TRADE UPDATE #52

Compliments of the Season!

27/12/2019

With the year about to end, this week was relatively quiet for the export community, while the new year comes with fresh hope for better trade policies. Earlier this year, the World Trade Organization (WTO) ruled that India’s export subsidies, including the Merchandise Exports from India Scheme (MEIS), along with the subsidies that are given to Special Economic Zones (SEZs) violate global trade norms. The Indian government is now attempting to introduce some reforms and align its policies with WTO rules.

Last week, Commerce Minister Piyush Goyal reviewed and sought inputs from industry stakeholders such as Export Promotion Councils (EPCs), the Federation of Indian Export Organisations (FIEO), and Commodity Boards to discuss the upcoming FTP 2020-25. To further boost exports without violating WTO norms, the government is also looking at reforming provisions for SEZs, and busy weighing several options.

A new decade and a series of new policies to improve slacking exports are around the corner - but will this actually boost trade? It's a question only the new year will answer.


EXPORTS

Centre seeks stakeholders' inputs on boosting exports

Commerce and Industry Minister Piyush Goyal held a mega meet on 20th December with all Export Promotion Councils, the Federation of Indian Export Organisation (FIEO) and Commodity Boards to discuss ways to boost exports, an official statement said on 20th December. 37 EPCs, FIEO and three Commodity Boards under the Department of Commerce attended the meeting to discuss issues being faced by them. “In a marathon five-hour meeting held yesterday (Thursday) in New Delhi, Piyush Goyal reviewed and sought inputs from EPCs for the Foreign Trade Policy and to get their views on steps that may be taken to boost India’s exports,” the ministry said in a statement on 20th December


BILATERAL TRADE

India-US 2+2 Dialogue: Concerns remain amid growing strategic convergence

The second India-US 2+2 dialogue between foreign and defense principals of the two countries has certainly furthered the bilateral defense partnership. The two sides are now engaging in a tri-service military exercise, enhancing coordination on the Indo-Pacific and even facilitating private sector collaboration in defense. India will also now cooperate with US Centcom and Africa Command in addition to the Indo-Pacific command.


INTERNATIONAL TRADE

Container trade in third quarter of 2019 seen flat compared to global growth of 1.5%: Maersk

India’s container trade in the third quarter of 2019 is seen flat as compared to the global growth of 1.5%, according to a trade report released by Maersk, the world’s largest container shipping company. The Maersk report for import and export for July-September 2019 for India says that while imports into the country witnessed subdued growth, the overall fiscal impact was nullified by an identical contraction in exports.


COMMODITY

Indian sugar industry poised to export 5 mn tonne, likely to set new record

India, the world’s biggest sugar producer, is poised to break its own export record this year thanks to a flurry of overseas sales in the past few months, prompted by attractive global prices, trade and industry officials said on 17th December. Sugar mills in India have done deals to export 2 million tonnes in the new season that began on 1st October 2019, raising hopes that the country would sell at least 5 million tonnes on the world market in the 2019/20 season, nearly a third higher than the previous year.


POLICY

Government exploring alternative incentives for SEZs to make them WTO compliant

With the World Trade Organization (WTO) prescribing withdrawal of prohibited subsidies given to Special Economic Zones (SEZs) by the middle of 2020, the government is trying to fast-track work on reforming provisions for the zones to make them compatible with the multilateral norms. One of the options before the Commerce Ministry, which is exploring several alternative incentives for SEZ units, is the new bonded manufacturing space scheme that the Customs department implemented earlier this year, an official told BusinessLine.


OTHER NEWS

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