Category: Economy

On Wednesday, Indonesia once again widened the scope of its export ban on raw materials for cooking oil including crude and refined palm oil along with other products.

This latest round of flip-flops might have a direct impact on the Indian edible oil. India is one of the biggest importers of Indonesian palm oil and this export ban brings the nation to square one. Earlier this month, it was clarified the ban would not cover crude palm oil, which is widely consumed.

The nation consumed nearly 12-12.5 million toned of edible oil of which around 63% (8-8.5 million tonnes) is palm oil. Out of the total consumption of 8-8.5 million tonnes, 45% come from Indonesia and the rest from Malaysia.

According to trade sources, if imports of palm oil abruptly come to a halt from May onwards, it will lead to a sharp increase in edible oil prices in India, which are already skyrocketing due to the ongoing Russia-Ukraine crisis.

Director-General of Solvent Extractor’s Association of India (SEA) B.V. Mehta said, “Ever since the Russia-Ukraine crisis, India’s sunflower oil supplies have gone down from 200,000-250,000 per month to less than 100,00 tommed per month causing a sharp spike in prices. On top of this if Indonesia decides to suspend palm oil exports, then it will cause serious trouble for us”.

On Tuesday, Union Minister Nitin Gadkari urged billionaire and CEO of Tesla, Elon Musk to manufacture Tesla cars in India. In an interactive session at the Raisina Dialogue, Gadkari said, “India is a large market and there is a huge potential for all-electric vehicles”.

He further added that it is a very easy alternative if the CEO is ready to manufacture Tesla in the country. He said the nation has got all competencies, the vendors are available and have got all types of technology due to which he can reduce the cost.

The road transport and highway minister said that he is requesting Elon Musk to come and manufacture in India. He added, “He is welcome in India. We don’t have any problem, but, suppose, he wants to manufacture in China and sell in India, it cannot be a good proposition for India. Our request to him is, to come to India and manufacture here.

He suggested that in India he will get a good market and is a win-win situation for both.

Gadkari also discussed instances in which two-wheeled electric vehicles caught fire. He urged companies to take preventive measures to prevent this from happening. In his view, the country’s EV industry has just begun, and the government does not wish to impede its development.

British Prime Minister Boris Johnson will announce a raft of commercial agreements to hail a “new era” in bilateral trade and investment ties during his visit to India.

A high Commission from the UK said that both countries’ businesses will confirm more than 2 billion pounds in new investments and export deals on Tuesday. The investment will be done with a focus on creating almost 11,000 jobs across the UK from software engineering to health.

The statement stated that PM Johnson will use his visit to boost collaboration with one of the fastest-growing economies, slashing trade barriers for UK businesses and driving jobs and growth in the UK.

The two-day visit of PM Johnson will further expand ties between the two nations and exchange views on global challenges including the crisis Ukraine crisis and the Indo-Pacific situation.

Johnson quoted, “As I arrive in India today, I see vast possibilities for what our two great nations can achieve together. From next-generation 5G telecoms and AI to new partnerships in health research and renewable energy- the UK and India are leading the world”. He further added that this powerhouse partnership will deliver jobs, growth and opportunities for their people and will go strength to strength in the coming years.

The top official for the International Monetary Fund stated that regulating crypto assets with digital currency, addressing remaining regulatory concerns in the banking sector, and integrating with the global economy are among the few short-term structural challenges for India.

On Tuesday, the Financial Counselor and Director of the Monetary and Capital Markets Department- Tobias Adrian said that the IMF is looking at India in “a very positive fashion”.

According to him regulating crypto assets is certainly high on the agenda for the country when it comes to mid-term structural issues which India needs to address in the coming years.

He further added, “I think there are many opportunities and growth (in India is coming back). There’s a recovery. There’s a lot of excitement around new growth opportunities, and new developments”.

He said that IMF applauds the policy developments that Indian Central Bank is exploring in digital currencies. They are closely monitoring what India is doing in terms of financial inclusion and financial development.

In addition to addressing remaining regulatory concerns in the banking sector and in the nonbank sector, Adrian noted that the financial markets and financial institutions are critical for growth and economic development.

On Wednesday, Singapore and New Zealand signed two new agreements to work closely in trade, food and technology.

Business leaders from New Zealand Trade and Enterprise and Enterprise Singapore have signed the Enhanced Partnership for Growth Agreement as a means of sharing expertise and knowledge, as well as deepening business alliances in areas of common interest – such as trade, connectivity, and emerging technologies.

The signings were witnessed by the visiting New Zealand Prime Minister Jacinda Ardern and New Zealand Minister for Trade and Export Growth Damien O’Connor during a breakfast session at 67 Pall Mall at Shaw Centre.

A collaboration agreement was also signed by the Singapore Institue of Technology with a New Zealand government-supported food innovation network- The FoodBowl, to develop sustainable food innovations that benefit people and the planet.

During the event, Ms Ardern said, “So often our relationships are defined by competition. And yes, there are advantages to maintaining a competitive edge to drive solutions,  but some solutions we must strive towards together if we are to solve them”.

Citing Mr O’Connor she said, “He often says it is one thing as a nation to aspire to be the best in the world”.

With the weak economic recovery, the tax collection was at a record high in U.S., U.K and India. The tax collection for India was more than the revised estimate of about Rs. 2 trillion which turned out to be Rs. 3 trillion, more than the budgeted estimates of the last year.

Justin Theal and Alexandra Fall of Pew Charitable Trusts note that in the latest year, tax collections in more than half the states topped what they would have collected if the economy had grown at pre-pandemic levels.

The record high collection is considered due to all country’s goods purchases outstripping that of services for most of calendar 2020 and 2021. It was easier to tax the entire good manufacturing chain while other services that are informal escape the tax net.

The last six months saw rising inflation and it always elevates the nominal parameters, due to which high product prices led to supernormal profit for metal companies along with other products that could pass on price hikes.

As a result of massive stimulus measures from many governments including the US, UK, EU and Japan, global trade picked up in 2021. Also in FY22, India’s exports reached $418 billion and its imports reached $610 billion. These numbers drive up the entire manufacturing ecosystem, resulting in higher tax revenues.

Italy and Algeria have signed agreements to strengthen energy ties and increase the North African state’s energy exports to Italy. Italian Prime Minister Mario Draghi announced the deals in Algeria on Monday, adding that they were a significant step in Italy’s drive to reduce its dependency on Russian gas. The country clinched an agreement to ramp up gas imports from Algeria by around 40% in its first major deal. Italy, which sources about 40% of its gas imports from Russia, has been scrambling to diversify its energy supply mix. Ministers have tapped numerous countries like Congo, Angola, Azerbaijan and Qatar to find capacity to try and replace the 29 billion cubic metres Italy receives from Russia. Italian PM Draghi has previously said while replacing 30-40% of supplies from Russia could be done immediately, it would be much harder to replace the rest. Algeria is Italy’s second-biggest gas supplier. The Transmed pipeline has a daily capacity of more than 110 million cubic metres but currently transports only around 60 mcm. Rising domestic consumption, under-investment and political instability, including the closure of a pipeline to Spain over a dispute with Morocco, have capped Algerian exports.

India’s agricultural export spurt by 20% during 2021-2022 despite logistical challenges posed by the COVID-19 pandemic. The Commerce and Industry Ministry said the export rose to $50 billion with which exports of rice being the top forex earner with a $9.65 billion and grew by 9.35% from the previous year.

In 2021-2022, wheat exports jumped to $2.2 billion against $567 million in the previous year. Dairy products export rose by 96% to $634 million from $323 million in the previous year. Poultry products rose to $71 million in 2021-2022 fr4om %58 million in the previous year and sheep/got exports increased by 34% to $60 million in 2021-2022. Meanwhile, bovine meat saw a spurt from 3.17 billion to $3.30 billion in 2021-2022.

The statement further stated, “The rise in export of agricultural and processed food products has been largely due to the various initiative taken by the Centre through APEDA such as organizing B2B exhibitions in different countries, exploring campaigns by the active involvement of Indian Embassies”.

Bangladesh, UAE, Vietnam, US, Nepal, Malaysia, Saudi Arabia, Indonesia, Iran and Egypt were the major export destination.

On Tuesday, in a new staff paper, the International Monetary Fund asked the countries around the world to provide $15 billion in grants this year and $10 billion a year thereafter to manage the long-term risks of COVID-19.

The paper, which was co-authored by the Coalition for Epidemic Preparedness Innovations (CEPI), the Global Fund, and the charitable organisation Wellcome, stated that a new, more comprehensive approach was required right away to strengthen global health systems and limit the pandemic’s already staggering $13.8 trillion costs.

IMF First Deputy Managing Director Gita Gopinath said in a statement, “It is now clear that COVID-19 is likely to be with us for the long-term. Given the many possible scenarios for the evolution of COVID-19 and given the limited resources countries have, we need a new strategy. The cost of inaction-for all of us- is very high. We need to act now”.

She further added that the countries need to have a more comprehensive approach to fight the pandemic with kit including vaccines, tests, treatments and bolstering the resilience of the health system so that there can be a better position to tackle both the COVID-19 and other deadly diseases in a sustainable and effective way.

On Wednesday, Prime Minister Narendra Modi urged The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) to strengthen its ties with the littoral states of the Bay of Bengal and welcomed the unveiling of the Charter of the organization.

The Ministry of External Affairs officials issued a statement at the conclusion of the summit in Colombo that BIMSTEC will be the “security pillar” of the grouping. A master plan for transport connectivity was also announced at the summit that would provide a framework for regional and domestic connectivity.

PM Modi said, “Today we have adopted the Charter of BIMSTEC. This is an important step towards creating an institutional architecture of BIMSTEC”. By adopting the Charter, BIMSTEC had a new direction and clear objectives. According to the Charter, the members should meet every two years.

In his speech, Modi called for an agreement among the member nations on free trade. Among the essential elements of BIMSTEC’s evolving shape, he mentioned coastal shipping ecosystems and electricity grid interconnectivity.

MEA’s Joint Secretary in charge of the BIMSTEC and South Asian region, Rudrendra Tandon announces that with the development of the organization in the formal structure, the member leader has agreed to divide the working of the grouping into seven segments and India providing leadership to the security Pillar.