As the second term of the Narendra Modi-led government gets underway, one of the first major items on the agenda is the upcoming Budget. Set to be presented on 5th July, the Budget’s provisions will be closely monitored by industry and trade stakeholders, as India fends off increasing international challenges at the WTO while also attempting to boost trade and exports. New Finance Minister Nirmala Sitharaman is currently taking consultations with industry stakeholders, who have made it clear that they expect the Indian government to start enacting policies that boost Indian industry and trade.
Given Commerce Minister Piyush Goyal’s recent comments about Indian exporters needing to “mature”, there are going to be plenty of observers on 5th July, waiting to see what steps the Indian government will roll out for Indian exporters. Additionally, the Commerce Ministry’s recent announcement to start considering e-commerce as a possible channel for Indian exports is also going to merit further observation.
In recent months, India’s trade has taken blows from rising global protectionism and a general environment of concern, following escalating trade wars between the US and China. The Indian government has also accepted the US’s decision to withdraw GSP benefits for Indian goods; however, there has been no news yet on what -- if any -- policies will be implemented to support exporters in place of this. Come 5th July, Indian traders and sellers will be keeping a close watch on Sitharaman’s Union Budget, and hoping and praying for good news.
Union Budget 2019: Address liquidity, incentivise manufacturing to boost exports, says trade body
A string of measures, including adequate availability of liquidity and incentivising manufacturing, should be included in the forthcoming Budget to boost exports, the Trade Promotion Council of India said on 13th June. “The government needs to address liquidity and manufacturing constraints by increasing the lending cap of the nationalized banks for credit financing and ensure adequate liquidity. Private players including NBFCs may also be allowed,” TPCI Chairman Mohit Singla said in a statement.
Timely availability of credit is key to boost exports: Goyal
A stable policy framework and easy availability of credit are essential for Indian exports to make a mark in international markets, Minister of Commerce and Industry Piyush Goyal said on 7th June. “We have to develop a framework with a stable policy that is internationally acceptable, consistent and robust. And then look for solutions within that framework based on trust, integrity and due diligence,” he said. “Greater transparency has to be brought into the work being done by government organizations, export promotion councils, and financial institutions,” said Goyal while addressing a gathering in the national capital.
Iron ore production peaks to 10-year high in FY19, exports nosedive 33%
The country’s iron ore production rose to a decade-high of 220 million tonnes (mt) in FY19, growing 9.5% year-on-year from 201 million tonnes in FY18. Analysts are betting on the growth momentum, pertaining to ore output, continuing in this fiscal year. Their positive sentiment springs from merchant miners looking to accelerate extraction from mines headed for expiry on 31st March, 2020. “We believe the production (of iron ore) is likely to rise 5-8% this fiscal. Merchant miners, whose lease validity will cease by 31st March, 2020, will be looking to ramp up output. On the import side, we expect moderation during FY20. Exports, on the contrary, should go up for iron ore pellets,” said Vahishta M Unwalla, research analyst (iron ore), CARE Ratings.
Commerce Ministry plans to boost exports through e-commerce
The government is planning to promote exports by making use of e-commerce and is in the process of finalising a strategy that would detail the roles to be played by the Reserve Bank of India (RBI), Export Promotion Councils, India Post and customs authorities. “In order to boost exports, the government is planning to standardize pin codes, a parcel directorate for e-commerce packages and using India Post to track foreign postal systems are some of the things we are looking at. A document on the same will be prepared in a month’s time,” a senior official told Moneycontrol.
Government scraps incentives on onion exports as prices rise
The Centre on Tuesday scrapped incentives on export of fresh and chilled onions to discourage overseas sales of the commodity following a steady rise in domestic prices. Under the Merchandise Exports from India Scheme (MEIS), sellers were given an export incentive of 10% of the free-on-board value of onion. “The rate at which MEIS benefits for exports of fresh and chilled onions is granted under the foreign trade policy has been made zero from the current 10% with immediate effect,” the Directorate General of Foreign Trade (DGFT) said in a notification.
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