce and industry minister Piyush Goyal had, on November 16, said that India will be launching a new free trade agreement (FTA) next week.

This would be a kind of resumption of FTA talks as earlier two rounds of negotiations held in 2006 and 2008 between India and GCC. Third round did not happen as GCC deferred its negotiations with all countries and economic groups.

India imports predominately crude oil and natural gas from the Gulf nations like Saudi Arabia and Qatar, and exports pearls, precious and semi-precious stones; metals; imitation jewellery; electrical machinery; iron and steel; and chemicals to these countries.

India’s exports to the GCC grew by 58.26 per cent to about USD 44 billion in 2021-22 against USD 27.8 billion in 2020-21, according to data from the commerce ministry.

The share of these six countries in India’s total exports has risen to 10.4 per cent in 2021-22 from 9.51 per cent in 2020-21. Similarly, imports rose by 85.8 per cent to USD 110.73 billion compared to USD 59.6 billion in 2020-21, the data showed.

The share of GCC members in India’s total imports rose to 18 per cent in 2021-22 from 15.5 per cent in 2020-21.

Bilateral trade has increased to USD 154.73 billion in 2021-22 from USD 87.4 billion in 2020-21.

Besides trade, Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries.

These NRIs send a significant amount of money back home.

According to a November 2021 report of the World Bank, India got USD 87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations.

Saudi Arabia was India’s fourth-largest trading partner last fiscal. From Qatar, India imports 8.5 million tonnes a year of LNG and exports products ranging from cereals to meat, fish, chemicals and plastics.

Kuwait was the 27th largest trading partner of India in the last fiscal, while the UAE was the third-largest trading partner in 2021-22.

Bangladesh PM Sheikh Hasina gives green signal for CEPA with India

Source: Economic Times, 18 August 2022

Bangladesh Prime Minister Sheikh Hasina has given the green signal to begin formal negotiations for signing a comprehensive economic partnership agreement (CEPA) with India in what can also boost trade and investments in eastern and north-eastern India in a big way.

This will be Dhaka’s first trade pact with any country, and it has given preference to India despite requests from China and Japan to have free-trade agreements, ET has learnt. Pacts with Japan and China are still at an assessment stage.

The CEPA will figure high on the agenda during Hasina’s proposed visit here on September 6-7.

The proposed deal is expected to boost Bangladesh’s export earnings by 190% and India’s by 188%, and gross domestic product by 1.72% and 0.03%, respectively, as revealed by a Dhaka-Delhi joint feasibility study.

The CEPA will cover trade in goods and services, investment, intellectual property rights and ecommerce.

In the last fiscal year, Bangladesh’s exports to India rose to nearly $2 billion for the first time. Imports from India totalled $14 billion.

Officials from Dhaka said Bangladesh already enjoyed duty-free and quota-free benefits for the exports of all but 25 products, including tobacco and alcohol, to India, as a least developed country under the South Asian Free Trade Area agreement.

During the visit of PM Narendra Modi to Bangladesh in March 2021, he and Hasina issued instructions on concluding the joint feasibility study relating to the signing of the CEPA.

Accordingly, Bangladesh’s Foreign Trade Institute and India’s Centre for Regional Trade conducted the detailed joint feasibility study. In May this year, they sent the study report to their respective commerce ministries. The report suggested launching negotiations for the signing of the CEPA.

Once the trade deal is signed, Bangladesh’s export earnings will go up by $3-5 billion and India’s by $4-10 billion in the next 7-10 years, according to a final draft report of the joint feasibility study.

It will also open new investment windows for both countries, the study claimed.

“It may be concluded that the estimates and analysis of this study indicate that the proposed CEPA between India and Bangladesh is not only feasible but also mutually beneficial in terms of possible gains in the realms of trade in goods and services, and investment,” according to the study.

Bangladesh is India’s biggest trade partner in South Asia, and India is the second biggest trade partner of Bangladesh.

New UK parliamentary panel to promote trade, investment ties with India

Source: Economic Times, 27 July 2022

A new cross-party UK parliamentary panel has been created to promote trade, investment and people-to-people ties with India, backed up by British Indian think tank 1928 Institute.

The India (Trade and Investment) All Party Parliamentary Group (APPG) was formally registered last week as part of celebrations of the 75th anniversary of India’s independence and is made up of 25 members of Parliament and peers of different political affiliations.

With a stated goal to promote trade and investment between India and the UK for the mutual betterment of their citizens, whilst building an inclusive living bridge between the two countries, the new APPG hopes to support the ongoing India-UK free trade agreement (FTA) negotiations and promote its benefits once concluded.

“Given 75 years of India’s Independence, the creation of an All-Party Parliamentary Group focused on India will set the tempo between the UK Parliament and India/Indians,” said Navendu Mishra, Indian-origin Opposition Labour Party MP for Stockport in north-west England and Co-Chair of the new APPG.

“Investment in people is the best way to ensure economic stability and this APPG intends to benefit the peoples of both the UK and India. In particular, I’m looking forward to bringing investment to Stockport and to the Greater Manchester region, both from stronger cultural ties and from utilising the trade agreement,” he said.

“Furthermore, what better way to celebrate the 75 years of Independence then to strengthen the living bridge between the countries and to solidify an equal partnership between these two great nations,” he added.

From trips across different parts of Britain to visits to India, the India (Trade & Investment) APPG said it will work with diverse stakeholders and encourage beneficial collaborations.

“It’s a new chapter in the story of the Indo-British trade partnership and I’ll be working tirelessly to ensure that we get the best possible FTA and that it is utilised after. The group’s establishment coincides with the 75th year of India’s Independence and it will be a parliamentary driving force behind the UK-India story in the years to come,” said Lord Karan Bilimoria, Indian-origin businessman and Co-Chair of the APPG.

“This APPG will be the conduit which not only connects UK and Indian policymakers but connects businesses and entrepreneurs to drive growth. The APPG will ensure that dialogue and engagement will cut across all levels of business, particularly encouraging a wider lens on female led business and start-ups,” added Baroness Sandy Verma, the President of the new group.

The APPG is chaired by Conservative Party MP Bob Blackman and includes other Indian-origin parliamentarians as vice-chairs, including Lord Meghnad Desai, Baroness Usha Prashar, Labour MP Virendra Sharma and Tory MP Gagan Mohnidra.

“We are honoured to facilitate the APPG as its Secretariat and look forward to collaborating with diverse partners to champion trade, investment, and development,” said the 1928 Institute, a University of Oxford spinout focussed on Indian diaspora research in the UK.

“We intend to create an energised, inclusive, and pluralistic space to accelerate the improvement of material conditions for all. Our vision spans opportunities from Pembrokeshire to Punjab, and we encourage you to get in touch to help shape this nascent space,” it said.

The new APPG will officially kick-start its activities when Parliament resumes after its summer recess under a new Prime Minister in September.

APPGs are informal, cross-party groups in the UK formed by MPs and members of the House of Lords who share a common interest in a particular policy area, region or country and have no official status within Parliament.

PM Modi to attend I2U2 virtual summit

Source: Economic Times, 14 July 2022

Prime Minister Narendra Modi will join US President Joe Biden, Israeli PM Yair Lapid and UAE President Mohammed bin Zayed Al Nahyan at the first virtual summit of the four-nation grouping ‘I2U2’ on Thursday. The leaders are expected to discuss joint economic projects to bolster economic cooperation under the framework of the coalition.

The grouping is known as ‘I2U2’ with “I” standing for India and Israel and “U” for the US and the UAE.

The global food and energy crisis arising out of the Ukraine conflict is likely to figure prominently in the talks.

The virtual summit is likely to begin around 4 pm.

“The leaders will discuss the possible joint projects within the framework of ‘I2U2’ as well as the other common areas of mutual interest to strengthen the economic partnership in trade and investment in our respective regions and beyond,” the Ministry of External Affairs (MEA) said on Tuesday.

The I2U2 grouping was conceptualised during the meeting of the foreign ministers of the four countries held on October 18 last year.

India’s bilateral strategic ties with each of the three countries are on an upswing in the last few years.