Fake drugs from China reach Kenya now

NEW DELHI: The supply of fake drugs from China to the African sub-continent is not limited to Nigeria, it now appears. The Kenyan government has seized two container loads of medicines shipped from Shanghai bearing a 'government of Kenya' label falsely indicating that it was manufactured in Kenya, a communication from the Indian High Commission in Nairobi to the Indian government has indicated.

Although unlike the Nigerian seizures, the present impounded consignments do not bear India's name, India, nonetheless, is on the alert, as there might be other similar fake consignments in the country. The Kenyan government is trying to establish whether there are other consignments of fake drugs that have reached the country or are on the way.

“It is pretty clear by now that sub-standard drugs manufactured in China with false manufacturing labels are being shipped to African countries. Since such consignments have been seized in Kenya and there are chances that other such consignments may have reached the country or are on their way, India has to ensure that the fakes are not passed off as manufactured-in-India products, bringing disrepute to the country,” a commerce department official told a news agency.

The Nigerian government had recently seized a large consignment of fake anti-malarial drugs labelled made in India but produced in China. India lodged a strong protest with China demanding strict action against Chinese manufacturers of such spurious drugs whose names and addresses were clearly printed on the confiscated cartons.

Africa is an important market for Indian drug producers as it accounts for over 15% of India’s total generic (off-patent drugs) exports worth Rs 30,000 crore annually.

“India can’t afford to get a bad name in the African market for drugs. We have to do all possible through the diplomatic channels to stop unscrupulous Chinese producers from bringing disrepute to the Indian industry,” the official added.

Meanwhile, India will take up with Libya a complaint by Ajanta Pharma that its consignment was barred entry on the grounds that it was from a non-US, non-EU region.

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Exports continue to drop, 29% in June

NEW DELHI: India’s exports saw a 29% drop in June 2009, Union minister for commerce & industry Anand Sharma told the Rajya Sabha on Wednesday.

The country’s exports are experiencing a declining trend for the last nine months. The growth in exports had registered a 29.2% drop at $11 billion in May 2009. The decline was 34% in April 2009.

As per a sample study conducted by the commerce department, 648 exporting units across the country posted a loss of Rs 8,982 crore between August 2008 and April 2009.

Exporting units in 17 sectors saw 134,593 people losing jobs during the period, another survey conducted by the department on retrenchment said. “This does not reflect the total job losses, which would be higher,” minister of state of commerce & industry Jyotiraditya M Scindia informed the House.

Mr Sharma said the pace of export fall had begun to recede. He expressed optimism that the measures announced in the budget would help the crisis-ridden export sector.

In the budget, the finance minister decided to continue with the interest rate subvention (discount) scheme and the export credit guarantee scheme for exports beyond September 2009 till March 2010.

The commerce and industry minister also said it is against creating barriers against imports into the country as India itself has been opposing the protectionist policies that block the flow of global trade.

“Our position has been clear that we are against any protectionist barriers coming up that many countries have shown a tendency to go in for and which is impacting the flow of global commerce, including India’s exports to those countries,” Mr Sharma said in the Rajya Sabha.

In 2008-09, India’s exports were just 3.4% higher at $168.7 billion compared with $163 billion in 2007-08. While exports grew 34% in the first six months of 2008-09, the downturn hit exports in the second half of the fiscal, bringing down the growth rate to less than 4%.

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India against import barriers

NEW DELHI: Government on Wednesday said it is against creating barriers against imports into the country as India itself has been opposing the protectionist policies which blocked the flow of global trade.

"Our position has been clear that we are against any protectionist barriers coming up, which many countries have shown tendency to go in for, which is impacting the flow of global commerce, including India's exports to those countries," Commerce and Industry Minister said in the Rajya Sabha.

Answering supplemantaries during the Question Hour, Sharma said as a "matter of policy the government cannot have protectionist barriers".

However, he said the government would respond to the issue of dumping of cheap imports.

Thanks to a steep fall in the value of crude oil imports, the country's imports fell at a sharper pace than exports in May. While exports declined by 29.2 per cent in May, imports contracted by 39 per cent.

The country's trade deficit more than halved to $5.2 billion in May 2009-10 from $11.11 billion in the same month last year.

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Highlights of Economic Survey 2008-2009

New Delhi (PTI): Following are the highlights of the pre-Budget Economic Survey 2008-09.

# Unleash reforms - phase out cesses, surcharges and transaction taxes (such as commodities transaction tax, securities transaction tax and Fringe Benefit Tax)

# Introduce new Income Tax Code that results in neutral corporate tax regime

# 7-7.5% growth possible in 2009-10

# Allow 49% FDI in defence and insurance; permit FDI in multi-format retail starting with food

# Proposes another round of fiscal stimulus including tax cuts and increase in expenditure

# Decontrol petrol and diesel prices; end Govt monopoly in railways, coal and nuclear energy

# Lift all bans on future contracts to restore price discovery; decontrol sugar and fertiliser

# Revitalise disinvestment programme to generate Rs 25,000 crore annually, list all PSUs and auction those beyond revival

# Economic growth decelerated in 2008-09 to 6.7 per cent from nine per cent in 2007-08

# Fiscal deficit in 2008-09 shot up to over 6 per cent from 2.7 per cent in 2007-08

# Survey indicates FRBM-II to get back to path of fiscal consolidation

# Complete the process of selling 5-10 per cent equity in identified profit-making non-'Navratna' PSUs

# List all unlisted PSUs and sell a minimum 10 per cent equity to public.

# Auction all loss-making PSUs that cannot be revived

# In PSUs with zero networth, allow negative bidding in the form of debt write-off

# Auction 3G spectrum

# The auctioned spectrum must be freely tradable, with capital gains on spectrum to be taxed under the Income Tax Act

# Rationalise Dividend Distribution Tax to ensure full single taxation of returns to capital in the hands of the receiver

# Reform petroleum (LPG, Kerosene), fertiliser and food subsidies to reduce leakages and ensure targeting

# Limit LPG subsidy to a maximum of 6-8 cylinders per annum per household

# Phase out kerosene supply-subsidy by ensuring that every rural household has a solar cooker and solar lantern

# Review customs duty exemptions and move to a uniform duty structure to eliminate inverted duties

# Implemnet GST from April 1, 2010

# Rapid operationalisation of UID Authority within 3 months

# Agriculture growth fell sharply to 1.6 per cent in 2008-09 from 4.9 per cent

# Exports grew at 3.4 per cent to 168 billion dollar in 2008-09 from 163 billion dollar in previous fiscal

# Imports grew at 14.3 per cent to $287.75 bn from $251.65 bn

# Trade balance deteriorated to $119.05 bn from $88.52 bn.

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Economic Survey: Cut customs duties, streamline export promotion

New Delhi (PTI): The government should cut customs duties and streamline export promotion schemes and pay special attention to infrastructure to overcome the contracting exports on account of recession in India's major trading partners, the Economic Survey said on Thursday.

The Economic Survey cautioned that the global meltdown, particularly in the US and EU, is expected to impact the country's export growth in 2009-10.

"With import demand falling from our major trading partners, India's exports of goods and services (are) expected to be impacted," the pre-Budget Economic Survey tabled in Parliament on Thursday said.

India's exports, after registering a healthy growth rate of over 30 per cent in the first half of 2008-09, turned negative in October 2008. Overseas shipments declined by 29.2 per cent in May — contracting for the eighth month in a row — over the same month last year.

In the last fiscal, exports grew by a meagre 3.4 per cent to $168.7 billion dollars.

The survey said that besides short-term relief measures and stimulus packages, some fundamental policy changes are needed for the merchandise trade sector.

The measures include continuing to reduce customs and excise duty to make our exports and industry competitive, streamlining existing export promotion schemes, and giving special attention to export infrastructure.

The survey talked of "weeding out unnecessary customs duty exemptions", and rationalising the tax structure including specific duties in a calibrated manner taking into account the specific duty levels in our trading partner countries.

There is also a need to check the proliferation of special economic zones, evolve clear-cut policy for beneficial Comprehensive Economic Cooperation Agreements even with some developed countries "... which should be well integrated with our economic and trade policy reforms and the blueprint for possible changes due to WTO negotiations."

However, the Economic Survey said the steep fall in petroleum prices and cooling of the prices of commodities could have a positive effect on imports.

Imports dipped for the fifth straight month by 39.2 per cent to $16.21 billion in May over the year-ago month.

It also said in 2010 recovery is expected with IMF projections at 1.9 per cent increase for world output and 0.6 per cent for world trade volume of goods and services.

The survey emphasised the need to desist from any protectionist tendencies and proceed on the reform path.

"While efforts to promote exports are needed, there is a need to guard against protectionist measures originating from our trading partners," it said.

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China warns of tit-for-tat over dairy ban

NEW DELHI: China has retaliated against India's ban on its dairy products, putting the two neighbours with a legacy of estrangement on the brink of a trade war.

China is annoyed with India's decision to extend the ban on its milk and milk products, which expired on June 24, by another six months until December 24. It has threatened to ban Indian products in retaliation.

In a letter to the Indian embassy, general administration of quality control bureau of China said, "During the period of financial crisis, we are strongly against trade protectionism of any form. As a member of BRIC and WTO, we hope your party determines the prohibition towards China's dairy products ASAP, in the spirit of safeguarding bilateral trade."

It added, "If India insists on this decision, China will respond to the safety and quality of imported products from India."

According to commerce ministry officials, China has raised doubts about food products imported from India, including seafood products, dairy products and sesame oil to pressurise India to lift the ban. "China has also taken a moral high ground by saying that it has not banned import of these Indian products," an official said.

Arguing for lifting the ban, China pointed out that after the milk scandal, it had taken several measures to deal with the problem and highlighted that these measures prompted countries like Singapore, Malaysia, Thailand and Chile to lift the ban on Chinese dairy products.

China has asked India to provide the scientific basis and risk assessment under the WTO/SPS agreement to enforce the ban on its products.

"The Chinese side shows grave concern because the ban is extended in India while it is removed in other countries. The reaction in India, regardless of the efforts and achievements by Chinese government, differ from good cooperation between both sides, lacking scientific ground and against scientific principle, the transparency principle and the minimum impact on foreign trade principle stipulated in WTO agreements," the letter said.

The ban on dairy products was extended for six months to ward off any threat of contaminated whitener which had caused deaths of several infants and made several thousands ill. A notification to this effect was issued by the Directorate General of Foreign Trade (DGFT).

India, in September 2008, had banned Chinese milk and its byproducts for three months which was later extended in December last year for six months. Melamine, used to make plastics and fertilisers, was found in infant milk and other dairy products of several Chinese firms. The dangerous chemical can cause kidney stones as well as failure of the organ.

More than a dozen countries in Asia and Africa had also banned milk and dairy product imports from China, while several others had recalled products suspected to be contaminated.

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Exporters seek service tax waiver

NEW DELHI: Exporters, hit hard by the global economic slowdown, have sought exemption from payment of service tax in the forthcoming Union Budget.

In a meeting with the revenue department, exporters pointed out that while the government allows refund of taxes on a number of services, very little refund has actually taken place because of the cumbersome process involved.

According to Delhi Exporters' Association (DEA) president SP Agarwal, who led a delegation to meet revenue secretary PV Bhide earlier this week, the problem with refund of service tax is a long-pending issue for exporters.

"We are hardly getting any refunds. If the government wants us not to pay service tax, then we should get an exemption," Mr Agarwal said.

According to DEA, exporters are working on just 4-5% profit margins as demands have shrunk due to the global slowdown and it is very difficult for most to pay a 10.5% service tax.

He added that the revenue secretary has assured exporters that the government would take steps to solve the problem. "We are hopeful that the Budget would sort out the issue," he said.

The delegation also asked the government to exempt exporters from paying value-added tax (VAT) at the state level. DEA pointed out that while as per law the refund of VAT is to be made to exporters in one month, very little is being refunded within the given period. "There is also a provision for 8% interest on delayed refund, but not a single paisa has been paid so far," Mr Agarwal said.

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India to host Doha meeting in September: Commerce Minister Anand Sharma

PARIS: India plans to convene a meeting of key world trade ministers in September to capitalise on new momentum in global commerce talks, Indian Commerce and Industry Minister Anand Sharma said today.

"In early September we're looking at a ministerial meeting," Sharma told AFP on the sidelines of informal world trade talks in Paris taking place this week.

Sharma said the talks in Paris were "important enough to give confidence and hope that we can do business together," adding: "We've reaffirmed our commitment to take the Doha Round to a successful conclusion."

The United States and India have been at odds in the Doha round of trade liberalisation talks, which got under way in the Qatari capital in late 2001 and has been foundering ever since.

Progress has been hampered by disputes between developed and developing nations on measures to ease restrictions on trade in agricultural and industrial products.

Sharma today however pointed to "major changes" in both the United States and India following elections in the two countries in recent months.

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Govt defers decision on safeguard duty on steel items

New Delhi, May 11; In what appears to be a victory for users, the Government has deferred a decision on a proposal to impose provisional safeguard duty on hot rolled coils/sheets/strips. It said the matter needs to be examined further after taking views of the consuming industry.

“We felt that not enough homework had been done and there is a need to consult both the domestic industry and other interested parties concerned. We have asked the Directorate General on Safeguards (DGS) to consult the domestic user industry and come back to the board after 60 days (with recommendations),” Mr G.K. Pillai, Commerce Secretary, told reporters after a meeting of the Standing Board on Safeguards. Mr Pillai heads the board.

The Steel Secretary, Mr P.K. Rastogi, said there was no urgency to consider the safeguard duty. The interim proposals of the DGS were found to be “insufficient”, he noted.

Asked if there could be any injury to the local industry in view of non-imposition of the safeguard duty, Mr Pillai said, “From the evidence we do not see any threat to the industry”. He also highlighted that steel users had brought to the Government’s notice that they had appealed to steelmakers to further reduce steel prices, matching import prices.

“We were expecting a decision. Imports were being allowed at very low prices. The advantage of whatever demand was generated from stimulus package was going to Ukraine and Chinese companies,” a spokesman for Ispat Industries said.

The Director-General (Safeguards) had in April 2009 recommended a provisional safeguard duty of 25 per cent on imports of hot rolled coils/sheets/strips up to the cost, insurance and freight (CIF) value of $600 a tonne, considered a reasonable benchmark.

In India, there are currently five producers who have the capacity to produce hot rolled coils/sheets/strips — Ispat Industries, Essar Steel, JSW Steels, Steel Authority of India and Tata Steel. The petition seeking safeguard duty was filed by Ispat Industries and Essar Steel. JSW Steel and Steel Authority of India had supported the petition.

In its preliminary finding, the Director General (Safeguards) had concluded there has been significant increase in imports at low prices. Also, the volume of imports surged in view of steeply falling import prices.

This has impacted the domestic industry prices, which fell from Rs 40,000 a tonne in April-September 2008 to Rs 26,296 in February 2009, and consequently led to a decrease in profits. In fact, the domestic industry suffered significant financial losses and negative return on capital employed, the DGS had concluded.

From the range of 1,000-8,000 tonnes a month, the volume of lower priced imports had suddenly surged to as high as 97,000 tonnes and 1,30,000 tonnes in January and February 2009 respectively, according to preliminary findings. The domestic industry had argued that in February 2009 itself, about 1 lakh tonnes landed at Mumbai port at an average price of $450 a tonne. The import prices started declining from above $1,000 a tonne in August 2008 and have continued to fall even now.

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Govt extends deadline for exporting non-basmati rice

NEW DELHI: The government on Monday extended a deadline for exporting 55,000 tonnes of non-basmati rice to four African countries by three months, just a few days after the Commerce Ministry gave permission for export of 10 lakh tonnes (one million) of rice to 21 other African countries.

In a statement issued here by the Agriculture ministry said that State Trading Corp of India (STC) would export the rice to Nigeria, Senegal, Ghana and Cameroon by July 30. So far, the agency has only been able to export only a paltry 15,000 tones to Ghana at about $500 per tonne.

According to a Commerce ministry official, the extension was made in response to a request for extension by the STC since there were no fresh import deals of late. The move, however, endorses the reading within the sector that parastatals may prove unequal to the task of striking a deal that is advantageous to India despite the economics for rice export proving positive.

Indian rice, with its price pressured down on account of oversupply and the reluctance of the government to pick up anymore levy supplies, reportedly costs not more than Rs 17,000 or $340 a tonne at the port currently. Better-quality parboiled rice with just 16 per cent brokens can reportedly be sourced from Chhattisgarh for as low as Rs 11,500 a tonne, way below the Rs 14,500 rate payable to mills for levy rice.

And at a low rate of around Rs 11,500, the export cost at Kakinada is pegged by trade at slightly lower than $300. Compared with Thai or even Viet Namese rice (they are the world’s leading rice exporters, producing 70% of global volume) Indian rice is relatively economical. By the first week of May, the benchmark Thai rice price for export fell to $530 a tonne from s $540 due to thin demand, with the planned government stock sale adding to the downward pressure. Apprehensive that prices could plummet further, the Thai government announced last week that it could “revise” a plan to sell 3.76 million tonnes of rice from its stocks.

Last Wednesday, the government had allowed parastastals STC, MMTC and PEC to export one million tonne of non-Basmati (premium, aromatic, long grained rice variety) rice exports to 21 African nations. Curiously, while the exports are apparently on government-to-government account and to be routed through the parastatals, the actual sourcing and shipping are reportedly expected to be sub-contracted to private firms including the Delhi-based Shri Lal Mahal Ltd, Emmsons International and Amira Foods.

That has already set off apprehensions among commodity experts that the private sector may once again end up, cocking a snook at parastatals, raking in the big profits on the first significant steps to open up rice exports totally by doing away with the conditional ban imposed early last year.

A meeting of a committee of secretaries recently decided to open up wheat exports to the tune of two million tonnes to the private sector, a move meant to sponge up as much of the wheat glut in the plunging domestic market for sale outside the country.

In the case of rice, however, the government appears to be deliberately proceeding far more cautiously in completely lifting the blocks to export despite an estimated production of 98.89 million tonnes in the crop year to June.

According to the agriculture ministry, that would be higher by about 2.3 percent compared to last year. But rice stocks with the government have mounted to phenomenal highs, necessitating exports urgently although global rice prices have eased up since early this year based on improved global output prospects. On May 1, India's rice stock rose 66 percent on year to 21.4 million tonnes.

That notwithstanding, the government has been reluctant to make any bold decisions on rice exports in the throes of the general election and persistently high food prices, choosing instead to allow exports on a governmetn-to-governmetn basis to mainly African countries, ostensibly on “humanitarian” considerations. Unlike Western importers such as the EU and USA as well as W Asia, African nations have been big buyers of non Basmati rice varieties.

The imposition of MEP (minimum export price), aimed at preventing more popular non Basmati varieties of domestic consumption from flying out of the country in big quantities and consequently boosting rice prices in the country, hurt the African nations the most. Last year, the FAO urged the Indian government to take the lead in lifting the export bars and easing global rice prices.

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