India to become major exporter of telecom equipment in 2-3 years: Ashwini Vaishnaw

Source: Financial Express, 08 January 2023

India will become a major exporter of telecom equipment in the next two to three years and the government is working to achieve that goal, communications minister Ashwini Vaishnaw said on Saturday.

The statement from the minister follows the government’s meeting with 42 companies including Nokia, Samsung, Jabil, HFCL and Tejas Networks, among others, last month, which got approval for the production linked incentive (PLI) and design-linked incentive (DLI) schemes for domestic manufacturing of telecom and networking equipments.

“Electronics manufacturing in India has come to that level that the country today is the second largest manufacturer of mobile phones in the world. Similarly, in the next two to three years it will emerge as a major exporter of telecom equipments as well,” Vaishnaw said at the Digital India Awards.

In February 2021, the government had introduced the PLI scheme for manufacturing of telecom and networking equipment with an outlay of Rs 12,195 crore over a five-year period. The government in June last year approved 31 companies, including Dixon Technologies, Nokia India and Foxconn, to manufacture telecom equipment under the scheme.

Further, the government amended the existing scheme to include design-led manufacturers into it. The existing companies under the PLI scheme for telecom and networking products were allowed to add more products and apply under the DLI scheme with an additional incentive of 1% over the existing incentive rates. For the DLI scheme, the government has kept aside Rs 4,000 crore as incentives out of the total outlay of Rs 12,195 crore.

Last month, the government had also announced setting up four to five taskforces for developing component ecosystem in the country, developing some chipsets (used in radio equipment) and bringing them into production, developing highly skilled designers and workers in the telecom sector, and for simplifying testing and certification of equipment.

Apart from the push on telecom equipment exports, Vaishnaw also said the government will focus on providing easy micro-credit facility of Rs 3,000-5,000 to street vendors and small businesses digitally.

“In 2023, there will be a big focus on extending easy credit to small businesses, street vendors on easy terms and simplified manner,” Vaishnaw added.

Speaking on last-mile 4G and 5G connectivity, the minister said Prime Minister Narendra Modi has allocated Rs 52,000 crore for the same. Further, the government is also aiming for a massive rollout of indigenous 4G and 5G technology stacks in the country during the year.

Exports up 27% in November but trade deficit hits record

Source: Financial Express, 15 December 2021

Merchandise exports rose 27.2% in November from a year before but an almost 57% surge in imports inflated trade deficit to a record $22.9 billion last month, according to the provisional estimate released by the commerce ministry on Tuesday.

The November deficit is not just double the level witnessed a year before, but also significantly higher than the November 2019 mark. This is a “cause for concern regarding the implications for the size of the current account deficit (CAD) in the second half of this fiscal”, according to ICRA chief economist Aditi Nayar.

She forecast the CAD to widen to $25-30 billion in the third quarter itself, exceeding the full-year deficit recorded in the pre-pandemic year of FY20. Still, it would remain well within control, said a senior government official.

Having hit a monthly record of $35.7 billion in October, merchandise exports dropped to $30 billion in November, as fresh supply bottlenecks across the globe, including a spike in shipping costs and container shortage, hurt exporters’ ability to ship out.

Nevertheless, exports registered a 16.6% rise from the pre-pandemic (same month in FY20) level to $30 billion. However, imports shot up by 37.4% from the pre-Covid level to $52.9 billion.

Of course, imports were driven partly by a spill-over of pent-up domestic demand that remained mostly muted in the wake of the pandemic. But import bill was greatly inflated by elevated global crude oil prices and massive purchases of coal, cooking oil and gold.

Importantly, if the emergence of a new Covid variant in South Africa spread rapidly to other countries, especially a key market like Europe, the growth momentum, witnessed in merchandise exports in recent months, could come under pressure.

Exports this fiscal have been supported by strong order flow from key markets such as the US and China, thanks to an industrial resurgence there and elevated global commodity prices.

Imports of coal, coke and briquettes jumped 136%, while those of petroleum products shot up by 132%. Vegetable oil imports rose by 79%, while gold imports continued to rise at a fast pace, by 40%. Of course, base effect, too, remained unfavourable.

A Sakthivel, president of the exporters’ body FIEO, said while the government has announced a slew of measures to support exports, “the need of the hour is to soon announce extension of the interest equalisation scheme and allow transfer of MEIS”. He called for necessary support if the new Covid variant spreads. These steps could include augmenting the flow of liquidity and setting up a regulatory authority to seek justification of imposition of various charges by the shipping lines, among others, he said.

Walmart CEO commits $10 billion exports by 2027 from India

Source: Economic Times, 14 December 2021

Walmart International chief executive Judith McKenna has reiterated the US retail giant’s commitment to export $10 billion worth of goods out of India annually by 2027, which she said will create a network of small and medium enterprises selling to the company’s global buyers and help in the Make-in-India programme.

“We think this will open a global opportunity for SMEs to spread the communities and accelerate India’s progress as a manufacturing destination that can export to the world,” McKenna told a CII
conference Monday. “I actually love the phrase ‘Make in India for the world,” she added.

McKenna leads Walmart’s global operations consisting of 24 international markets outside of the US. In India, Walmart employs about 140,000 staff, mainly in its Flipkart Group unit. With the Flipkart acquisition, Walmart also inherited PhonePe digital payment cogmpany. McKenna said PhonePe currently does about 20 billion UPI transactions a year. McKenna lauded India’s enterprising ecosystem, especially in the digital economy space.

“We have seen incredible signs of India’s enterprising spirits accelerating through Covid and I hope the way the world looks at India, they see what we see … that is extraordinary public commitment to make it a digital economy,” she said over video conferencing. “We see a nation of entrepreneurs with a spirit that is hard to match, and we see an opportunity to support and build new businesses that can realise India’s potential.”

Govt seeks greater industry role in boosting exports

Source: Financial Express, 03 December 2021

Having hit a monthly record of $35.7 billion in October, merchandise exports dropped below the $30-billion mark in November. Exports still registered a 26.5% rise in November from a year before but it was the lowest growth rate this fiscal.

The commerce ministry has asked state-backed export councils and key industry bodies to work more closely with various government departments and overseas missions, and suggest, through research and studies, “relevant areas for intervention”, as part of its broader effort to realise the lofty $400-billion export target for FY22.

Having successfully weathered the damage caused by two Covid waves, Indian exporters face fresh uncertainties now from the emergence of a new Covid variant in Africa that can further disrupt the already-burdened global supply chains.

For its part, the ministry is planning to bring in a new set of reforms to invigorate special economic zones (SEZs), once considered to be drivers of export growth in future, under an “SEZ-plus” initiative, an official source told FE. The new plan could include revised norms for SEZs to sell in the domestic market at lower duties and easier exit route for loss-making firms in these duty-free enclaves.

The ministry also wants industry to take advantage of various production-linked incentive schemes and identify areas of benefits from potential free trade agreements with key economies. It also wants export bodies to raise the issue of non-tariff barriers posed by any country so that New Delhi can put in place appropriate retaliatory measures. At the same time, it has asked industry bodies to be “vocal about local” and more proactive in their approach to bolster exports.

Commerce and industry minister Piyush Goyal, who has already held scores of meetings with various state-run as well as industry bodies, has also proposed to reduce the compliance burden of India Inc, which will help boost exports as well.

In September, the government also decided to release `56,027 crore to clear all the pending dues owed to exporters until FY21 under various schemes to ease any liquidity crunch. A major part of the funds will be released in the last quarter of this fiscal.

Merchandise exports fluctuated between $250 billion and $330 billion since FY11; the highest export of $330 billion was achieved in FY19. In the first eight months of this fiscal, exports hit as much as $262.5 billion. However, a slowdown in export growth in November, amid persistent bottlenecks in the global supply-chain such as elevated shipping costs and container shortage, brings to the fore new risks.

Having hit a monthly record of $35.7 billion in October, merchandise exports dropped below the $30-billion mark in November. Exports still registered a 26.5% rise in November from a year before but it was the lowest growth rate this fiscal.

Adding to exporters’ woes, some countries in Europe, a major market, have already imposed travel and other curbs in the wake of the emergence of the new Covid strain, which last week led the World Trade Organization to defer its ministerial meeting. China, another key market for India, has also seen a surge in Covid cases of late. While some experts have suggested against undue anxiety over the ferocity of the new variant, some others have advised a cautious approach.

Ohmium establishes India as global hub for hydrogen, ships first Hydrogen Electrolyzer to US

Source: Financial Express, 24 November 2021

Ohmium, through its Indian subsidiary, has shipped its first electrolyzer from India to the US, establishing India as a global hub for hydrogen. The electrolyzer has been manufactured by Ohmium at its Bangalore plant, which was set up to ensure the availability of end-to-end solutions within the country and reduce dependency on imports for this key equipment.

Green hydrogen is a key component of India’s goal to achieve net-zero emissions. India aims to alter the present state of play wherein its entire hydrogen production comes from fossil fuels. It was also reiterated by the COP26 Energy Transition Council (ETC) that an instant and just transition to clean energy would be critical in meeting the Paris Agreement goals. India has voiced its keenness to scale up green hydrogen and mandate its use in industries like petroleum refineries and fertilizer industries.

“The first shipment of a product is a big moment for any company. This is especially exciting for Ohmium as well as all of our suppliers in India because it proves beyond a doubt that both manufacturing and technology excellence in the field of green hydrogen generation are in India’s wheelhouse. We feel that when we export Ohmium products from India we are pushing the boundaries of the Honorable Prime Minister’s “AatmaNirbhar Bharat” and “National Hydrogen Mission” – in a good way – by expanding the global impact of these programs,” said Arne Ballantine, CEO & Co-Founder, Ohmium.

“We are seeing significant activity in India and around the world in green hydrogen projects. Ohmium is constantly working towards providing innovative, scalable, profitable, flexible, and safe solutions that can be leveraged to achieve competitive levelised costs of hydrogen, supporting the growth of India’s economy. We are confident of Green Hydrogen as the fuel of the future owing to its enormous potential, numerous applications across sectors and a zero-carbon footprint. Currently, our factory has a manufacturing capacity of approximately ½ GW per year, and we can rapidly expand it to 2 GW per year to facilitate India’s accelerated transition to clean energy systems,” said Ahmad Chatila, Chairman, Ohmium.

Engineering goods shipments cross $9 billion for the third month in a row in September

Source: Economic Times, 24 October 2021

Engineering goods shipments crossed $9 billion for the third month in a row in September with 22 out of 25 top export destinations such as China, UK and UAE recording positive growth.

Out of 33 engineering product categories, 27 witnessed positive growth in exports during September 2021 when compared with the same month last year. Maximum year-on-year decline was witnessed in zinc; aircraft, spacecraft and parts; ships and floating structure and electrical machinery during this period.

Share of engineering goods in total merchandise export was 26.65% in September 2021.

“India’s engineering exports have cumulatively increased from $32.4 billion in April-September 2020-21 to $52.3 billion in April-September 2021-22, registering a growth rate 61.4%. Annualising the figure means we are well on track to achieve our target of $105 billion in FY22. In the first six months, almost 49% of the target has been achieved so we are almost half-way mark,” EEPC India chairman Mahesh Desai said.

“However, we need to observe the trend in the festival months (October and November) as holidays may lead to some slowdown in certain parts of the country and in December in Western countries,” he added.

During September, the US remained top destination for engineering goods exports with the total value of the shipment at $1.29 billion, up 12.2 per cent compared to $1.15 billion in the same month last year. China was the second biggest market with total shipments growing 49% year-on-year to $568 million during this period.

India’s engineering goods exports to UAE grew by 48 per cent to $399.6 million in September 2021 as against $268.6 million in the same month last year.

Among other countries which had positive growth included Germany, Turkey, Italy, UK, Vietnam, Singapore and Mexico. Rapid pace of recovery, declining Coronavirus cases, pent-up demand and policy measures taken by the government have been key factors supporting high engineering goods exports from the country.

Mr Desai welcomed the government’s move to fast-track free trade agreements (FTAs) with as many as six countries and blocs but urged the government to take learning from its earlier FTAs.

“The FTAs signed earlier led to an increased import especially in the ferrous and non-ferrous metal sectors from countries such as Korea and Japan. Hence it is important for India to take a cautious stand while signing the new FTAs,” he said.

Among various engineering panels and sub-groups which reported record exports during September included iron and steel, aluminium and products made from them, industrial machinery, automobiles and auto-components.

As per EEPC India analysis of exports figures for the month of September, iron and steel exports jumped 136% year-on-year to $2.2 billion.

Industrial machinery comprising boilers, IC engines and parts, pumps of all types, ACs and refrigerators grew by 27% to $1.37 billion in September this year as compared to $1.08 billion in September, 2020. Automobiles exports comprising motor vehicle/cars, two and three-wheelers, auto components and parts posted 25% year-on-year growth in September to $1.47 billion.

While Zlxinc exports exhibited a decline since May 2021, this month also witnessed decline in lead and tin exports mainly on the account of decline in demand from the Chinese economy.

While aircrafts and spacecraft parts and products recorded a decline in exports to the tune of 46.4% during September, the ships boats and floating products and parts panel fell 83%.

Tamil Nadu eyes $100 billion exports by 2030, signs MoUs worth Rs 2,120.54 crore

Source: Economic Times, 22 September 2021

The Tamil Nadu government on Wednesday signed Memorandum of Understanding for 24 projects worth Rs 2,120.54 crore, while Chief Minister M K Stalin said the government’s goal is to increase the state’s exports to USD 100 billion by 2030.

The state government’s Micro Small and Medium Enterprises Trade and Investment Promotion Bureau (M-TIPB) entered into an MoU with Flipkart/Walmart for promotion of e-commerce among MSMEs in Tamil Nadu through a supplier development programme.

This initiative envisages expanding the capabilities of MSMEs through intensive training and support and equip them to scale up their businesses and become part of domestic and global supply chains.

M-TIPB and The Indo German Chamber of Commerce entered into an MoU for collaboration between MSMEs in the state and businesses in Germany. The MoU would facilitate linkages, interaction, technology collaboration programmes and export opportunities for MSMEs in the state.

Presided by Chief Minister Stalin, the inaugural of the Tamil Nadu Exports Conclave, organised by the departments of the state and central governments to showcase the strengths of Tamil Nadu in exports, was held here today.

The conclave is part of nation-wide events to commemorate the 75th anniversary of Indian Independence (Azadi Ka Amrit Mahotsav).

As part of the event, Stalin released Tamil Nadu Exports Promotion Policy (TNEPP) and MSME Exporters Handbook and inaugurated an Export Exhibition, which saw the participation of 21 export units, export promotion centres and government departments.

On behalf of the Industries Department, 14 MoUs were signed with the 100 per cent Export Oriented Units, with a cumulative investment of Rs 1880.54 crore, creating employment opportunities for 39,150 persons, an official release here said.

Another 10 MoUs were signed on behalf of the MSME Department, with a cumulative investment of Rs 240 crore, providing employment opportunities for 2,545 persons.

In his address, Stalin said “We have set up a target of one trillion USD economy for Tamil Nadu by 2030. To achieve this, the state’s exports should be increased to 100 billion USD from the present 26 billion USD.”

To help attain the goal, public and private sector companies should work in cohesion, he said.

The state shall adopt a two-pronged approach of export promotion and export diversification to achieve this objective, a key aspect of the TNEPP.

The government has also planned developing two “Export Enclaves” at Manallore and Tuticorin with world class infrastructure amenities for exporters, the CM said.

The government has identified 10 export hubs and would strengthen export related common infrastructure projects in these places by reimbursing 25 per cent of the project cost, subject to a ceiling of Rs 10 crore per hub.

The 10 identified locations are Chennai, Coimbatore, Hosur, Kancheepuram, Tirupur, Karur, Madurai, Ambur, Tuticorin and Pollachi, the CM said.

Schemes have also been formulated to incentivise production of value added products (Special Package Incentives) by exporters.

Such initiatives are part of the TNEPP.

Every district produces several unique products and to market them globally, Export Centres are being set up in every district.

Similar to the “Made in India” tagline, “Made in Tamil Nadu” should echo and “this is not only our desire, it is our goal too and our journey will be towards that goal,” he said.

With Rs 1.93 lakh crore exports, Tamil Nadu is the third biggest state in India in exports, and its share in national exports is 8.97 per cent (2020-21), Stalin said.

Citing sector-wise statistics on exports from the state, including a 58 per cent and 45 per cent share in apparel and accessories and footwear respectively, Stalin said “we should not be satisfied with this victory, the export per centage should go up every year.”

Stressing on producing value added products to drive exports, he said electric vehicles, food processing and defence are among the sectors that should gain momentum to add up to Tamil Nadu’s export capacity.

As part of the government’s efforts to further boost exports, “State Export Promotion Committee” would be set up and the Chief Secretary shall lead the panel, he said.

Stalin said a Project Monitoring Unit, an exclusive body, has been set up to monitor export schemes of MSMEs.

A first in the country, the Tamil Nadu government is setting up an “International Furniture Park” at Tuticorin, an export oriented initiative and this would drive the industrial growth of southern regions of the state.

As a result of the cancellation of the one per cent market cess on cotton and waste cotton by his government, Stalin said, “I am happy to announce that the Cotton Corporation of India has now come forward to set up cotton depots in Salem, Madurai, Coimbatore and Virudhunagar.”

In total, investments committed in 24 projects is Rs 2,120.54 crore and would bring employment opportunities to 41,695 people.

The investments covers various sectors like textiles, chemicals, IT / ITES, steel, leather, apparels and general manufacturing.

Such investments would be made across the state in various locations like Chennai, Kanchipuram, Tirupathur, Krishnagiri, Madurai, Salem, Tiruchirappalli, Thanjavur, Thoothukudi, Dindigul and Tirunelveli districts.

Stalin also issued land allotment orders for the first two companies that are set to come up in an exclusive Polymer Park at nearby Ponneri to cater to the needs of the polymer industry.

The MSME Exporters Handbook provided comprehensive information about various export clearances and processes required for MSMEs.

Ministers for Industries and Rural Industries, Thangam Thennarasu, and T M Anbarasan respectively, Chief Secretary V Irai Anbu, Additional Secretary, Union Commerce Ministry, Sanjay Chadha and Additional Director General of Foreign Trade, Shanmuga Sundaram participated.

Bhuvnesh Seth is new chairman of Export Promotion Council for EOUs and SEZs

Source: Economic Times, 30 August 2021

NEW DELHI: Export Promotion Council for EOUs and SEZs (EPCES) on Sunday said Bhuvnesh Seth will be the new chairman of the council, set up by the ministry of commerce and industry.

Srikanth Badiga, currently serving as the member of Central Governing Council, has been unanimously elected as the new vice-chairman, it said in a statement.

Seth said that the council would work towards taking the country’s exports to $400 billion by 2022.

India seeks to tailor its policies suitably to cash in on an expected rebound in the global economic growth as it recently introduced Performance Linked Incentives scheme (PLI) for exporters, the council said.

Exports from SEZs stood at Rs 7.6 lakh crore in 2020-21.

Mobile phone export jumps over three-fold to Rs 4,300 cr in June quarter: ICEA

Source: Economic Times, 25 August 2021

India’s mobile phone exports jumped over three-folds to Rs 4,300 crore during the April-June 2021 quarter, showing signs of recovery and growth in the segment, the India Cellular and Electronics Association (ICEA) said on Tuesday. Mobile phones’ exports had stood at around Rs 1,300 crore in the corresponding period a year ago, when the COVID-19 pandemic hit the globe, according to the ICEA.

“The mobile handset manufacturing industry is continuing its growth juggernaut and its historic journey to meet its objective of becoming the world’s number one manufacturing destination in sync with the Prime Minister’s (Narendra Modi) vision,” ICEA Chairman Pankaj Mohindroo said in a statement.

He added that despite the second COVID-19 wave, the industry has made significant progress in manufacturing and exports, backed by the government’s prudent policy to continue manufacturing and the production-linked incentive (PLI) scheme.

Mohindroo said electronic goods’ exports have also shown a tremendous rise of 100 per cent year-on-year during the first quarter of the current financial year, crossing the Rs 20,000-crore-mark.

“There is a sharp decline in the imports of mobile phones to a minuscule Rs 600 crore during the first quarter of 2021-22, which was Rs 3,100 crore for the similar period in 2020-21. This is at an all-time low since 2014-15,” he said.

Mohindroo also said the industry is showing impressive growth defying all the odds during these difficult times, and is on a path of regaining the momentum as envisaged in the National Policy on Electronics 2019.

According to the ICEA data, imports of laptops and tablets saw over 50 per cent jump to Rs 10,000 crore during the June 2021 quarter, compared with over Rs 6,000 crore in 2020-21.

“Our endeavour is to replicate the success of mobile phone manufacturing in India to ‘IT hardware’ (desktops, laptops and tablets).

“We are working with the government to create suitable policy intervention to support and create an ecosystem to build large-scale manufacturing of these products in India, and cater to at least 25 per cent of the global requirement,” Mohindroo said.

Exporters want steel, pharmaceuticals sectors under RoDTEP scheme

Source: Business Standards, 19 August 2021

As the Centre announced tax refund rates for the Remission of Duties and Taxes on Export Products (RoDTEP) scheme on Tuesday, it brought relief to some exporters. However, it has irked others as some sectors do not come under the ambit of the scheme.

According to the RoDTEP guidelines released by the government, sectors such as steel, organic and inorganic chemicals as well as pharmaceuticals have not been included in the scheme. Other ineligible categories include exports by advance authorisation holders, special economic zones and export-oriented units (EOUs).

According to commerce secretary BVR Subhramanyam, these sectors have been performing well, which is the reason why they have been excluded. He also said that the scheme will be reviewed regularly, and some items may be excluded or included, depending on the situation. RoDTEP will cover 8,555 items.

The industry, however, has a different view. “The pharmaceuticals sector has the strategic advantage and India needs to leverage the potential (of the sector) that is doing well, and in which India has competitive advantage. Especially at a time when (pharma) exports are doing well. Competition is also increasing in the sector,” said Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance (IPA).

Jain also said that the pharmaceutical industry will share its concerns with the government as well. An industry executive raised concerns, citing that over the last one year, consultants were hired and rates fixed based on the data submitted to a government panel by the industry, after which some sectors were made ineligible. However, experts believe that one of the reasons for excluding some sectors could be due to budgetary constraints.