Weekly News 6 - 10 May 2024
Monday, 6 May 2024 (mint) India to leverage South Africa WTO case to get EU food rules ralxed
India is planning to leverage a recent case filed by South Africa against the European Union's (EU) strict food safety regulations on citrus fruit to advocate for relaxations in standards hindering various Indian food exports. The EU's stringent norms have limited India's exports of items like chilli, tea, basmati rice, and poultry. Aligning with South Africa on this issue could address broader concerns about EU trade barriers affecting multiple exporting countries, according to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI).
South Africa's challenge against the EU regulations, particularly concerning the False Codling Moth, reflects its concerns about restrictions on citrus fruit exports. This development occurs amid tensions between India and Pakistan over Basmati rice's Geographical Indication (GI) registration in the EU, further complicating trade relations. Despite these challenges, Indian agricultural exports to Europe increased by 18.65% to $3.70 billion in FY24, with overall exports rising by 1.5% to $98.88 billion. India exports various fruits and vegetables to European nations, while South Africa contends that the EU measures may violate WTO agreements on sanitary and phytosanitary measures.
Tuesday, 7 May 2024 (The Economic Times) PSBs set to Develop Road Map for Deploying GenAI Systems
State-run banks are gearing up to deploy generative artificial intelligence (GenAI) systems, with detailed strategies and pilot use cases slated for rollout within the current financial year. These initiatives, integral to the reform agenda of state-run banks for 2024-25, include establishing AI-friendly policies and governance frameworks, with a focus on data governance and analytics capabilities.
The adoption of GenAI applications is expected to revolutionize various aspects of banking, from credit modelling and data analytics to cybersecurity and digital marketing. McKinsey Global Institute estimates suggest that GenAI could add significant value to the banking sector globally, primarily through increased productivity. As part of the Enhanced Access and Service Excellence reform version 7.0, banks are prioritizing digitally-enabled operating models to optimize costs, enhance quality, and improve data governance to bolster analytics effectiveness, aligning with the evolving digital landscape and ensuring the integrity of domestic financial systems.
Wednesday, 8 May 2024 (Financial Express) Govt measures bring down toy imports, but exports stagnate
India's efforts to reduce toy imports through fiscal and administrative measures have yielded significant results, with imports dropping from $304.1 million in FY19 to $64.9 million in FY24. The government's actions, including increased import duties and quality control orders, particularly targeting substandard imports from China, have led to a decline in cheap toy inflows and an increase in domestically produced toys meeting stringent safety standards. However, despite the reduction in imports, India's toy exports have seen only a modest rise, reaching $152.34 million in FY24 from $129.6 million in FY20, according to a study by the Global Trade Research Initiative (GTRI).
The study suggests that India needs a more comprehensive approach to foster the development of its toy industry, recommending support for small and medium enterprises in digital marketing and participation in international fairs to boost global connections. Despite the progress, India's toy industry remains relatively small, valued at $3 billion compared to China's $100 billion. To further enhance the sector, the report suggests inviting international toy manufacturers operating in China to establish production facilities in India and emphasises the importance of local manufacturing of toy parts.
Thursday, 9 May 2024 (mint) Sugar supply fine, but export ban stays
Despite comfortable supply in the domestic market, the Indian government remains firm on its ban on sugar exports, citing priorities such as ensuring availability, maintaining sufficient opening balance, and achieving its E20 target for ethanol blending with petrol by 2025-26. The decision comes despite lobbying from the sugar industry, which sought permission to export 2 million tonnes of sugar in the current marketing year. With estimates indicating a production surplus of 32 million tonnes against consumption of 28.5 million tonnes for the 2023-24 season, the government emphasises prioritising domestic consumption and ethanol blending over exports.
Government officials express concerns about uncertainties in the sugar market, including unpredictable crop yields and challenges posed by weather conditions such as below-normal rainfall forecasts. While comfortable with current production levels, officials stress balancing domestic consumption and ethanol blending targets. India aims to increase its ethanol-blending targets to 15% by 2023-24 and 20% by 2025-26, with the current rate at 12%. Despite calls from the sugar industry, the government remains cautious, focusing on internal needs and the uncertain outlook for future crop yields.
Friday, 10 May 2024 (mint) Regulator tightens points of entry for food shipments
The Food Safety and Standards Authority of India (FSSAI) has tightened its oversight on food imports, restricting authorized officers to only 155 points for clearing shipments "until further orders." This move aims to establish a robust regulatory framework at entry points to ensure the safety of imported food in India. The decision follows a communication from G. Kamala Vardhana Rao, CEO of FSSAI, highlighting the need to review entry points based on factors such as import trends, testing facilities, and logistics infrastructure. Despite queries, responses from the FSSAI spokesperson are pending.
In response to increased scrutiny, food items undergoing clearance at entry points are subject to rigorous inspection, including document scrutiny, visual inspection, sampling, and testing for compliance with regulations. This development comes after a parliamentary committee recommended direct FSSAI regulation of all food imports, emphasizing the need for more personnel and quality training at entry points. Additionally, the FSSAI has expanded its investigation of Nestle to include all baby food brands, amidst concerns raised by an international investigation regarding the presence of added sugar in Cerelac baby cereal products sold in India.
