Trade 15 Nov 2017 by Tojo Jose

India records highest trade deficit in 35 months

India records highest trade deficit in 35 months

Multiple adverse factors rooted on GST launch has caused the country’s trade situation to worsen as the October 2017 data shows export decline of 1.1%.  According to the Commerce Ministry data for October, exports fell to $23.1 billion while imports recorded its 10 months slowest increase of 7.6% to $37.1 billion. The net result is a trade deficit of $14 billion which is the highest one since mid-2014. Poor trade performance is attributed to the GST induced liquidity crunch induced on SMEs and other small players. Various trade bodies are criticizing the premature and hasty GST launch to affect the country’s ailing trade sector. Exporters are blaming on the dela

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Trade 05 Apr 2017 by Tojo Jose

India and UK to Plan FTA post Brexit

India and UK to Plan FTA post Brexit

India and the EU-exiting UK hinted that both countries are going to make their economic engagement deeper after the Brexit. The two countries are planning to reach in a Free-Trade Agreement once UK comes out of the European Union. In a meeting between Finance Minister Arun Jaitely and Britain’s Chancellor Philip Hammond in New Delhi, the two countries decided to set up a fund under National Infrastructure Investment Fund (NIIF) to promote clean energy projects. The fund called Green Growth Equity Fund with a corpus of 240 mn pound will be constituted as a sub- fund within the NIIF. Both countries discussed effort to add tradability to rupee in the international markets and

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Trade 06 Jan 2017 by Tojo Jose

Government to design a new export infrastructure scheme for states

Government to design a new export infrastructure scheme for states

The Union Commerce Ministry is designing a new scheme aimed at supporting export infrastructure in association with state governments so that states can provide better export facilitation services. Commerce Minister Nirmala Sitharaman after the meeting of central and state officials has stressed states’ own efforts to create infrastructure capabilities in export production. The decision about the launch of common export supporting infrastructure scheme was reached at the second meeting of the Council for Trade Development and Promotion on Thursday (January 5th). The new scheme will be known as Trade Infrastructure for Export Schemes (TIES) is aimed to set up common faciliti

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Trade 16 Nov 2016 by Tojo Jose

Problems for rupee resurfaces as capital outflows weakens the currency

Problems for rupee resurfaces as capital outflows weakens the currency

Rupee lost 49 paise against Dollar on Tuesday amidst domestic cash disturbances and a distant prospect for interest rate hike in the US. More than the cash stalemate, it was the expectation about a Fed rate hike that weakened the currency. Rupee reached a five-month low of 67.72 against dollar at the end of trading on Tuesday. Several EME currencies also undergone weakness against dollar. The Chinese Yuan reached its eight year low against the US green back. Chinese officials who follows a fixed exchange rate system allowed yuan to depreciate to 6.8495 against their target of 6.83. Yuan’s low will help Chinese exports. On the other side, the US is losing competitiveness amid

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Trade 21 Oct 2016 by Tojo Jose

India and the US reopens the IPR Pandora box

India and the US reopens the IPR Pandora box

India and the US- the fast emerging friends on several fronts continue to differ on IPR issues. In the bilateral Trade Policy Forum meeting held at New Delhi, representatives of the two countries both countries opened new areas of conflicts within the IPR front.  Commerce Minister Nirmala Sitharaman firmed the stand of limiting IPR within WTO’s TRIPs agreement.   She highlighted the UN High level panel report on access to medicines. “I pointed out to the USTR that a report brought out by a UN high level panel on access to medicines clearly vindicates India’s position on TRIPS plus issues such as data exclusivity and patent linkages,”- the Co

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Trade 30 Aug 2016 by Tojo Jose

US revives comprising stand on WTO issues with India

US revives comprising stand on WTO issues with India

The US has expressed the hope it can find common ground on trade issues with India and other developing countries on controversial trade issues like the Doha round subjects at the WTO. Jeff Zients, Director of the National Economic Council told the PTI that there is the need for enhanced cooperation at global economic platforms. Citing the WTO, Mr Zient asserted that the future looks bright for the WTO. Mr Zient will be in India next week for the second India -US Strategic and Commercial Dialogue. Both countries are in an effort to raise their trade engagement to a higher level because of overall warmth prevailing between them. The new soothing view from the US on evergreen disp

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Trade 12 Aug 2016 by Tojo Jose

RCEP: Officials to meet on tariff structure today; India to fight zero tariff formula

RCEP: Officials to meet on tariff structure today; India to fight zero tariff formula

The crucial meeting of the officials of the proposed RCEP is meeting in Vietnam. Meeting of the officials will negotiate on future tariff structure within the RCEP which has 16 members including ASEAN countries, India China, Japan, South Korea, Australia and New Zealand. The RCEP is an Asian alternative to the US led TPP where China is not a member. From the Indian angle, the proposed FTA discussion is very important as the country is the least prepared for the aggressive tariff cut suggested by others especially China. Beijing aims a zero tariff structure for bulk of the manufacturing commodities given its advantage in the sector. ASEAN is also not opposed to such a tariff struc

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Trade 10 Jul 2016 by Tojo Jose

India to resist RCEP’s zero tax regime

India to resist RCEP’s zero tax regime

Discussions for the proposed Free Trade Platform comprising the major Asian countries - the RCEP (Regional Comprehensive Economic Partnership), is entering into a tough round with India resisting zero tax regime advocated by major partners. Commerce Ministry officials have indicated that eliminating import duty on majority of tradable goods will be disastrous for India. Existing data indicate that India’s FTAs with ASEAN and bilateral ones with several other countries have bought only trade deficits. Most of the arrangements caused flooding of goods into the Indian market. East Asia’s’ developed industrial sector and early established advantage in FTA formations

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Trade 09 Jul 2016 by Tojo Jose

US demands compensation from Indiafor Poultry import restrictions

US demands compensation from Indiafor Poultry import restrictions

Trade battle between the US -world’s largest economy and India world’s fastest growing economy is on an uptrend and WTO battles have increased in recent years. the latest incident is the US’s follow up compensation demand out of its poultry trade dispute victory at WTO’s DSB(Dispute Settlement Body). In the latest development, the US has requested WTO to initiate compensation from India for the poultry trade restrictions against US imports. Earlier, the US had won a case against India’s import restrictions against US imports including poultry, egg and live pigs at WTO’s DSB. The DSB in June 2015, ruled that Indian ban on import of poultry meat,

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Trade 17 Jun 2016 by Tojo Jose

Current account deficit comes down but remittances and service exports fall amidst declining trade: trade data

Current account deficit comes down but remittances and service exports fall amidst declining trade: trade data

India’s current account deficit has registered its smallest deficit figure in the last seven years. Declining trade deficit amidst the global recession has helped to narrow down the trade deficit. According to the RBI's quraterly estimate about trade data for the quarter, other developments for the quarter include fall in services exports which is a matter of concern in the context of sharp decline in exports of goods. The current account deficit for the fourth quarter of the last financial year (2015-16) was just $300 million which is around 0.1% of GDP. This is significantly lower than US$ 7.1 billion (1.3 per cent of GDP) in Q3 of 2015-16 and marginally lower than US$ 0

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