TRADE UPDATE #66

The Need for Speed

14/04/2020

Even as Prime Minister Narendra Modi announced that India’s countrywide lockdown would be extended till 3rd May, millions of MSMEs and exporters across the country are looking at the coming weeks with concern. Supply chain disruptions and large-scale order cancellations from prime markets have left many of these businesses in dire straits, and in immediate need of assistance. The government has pledged a fresh export package soon with a raft of proposals, including fresh interest subsidies and allowing manufacturing to resume in a staggered manner.

MSME Minister Nitin Gadkari has pledged the government’s support to helping MSMEs tide over this crisis, even as the Commerce and Industry Ministry and other stakeholders have requested the Prime Minister to allow economic activity to resume gradually, with adequate safeguards in place. Industry experts fear that without speedy implementation of relief measures, India’s trade and economy could be looking at protracted economic pain.

Meanwhile, confusion continues to follow India’s exports of hydroxychloroquine (HCQ). After first banning exports of the malaria drug earlier this month, the Indian government allowed exports recently following the “threat” of retaliation by US President Donald Trump. Despite the government’s reversal on the issue, the Directorate General of Foreign Trade (DGFT) maintains that exports of the drugs are banned, leading to widespread confusion in pharma manufacturers and exporters. With the pharmaceutical industry staring at a US$1.5 billion loss, this issue, like many others, needs to be resolved quickly if the Indian economy is to weather the current crisis effectively.


EXPORTS

Up to 4% interest relief part of Govt’s fresh export package

Exporters struggling to cope with the negative fallout of the COVID-19 outbreak are in for relief, as the government is considering a raft of proposals -- including extending a 2-4% interest subsidy on soft loans to them, expanding the interest equalization scheme and allowing large companies and those in special economic zones (SEZs) to resume manufacturing in a staggered manner. “Exporters may be offered the interest subsidy on loans under a new scheme or the government may wish to enhance the scope of the existing interest equalization scheme to help them. Various proposals are being discussed. A decision will be made soon,” a source told FE.


MSMES

Govt committed to support MSMEs in distress due to lockdown: Gadkari

Union Minister Nitin Gadkari on 13th April said the government is committed to support micro, small and medium enterprises (MSMEs) facing difficulties amid the lockdown, and discussions are on towards financing 10% of their working capital and introduction of a deferred payment plan for units in distress. “We will have to support industries facing difficulties, increase their working capital. We are already in talks for increasing it by 10%, along with this deferred payment,” said the minister via video-conferencing.


INDUSTRY

Commerce & Industries Ministry suggests opening up Industries and MSMEs with precautions after April 14 to safeguard the economy

A day before the crucial announcement of Prime Minister Narendra Modi on the further plan of the 21-day lockdown which ends on 14th April night, the Union Commerce Ministry has asked the Union Home Ministry to open industries and many business sectors with precautions to prevent COVID-19. Demanding the opening up of industries with “single entry point for workers” and “keeping of social distancing” in “work atmosphere” the Commerce Ministry on 11th April said, “However, it is felt that certain more activities with reasonable safeguards should be allowed once a final decision regarding extension and nature of lockdown is taken by the central Government. These new activities are essential to improve economic activity and provide liquidity in the hands of the people. These suggestions have been obtained on the basis of very detailed interaction of the Hon’ble CIM (Commerce and Industries Minister Piyush Goyal) with various States and industry bodies, and the feedback...”


COMMODITY

Coronavirus | Pharma units in limbo amid confusion over hydroxychloroquine exports

A week after the Ministry of External Affairs (MEA) announced that it would “license” the malaria drug hydroxychloroquine (HCQ) and supply it to various countries on a “government to government basis”, the Directorate General of Foreign Trade (DGFT) maintains that the drug is still prohibited for export, causing some confusion in industry circles. “There is huge capacity in our industry for both HCQ and paracetamol production. But our manufacturers, especially the MSMEs and SMEs, are confused about the process, given the DGFT’s notification banning exports,” Dinesh Dua, Chairman of the Pharmaceutical Export Promotion Council of India told The Hindu.


COMMODITY

Covid-19: Pharma exports may take a $1.5 billion hit

The COVID-19 pandemic and the lockdown have adversely impacted pharmaceutical exports to the tune of $1.5-2 billion. “Pharmaceutical exports stood at $18.75 billion at the end of February with 10.7% year-on-year growth,” R Uday Bhaskar, Director-General, Pharmaceutical Export Promotion Council (Pharmexcil), told BusinessLine on 3rd April. But due to restrictions on export of some categories of drugs and the lockdown that has restricted the movement of goods, pharma exports have almost stopped from 3rd March.


OTHER NEWS

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