India asks Indonesia to remove non-tariff barriers on Indian pharma products news

India has asked Indonesia to consider removing Non-Tariff Barriers (NTBs) on the import of Indian pharma products into Indonesia.

Union minister of commerce and industry Kamal Nath during a bilateral meeting with Indonesian trade minister Mari Elka Pangestu, said that such a step would be beneficial for Indonesia to source cost-effective Indian drugs and pharmaceutical products. He further stated that the Indian pharmaceutical products are being exported to several countries including the highly regulated markets of US, Europe, Japan and Australia.

The two sides discussed issues regarding non-tariff barriers on carbon black, wheat flour, uncoated writing and printing paper and milk products and ascertained the concerns of each other to remove barriers to free flow of trade in these goods.

Nath also underlined the potential of small and medium enterprises (SMEs) in both the countries and stressed the need to explore the opportunities in the each other's countries.

"The Indian small and medium sector is quite strong and would welcome engagement with the Indonesian counterparts and some of the Indonesian products such as wood furniture, handicrafts, traditional textile (batik), food processing, etc, that can find good market opportunities in India," he added.

The commerce minister said there was scope for widening the trade basket between the two countries, particularly in the services sector and highlighted the strengths of financial and banking sector.

He said that Indian banks were interested in taking up stakes in Indonesian banks, with State Bank of India and Bank of India having already started operations there. He also suggested that Indonesia too could think about investing in the Indian banking sector, which would enhance the confidence of Indonesian businessmen and investors to do business with India.

In October 2007 the first meeting of the India-Indonesia joint study group was held in Jakarta, which had agreed to submit a report by June 2008. The next meeting of the group is expected in February in New Delhi.

Bilateral trade between India and Indonesia rose to $6.20 billion in 2006-07, a massive jump of 41.22 per cent over the previous year. The share of India's exports to Indonesia was $2.03 billion and Indonesia's exports to India were $4.17 billion with the balance of trade in favour of Indonesia.

Bilateral trade has shown impressive growth over the last five years with Indian exports growing at a compounded annual growth rate (CAGR) of 30.6 per cent and Indian imports growing at 32 per cent.

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India-China FTA not in near future: Nath

Negotiations on the proposed India-China free trade agreement will have to wait, as a final decision in this regard will be taken only after a meeting between Commerce Minister Kamal Nath and his Chinese counterpart.

A joint task force report, prepared by officials of both the countries, has recommended the feasibility of an FTA between both the countries.

"Negotiations on free trade agreement (FTA) between India and China will not start in the near future this year. The Prime Ministers of both India and China in their recent meeting had decided to recommend the report of the joint task force to the commerce ministers of both the countries. We will be holding a meeting on this to decide what we should do," said Nath, at the sidelines of the CII partnership summit held in Gurgaon.

Nath said he would consult industry before going ahead with FTA negotiations. Indian industry is against an FTA with China, unless the country conforms to the WTO norms, abolishes an controlled exchange rate and stops subsidising exports.

In 2004, Indian exports exceeded Chinese imports by $ 400 million. Chinese imports are likely to exceed Indian exports by $ 12 billion by end of fiscal.

Currently, India-China bilateral trade is worth $ 38.6 billion and is likely to exceed $ 40 billion by this fiscal end. The two countries have set a bilateral trade target of $ 60 billion by 2010.

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Australia raises concern on India's sugar export sops

NEW DELHI: After raising the sugar export subsidy issue in WTO, Australia has taken it up with India saying the sops distort a competitive global market for the sweetener.

The issue was raised by the Australian Trade Minister, Mr Simon Crean with Agriculture Minister Mr Sharad Pawar at their meeting here today.

India, on its part, has informed Australia that the subsidy given to sugar exporters was in compliance with the guidelines of the World Trade Organisation.

"There is the issue about concessions given to the sugar exporters. I have explained (to the Australian Minister) about the background ... And how it fits into the WTO guidelines," Mr Pawar said after his meeting with Mr Crean.

The Indian Government has been giving subsidy to sugar exporters at the rate of Rs 1,350 per tonne for coastal states and Rs 1,450 per tonne for non-coastal states in the backdrop of a glut in the industry.

Besides, Mr Pawar also said India was eager to export mangoes to Australia from April 2008.

"There is some problem from their side. They have assured us that they will look into the matter," he said.

India has started exporting mangoes to the US last year after the ban was lifted. The Government is trying to push export of the fruit in several other countries. - PTI

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Indian apparel exports drop 14 pct in 2007; seen 8 pct down in 2008 - trade body

Indian apparel exports declined by 14 pct in 2007 due to rupee appreciation and are expected to drop by about 8 pct in 2008, according to a national trade body.

The Confederation of Indian Apparel Exporters (CIAe) said the export of readymade garments to the US alone declined by 10 pct in rupee terms during April-Nov 2007, and added that exporters have already started to feel the heat from a possible recession in the US coupled with competition from neighbouring countries.

'This is only the beginning, and if the government does not seriously look into the plight of the exporters this industry could be heading for a disaster,' CIAe's president Amit Goyal said.

The threat of a US recession and competition from China, Vietnam and Bangladesh will remain the dominant concerns in 2008, he said.

The cost of production is believed to be 20 pct lower in these countries compared with India's, where costs rise by 5 pct each year.

Even exports to the European Union have declined by around 4 pct as most volume-based business has gone to Bangladesh due to the duty-free concessions enjoyed by it, and only small orders with a quick turnaround are coming to India, he said.

'Unless the government doesn't increase the drawback rates as demanded by the industry and stabilise the rupee exports will continue to show a downtrend,' said JB Jain, a leading garment exporter.

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NDIA SEEKS MARKET ACCESS TO EXPORT AGRI PRODUCTS TO AUSTRALIA

India is keen to export agricultural products and dairy & poultry products to Australia and has asked Australia to facilitate these exports through appropriate market access initiatives and removing non-tariff barriers. This was conveyed by Shri Kamal Nath, Union Minister of Commerce and Industry, during his bilateral talks with the Trade Minister Mr. Simon Crean, here today. India is also looking forward to exporting mangoes from April 2008, the Minister added. The meeting was attended by the Commerce Secretary Shri G.K. Pillai; Secretary (DIPP) Shri Ajay Shankar; Director General of Foreign Trade Shri R.S. Gujral and senior officials from various Ministries from both the countries.

Shri Kamal Nath stated that “India is growing and a stable investment climate presents huge opportunities for Australian companies, particularly in energy and infrastructure sectors. Some of the major Australian companies, which have invested in India are BHP Petroleum Pty. Ltd., Telstra Corporation Ltd., Telstra Holding Pty. Ltd., Australian India Resources N.L.., BHP Steel, BHP Billiton, Rio Tinto, MIM Holdings, Snowy Mountains Engineering Corporation etc. Australia’s investments in India have been US $ 1.92 billion since 1991. Indian investments in Australia are now well over US $ 1 billion and most of these are in the IT sector”.

The bilateral trade between India and Australia has seen a growth of 37.50% between 2005-06 and 2006-07, and the total bilateral trade during 2006-07 is US $ 7932.79 million. Bilateral trade from April to September 2007 is US $ 4967.27 million recording a growth of 29.41% for the same period in 2006. The compounded Annual Growth Rate during 2001-02 and 2006-07 is 14.14% for exports and 32.31% for imports. For total trade during the same period, the CAGR is 28.96%.

India’s exports to Australia in 2006-07 were US $ 924.78 million, an increase of 12.61% from 2005-06. India’s imports in 2006-07 was US $ 7008.01 million, an increase of 41.64% over 2005-06. Australia’s trade in services with India during 2006-07 was US $ 1895 million. Of this, the import of services was US $ 360 million and the export was US $ 1536 million.

The major items of India’s exports are gems & jewellery, metals, machinery & instruments, cotton yarn, fabrics, drugs & pharmaceuticals. The major imports consists of gold, coal, coke and briquettes, metal ore, metal scraps and non-ferrous metals.

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China may ask PM for FTA on his Beijing visit

NEW DELHI: China is expected to step up pressure on India to negotiate a bilateral free trade agreement (FTA) during Prime Minister Manmohan Singh’s visit to Beijing later this month. The trade and economic relations committee (TERC) headed by the PM will meet soon to finalise India’s agenda for the three-day visit beginning January 13. While India may not agree on FTA negotiations before China gets market economy status, it will try to convince Beijing to lower barriers to trade, mostly non-tariff in nature, for products such as coke and agricultural items.

The joint task force, set up to look into the possibility of an FTA, is expected to hand over its report during Mr Singh’s visit. According to sources, the joint task force will not rule out an FTA, but defer it. “India will not like to completely rule out an FTA as it might hurt its relations with China. However, it will certainly be deferred,” a source said.

India has not yet granted market economy status to China as it fears the move may result in large-scale dumping of Chinese products. Once the status is granted, India will compulsorily have to accept numbers supplied by China in all anti-dumping cases initiated by it against the country.

Since the Chinese pricing and accounting systems are still opaque, accepting their prices for anti-dumping calculations could result in a situation where India will not be able to establish dumping at all. This will prevent India from taking action against dumping of Chinese goods.

During Mr Singh’s visit, India plans to ask China to remove the export duty on coke as it was affecting India’s steel industry, which prefers to use high-quality coke from China. The country will also urge Beijing to remove restrictions on import of most agriculture products from India.

According to statistics released by China, India’s trade with the country touched $14.7 billion in the first five months of 2007 –– registering a 50% growth over the previous year. Bilateral trade is expected to cross $35 billion by the year-end.

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Centre can scrap notified Goa SEZs, Nath tells CM

PANAJI/NEW DELHI: Adopting a conciliatory stand in the stand-off with Goa over scrapping of special economic zones (SEZs) in the state, Union commerce & industry minister Kamal Nath said that the Centre can review all SEZs in Goa — irrespective of whether they have been notified or not. In a meeting with Goa chief minister Digambar Kamat on Thursday, Mr Kamal Nath asked him to give in writing the reasons for scrapping all SEZs in the state and promised to take necessary action.

The minister’s statement is in stark contrast to commerce secretary GK Pillai’s comment on Wednesday that notified SEZs cannot be denotified as they were legal entities.Speaking to reporters after the meet, Mr Kamal Nath said there was “absolute provision” in the SEZ Act for everything, including review of the notified zones. “Centre can review all Goa SEZs,” he said.

“We have been assured that no SEZ, including those notified, will be allowed in Goa, if the state does not want it. The minister is very concerned and cooperative on this issue,” said Mr Kamat who along with north Goa MP Shantaram Naik and state secretary JP Singh held an hour-long meeting with the Union minister.

The Centre’s decision to back off from a confrontation could be to avoid more controversies related to SEZs, especially in the light of the violence in Nandigram which lasted for months after a decision to scrap the Salim Group SEZ project was taken.

In the meeting, the Goa CM presented three points against the proposed SEZs. Besides highlighting public sentiment against developing such zones, he is understood to have shown facts to prove that SEZs to be a deterrent to the state’s growth; and as such would not generate any income or employment for the locals here, apart from posing grave environment concerns. Mr Kamat also brought to the Centre’s notice that the claims of employment generation by SEZ developers were far fetched.

“The companies’ have misrepresented facts to us while applying for SEZs. They are unable to prove that they can generate large-scale employment. That is how we got cheated into giving permissions,” said Congress MP from north Goa Shantaram Naik.

The Centre is likely to wait for the SEZ board to examine the points made by the Goa CM, before deciding its next course of action.A day before new year, Goa had decided to ‘do away’ with setting up SEZs and wanted central government to denotify the three approved zones.

Meanwhile, the issue took a political twist with the opposition alleging that Mr Kamat is only ‘buying time’ to dampen the anti-SEZ protests in the state. “If I come to power, these SEZs will never come. I doubt if the CM is serious about the issue, I have questions about his intention,” said leader of opposition and senior BJP leader

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India slashes customs duties on 4800 items from SAARC

NEW DELHI: India has scrapped import duty and reduced customs tariff on more than 4,800 items from neighbouring least developed countries (LDCs) like Pakistan and Sri Lanka in order to boost trade in South Asia. All countries are members of the South Asia Free Trade Agreement (Safta) which came into force in January 2006.

The import duty has been reduced from 16-40% to zero level on items like meat, fish, milk, dairy products and dry fruits from Bangladesh, Nepal, Bhutan and Maldives. However, the duty rates on these items have been reduced to 12% from 20% on goods imported from Pakistan and Sri Lanka. The new rates have come into effect from January 1.

All pharmaceutical products and drugs can now be imported at 10% duty from LDCs, as against 12.5% earlier. However, tariff on drugs has not been cut in case of Pakistan and Sri Lanka, a Central Board of Excise and Customs notification said. Customs duty on fertiliser, lime and cement items has been cut to 10% in case of LDCs, but it would remain at 12.5% for Pakistan and Sri Lanka. Dairy products, excluding milk powder, and butter oil can also be imported from Bangladesh, Nepal, Bhutan and Maldives at zero duty.

The decision to abolish duty on dairy products from these countries is unlikely to impact the domestic market or benefit these countries as they are not major players in milk market. Pakistan and Sri Lanka, which can export dairy products to India, would have to pay 20% duty on these.

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Indian November imports grow faster than exports

NEW DELHI: Indian imports grew faster than exports in November, data showed on Tuesday, and analysts expect the trade deficit could widen further on a mix of record oil prices, a fast-growing economy and a strong rupee.

Exports in November rose 26.8 percent from a year earlier to $12.4 billion in November, while imports rose an annual 29.3 percent to $19.8 billion, government data showed on Tuesday. That left a trade deficit of $7.4 billion for November, larger than $5.5 billion a year earlier.

The rupee rose 12.3 percent against the dollar last year, denting exporters’ competitiveness in foreign markets but offering some cushion against high oil prices.

“There could be some moderation in export growth in the coming months. The annual export target is difficult to meet,” said DK Joshi, principal economist at rating agency Crisil.

Last April, the government set an export target of $160 billion for the fiscal year ending in March 2008. In December, Commerce Secretary GK Pillai said exports were likely to be $140 billion. Tuesday’s data showed exports of $98.4 billion for the eight months ended November, up 22.1 percent from a year earlier.

High oil prices were a threat to domestic inflation, especially if the rupee’s rise stalled, Joshi said. However, he also said a 10.2 percent annual rise in the oil import bill to $43.3 billion for April to November was ‘not a concern’.

India’s trade deficit widened to $52.8 billion in the first eight months of 2007/08, up from $38.5 billion a year earlier, boosted mainly by non-oil imports, the data showed.

The Indian economy has grown at an average of 8.6 percent over the last four fiscal years, and is expected to grow at a similar rate in 2007/08, boosting demand for capital goods both from domestic and overseas markets. “Non-oil imports are reflective of a strong economic growth,” Joshi said. reuters

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Centre dares Goa, says SEZs once notified cannoat be cancelled

NEW DELHI: In a move that could lead to a direct confrontation with the Goa government over the special economic zone (SEZ) policy, the Centre has said that the three SEZs notified in the state –– pharma major Cipla’s Meidtab Specialities, Raheja’s IT/ITeS SEZ and Peninsula Pharma’s biotech SEZ –– cannot be denotified.

The Goa government that has decided not to house any SEZs is sure to find the Centre’s stand unpalatable. Moreover, the Centre also feels that the onus is on state governments to compensate promoters of notified SEZs if the door is shut on their projects. Goa chief minister Digambar Kamath is expected in New Delhi on Thursday and he is likely to meet commerce & industry minister Kamal Nath to discuss the row over SEZs.

Following a meeting of the board of approval (BoA) of SEZs, which granted formal approval to 24 proposals and in-principle clearance to four, commerce secretary G K Pillai said on Wednesday that there was no provision under law to denotify SEZs. “The SEZs that have been notified have become legal entities and cannot be denotified,” Mr Pillai said.

Mr Pillai said there could be legal consequences if the attempts were made to denotify the notified SEZs as investments has already been made in the zones. Meditab has invested more than Rs 500 crore in its SEZ. "Duty-free equipment has also started coming in. How will the state government compensate the developers," Mr Pillai said. Developers may even approach the court against the decision of the Goa government, he added.

Mr Pillai said the four remaining SEZs, which had been formally approved but not notified, could be cancelled. The ones in danger of cancellation include Inox Mercantile’s biotech SEZ, Paradigm Logistics IT/ITeS SEZ, Panchbhoomi Infrastructure’s IT SEZ and Planetview Mercantile’s gems & jewellery SEZ.

The Goa government had decided to scrap all SEZs in the state following widespread political protests initiated by the BJP and subsequently endorsed by the Congress, NCP and the Catholic Church. There have been protests against individual SEZs in a number of states including West Bengal, Maharashtra and Haryana. However, Goa is the first state where the entire policy is being challenged.

The 24 proposals given formal approval on Wednesday include Steel Authority of India (SAIL)’s SEZ at Salem in Tamil Nadu, Iffco’s multi-product SEZ in Andhra Pradesh, Dr Reddy’s pharma SEZ in AP and Orion’s IT SEZ in West Bengal.

The Centre has formally approved 404 SEZs out of which 187 have been notified. SEZs enjoy several tax sops including income tax exemption for a specified period under the SEZ Act 2005 and SEZ rules notified in 2006.

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