Weekly News 26 February - 1 March 2024

Monday, 26 February 2024 (Financial Express) Key products find new export markets

Efforts to diversify Indian goods markets have intensified recently, leading to increased exports of automobiles, gold jewellery, and petroleum products to new markets in East Europe, Africa, South America, and Central Asia. The Commerce Ministry is strategically evaluating GDP growth rates, import trends, and India's market share in these regions, collaborating with diplomatic missions and export promotion councils to facilitate market penetration. Significant growth has been observed, notably with exports to Albania surging by 2,747% to $967 million in the April-November period, predominantly driven by automotive diesel, which accounted for $901 million. 

Furthermore, Romania has seen a 551% increase in imports of automotive diesel, totalling $933 million, contributing to an overall export growth of 167% to $1.3 billion during the same period. These developments reflect both existing and emerging opportunities, signalling a successful expansion of Indian exports into previously untapped markets. 

Tuesday, 27 February 2024 (The Economic Times) Mauritius to Amend DTAA with India

The Mauritius Cabinet has decided to amend the India-Mauritius tax treaty to align with the minimum standards of the multilateral instrument (MLI) under Base Erosion and Profit Shifting (BEPS) rules, aiming to strengthen anti-abuse provisions. This amendment, synchronized with the global tax agreement, aims to discourage companies from exploiting source-based tax exemptions and prevent abuse of the tax treaty for treaty shopping. The BEPS MLI introduces a provision to reject the shelter of a Double Taxation Avoidance Agreement (DTAA) if the primary purpose of a business arrangement is tax avoidance, assessed through a Principal Purpose Test, a minimum standard under MLI. Although both India and Mauritius are signatories of MLI, Mauritius had not previously included its DTAA with India within its MLI compliance scope. 

According to a senior tax official, adherence to the BEPS MLI framework enables the denial of DTAA benefits if a business arrangement is solely aimed at tax avoidance. Despite India's 2016 DTAA amendment, some exemptions remained for investments from Mauritius, prompting this adjustment to further tighten regulations and ensure compliance with international tax norms. 

Wednesday, 28 February 2024 (The Economic Times) ‘China’s Investment Facilitation Proposal Beyond Scope of WTO’

India has voiced opposition to the plurilateral Investment Facilitation Development Agreement (IFD) proposed by China, citing it as a non-trade issue outside the World Trade Organization (WTO) scope and being pushed onto countries while longstanding mandated issues remain unresolved. Indian officials argue that the IFD, led by Belt and Road Initiative (BRI) countries and vested interests, introduces unpredictability into the system and violates the consensus-based decision-making principle of the WTO. They insist on consultations among members, expressing concerns that bringing a non-mandated issue into the WTO framework through annexure-4 could undermine the organization's fundamental rules. 

Additionally, India opposes extending the moratorium on taxing e-commerce transmissions beyond March 31, a contentious issue at the WTO. The moratorium, in place since 1998, faces opposition from India and other developing nations, who seek its termination. India plans to address this issue at the upcoming MC13, alongside other developing nations, with specific demands to achieve their goal. 

Thursday, 29 February 2024 (The Indian Express) Reliance, Disney sign mega deal to create a ₹70,000 crore media giant

Reliance Industries Ltd (RIL), Viacom18, and Walt Disney Company have announced a binding agreement to establish a joint venture (JV) by combining the businesses of RIL-controlled Viacom18 and Star India, a Disney subsidiary. The transaction values the JV at Rs 70,352 crore ($8.5 billion) post-money, with RIL investing Rs 11,500 crore ($1.4 billion) to create a mega TV and digital streaming platform for entertainment and sports content in India. Following the merger, RIL will control the JV, with RIL and Viacom18 holding 16.34% and 46.82% respectively, and Disney holding the remaining 36.84%. 

The JV, led by Nita Ambani as chairman and Uday Shankar as vice chairperson, aims to be a leading platform for entertainment and sports content in India, offering iconic media assets across entertainment and sports to over 750 million viewers. It seeks to drive the digital transformation of the media and entertainment industry in India, providing consumers with high-quality and comprehensive content offerings anytime, anywhere. The agreement also grants exclusive rights to distribute Disney films and productions in India, enhancing the JV's content portfolio. Subject to regulatory approvals, the transaction is expected to be completed by the last quarter of calendar year 2024 or the first quarter of calendar year 2025. 

Friday, 1 March 2024 (The Indian Express) Centre launches 2nd part of critical minerals auction

India's Mines Minister, Pralhad Joshi, announced the launch of the second phase of critical minerals auction valued at around $362 billion. Eighteen mineral blocks containing resources like tungsten, vanadium, cobalt, and nickel will be auctioned across states like Chhattisgarh, Madhya Pradesh, Karnataka, Maharashtra, and Rajasthan. Seventeen blocks will be offered for composite licenses, while one block will be for a mining lease. Additionally, several states including Maharashtra, Madhya Pradesh, Haryana, Chhattisgarh, and Rajasthan will auction blocks for exploration licenses separately. 

In the first part of auctions last November, the government received 56 bids from companies like Vedanta Ltd, Coal India, Ola Electric, Dalmia Group, and Jindal Power. The second round of bidding for the first tranche of auctions will be held in mid-March, with the bid winner to be announced in mid-April. Joshi also reassured that there will be no coal shortage this year, despite Coal India revising its annual production target for FY25 due to sufficient stockpiles.