Daily News - Monday, 6 January 2025

‘EU to help MSMEs to cope with tech, sustainability reporting’ (mint)

⁠The European Union (EU) plans to assist Indian MSMEs in adapting to its upcoming Carbon Border Adjustment Mechanism (CBAM) by funding decarbonization technologies, aligning with India’s RAMP Scheme and World Bank initiatives to reduce compliance burdens for businesses contributing 45% of EU imports from India. The carbon tax, targeting exports like cement, steel, aluminium, and fertilizers by 2026, poses a challenge to India-EU trade talks, as Indian officials argue it represents a non-tariff barrier, emphasizing rich nations’ responsibility to freely transfer green technology to developing economies. The India-EU Free Trade Agreement is expected to open new opportunities for MSMEs by reducing tariffs on sectors like chemicals, electronics, and green technology while mitigating the costs of evolving EU regulations like CBAM and CS3D. 

Shipping to get infra status to push Indian shipbuilders (mint)

The Indian government is considering granting infrastructure status to the shipping industry, enabling access to long-term, low-cost funding, which would bolster ship purchases, promote coastal and global shipping operations, and help India climb from its current rank of 18th to the top five globally in shipbuilding and ownership by 2047. The Ministry of Ports, Shipping, and Waterways (MoPSW) has also proposed extending its capital subsidy scheme for shipbuilding by 10 years under the Amritkaal Maritime Vision 2047, providing financial assistance to shipyards until 2026, with rates diminishing from 20% to 11%. Inclusion of the shipping sector in the harmonized infrastructure list, alongside policy-driven support through entities like NaBFID and NIIF, is expected to significantly expand India’s maritime footprint and enhance competitiveness against global peers benefiting from low-cost financing. 

⁠India gets FDI of $42 bn in 9 mths (Financial Chronicle)

India has maintained robust foreign direct investment (FDI) inflows, averaging over $4.5 billion monthly in 2024, with FDI rising 42% to $12.13 billion during January-September and 45% to $29.79 billion during April-September 2024-25, compared to $20.48 billion in the same period the previous year. Key sectors driving this growth include services, computer software and hardware, telecommunications, construction, mobile, auto-chemicals, and pharmaceuticals, with total FDI in 2023-24 reaching $71.28 billion. These inflows are vital for funding infrastructure development, supporting economic growth, stabilizing the balance of payments, and maintaining the rupee’s value amidst global uncertainties. 

'Bangladesh crisis offers new opportunities for Indian textile clusters' (Financial Express)

Amid economic and political instability in Bangladesh, Indian apparel exporters, particularly in Tirupur, are seeing increased interest from global brands like Primark, Tesco, Decathlon, GAP, and Walmart, with order conversions expected by early 2025. Bangladesh’s foreign exchange reserves have dropped below $40 billion, hindering cotton imports and reducing its competitiveness, despite its 10-15% cost advantage from duty-free access to markets like the EU, UK, and Canada due to its LDC status. Capturing 10% of Bangladesh’s global apparel exports could create 500,000 direct and 1 million indirect jobs in India, but to capitalize on this opportunity, India needs to address skill development, capacity augmentation, and expedite free trade agreements with the EU and UK to offset its duty disadvantage. 

Govt Working on Strategy to Push Exports: Goyal (The Economic Times)

The Indian government is formulating an export strategy to achieve $2 trillion in exports of goods and services by 2030, with projections for exports exceeding $800 billion in 2024-25, compared to $778 billion in the previous fiscal year. Commerce and Industry Minister Piyush Goyal emphasized addressing exporters’ concerns, such as declining export credit and high interest rates, while focusing on India’s competitive advantages to accelerate growth. The government is collaborating with stakeholders, including banks and the Export Credit Guarantee Corporation (ECGC), to resolve financial challenges and ensure robust support for the exporting community.