TRADE UPDATE #40

Fresh Capital in Sight

06/09/2019

Amidst all the highs and lows of recent months, the Indian MSME sector has had one consistent demand -- easier access to more capital. Now, this demand may finally be met in the near future, with the announcement of the new Credit Linked Capital Subsidy Scheme (CLCSS) by MSME Minister Nitin Gadkari. The Scheme is built in response to the recommendations of the U K Sinha Committee, set up by the RBI to look at ways to boost MSMEs. More details about the CLCSS will likely be revealed in the coming days and weeks.

Additionally, Commerce Minister Piyush Goyal has announced that he will be meeting with stakeholders from the export sector on 11th September to discuss additional steps the government can take to boost shipment volumes. Alternatives to the government’s phased-out MEIS scheme are likely to be a key discussion point at the event, particularly following the EEPC’s demand for the same this week. Expansion of India’s exports into fresh markets will also likely come up -- Chile’s Vice-Minister of Trade Rodrigo Yanez has said that the country is hoping for better trade ties with India.

After the spate of emergency measures announced recently by Finance Minister Nirmala Sitharaman to stabilize India’s economy and exports, perhaps a turnaround for the sector’s growth is finally in sight.


POLICY

Govt launches updated Credit linked Capital Subsidy Scheme for MSMEs

The government on 5th September launched the updated Credit Linked Capital Subsidy Scheme (CLCSS) to allow micro, small and medium enterprises (MSMEs) access to capital. MSME Minister Nitin Gadkari announced the government would prepare a final report on the recommendations of the U K Sinha committee, which had been set up by the Reserve Bank of India (RBI) to suggest expeditious ways to strengthen MSMEs, within the next eight days.


GOVERNMENT

Commerce Minister to meet exporters on September 11 to discuss measures to push shipments

To push languishing exports on a higher growth track, Commerce Minister Piyush Goyal has called a meeting of stakeholders, including export bodies, to give suggestions on trade policy instruments that could stimulate development. “There is an urgency in the Commerce Ministry on the need to make decisions that would boost export growth. The meeting called by the Minister on 11th September will focus on measures that could be taken to aid exports and spur development,” a government official told BusinessLine.


POLICY

EEPC seeks alternative to Centre’s interest subvention scheme

The EEPC has sought an alternative to the existing interest subvention scheme. The scheme, currently provided by the Centre, has been objected to by the WTO. According to Ravi Sehgal, Chairman, EEPC, the Centre provides interest subvention to the extent of 3-5% on bank credit. “We need an alternative to the interest subvention scheme for availing of bank credit since this has been objected to by the WTO. This will not remain for long,” he said, on the sidelines of an award ceremony organized by the council in Kolkata on 31st August.


BILATERAL TRADE

Chile wants to expand India trade ties, says Rodrigo Yanez, country’s vice-minister of trade

Chile, India’s sixth-largest trade partner in the Latin American region, wants to expand relations with India. It is exploring avenues to increase knowledge sharing between the countries about each other’s production structures as well as to identify value chains. As Chile and India celebrate 70 years of establishment of diplomatic relations, its Vice Minister of Trade, Rodrigo Yanez, who is on a visit to India, said in an interview with FE’s Rishi Ranjan Kala that his country is interested in transforming the preferential trade agreement (PTA) into a more comprehensive accord.


OPINION

Is it time for India to look beyond tariff cuts? Here’s how to boost exports’ growth

From biscuits to automobiles, the Indian industry is battling the combined adverse impact of the economic slowdown and FTA-led import surge and is putting pressure on the government not to sign the mega-FTA, the Regional Comprehensive Economic Partnership (RCEP). The RCEP is aiming at greater integration among the 10-member ASEAN and six of its bilateral FTA partners in the Asia-Pacific region. Amidst the global slowdown and escalating trade tensions, the prospect of increased duty-free access to India’s large market is definitely of prime importance to the other negotiating countries.


OTHER NEWS

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