Weekly News 19 - 23 February 2024
Monday, 19 February 2024 (The Economic Times) SEZs, EOUs set to get Export Benefits
The government is considering extending export benefits under the RoDTEP scheme to companies in special economic zones (SEZs) and export-oriented units (EOUs). This scheme refunds various central and state duties, taxes, and levies imposed on input products to exporters, with current rates ranging from 0.3-4.3%. The Directorate General of Foreign Trade is expected to issue a formal notification soon, amending the foreign trade policy to include SEZs and EOUs, following the rollout of ICEGATE in SEZs. While this move could offer significant incentives for large-scale exports from SEZs like electronics and jewellery, concerns have been raised about potential overcompensation for import-intensive exports and the exclusion of certain export categories.
The RoDTEP extension could represent a substantial incentive for exports from SEZs, particularly in sectors like electronics and jewellery with high import content. However, there are concerns about overcompensation for import-intensive exports and the exclusion of certain export categories. The decision to extend RoDTEP to SEZs and EOUs overlooks exports from other categories facing similar challenges. As the government moves forward with this initiative, balancing incentives across export sectors and addressing concerns about overcompensation will be crucial to ensuring fair and effective support for India's exporters.
Tuesday, 20 February 2024 (mint) India eyes Brazilian urad, tur supplies
India and Brazil are collaborating to increase supplies of Brazilian black matpe (urad) and pigeon peas (tur), as domestic production declines and demand for protein-rich food grows, particularly among vegetarians. Indian officials expressed reliance on Brazil as a partner and reliable pulse supplier, emphasizing bilateral trade discussions and strategies to enhance cooperation for food security. Last year, India imported 3,000 tonnes of black urad from Brazil, with plans to purchase an additional 20,000 tonnes in 2024, according to Union Consumer Affairs Secretary Rohit Kumar Singh. Brazilian agricultural attaché Angelo de Queiroz Mauricio highlighted the potential for Brazil to become a strategic supplier for India, emphasizing collaboration across agricultural sectors and the importance of stable import policies for optimal bilateral trade.
The collaboration between India and Brazil on pulses signifies a significant opportunity for expanding agricultural bilateral trade, with Brazil potentially becoming a strategic supplier for India's growing demand for protein-rich pulses. Both countries aim to foster cooperation in ensuring food security, with discussions focusing on enhancing trade mechanisms and promoting long-term stability in bilateral trade relations. While India's Ministry of Consumer Affairs, food, and Public Distribution did not immediately respond to queries, the ongoing dialogue between the two nations underscores the importance of effective collaboration in addressing food security challenges and meeting the dietary needs of their populations.
Wednesday, 21 February 2024 (Financial Express) Japan to invest ₹12,800 crore in nine projects
The Finance Ministry announced that the Japanese government has committed a loan of 232.209 billion yen (about ₹12,800 crore) for nine projects across various sectors in India. These projects encompass initiatives such as improving road connectivity in the North East, promoting startup and innovation in Telangana, constructing the Chennai Peripheral Ring Road, promoting sustainable horticulture in Haryana, and addressing climate change and enhancing ecosystem services in Rajasthan. The agreement was signed between Vikas Sheel, additional secretary of the Department of Economic Affairs, and Suzuki Hiroshi, Ambassador of Japan to India, highlighting the ongoing bilateral development cooperation between the two nations since 1958 and the strengthening economic partnership.
Specifically, the projects aim to enhance infrastructure development, alleviate traffic congestion, improve medical services, support entrepreneurial skills development (with a focus on women and rural populations), and modernize the intermodal logistics system. This collaboration reflects the deepening strategic and global partnership between India and Japan, with the exchange of notes for these projects expected to further strengthen their economic ties and advance mutual development goals.
Thursday, 22 February 2024 (The Economic Times) FDI Norms Eased for Space Sector
India has announced a significant easing of foreign direct investment (FDI) norms for the space sector, aiming to attract overseas and private investments. Under the new policy, 100% FDI is permitted in satellite components manufacturing, which is expected to boost foreign investments and support the 'Make in India' initiative. The revised FDI policy divides the satellite sector into three activities with defined limits for foreign investment, allowing up to 74% FDI under the automatic route in satellite manufacturing and operations, among other segments.
The liberalization of FDI thresholds aligns with the Indian Space Policy 2023 and aims to foster increased private sector participation, leading to job creation, technology absorption, and self-reliance in the sector. By allowing up to 100% overseas investments in certain sub-sectors, the government seeks to integrate Indian companies into global value chains and facilitate the establishment of manufacturing facilities, thus enhancing the country's position in the global space industry.
Friday, 23 February 2024 (mint) Readymade garment exports up in Jan
India's export of readymade garments experienced a notable surge in value in January, reaching $11.57 billion, attributed to shipments circumventing the Red Sea crisis by taking longer routes via the Cape of Good Hope. While volume data for these shipments was not available, the commerce ministry's data analysis revealed an 11% increase from December 2023. However, overall textile exports for the fiscal year April 2023 to January 2024 were slightly lower compared to the corresponding period in the previous year, standing at $27.69 billion compared to $29.41 billion.
European nations, including Germany, the Netherlands, Italy, Poland, and Denmark, emerged as the primary buyers of Indian readymade garments, recording a significant month-on-month growth of 19% to $4.30 billion in January. The Red Sea crisis, triggered by Houthi rebels targeting ships, disrupted India's trade routes to Europe, affecting key products like crude oil, auto parts, chemicals, textiles, and iron and steel. The rerouting of vessels around the Cape of Good Hope has increased shipping costs and journey durations, impacting global trade sentiments and potentially hindering future textile exports, according to industry experts.
