Don’t blame oil for India’s rising trade deficit

Source: Live Mint.com, Jun 19, 2018

The widening merchandise trade deficit is reason for concern. It’s easy to pin the blame on high oil prices. However, oil prices were much higher in fiscal year 2013-14, the year of the taper tantrum, but the trade deficit was lower then. More fundamental factors are at play.

Crude oil imports have been the Achilles’ heel of India’s external trade. But Brent crude prices in 2013-14 were more than double the average for 2017-18. The oil import bill in 2017-18 was much lower than in 2013-14. Why then did the trade deficit shoot up from $134 billion in 2013-14 to $161 billion in 2017-18?

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India set to launch US$ 240 mn retaliatory tariffs on US imports

Source: Live Mint.com, Jun 18, 2018

New Delhi: India is likely to introduce retaliatory tariffs worth $240 million next week on a revised list of 30 items imported from the US to counter the American move to unilaterally hike duties on Indian steel and aluminium. The move comes at a time when India has decided to negotiate a “trade package” with the US to ease tensions between the two sides.

India on Wednesday notified to the World Trade Organization (WTO) a revised list of 30 items imported from the US, including almonds, apples, phosphoric acid and motorcycles with engine capacity more than 800 cc (including Harley-Davidson Inc.), on which it intends to impose retaliatory tariffs. Earlier, on 18 May, India had given the WTO a list of 20 items imported from the US worth $166 million on which it was proposing to hike tariffs. However, in the revised list, India has brought down the proposed maximum additional duties from 100% (on walnuts) to 50% (on Harley-Davidson).

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India’s exports hit 6-month high; trade deficit widens as imports up 14.85%

download (1).jpgSource: Business Standard, Jun 16, 2018

New Delhi: A rise in receipts of petroleum, engineering and pharmaceutical products boosted May’s export growth figures to a six-month high of 20.18 per cent, up from 5.71 per cent in April.

Even then the trade deficit widened to a four-month high of $14.62 billion, compared to the $13.7 billion deficit in April as imports rose by 14.85 per cent during the month, compared to the 4.60 per cent rise in April. This could pressurise the current account deficit in the first quarter of the current financial year after it stood at 1.9 per cent of GDP in the fourth quarter of 2017-18, compared to 2.1 per cent in the third quarter.

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India has trade deficit with 10 Regional Comprehensive Economic Partnership (RCEP) members

Source: The Economic Times, Jun 17, 2018

India had trade deficit with as many as 10 member countries, including China, South Korea and Australia, of the RCEP grouping of 16 nations which have been negotiating a mega trade pact since November 2012.

The Regional Comprehensive Economic Partnership (RCEP) bloc comprises 10 Asean group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners – India, China, Japan, South Korea, Australia and New Zealand.

According to the commerce ministry data, India’s trade deficit — the difference between imports and exports — with seven countries (Indonesia, Thailand, China, Japan, South Korea, Australia and New Zealand) of RCEP has in fact increased in 2017-18 as compared to the previous fiscal.

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India to bring together 8-10 WTO countries to work on future trade agenda

Source: Business Standard, Jun 11, 2018

New Delhi: India is considering to bring together a group of 8-10 member countries of the WTO to prepare an agenda for creation of a conducive atmosphere in Geneva to ensure smooth functioning of the global trade body, a top government official said.

It would be an informal group within the World Trade Organisation (WTO), which may also include countries like Brazil, China, South Africa, China, Indonesia and Columbia.

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Import of medical devices from US on the rise

Source: Business Standard, Jun 11, 2018

New Delhi: Even as medical device makers in America allege the regulatory environment in India has hindered the growth of their export, the data suggests otherwise. From Rs 61.5 billion in 2014-15, import of medical devices from the US was Rs 74.2 bn in 2017-18.

India imports around 80 per cent of its medical devices’ requirement and a fourth of that comes from the US. The overall medical devices market in India is estimated to be Rs 640 bn.

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Tax dept clears Rs 7,000 crore GST refunds of exporters

Source: The Economic Times, Jun 09, 2018

Over Rs 7,000 crore or half of the pending GST refunds of exporters has been cleared in the first nine days of the ongoing special refund fortnight.

“More than Rs 7,000 crore of IGST/ ITC refunds sanctioned till now during the ongoing Special Refund Fortnight,” the Central Board of Indirect Taxes and Customs (CBIC) said in a tweet late last night.

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