Digital push: Five-year FTP likely to include guidelines to promote e-comm among exporters

Source: The Hindu Business Line, Feb 14, 2021

New Delhi: The five-year Foreign Trade Policy (FTP), to be announced on April 1, 2021, is likely to come up with guidelines on e-commerce for exporters to remove regulatory bottlenecks and encourage exporters to use the online platform for increasing business, an official has said.

“Through e-commerce, not only can existing exporters reach out to more buyers but producers selling in the domestic market too could explore the option of going global.

It can be an efficient platform to support the government’s ‘One District One Product’ initiative and also promote export of GI (Geographical Indications) products,” the official tracking the development told BusinessLine.

Addressing regulatory problems for overseas e-commerce transactions, including those related to third party payments and clearance of consignments, could be considered, the official said.

Payment received through OPGSP (Online Payment Gateway Service Providers) is not an authorised mechanism of receipt of exports payment, and thus, a tie-up with banks becomes necessary, pointed out Ajay Sahai, Director-General, Federation of Indian Export Organisations (FIEO).

“If the RBI adds them in the option of ‘manner of receipt of payment’ for exports, this issue can be addressed.

“This will not only reduce transaction cost for exporters but will give a huge fillip to e-commerce retail exports,” he said.

CBEC Zones

Suggestions made by exporters on the proposed setting up of Cross-border e-Commerce (CBEC) Zones comprising e-commerce market players, third-party payment agencies, logistics providers and other support services like credit insurance and banks, are also being looked at.

“All proposals are under discussion as the government is weighing all options to see what all could be incorporated in the policy. Inputs are being extensively taken from exporters. It may take at least 10 days more to give a final shape to the FTP and the guidelines on e-commerce for exporters,” the official said.

‘One District One Product’

E-commerce is being viewed as a good way of promoting the initiative of ‘One District One Product’ under which each district of the country is to be converted into an export hub by identifying products with export potential from that region and addressing bottlenecks, helping producers to scale up and enabling them to find potential buyers outside India.

Under the initial phase of the programme, 106 products have been identified from 103 districts across 27 States.

GI products

Facilitating producers of GI products (a tag used on items that originate from a specific geographic location and have special attributes) to use e-commerce to export their wares is also under consideration of the government, the official said.

GI products include items such as Darjeeling tea, Kashmiri Pashmina, Kangra paintings, Santiniketan leather goods, Bhagalpur silk and Blue Pottery of Jaipur.

As per UNCTAD estimates for 2018, the world market for e-commerce was $25.6 trillion.

About 75,000 exporters from India sent out $1.2 billion worth of goods via the e-commerce channel during 2018-19, according to industry numbers.

The view that there is a huge scope for growth, for Indian e-commerce exports, is also supported by the fact that online exports are just a minuscule part of India’s total annual goods export of around $300 billion.

Exports up 10.3% during Feb 1-8: Official

Source: The Economic Times, Feb 10, 2021

Continuing with the positive growth, the country’s exports grew by 10.3 per cent to USD 7.3 billion during the first week of February on account of strong performance by key sectors such as engineering and chemicals, an official said on Wednesday.

Imports too increased by a marginal 0.7 per cent to USD 9.84 billion during the week, the official added.

The trade deficit narrowed to USD 2.54 billion.

Engineering goods showcased the maximum growth and the outbound shipments witnessed a multifold increase to USD 1.6 billion during February 1-8.

Exports of organic and inorganic chemicals stood at USD 617 million during the period.

However, some sectors which recorded negative growth include meat, dairy and poultry products; oil meals; and fruits and vegetables.
Further, gold imports increased by 70.7 per cent to USD 391.9 million during the week. Imports of petroleum products dipped 29.5 per cent to USD 951.7 million.

Exports in December 2020 and January had recorded positive growth.

Exports plunge by record 60.28%in April; trade deficit lowest in 4 years

Source: The Economic Times, May 15, 2020

NEW DELHI: Contracting for the second straight month, India’s exports shrank by a record 60.28 per cent in April to $10.36 billion, mainly on account of the coronavirus lockdown, official data showed on Friday.

Imports too plunged by 58.65 per cent to $17.12 billion in April, leaving a trade deficit of $6.76 billion as against $15.33 billion in April 2019, according to the data by the commerce and industry ministry.

This is the lowest trade deficit since May 2016, when it had stood at $6.27 billion.

The country’s exports had declined by 34.57 per cent in March 2020.

“The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. The latter resulted in large scale disruptions in supply chains and demand resulting in cancellation of orders,” the ministry said in a statement.

Barring iron ore and pharmaceuticals, all the remaining 28 key sectors registered negative growth in the month under review.
Gems and jewellery shipments declined 98.74 per cent, followed by leather (- 93.28 per cent), petroleum products (- 66.22 per cent), engineering goods (- 64.76 per cent), and chemicals (- 42 per cent) .

Oil imports in April were $4.66 billion, which was 59.03 per cent lower as compared to the same month last year.Â

All 30 key imports sectors like gold, silver, transport equipment, coal, fertiliser, machinery and machine tools posted negative growth during the month.

Non-oil imports fell 58.5 per cent to $12.46 billion in April. Gold imports stood at $2.83 million, as against $4 billion in April 2019.

The nationwide lockdown to contain the spread of the coronavirus outbreak began on March 25, shutting industrial units and restricting movement of goods.

Commenting on the numbers, Federation of Indian Export Organisations (FIEO) said it is “highest-ever” decline in monthly exports, and demanded an incentive package from the government.

FIEO President Sharad Kumar Saraf said the lockdowns around the world have not only pushed business sentiment to the lowest levels but also impacted supply chains and economic growth.

“We may expect revival in exports from the third quarter of the fiscal, depending on the condition evolving in the international market.

“With major global players including the US, UK, Canada, Japan, Germany, France, Austria, Spain, and Bangladesh having provided bailout or financial packages to their industry to sail through these difficult times, it is also expected that the same would help in bringing good news for the overall international trade,” Saraf said.

He said with cancellation of 70-80 per cent of orders, job losses and rising NPAs among exporting units, the government should immediately implement the economic measures announced at the ground level for quick revival.

Meanwhile, Finance Minister Nirmala Sitharaman on Friday announced measures to promote agri exports.

Mohit Singla, chairman of Trade Promotion Council of India (TPCI), said the announcement would help India achieve its target of $100 billion agri exports.

“The proposed amendment in essential commodity act is a welcome step in deregulating the agri sector which will save the farmers from artificial price management activities by different forces,” Singla said.

Since 2011-12, India’s exports have been hovering around the $300 billion mark. During 2017-18, the overseas shipments grew by about 10 per cent to $303 billion and further to $330.08 billion in 2018-19 and $314.31 billion in 2019-20.

The drop in exports is in sync with the projections of the World Trade Organisation (WTO), which has stated that world trade is expected to fall between 13 per cent and 32 per cent in 2020 due to the COVID-19 pandemic.

India out of US’ developing nations list for trade benefits

Source: The Economic Times, Feb 12, 2019

New Delhi: Ahead of President Donald Trump’s visit on February 24-25, the US on Monday removed India from its list of developing countries that are exempt from investigations into whether they harm American industry with unfairly subsidised exports.

The United States Trade Representative (USTR) eliminated a host of countries including Brazil, Indonesia, Hong Kong, South Africa and Argentina from getting special preferences under the methodology for countervailing duty (CVD) investigations, stating that the previous guidance that dated back to 1998 “is now obsolete”.

The US removed India from the list on account of it being a G-20 member and having a share of 0.5% or more of world trade. The move has cast a shadow on India being able to restore preferential benefits under the Generalised System of Preference (GSP) as part of its trade talks with the US, as only developing countries are eligible for it. Read the rest of this entry »

Government mulls new duty on imports

Source: The Economic Times, Dec 16, 2019

NEW DELHI: Ahead of the Budget, the commerce department has asked the finance ministry to levy border adjustment tax (BAT) on imported goods to offset the impact of levies such as electricity duty, clean energy cess, levies on fuel and royalty that are not part of goods and services tax (GST).

“Such taxes (which are not part of GST), while resulting in an increase in the cost of production of domestic goods, also place them on an unequal footing vis-a-vis imports rendering our exports uncompetitive,” commerce secretary Anup Wadhawan has proposed to the revenue department.

An estimate suggested that coking coal, which faces clean energy cess, constituted 40% of the raw material cost producing steel, officials told TOI. An analysis shared by a steel manufacturer with the commerce department has estimated that the share of non-creditable taxes in the sale price of hot-rolled coil may be as much as 5% of the sale value, while in case of imports it could be around 3% of the price.

The commerce secretary has sought an urgent status report to brief commerce and industry minister Piyush Goyal on the proposal. Since taking charge six months ago, Goyal has been seeking a series of steps to discourage imports, especially of “nonessential” items, to boost local manufacturing.

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After dropping out of RCEP, India eyes trade deals with ASEAN countries

Source: Business Standard, Dec 11, 2019

India is reviewing trade and goods agreements with its Southeast Asian neighbors to boost exports after opting out of a China-backed trade pact.

New Delhi is working to strengthen trade deals with the ASEAN group, as well as South Korea and Japan, Commerce Minister Piyush Goyal, told lawmakers in Parliament on Tuesday. “The government priority is also to correct the asymmetry in the existing agreements and maximize its export potential to benefit domestic industry and farmers,” he said. The administration of Prime Minister Narendra Modi withdrew from the Regional Comprehensive Economic Partnership in November, citing the deal’s potential impact on the livelihoods of its farmers and job creation. China said that the other 15 countries decided to move ahead with the pact and New Delhi was welcome to join RCEP whenever it was ready. Japan has said it won’t sign the trade pact without India.“Modi government is also trying to mitigate some of the damage that was done to India’s reputation with global investors and the economic costs of being outside RCEP by intensifying rhetoric on pursuing new or revamped bilateral trade deals,” said Akhil Bery and Peter Mumford, analysts at risk consultancy Eurasia Group, in a statement on Monday. “The government is particularly eager to move ahead with trade negotiations with the U.S., European Union and Australia, while also looking to upgrade its existing FTAs with ASEAN and South Korea. ”As was the case in RCEP negotiations, there will also likely be reticence on the part of its counterparts to acquiesce to Indian demands for much greater liberalization of services markets and relaxation of immigration restrictions on skilled labor,” they said.

Govt eases input tax refunds for exporters

Source: The Economic Times, Nov 20, 2019

NEW DELHI: In a major relief for the export sector, the customs authority has directed tax officials not to insist on proof of realisation of exports proceeds for processing of input tax refunds.

Delay in issuance of refunds has been a sore point for exporters since the switchover to goods and services tax (GST) regime in July 2017.

The new directive from the Central Board of Indirect Taxes and Customs (CBIC) follows assurance from finance minister Nirmala Sitharaman to the industry on easing of compliances.

The circular makes it clear that tax authorities will not insist on proof of realisation of export proceeds for processing of refund claims related to export of goods as it has not been envisaged in the law.

CBIC emphasised that exports have been zero rated under the Integrated Goods and Services Act. Hence, as long as goods have actually been exported, even after a period of three months, tax officials should not insist on payment of Integrated tax first and claiming refund at a subsequent date.

There have been reports that exporters were being asked to pay integrated tax in cases where the goods were exported more than three months after the date of the issue of the invoice for export.
Tax experts said the circular has come at an opportune time. “The circular has provided some key relaxations,” said Harpreet Singh, partner at KPMG. Tax authorities will no longer insist on proof of realisation of proceeds, or on payment of tax before refunds are initiated when the export is delayed, he said. Also, there won’t be any adverse action in case the order of debit on claiming refund is not followed, Singh said.

Oman provides India strategic depth in West Asia and Eastern African region

Source: The Economic Times, Nov 17, 2019

NEW DELHI: India is increasing its presence with significant interest in Oman by creating a footprint in the Gulf Cooperation Council and Eastern Africa and this has given Delhi strategic depth in the region.

“Oman’s Sea ports and Industrial hubs established along its 1700 kilometers of its sea coast on the Indian Ocean makes it one of the most ideal area for international businesses to make a home. The Sultanate of Oman offers 4 sea ports and an equal number of industrial free zones all facing the Indian Ocean and Indian private and public sectors are increasingly increasing their footfall in the country,” Oman’s Ambassador to India Sheikh Hamad Bin Saif Al Rawahi told ET.

Prime Minister Narinder Modi’s visit to the Sultanate of Oman in 2018 initiated a new energy in bilateral relations with enhanced cooperation in trade and investment, energy, defence, security, food security and regional issues, according to Al Rawahi.

“The Industrial Zones at Oman’s Duqm offer 30 years corporate tax exemption, 0% customs duty, 100% foreign ownership, usufruct agreements, 50 years renewable , no restrictions on repatriation of profits , no income tax, currency exchange freedom and a stable currency rate. These Sea Ports are supported with airports and warehousing facilities for the benefit of the entrepreneurs,” the Ambassador said as his country celebrates 49th National Day anniversary on Monday.

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Smartphone shipments in July-September

Source: Financial Express, Nov 12, 2019

New Delhi: The domestic smartphone market registered one of its best performances 20191113-6during third quarter of calendar year 2019, carrying a shipment size of almost 47 million units with handsets in the Rs. 21,000-35,500 range emerging as the fastest growing segment.

Attractive schemes and discounts aided the mid-range segment (Rs. 14,000-35,000) during the quarter to increase its share at the expense of the low-end price category.

As per the latest numbers by IDC, the smartphone market shipped a record 46.6 million units in the Q3 2019, with 26.5% quarter-on-quarter growth and 9.3% year-on-year, driven by multiple online sales festivals, new model launches, and price corrections on a few key models by various brands.

“While the low-end price segment of $200 (Rs. 14,000) still accounted for 80% of overall India smartphone market in Q3 2019, its share dropped 5 percentage points year-on-year at the cost of the mid-range segment of $200-500, gaining 5 percentage points to 18.9%,” IDC said.

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APEDA eyes US$ 60 billion agriculture exports with support of new policy

Source: IBEF.org, Nov 11, 2019

20191113-1With the help of the new agriculture export policy, the agri exports from India is likely to reach the export target of US$ 60 billion by the year 2022, said Agricultural and Processed Food Products Export Development Authority (APEDA) a statutory body under Ministry of Commerce. The policy has acted as a bridge between Ministry of Commerce and Ministry of Agriculture helping in to reach the target.

“Achieving an agriculture export target of US$ 60 billion by 2022 does not look ambitious, given the current global market conditions. More so, because India’s export basket largely comprises meat, marine products, and basmati rice whose demand in the world market is on constant increase,” said Mr. Tarun Bajaj, GM, APEDA.

“With an integrated approach and better cooperation among the two union ministries for boosting agriculture production and trade increase export of organic food products as well as to double Agri-exports to US$ 60 billion by 2022 from current $38 billion” said Mr. Bajaj.

APEDA gives a platform to display India’s quality produce to the global market along with promoting the export of various agricultural commodities. Mr. Bajaj added, “After the announcement of Agri Export Policy (AEP) by the government, all the concerned ministries which includes Ministry of Commerce, Ministry of Agriculture, Ministry of Animal Husbandry, Ministry of Food Processing Industries and other agencies are working in close coordination, they are also focusing on exports. In addition, involving states since they also have an important role in encouraging exports of agriculture products from the region.”

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