Weekly News 1 - 5 April 2024
Monday, 1 April 2024 (The Indian Express) India’s trade reliance on China and EU rising: UN trade body
The UNCTAD report highlights India’s increasing trade reliance on China and the European Union, amidst a global shift in trade dynamics influenced by geopolitical factors like the pandemic and the Russia-Ukraine war. Despite India’s efforts to reduce dependency on China through schemes like the PLI and QCOs, its reliance on China and the EU has grown, while its dependence on Saudi Arabia has decreased. The report also notes a trend favoring trade between countries with similar geopolitical stances, alongside a concentration of global trade among major partners, albeit softening in late 2023.
The ongoing Russia-Ukraine conflict has significantly altered trade patterns, with Russia’s trade dependence on China surging while its reliance on the EU declines. Notably, Chinese-Russian trade reached a record high in 2023. Additionally, the report indicates a global decline in trade across most sectors, except for pharmaceuticals, transportation equipment, and electric cars, while merchandise trade is expected to contract by 5% in 2023, with services trade gaining 8%.
Tuesday, 2 April 2024 (mint) Debt, trade barriers to drag Asian economies in 2024
The World Bank’s latest report indicates a slowdown in Asian economies, with growth projected to decrease from 5.1% in 2023 to 4.5% in 2024. Factors such as rising debt, trade barriers, and policy uncertainties are dampening economic dynamism in the region. Despite outperforming other parts of the world, Asia faces challenges such as weak social safety nets and underinvestment in education. Additionally, while global trade is expected to rebound and financial conditions ease, concerns persist over the impact of higher interest rates and trade-distorting measures imposed by major economies like the US, China, and India.
Aaditya Mattoo, the World Bank’s chief economist for East Asia and the Pacific, emphasized that while Asia is surpassing global performance, it is falling short of its potential. The report highlights the need for Asian economies, particularly China, to transition to more balanced growth paths and address structural issues beyond merely increasing spending. The region’s leading firms are urged to play a more proactive role in driving economic growth, suggesting a pivotal need for policy reforms and investment in key sectors such as education and social safety nets.
Wednesday, 3 April 2024 (Financial Express) India, Eurasian union kick-start FTA discussions
India and the Eurasian Economic Union (EaEU), comprised of Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan, are set to begin formal negotiations for a free trade agreement (FTA). The EaEU, established in 2015, boasts a single market with 183 million people and a combined GDP exceeding $2.4 trillion as of 2023. Talks for the FTA have gained momentum recently, particularly fueled by Russia’s significant role as India’s second-biggest import source, mainly in the crude oil trade, resulting in a substantial trade deficit. India aims to leverage the FTA to expand opportunities for its agriculture, engineering, and energy sectors in Russia.
India’s imports from Russia stood at $51.1 billion in April-January 2023, far outweighing exports at $3.43 billion, highlighting the trade disparity. Apart from Russia, Kazakhstan emerges as India’s second-largest trading partner within the bloc. While India actively pursues FTAs, including the recent one with the European Free Trade Association, negotiations are underway with the UK, Oman, the European Union, and Peru.
Thursday, 4 April 2024 (mint) Govt to push export of fruit, veg
The Union Commerce Ministry, responding to export bans on essential food items like rice and wheat, is shifting focus towards exporting agricultural produce such as fresh fruits and vegetables to new markets like the US, European Union, and African countries. The Agricultural and Processed Food Products Export Development Authority (Apeda) is spearheading this initiative with trial shipments of mangoes, pomegranates, and bananas among others. This strategic move aims to double agricultural exports to $100 billion by 2030 and tap into untapped markets like Nigeria, Switzerland, and Mexico.
According to Rakesh Arrawatia, a professor of finance and accounting, this shift will encourage farmers to diversify crops, boosting income and addressing export-import imbalances. Despite bans on wheat and rice exports, India’s export of fresh fruits and vegetables has surged, indicating high demand in new markets. With India’s leading position in fruit production, including mangoes, bananas, papayas, and guavas, the initiative holds promise for agricultural growth and foreign exchange earnings.
Friday, 5 April 2024 (mint) India to launch solar module databank as imports rise
The government plans to introduce an online repository for domestically manufactured solar modules in response to escalating Chinese imports. Secretary Bhupinder Singh Bhalla from the Ministry of New and Renewable Energy announced that all indigenous modules would receive a unique identification number, allowing verification on the platform. This initiative, expected to launch in two months, aims to ensure compliance with domestic content requirements and facilitate tracking of module manufacturing and usage, particularly beneficial for schemes like PM Surya Ghar.
The platform, serving as a database of Indian-made modules, will aid in verifying compliance with domestic content regulations and can be utilised for grid-scale solar projects. This move coincides with the reimposition of the Approved List of Modules & Manufacturers (ALMM) amid concerns about rising imports despite a 40% import duty. The emphasis on domestic manufacturing aligns with India’s ambitious renewable energy targets and reflects efforts to reduce reliance on imports, particularly from China, the world’s largest solar module exporter.
