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 The benefits to India were withdrawn from June 5, 2019, after the US dairy and medical devices industries alleged that Indian trade barriers affected their exports.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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Tax department gets a ₹10,000 cr windfall from pact with MNCs

Source: LiveMint.com, Jan 27, 2019

New Delhi: The income tax department has made a windfall gain of ₹10,000 crore from a scheme meant to avoid tax disputes, with multinational companies operating in India, a development that could give impetus to new schemes that will reduce litigation while adding to the government coffers.

The gain is from the advance pricing agreement (APA) programme that allows MNCs to negotiate how profit margins for India operations are to be calculated for tax purposes for five years in return for avoiding rigorous scrutiny of transaction details. Introduced in 2012, the scheme was tweaked in 2015 to allow such negotiated profit margins applicable for the past four years as well, allowing companies tax certainty for a total of nine years. Extending the agreed profit margin for past years has led to many MNCs revising their past year profit margins upwards, a government official said on condition of anonymity. Questioning the price at which MNCs transact with their units in India, called transfer price, has been an area of intense tax disputes at the beginning of this decade, which forced the government to roll out the APA scheme. Companies such as International Business Machines Corp. and Microsoft Corp. had in the past faced transfer pricing disputes in India. Read the rest of this entry »

India, Brazil ink 15 pacts; PM Modi says a 'new chapter in bilateral ties'

Source: Business Standard, Jan 25, 2019

New Delhi: India and Brazil on Saturday inked 15 agreements to ramp up cooperation in a wide range of areas and unveiled an action plan to further broadbase strategic ties after talks between Prime Minister Narendra Modi and Brazilian President Jair Messias Bolsonaro.

In the action plan, the two countries have set specific goals for deeper cooperation in areas of defence and security, trade and commerce, agriculture, civil aviation, energy, environment, health and innovation and vowed to work together to conclude an agreement to deal with international terrorism.

The major focus of the talks was on boosting bilateral trade and investment as both the large economies were hit by global economic slowdown.

The 15 agreements will provide for cooperation in a wide range of areas including oil and gas, mineral resources, traditional medicine, animal husbandry, bioenergy and trade and investment.

“Your visit to India has opened a new chapter in ties between India and Brazil,” Modi said, summing up the outcome of his talks with Bolsonaro.

Calling Brazil a valuable partner in India’s economic growth, the prime minister said both the countries have been on the same page on various global issues and exuded confidence that the ties will strengthen further.

“Despite geographical distance, both India and Brazil are together on various global issues as there is convergence in our views,” Modi said in his media statement in the presence of Bolsonaro.

The prime minister said focus is being given to new ways of boosting defence industrial cooperation.

“We want to have broad-based cooperation in defence,” he added.

On his part Bolsonaro said the two countries have further consolidated the already strong ties by signing 15 agreements which will provide for cooperation in a range of areas.

According to the action plan, the two countries will encourage greater collaboration between their defence industrial bases and work together to conclude an agreement in combating international terrorism and transnational organised crime.

It mentioned that the two sides will strengthen established institutional mechanisms and promote coordination on bilateral, plurilateral and multilateral issues of mutual interest based on the principles of equality and trust.

Bolsonaro arrived here on Friday, accompanied by his daughter Laura Bolsonaro, daughter-in-law Leticia Firmo, eight ministers, four members of the Brazilian parliament and a large business delegation.

The Brazilian president will grace the Republic Day Parade as chief guest on Sunday.

Earlier, the Brazilian president was given a ceremonial welcome at the Rashtrapati Bhavan in the presence of President Ram Nath Kovind and Modi.

India’s ties with Brazil, the largest country in Latin America, have been on an upswing in the last few years. The country has a population of 210 million with USD 1.8 trillion economy.

This is the first visit of President Bolsonaro to India.

The volume of bilateral trade was USD 8.2 billion in 2018-19. This included USD 3.8 billion worth of Indian exports to Brazil and USD 4.4 million as imports by India.

Both the governments feel there is a huge potential to enhance bilateral trade further.

Major Indian exports to Brazil include agro-chemicals, synthetic yarns, auto components and parts, pharmaceutical and petroleum products.

Brazilian exports to India include crude oil, gold, vegetable oil, sugar and bulk mineral and ores.

Indian investments in Brazil were around USD 6 billion and Brazilian investments in India are estimated at USD 1 billion in 2018.

Govt gives nod for pact with Brazil for cooperation in geology, mineral resources

Source: The Hindu Business Line, Jan 22, 2019

New Delhi: The government on Wednesday gave its approval for signing of a pact between India and Brazil for cooperation in the field of geology and mineral resources.

The Cabinet under the chairmanship of Prime Minister Narendra Modi “has given its approval for the Memorandum of Understanding to be signed between Geological Survey of India (GSI), Ministry of Mines of the Republic of India and Geological Survey of Brazil – CPRM, Ministry of Mines and Energy of the Federative Republic of Brazil on ‘cooperation in field of geology and mineral resources’,” the Mines Ministry said in a statement.

The pact will provide an institutional mechanism between both the nations for cooperation in field of geology and mineral resources, the statement said.

CK Birla Group’s NEI acquires Kinex Bearings

Source: Livemint, Jan 16, 2019

NEW DELHI : CK Birla group-owned National Engineering Industries Ltd (NEI) on Wednesday announced the acquisition of Slovakia-based automotive `bearing manufacturer Kinex Bearings. The Delhi-based automotive component manufacturer didn’t specify the value of the transaction, which was conducted through its wholly-owned subsidiary in Europe.

The transaction is in line with NEI’s strategy to augment its product portfolio and expand its geographic footprint, as well as serve its existing customers better and acquire new customers, said the company in a press release.

This acquisition includes two production plants in Slovakia, with the capability to produce bearings for various sectors such as railways, industrial segments and textile, and has an annual turnover of €60 million. It also manufactures bearings for aerospace and water pump bearings for the automotive sector. Kinex exports its products to over 80 countries and employs around 1,000 workers.

“The Kinex acquisition equips NEI to enhance its scale and further diversify its portfolio with a much stronger position to provide best-in-class products to both new and existing customers,” said C.K. Birla, chairman of the group.

According to Rohit Saboo, president and CEO, NEI, this deal positions the company on the global map with an international manufacturing footprint and the advantages of a more efficient supply chain to serve global customers.

“This acquisition is a significant step forward in NEI’s vision and global ambitions. We are excited to have the complementary product portfolio, skills and capabilities of Kinex and we firmly believe that we can leverage the synergies between both companies to chart an exciting path ahead for growth and engineering excellence,” said Saboo.

How India is resetting its trade ties with the world

Source: livemint.com, Jan 14, 2020

NEW DELHI : A day after Prime Minister Narendra Modi dramatically announced India’s exit from the China-led Regional Comprehensive Economic Partnership (RCEP) deal at the Bangkok summit on 4 November, trade minister Piyush Goyal addressed a packed house of journalists in the National Media Centre, reflecting on the lessons learnt from the prolonged trade negotiations where India was always a reluctant participant.

Goyal said India should never finalize a trade agreement in a hurry, citing the examples of the 2009 and 2011 pacts with Japan, South Korea, Malaysia and with Asean countries. “Trade discussions and negotiations should allow enough time and enough considerations so that they are done carefully keeping the best interest of our people and our national interest in mind,” he added.

While countries like Japan are still trying to woo India back to the RCEP fold, India has now signalled a shift in strategy when it comes to signing free trade agreements. It is now showing readiness to renew negotiations on the long-pending free trade agreement (FTA) with the European Union as well as with Britain after the impending Brexit deal is signed. India is currently negotiating a limited trade package with the US after which both sides may sit down for a comprehensive FTA negotiation.

“I have started talking to EU on a very informal basis. Barely a few days ago, their trade commissioner has been appointed and over the next few months, we will start a dialogue with the EU. Hopefully, Brexit should be done by January. We already have some preliminary exchange of dialogue with Great Britain. I hope to take that forward on a fast-track basis. With the US, we had several rounds of engagement; we are ensuring that even the first leg of our trade deal with them is for the benefit of both countries equitably. I can assure all of you going forward none of these FTAs will be settled in a hurry or will be settled to the disadvantage of Indian industry and Indian exporters,” Goyal said last month.

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Infosys signs five-year deal with European firm to digitize global operations

Source:  Livemint.com, Jan 14, 2020.

Bengaluru: Global software major Infosys signed a 5-year deal with leading European automotive logistics firm Gefco to digitise its worldwide operations, said the company on Tuesday.

Photo: Bloomberg“We are partnering with the Paris-based Gefco to digitise its multi-modal supply chain solutions and support its digital transformation over the next five years,” said the city-based IT behemoth in a statement from Paris.

The 70-year-old Gefco has presence in 47 countries and serves about 300 destinations worldwide with 15,000 work force.

“As technology partner, we will help transform Gefco’s business application management services, leverage its live enterprise suite to evolve into a digital native organisation,” said the statement.

Digitisation will also enable the logistics company to process information in real time and help it respond intelligently across the value chain.

“We begin our digital transformation journey with Infosys as digital innovation in the supply chain sector is key to strengthen our expertise and bring value to our customers (sic.),” said Gefco’s chief information officer Jean-Luc Galzi in the statement.

The 4.6-billion-euro Gefco designs smart, flexible solutions to meet supply-chain challenges in every industry sector.

“We value the trust of Gefco in us on its digital transformation, as we have a shared vision on the ‘art of possible’. We will apply our live enterprise approach to help it scale new performance thresholds and enhance its market leadership,” said Infosys global head for retail and logistics on the occasion.