Category: Economy

On Wednesday, Japan’s government passes economic security bill to guard sensitive technology and reinforce critical supply chains. Additionally, Japanese firms operating in sensitive sectors or critical infrastructure will be subject to tighter oversight.

Among the 14 sectors covered by the bill are energy, water supply, information technology, finance, and transportation. Japan’s government will be able to order software updates and vet equipment procurement.

The bill specifies that once it is enacted, it will implement the measures over a two-year period, primarily aimed at China. As a result, the United States has restricted imports of technology, including semiconductors, amid tensions with Beijing.

The Russian invasion of Ukraine is another reason for the new law as Moscow calls its actions “a special operation”. This has increased pressure on Japan to protect supply chains and do more on the infrastructure from hacking and cyberattacks. The nation’s focus is to secure that the technology critical to national security is not stolen.

Furthermore, the legislation provides subsidies for companies to strengthen their supply chains against disruptions, such as shortages of parts shipped from overseas. Moreover, it establishes a system for government officials to inspect firms on-site

A meeting will be held between the Commerce and industry Ministers of India and Oman on May 11 to foster the economic bond between the two countries

A meeting between India and Oman Commerce and Industry representatives will be held in New Delhi on May 11 to talk about ways to improve the economic kinship between the two countries, an official statement said on May 10.

Qais bin Mohammed Al Yousef, Oman’s Commerce, Industry, and Investment Promotion Minister is the head of the powerful delegation comprising 48 members to India from May 10-14, as told by the Commerce Ministry. The multi-sectoral delegation includes representatives from a range of different social fields, such as health, tourism, shipping, pharmaceuticals, mining, energy, telecommunication, and real estate.

The meeting would be jointly presided by Piyush Goyal, the Indian Commerce and Industry Minister, and his Omani counterpart.

The trade between India and Oman has jumped by 82 percent to $9.94 billion in 2021-22. On May 12, Ficci and the Oman Chamber of Commerce and Industry will jointly organize a meeting of the Joint Business Council (JBC). Meanwhile, the visiting delegation will be involved in several other commitments and meetings in New Delhi and Mumbai, including B2B events, industry discussions, investor interactions, and so on.

On Monday, Japan’s ambassador to the United States said Joe Biden’s visit to Japan this month will coincide with the launch of a new U.S. economic strategy for the Indo-Pacific, even as China seeks to fill the void left by Washington’s withdrawal from the regional trade pact.

In an event hosted by the Center for Strategic and International Studies in Washington, Ambassador Koji Tomita explained that Japan and the United States are working on the details of the Indo-Pacific Economic Framework (IPEF), which needs to strike a balance between inclusivity and high standards.

Biden, who is scheduled to visit South Korea and Japan from May 20 to May 24, announced the IPEF plan last year. In February, the administration announced its Indo-Pacific strategy and said it intended to launch IPEF in early 2021.

Asian countries are willing to strengthen ties with the US but have been dissatisfied by the country’s failure to clarify plans for economic engagement with the area since former President Donald Trump pulled out of a regional trade agreement in 2017.

Biden is hosting Southeast Asian leaders in Washington for a special conference on Thursday and Friday, but one Asian official said IPEF would not be on the formal agenda because most ASEAN economies would not be among the first signatories.

On Monday, the United Arab Emirates will introduce a form of unemployment insurance in the latest economic reform by the Gulf country as it focuses on attracting talent and investing amid increasing regional economic competition.

UAE Prime Minister, ruler of trade hub Dubai and Vice-President Sheikh Mohammed bin Rashid al-Maktoum said on Twitter, “The intention is to strengthen labour market competitiveness, provide a social umbrella for workers and establish a stable working environment for all”.

However, the statement did not specify who will be eligible to apply equally to citizens and non-citizen residents in the UAE. according to the IMF, 85% of the population were foreigners who got permission to reside in Gulf countries like UAE. They were traditionally tied to employment and losing jobs meant the workers would have to leave the country.

Meanwhile, Saudi Arabia is pushing to retain the initiative over its neighbour and introducing new visa types and social reforms to attract and keep skilled labours.

Several Gulf states have some form of unemployment assistance for residents, including Qatar, Oman, Kuwait, and Saudi Arabia, as well as Bahrain, which has a form of unemployment insurance for residents who aren’t citizens.

UAE Minister of Economy Abdulla bin Touq Al-Marri will lead a high-level business delegation this week to India. The visit from May 11-15 will is scheduled to discuss ways to further trade and investments between the two nations. It will assume significance as both countries implemented the Comprehensive Economic Partnership Agreement (CEPA) on May 1.

In the next five years, CEPA is expected to double bilateral trade from US$60 billion to US$100 billion. The duty-free access to the UAE market will be availed by the domestic exporters in various sectors like textiles, agriculture, jewellery and dry fruits under the trade agreement.

The official said, “It will be an important visit as we have implemented the free trade pact”. Minister from Small and Medium Enterprises from UAE will also be part of the delegation. They will visit Delhi and Mumbai to hold discussions with industry leaders. The 70-member delegations will represent different sectors like food, sovereign wealth funds, special economic zones, and aviation.

On average, India will benefit from preferential market access provided by the UAE on over 97% of its tariff lines (or goods) accounting for 99% of Indian exports to the UAE, especially in labour-intensive sectors such as textiles, sports goods, leather, footwear, plastics, furniture, and engineering products.

On Thursday, the Bank of England raised its key interest rate to the highest in 13 years. With a 6-3 vote, the Monetary Policy Committee voted to raise interest rates for a fourth consecutive meeting, boosting the rate that the Bank of England pays other banks by a quarter per cent to 1 per cent. Some even wished to increase more to 1.25% with a warning that the economy might shrink in the final quarter of the year.

While trying to rein in inflation without undermining consumer confidence, the Bank of England is struggling to demonstrate its business. In the United Kingdom, rising consumer prices are fuelling a cost-of-living crisis typified by skyrocketing energy bills and rising food and transportation costs.

The US Federal Reserve moved to avert inflation a day after it approved its biggest hike rate in more than two decades and signalled that more will follow. By a half-percentage point, the Fed raised its key short-term interest rate 0.75 per cent to 1 per cent. From Sweden to Australia, the other central banks have also started taking similar actions.

The Bank of England faces a challenging task. In a note to clients, Dmitri Theodosiu, head of foreign exchange and interest rates trading at Investec, stated that inflationary pressures from external forces are becoming increasingly intense.

Saudi Arabia recorded the highest rate of growth in the last 10 years at 9.6% in the first quarter of 2022. As per the latest data, the activity in the country related to crude oil, natural gas and refining rose by 20.4% whereas non-oil activity increased by 3.7%.

As a result, the largest economy in the Arab world saw its growth supported by government services activities, which rose by 2.4%. Brent is also up by 30% since the beginning of this year and falls from a 14-year high of $140 per barrel in March.

The growth is directly linked with the oil prices continued to trade higher amid supply concerns regarding the EU sanctions on Russian oil & gas imports in the back of Moscow’s military invasion in Ukraine.

The nation has quickly recovered from its lockdown phase and forecasts a 7.7% growth by the end of this year. Meanwhile, the oil sector is projected to rise by 15.5%, whereas, the non-oil economy is expected to grow by 3.4%.

The GDP’s estimate according to Gastat’s process adopts simplified assumptions about “extrapolating some indicators” related to production, income, expenditure price and foreign trade.

On Monday, India and Germany stressed the significance of a free, open and inclusive Indo-Pacific. In accordance with international law, both the nations underlined the importance of unimpeded commerce and freedom of navigation.

Following the sixth round of Inter-Governmental Consultations, Prime Minister Narendra Modi and German Chancellor Olaf Scholz issued a joint statement. Scholz called the Indo-Pacific one of the most dynamic global regions in his remark at the joint press event with Mr Modi. Indo-Pacific is also confronted with a number of conflicts and challenges.

According to him, Germany will continue to strengthen its commitment to various projects on the ground, including India as its most important partner in the region.

Meanwhile, Mr Modi said on Twitter, “The 6th India-Germany Inter-Governmental consultations were productive. Chancellor Scholz and I. along with ministers, officials from Germany and India discussed ways to boost cooperation in areas like sustainable development, mobility, economic growth and more”.

The statement further relieved that both the leaders condemned terrorism in all forms and manifests including any use of terrorist proxies and cross-border terrorism. They called all countries to work towards rooting out terrorist safe havens and infrastructure. They seek to disrupt the terrorist’s network and financing in accordance with international law along with international humanitarian law.

The oil Sector propels Saudi Arabia’s GSP growth with a 9.6% rise in the first quarter of a decade. The nation has registered nearly 10% growth as compared to the same period last year due to the high global crude prices.

According to the report, growth in the oil sector was 20.4% year-on-year, while growth in the non-oil sector was 3.7%.

On Sunday, preliminary results were released after Saudi Arabia resisted United States requests to boost output in order to rein in prices that have risen since the Ukraine war began.

The Saudi statistics authority said in its initial estimate published online, “Oil activities led the real Gross Domestic Product (GDP) of Saudi Arabia to achieve the highest growth rate in the last 10 years”. However, the agency said that the data for the quarter was “still incomplete” and could be revied”.

The International Monetary Fund said last week that as a result of the conflict in Ukraine and the subsequent rise in crude prices, oil-producing states such as Saudi Arabia are expected to see their GDP grow by 7.6% in 2022.

Rating agency Fitch also predicted last month that the kingdom will record a budget surplus in 2022 for the first time since 2013.

From May 1, India and UAE’s Free Trade Agreement has come into effect which will help domestic exporters in various sectors like agriculture, textile, dry fruits, gems and jewellery to get duty-free access to the UAE market.

On Sunday, the Central Board of Indirect Taxes and Customs and the Directorate General of Foreign Trade (DGFT) issued notification for the operationalisation of the agreement.

The Commerce Secretary  BVR Subrahmanyam handed over the Certificate of Origin to three exporters from the gem and jewellery sector in Delhi as a gesture for operationalising the agreement. He said, “Today, CEPA between India and the UAE is coming into force. Today, we are sending the first consignment from India to UAE, which will benefit from this agreement”.

In five years, the two-way trade will increase from USD 60 billion to USD 100 billion through the trade pact.

India is likely to benefit from preferential market access provided by the UAE for more than 97% of its tariff line which accounts for 99% of Indian exports to the UAE in value terms. Especially from labour-intensive sectors like textile, leather, footwear, sports goods, plastics, furniture and engineering products.

The Comprehensive Economic Partnership Agreement will not attract any customs duty under the pact for the consignments exported to Dubai.