British companies are poised to gain from a 'first mover' advantage ahead of the US and European Union (EU) in India as a result of a free trade agreement (FTA), which has the potential to overshadow other major UK trade deals, a new UK think-tank analysis said on Wednesday.

 

The Resolution Foundation is examining the economic impact of the UK's new trade pivot towards the Indo-Pacific region following Brexit.

 

In 'A presage to India?', its latest report for 'The Economy2030 Inquiry' with the London School of Economics (LSE) funded by the Nuffield Foundation, it noted that the economic benefits of a trade deal with India could eventually be even bigger than the 'now defunct' trade deal with the US.

 

'UK firms exporting to India currently face far higher tariffs (19 per cent, on average) than they do to the US (2 per cent), so there is far more scope for trade liberalisation. Securing an FTA with India could also give UK firms a 'first mover' competitive advantage over exporting firms in the US and EU, which don't have preferential access to the Indian economy,' notes the Resolution Foundation.

 

'India is forecast to become the world's third largest import market by 2050, while its demand for business, telecommunications and computer services - sectors where UK export firms already perform well - is expected to treble over the course of the 2020s. UK business services exports currently under-perform in India relative to other Indo-Pacific regions - accounting for just 1.8 per cent of imports to India, compared to 3 per cent in China, and 4.2 per cent in Malaysia - so the potential for future growth is huge,' it notes.

 

The UK and India announced the launch of FTA negotiations earlier this month, with the first round of talks between officials kick-starting virtually last week.

 

The latest analysis finds that much of the focus around the UK's pivot towards the Indo-Pacific is around its ambition to become the first European nation to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - an agreement that could cover eight per cent of current UK trade. However, as the UK already has free trade agreements (FTAs) with the majority of CPTPP members, with 95 per cent of CPTPP trade already covered by FTAs, a trade agreement with India could have a 'far bigger impact', the report says as India is a faster growing economy than the CPTPP bloc.

 

The think-tank also flags that while there are clear potential benefits of trade liberalisation with India, UK firms will also be exposed to 'far more uncertainty about competition from Indian exporters'.

 

The Indian economy has already developed a comparative advantage in exporting some business services, and is changing far more rapidly than more advanced economies, with eight sectors emerging as new comparative advantages for India - including pharmaceuticals and R&D - compared to just one in the US in the past 10 years, the analysis finds.

 

'Having raised trade barriers with Europe, and given up on a new US trade deal, the UK's trade strategy has now pivoted towards the Indo-Pacific region,' said Sophie Hale, Principal Economist at the Resolution Foundation.

 

'While much of the focus has concentrated on becoming the first European country to join the huge CPTPP region, the far bigger potential economic gains and risks lie in more trade with the huge, rapidly growing, but still relatively closed Indian economy. Trade liberalisation with India is expected to boost UK manufacturing in the short term, but could also benefit business services, where UK firms already enjoy a competitive advantage, and where demand is set to soar,' she said.

 

'But India is changing as well as growing, so any trade deal means accepting uncertainty about the competition that will face UK firms, as the price for access to a fast-expanding market,' she added.

 

A successful pivot towards a closer trade relationship with India rests on the idea that the UK can, in services, emulate the German goods success in exporting high value manufacturing to China, while avoiding a new 'India shock' - similar to the 'China shock' that hit US manufacturing - in which business services firms in the UK are undercut by Indian imports with lower labour costs, the think tank warns.

India’s wheat exports are likely to rise to a record high of between 6.5 million tonnes (mt) and seven mt this fiscal on the back of good demand for countries in South Asia and South-East Asia regions. 

 

'We have exported 4.5 mt of wheat by December. We are exporting 5-6 lakh tonnes of wheat every month and this leaves a possibility of additional shipments of 1.5-2 mt. Exports could be 6.5-7 mt,' said Nitin Gupta, Vice-President, Rice and Grains, Olam Agro India Ltd. 

 

According to the Agriculture and Processed Food Products Export Development Authority, wheat exports during the April-November period of the current fiscal were 4.11 mt, valued at Rs8,547.58 crore. Compared with this, total wheat exports last fiscal were only 2.08 mt, valued at Rs4,033.81 crore.

 

In 2012-13, India exported 6.51 mt of wheat, earning Rs10,529 crore, while in 2013-14, it shipped out 5.57 mt of grain, fetching Rs9,277.65 crore. Earlier this month, the US Department of Agriculture raised its estimates of India’s wheat exports this fiscal to 6.5 mt 'due to strong export demand combined with competitive Indian wheat prices in neighbouring markets'.

 

'India is exporting to Sri Lanka, the Philippines, Bangladesh in the region. Indian wheat is currently priced at $300-305,' said Olam India’s Gupta. Wheat export prices had touched $320 in December, but Australians offering wheat whose quality had been affected at a lower price proved to be a disincentive.

 

According to the International Grains Council (IGC), Argentina is currently quoting $304 a tonne for upstream river delivery of its wheat, while France is quoting $324 for its Grade I wheat. US’ soft red winter wheat is ruling at $347 and hard red winter wheat at $397 a tonne. The IGC wheat sub-index is up 28 per cent year-on-year at 295. 

 

'The advantage India enjoys is that Australia is oversold until March and any country in the region wanting to buy during this period will have to look at India only,' said Gupta. 

 

Russia-Ukraine standoff

 

'Even otherwise, Australia has logistics problems since it is not on the mainstream navigation route of ships. Ships have to deviate from the mainline to go to Australia,' said S Chandrasekaran, a New Delhi-based trade analyst

 

In the case of India, if ships carry wheat to Africa or South-East Asia, they can return carrying minerals or coal or any such commodity, which is not the case with Australia, he said. 

 

This is one reason why India could quickly achieve record wheat exports this fiscal, while any intensification of the Russia-Ukraine conflict could also help Indian wheat exports. 

 

'But you have to keep in mind that shipping charges will also rise in the region in the event of any conflict,' Chandrasekharan said. 

 

'Such a conflict will definitely help India, which is in a sweet spot with regard to wheat exports,' said Olam India’s Gupta. 

 

Production prospects

 

Another advantage that India will enjoy after March is that the new wheat crop will hit the market. 'No other country’s wheat will arrive before the end of the first half of this calendar year. So, India will be the only source for wheat till then,' Gupta said. 

 

The USDA said India’s wheat exports will be helped by a record wheat crop of 109.5 mt this season (July 2021-June 2022). According to the fourth advance estimate of the Ministry of Agriculture, wheat production last season was estimated at 109.52 mt. 

 

'India’s wheat crop is good with the current winter weather helping production further. Wheat production could be 105-108 mt,' Gupta said. 

 

The crop estimate comes despite the area under wheat dropping this year to 340.82 lakh hectares (lh) from 345.14 lh a year ago.

 

The record exports will leave India’s ending wheat stocks lower at 23 million tonnes, the USDA said. FCI data showed that as of January 1, wheat stocks were down at 33.01 mt compared with 34.29 mt a year ago. On April 1 last year, wheat stocks with FCI were 27.3 mt. 

 

Besides exports, free distribution of 5 kg wheat until March this year to the people below the poverty line to overcome any difficulty they face on account of the Covid pandemic has also resulted in the stocks dropping. The foodgrain is distributed under the PM Garib Kalyan Anna Yojana. 

Prime Minister Narendra Modi will hold the first ever India-Central Asia Summit on Thursday in a virtual format with the presidents of five countries, including Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The major areas of focus for the conference will be trade and connectivity, building development partnerships and enhancing cultural and people-to-people contacts and steps to take forward relations to newer heights.

 

This will be the first engagement of its kind between India and the Central Asian countries at the level of leaders, the Ministry of External Affairs had said.

 

The summit is symbolic of the importance attached by the leaders of India and the Central Asian countries to a comprehensive and enduring India-Central Asia partnership. During the conference, the countries are expected to propose ways to increase trade between India and the region, which is only about $2 billion at present, most of which comes from energy imports from Kazakhstan. 

 

India extended a $1 billion Line of Credit (LOC) for development projects in the areas of energy, healthcare, connectivity, IT, and agriculture in 2020 and proposes to increase the number of educational opportunities for students from Central Asian countries.

 

The summit is being held a day after the Republic Day. The leaders of the five central Asian countries were likely to be the chief guests but India saw a rise in COVID-19 cases which led to curtailed Republic Day celebrations.

 

The first India-Central Asia Summit, the MEA had said, is a reflection of the country’s growing engagement with the Central Asian countries, which are a part of India’s “extended neighbourhood”.

 

PM Modi had paid a visit to all Central Asian countries in 2015. Subsequently, there have been exchanges at high levels at bilateral and multilateral forums.

 

Earlier this week all five Central Asian leaders also met with Chinese President Xi Jinping in a virtual conference to mark 30 years of diplomatic relations, where they discussed increasing trade between China and the region, which is more than $41 billion at present.

The Centre has procured 606.19 lakh tonnes of paddy (or 406.14 lt in terms of rice), so far in the ongoing 2021-22 season (October-September), with maximum quantities being purchased from Punjab, according to the Union Food Ministry.

 

'Till now, 77 lakh farmers have been benefited from the official purchase programme for which the government has transferred Rs1,18,812.56 crore into their bank accounts,' the Ministry said in a statement Monday. During the 2020-21 season, the Centre had procured 895.83 lakh tones (lt) of paddy worth Rs1,69,133.26 crore, benefitting 1.31 crore farmers.

 

Of the total procurement this year, 186.85 lt of paddy have been procured from Punjab, followed by 82.62 lt from Chhattisgarh, 69.08 lt from Telangana, 56.49 lt from Uttar Pradesh and 55.30 lt from Haryana until January 23.

 

The government undertakes procurement operations through state-run Food Corporation of India (FCI) as well as State agencies.

Fresh grapes export from Maharashtra has begun on a sombre note this season. By January 24, 1,480.928 tonnes of grapes have been exported from the State in 113 containers. Compared with the same period a year, 1.06 lakh tonnes of grapes were shipped from the State in 7,694 containers.

 

The export figures available with the Agricultural and Processed Food Products Export Development Authority (APEDA) show that grapes export from the State has not gained momentum. The majority of grapes have been exported to the Netherlands – 1,261.372 metric tonne (MT). The export to other countries including Lativa, UK, Poland, Sweden, etc is not even 50 MT.

 

Of the total grapes exported from Maharashtra 1,468.448 MT is from Nashik district and 12.480 MT from Satara. Many grape growers in the Nashik region are waiting for service providers and exporters to approach them for harvesting.

 

However, service providers and exporters are waiting for the Maharashtra State Grape Growers Association (MSGGA) to clear its stand on the Minimum Support Price (MSP).

 

The MSGGA has announced that the MSP of the export quality grapes will be ?82 per kg in January, ?71 per kg in February, and ?62 per kg in March for this season. The Association says that this amount has been calculated on 10 per cent profit on the production cost of grapes.

 

Discussions between exporters and growers

The recent meeting between the Association and the service providers was inconclusive. However, grape farmers who have cultivated export quality grapes are worried as the export season has started and the issues of MSP remain unresolved.

 

Also, the prediction of unseasonal rains and changes in weather is cause for concern for grape growers. Exporters have already communicated to the farmers that the rate fixed by the Association are unreasonable. However, Association members say that exporters must not spread misinformation among farmers.

 

Export economy

 

The majority of grape growers in Nashik cultivate export quality grapes and exports play a major role in the economy of the region. In the last few years, farmers are cultivating varieties that are in demand in the foreign market.

 

Along with Nashik some parts of Sangli and Satara also export grapes. Farmers producer companies like Sahyadri are helping farmers to cultivate export quality grapes. Association members claimed that the MSP fixed by the members is based on facts and exporters should not stretch the issue beyond a limit.

 

However, traders and exporters have not come out openly on the issue and are waiting for farmers and the Association to take a stand on the revised MSP.

As a major boost to Centre and State collaboration in promoting products under the One District One Product (ODOP) Initiative – a State Conference was held on 21st January, 2022 by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry. The Conference was chaired by Smt. SumitaDawra, Additional Secretary, Department for Promotion of Industry and Internal Trade (DPIIT) and was attended by Principal Secretaries and other key officers of the Industries Departments of all States.

 

Smt. SumitaDawra, Additional Secretary, DPIIT opened the meeting with a special address that focussed on the successful activities undertaken under ODOP so far and best practices across the states.

 

This was followed by a deep dive into the ‘Changing Narratives for the Manufacturing Sector in Jammu & Kashmir’ by Shri. Ranjan Prakash Thakur, Principal Secretary Industries, Jammu & Kashmir. Herein, the ODOP Initiative’s work in Jammu & Kashmir especially its successes in trade facilitation for walnuts and apples was discussed. The ODOP initiative’s facilitation of Jammu & Kashmir’s representation at the Dubai Expo 2020 and successful buyer-seller meets as well as focused trade discussions conducted therein were also highlighted. The rest of the states would also soon be facilitated to participate in events at an international level.

 

The state of Uttar Pradesh was also able to bring attention to the remarkable success of the UP ODOP Model wherein artisans and producers from all districts of the state have been promoted and assisted under One District One Product (ODOP). The presentation was made by Shri. Navneet Sehgal, Additional Chief Secretary, Micro Small and Medium Enterprises (MSME) and Export Promotion, Uttar Pradesh.

 

UP provides a template for states to successfully implement and take forward the goal of creating each district as a hub for economic development through the product synonymous with it.

 

Smt. Swapna Debnath, Additional Director, Dept. of Industries and Commerce, Tripura outlined a roadmap for ‘Promoting remote districts and boosting local economy’. This included a discussion on the successful collaboration between the State Govt and the ODOP Team thus far, and the next steps that would be taken to promote product development and exports from all the 8 districts of Tripura.

 

Following the presentations from the States, the ODOP Initiative being facilitated by Invest India under DPIIT made a presentation on the scope of work under ODOP, the activities undertaken so far, and the way forward in fostering the vision of balanced regional economic development.

 

Invest India highlighted some of the existing stories of economic empowerment through trade facilitation, capacity building and product development.

 

Some key examples referred to included design trainings for Molela artisans in Rajsamand District, Rajasthan; skill trainings for Muga Silk weavers from Kamrup, Assam, sustained year-year trade facilitation of Lakadong Turmeric from West Jaintia Hills, Meghalaya and the promotion of ODOP products from across districts and categories at international events such as the Dubai Expo 2020.

 

ODOP’s work in e-commerce onboarding and its close association with large e-commerce players to support rural artisans in leveraging web-based sales through dedicated storefronts for ODOP was also discussed.

 

A roadmap for further State engagement with the ODOP Initiative was also laid out. Through the sharing of sellers’ data from the States, the ODOP team would take forward trade facilitation with buyer leads. Further, the appointment of a nodal officer in every state to work hand in hand with the ODOP Initiative would ensure the success of future activities under the same.

 

The Conference was well received by the participants and some including Hage Tari, Principal Secretary, Industries from Arunachal Pradesh expressed their keen interest in participating and wholeheartedly supporting the same in his state. All the principal Secretaries also eagerly shared contact details and sought to stay connected and updated on the ongoing activities under ODOP.

 

Shri B. Ramanjaneyulu, Director, DPIIT concluded the Conference with A Vote of Thanks and Closing Remarks. He urged the Industries Departments from all States and Union Territories to ensure active support for the successful implementation of the ODOP initiative across the length and breadth of the country, to propel the economy towards the goal of Aatmanirbhar Bharat. He also apprised the participants on the inclusion of ‘One District One Product’ initiative as a category for assessing the performance of Civil Servants being considered for the annual Prime Minister’s Awards for Excellence in Public Administration.

 

The successful States Conference marks the recognition of the outstanding success of the ODOP Initiative, while recognizing that it is a first step towards further impactful work towards the vision of Aatmanirbhar Bharat and #VocalforLocal.

The State Bank of India has raised US$300 million from the Taiwanese market through a maiden issue of Formosa bonds at a coupon rate of 2.49 percent. The issuance attracted a wide range of investors, such as supranational agencies, asset managers, private bankers and financial institutions. Meanwhile, the Indian government has also started talks with Taiwan on a free-trade agreement.

 

These developments would normally have been treated as a routine affair between India and Taiwan, but as the countries do not enjoy formal ties, and India has in the past remained hesitant to sign a free-trade agreement with Taiwan, the activities underscore a profound shift in New Delhi’s policy toward Taipei. More to the point, the successive governments before Indian Prime Minister Narendra Modi tried to foster ties with Taiwan in a closet due to their fear of China.

 

Now, India has taken several bold initiatives to openly acknowledge its ties with Taiwan. One such decision was of course to invite Taiwan’s ambassador to Modi’s swearing-in ceremony. Taiwan’s de facto embassy in New Delhi has also been given more public space.

 

The Indian political leadership’s new approach toward Taiwan has inadvertently encouraged Indian print and electronic media to focus on the relationship between the nations.

 

Moreover, there is a strong opinion among Indian experts, former diplomats and the general public that India should take initiatives to consolidate and improve ties with Taiwan.

 

This is a silver lining, because one of the challenges that the two sides continue to face is a lack of public awareness about each other.

 

The nations have also taken steps to foster cooperation in education and research. For example, the Ministry of Science and Technology and the Indian Council of Social Sciences signed an agreement enabling researchers of the two countries to work together on major projects of bilateral benefit.

 

It is not a coincidence that India has inched toward enhancing ties with Taiwan. There are several factors responsible for the change in public and political perception about Taiwan. China is of course a major common factor for the two countries.

 

While New Delhi and Taipei are facing major security threats from the Chinese communist regime, this is the first time that Taiwan, under President Tsai Ing-wen’s (???) leadership, and India, under Modi’s, have strongly positioned themselves against China, and have shown the desire to move beyond the shadow of Beijing in expanding their bilateral cooperation. While Taiwan has assumed a place in India’s Act East Policy, the Tsai government attaches huge importance to India in its New Southbound Policy.

 

It is also a hard truth that except for some political, economic and education initiatives, India has not made an effort to institutionalize the relationship. In turn, the nations’ ties suffer from inconsistency and unpredictability.

 

Learning from the US and even Lithuania, India should attempt to build political relations at some level. This would not only infuse trust in the relationship, but would also bolster Taiwan’s image as a flourishing democracy in Asia. India helping Taiwan would enhance New Delhi’s status among Asian nations and other countries.

 

India should also consider institutionalizing cooperation in several areas of common interest. One such area is bilateral trade and commerce.

 

While India and Taiwan view economic ties as the linchpin of their cooperation, the volume of bilateral trade has only marginally increased from US$6.4 billion in 2011 to US$7.5 billion in 2019. This underscores the need for the two sides to make serious efforts to realize the full potential of economic cooperation.

 

With Taiwan and India desperately trying to reduce their bilateral trade and commerce with China, the two countries can prove to be beneficial for each other in several ways. For example, between April 2019 and February 2020, imports from China were 1.42 trillion rupees (US$19.04 billion) or 40 percent of India’s total imports of electronics.

 

As a major exporter of electronics, including semiconductors, Taiwan holds huge importance for India. Cooperation between the two would not only reduce India’s dependability on China, but would also enable it to develop a safe and secure 5G network.

 

On the other hand, Taiwan would have access to India’s large market. Through India, Taiwan could easily expand its presence in other South Asian countries with which China has close relations.

 

It is equally important that India not merely see ties with Taiwan through a bilateral lens, but from a broader perspective. Enhanced economic ties between the countries would prove to be crucial in building robust global supply chains outside of China. Based upon this reasoning, India has realized the necessity of having a free-trade agreement.

 

While in a significant development the Indian Space Research Organization and the Indian Institute of Space Science and Technology are collaborating with Taiwan’s National Space Organization in launching a cubesat into space this month, it is imperative that the two countries work together on space exploration for civil and military purposes.

 

Taiwan and India should establish a joint working group to explore possibilities for enhanced cooperation, promote understanding of government policies and procedures, and facilitate collaboration by addressing issues promptly.

 

Closer cooperation in international initiatives, such as the Group on Earth Observations as well as efforts to develop a multiple hazards early warning and response system, would serve national objectives on both sides.

 

Another area of cooperation that India and Taiwan should explore is green energy. As India, an energy deficient country, tries to increase the contribution of green energy to its total energy consumption, Taiwan, a major Asian green energy giant, can play a pivotal role in this regard.

 

The time has come for India and Taiwan not only to accelerate the pace of cooperation in areas such as trade and commerce, and people-to-people engagement, but also aim for bilateral engagement in new areas.

 

Sumit Kumar is a former Ministry of Foreign Affairs visiting fellow at National Chengchi University and a post-doctoral fellow at the Indian Council of Social Sciences.

Israeli ambassador Naor Gilon on Monday recalled the role of soldiers of the British Indian Army in World War 1 in liberating areas that later became Israel and said India was a country where Jews had lived with total equality for more than 2,000 years.

 

Gilon was speaking at a virtual event that he addressed along with Sanjeev Singla, the Indian envoy to Israel, to mark the launch of a commemorative logo for the 30th anniversary of diplomatic relations between the two countries.

 

The Israeli envoy recalled his visits last year along with external affairs minister S Jaishankar to 'some places commemorating more than 900 Indian soldiers buried in Israel'. These were soldiers 'who fought during World War 1 as part of the British Indian army to liberate this area that later became Israel', he said.

 

Gilon said Jews have lived 'for over 2,000 years in India in total equality and peacefully'. He added, 'And as someone who arrived [in India] after serving quite extensive periods in Europe, I was very much surprised to see how much love and appreciation there is in India towards Israel. There is another element – there is no anti-Semitism in India, this phrase just doesn’t exist.'

Algeria's state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins, European traders said on Monday.

 

The tender sought a nominal 50,000 tonnes but Algeria often buys considerably more in its tenders than the nominal volume sought.

 

The deadline for submission of price offers in the tender is Jan. 26.

The Food Safety and Standards Authority of India (FSSAI) has notified the standards for ghee in the Official Gazette.

 

The notified regulations added few more parameters for the ‘ghee standards’, these include iodine value, saponification value and fatty acid profile.

 

Called, the Food Safety and Standards (Food Products Standards and Food Additives) Sixth Amendment Regulations, 2021, these standards shall come into force from July 1, 2022, except for fatty acid contents for ghee which shall come into force after two years of the publication of these regulations in the Official Gazette.

 

According to the notified standards, the iodine value for ghee is set at 25-38, while the saponification value is set  at 205-235 and ß-sitosterol should be absent.  

 

Besides, the moisture value has been fixed at 0.5% max, and 99.5% mini milk fat.

 

 The types of fatty acid include saturated fatty acids including Butyric acid 1 -5%, Hexanoic acid (Caproic acid) 0.5 – 2.2%, Octanoic acid (Cacprylic acid) 0.4 – 1.5%, Decanoic acid (Capric acid) 0.8- 5%, Dodecanoic acid (Lauric acid) 1.5 - 4%, Tetradecanoic acid (Myristic acid) 6- 13%, Hexadecanoic acid (Palmitic acid) 22-38%, and Octadecanoic acid (Stearic acid) 8-19%.

 

The mono-unsaturated fatty acid include Hexadecanoic acid (Palmitoleic acid) 0.9-2.8% and Octadecenoic acid (Oleic acid) 19-32% while the poly unsaturated acids include Octadecadienoic acid (Linoleic acid) 0.5-3.5% and Octadecatrienoic acid 0.3-1.0%.

 

Also, the notification added the definition of dairy analogues. The regulation says that analogue in the dairy context, as referred to in the Regulation 2.1 ( of these regulations), means a product in which constituents not derived from milk but take place, in part or in whole, of any milk constituent(s) and the final product resembles, organoleptically and/or functionally, milk or milk product or composite milk product as defined in these regulations.  

 

However, the admixtures of certain dairy products and other ingredients not exclusively derived from milk, sale of which are prohibited as per Food Safety and Standards (Prohibition and Restriction on Sales) Regulations, 2011,  are excluded from this definition.