Category: Economy

The Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC) summit is expected to adopt a charter and a roadmap for connectivity within neighbouring countries. The sumit will be hosted by Sri Lanka on March 30 to mark the continuing pivot away from Saarc.

The meeting will be held virtually in which the BIMSTEC charter will give greater cohesion to the group including Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand. These nations are expected to sign during the summit. The BIMSTEC master plan for transport connectivity will also be adopted at the meeting.

All BIMSTEC foreign ministers, except Myanmar, will meet in person on March 29 in Colombo. A virtual meeting will be held for Myanmar’s foreign minister. As a result of the situation in Myanmar after last year’s coup, the summit on March 30 will largely be a virtual affair.

Since some member states, including India, are hesitant to share a platform with Myanmar’s junta, which shows no signs of giving way to democracy, the summit is being held virtually. In spite of the country’s desire to host an in-person summit, the idea was shelved due to this issue

On Saturday, India and Japan collaborated to extend clean energy partnership to cover EVs, green hydrogen and battery storage as the two Asian economic powerhouse pivot net-zero carbon emission pathways.

Japan aims to achieve the target of net zero-carbon emission by 2050 meanwhile India expects to achieve it by 2070. 

After the 14th India-Japan Annual Summit, Japan Prime Minister Kishida Fumio met India Prime Minister Narendra Modi and issued a joint statement that outlined areas of cooperation between the two nations.

The statement said, “India and Japan acknowledged the need to explore a variety of options to ensure a secure and stable supply of energy for achieving both goals of sustainable economic growth and addressing climate change. They share the view that there is no single pathway to achieve a low-carbon economy, but rather there are different paths for each country”.

Japan and India agreed to expand their cooperation in 2007 as part of the Japan-India Energy Dialogue to include Electric Vehicles (EV), storage systems, such as batteries, electric vehicle charging infrastructure (EVCI), development of solar energy, such as solar PV cells, as well as wind turbines and clean coal technologies.

For the first time in history, India logged its highest-ever goods export target of $400 billion on March 23. The target was nine days ahead of schedule.

Mr Modi said on Twitter, “India set an ambitious target of $400 Billion of goods exports and achieves this target for the first time ever. I congratulate our farmers, weavers, MSMEs, manufacturers, exporters for this success. This is a key milestone in our Aatmanirbhar Bharat journey”.

During the month of February, India’s services and manufacturing activity remained steady despite the Russia-Ukraine conflict raising inflation and clouding the economy’s growth.

In February, Commerce and Industry Minister Piyush Goyal said in the Lok Sabha, “For the 10th month in a row, April 2021 to January 2022, India has posted over $30 billion of exports. It is a record, we have already crossed $334 billion of exports which is more than the highest ever that India has done in a full 12 months period. We are well on track to achieve $400 billion of export”.

In the current fiscal year, a range of initiatives has been rolled out by the Department of Commerce and Industry to maximize export revenues and establish dominance in key markets.

On Monday, Germany’s economy minister said German companies had signed agreements with UAE firms to build up hydrogen supply chains.

During the visit of German Economy Minister Robert Habeck to the gulf state, the deals were signed. Both parties discussed long-term energy supplies. Habeck said, “The accelerated expansion of hydrogen supply chains is a very pivotal factor in the transition to sustainable energy”.

Berlin aims to cut carbon emissions and cut down its dependency on Russian energy and is investing in cleaner energy as part of Western efforts to put pressure on Moscow over its invasion of Ukraine.

With this agreement, Hydrogenious will deliver hydrogen produced from renewable energy in the UAE to Wilhelmshaven in Germany using its Liquid Organic Hydrogen Carriers (LOHC) technology.

Extracting hydrogen from sources like wind and solar is widely popular as a clean energy source. However, being a very light element, it is potentially difficult to make and comparatively costlier to transport over large distances. Uniper issued a statement in Germany stating that the consortium will overcome these challenges by combining ADNOC’s energy sources. A combination of JERA Americas’ experience in energy trading and Uniper’s involvement in hydrogen projects and customer base in the Middle East with Hydrogenious’ expertise.

Officials report that in a bid to buy food and medicine, Sri Lanka has received a $1bn credit line from India, meanwhile, IMF announces that it will consider a possible bailout.

On Thursday, Treasury Secretary Sajith Attygalle told reporters in Colombo that India and Sri Lanka have formally entered into the credit agreement during finance minister Basil Rajapaksa’s visit to New Delhi.

India’s foreign minister Mr S. Jaishankar said on Twitter, “India stands with Sri Lanka. the US $1 billion credit line signed for the supply of essential commodities”.

Meanwhile, IMF spokesman Gerry Rice said in a statement to reporters in the capital, “We will discuss with the authorities how best we can assist Sri Lanka going forward”. He also said that IMF has highlighted the urgent need for Sri Lanka to implement a “credible and coherent strategy to restore macroeconomic stability and debt sustainability”.

The country is suffering from its worst economic crisis since its independence in 1948. It is facing a crippling shortage of essentials and fears that it will default on its foreign debt or might ask the bondholder to take a “haircut” on repayments.

Recently, a $500 million loan was provided by the Indian credit line to help Sri Lanka buy oil.

In an attempt to boost Britain’s domestic energy security, UK Prime Minister Boris Johnson looks to nuclear and wind energy following Russia’s invasion of Ukraine.

On Monday, PM will meet the leader from the nuclear industry to discuss how to speed up the progress of new projects. The premier of Britain is also scheduled to speak with CEOs from the wind sector soon.

Mr Johnson had banned the import of Russian oil by the end of the year and the cabinet is also looking forward to halting imports of Russian gas by the end of the year.

Since Russia’s war with Ukraine, which caused prices to spike and exacerbated the cost-of-living crisis in the UK, Mr Johnson has prioritized developing alternative energy sources beyond imported oil and gas.

PM’s other goal is to boost domestic oil and gas production in Britain. A forum will be formed of oil and gas leaders to discuss investment conditions for energy companies operating in the North Sea which will be chaired by Treasury minister Helen Whateley.

However, it will take a month to publish the government’s full energy security strategy.

The central bank of Indonesia kept its policy rate unchanged, keeping an eye on global inflation and the consequences of the Ukrainian conflict.

According to the Indonesian Finance Minister Sri Mulyani Indrawati, As a result of Russia’s invasion of Ukraine, consumer prices are on the rise and relations between the world’s biggest economies are deteriorating, which may slow Indonesia’s recovery and undo decades of globalization that made the country a “clear winner”.

She added that record prices for coal and key minerals, including nickel, help fill Indonesia’s coffers just enough, for now, providing it with the resources it needs to fight inflation through limited subsidies and financial assistance.

On Thursday, the Bank of Indonesia kept the seven-day reserve repurchase rate at 3.5% which was predicted by all 29 economists in a survey. Since February 2021, the rate was at a record low.

Governor Perry Warjiyo said that the central bank will look through the current round of food and oil prices. He pointed out that In response to supply-driven pressures, fiscal interventions, such as subsidies and price controls, are more effective.

He said, “I need to emphasize that monetary policy responds to a fundamental increase in inflation which is seen in core inflation and we don’t respond directly to the increase in volatile food and administered price inflation”.

India and Japan have set an investment target of $42 billion (five trillion yen) in the next five years. The announcement came after the 14th annual summit meeting in New Delhi where several agreements were signed.

Both the nations discussed various regional issues including the situation at the Line of Actual Control (LAC) with China, PLA’s attempts at “multiple transgression” on the LAC. The situations were briefed by PM Narendra Modi to PM Fumio Kishida.

According to foreign secretary Harsh Shringla, any normalcy in the India-China relationship will depend on the progress on the LAC de-escalation talks which indicates the proposed visit of Chinese Foreign Minister Wang Yi will focus on.

India-Japan also exchanged six agreements on cybersecurity, waste-water management, economic partnership, urban development, clean energy partnership and an agreement on promoting bamboo-based products from the northeast region.

Since 2018, this was the first India-Japan annual summit that was postponed due to protest against the Citizenship (Amendment) Act and the pandemic.

On the issue of the Russia-Ukraine conflict, a visible difference was seen between both PMs. Mr Kishida was emphasising that Russia’s actions must not be ‘condoned’. However, PM Modi made no direct reference to the situation of the Russia-Ukraine conflict.

On Wednesday, parliament was informed that the bilateral trade in goods will increase from $60 billion to $100 billion over the next five years after the free trade agreement is implemented.

The Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) was signed during the India-UAE Virtual Summit on February 18.

In a written reply to the Lok Sabha, Minister of State for Commerce and Industry Anupriya Patel said the India-UAE CEPA is a comprehensive and balanced partnership agreement that will give India enhanced market access for both goods and services.

According to her, the UAE has offered immediate market access at zero duties for India’s exports to the UAE that account for 90 per cent of the value of its exports to the UAE.

In her other reply, she said there is no shortage of coal supply from sources of Coal India Limited (CIL) to tea gardens in the northeastern region

She added, “CIL has provided coal supplies to the tune of 618.70 million tonnes (MT) during the current fiscal (up to March 9, 2011) in comparison to 531.4MT supplied during the same period last year, thereby achieving a growth of about 16.4%”.

In terms of trade in services, the UAE has granted India access to 111 sub-sectors from its 11 broad service sectors.

To reduce the dependency on Russian gas post-invasion on Ukraine, France is in talks with Spain to construct a gas pipeline connecting the two countries.

The French ambassador in Madrid, Jean-Michel Casa, said that France has long refused Spanish calls to build the link but is now ready to discuss the feasibility of the Midcat pipeline if Madrid officially requests it.

Casa said, “Now that the underlying situation has changed, is it necessary to talk about Midcat? Let’s talk”.

Both energy regulators in Spain and Portugal rejected the investment proposal for a central section of the Midcat line crossing the Pyrenees in 2019. This disappointed leaders in Spain and Portugal who had been pushing the project for years to strengthen energy links with the rest of Europe.

Spanish Prime Minister Pedro Sanchez is scheduled to visit Paris. He will be meeting France President Emmanuel Macron to discuss the gas pipeline matter.

The construction of the pipeline will help Europe drift away from Russian gas and provide them access to Algerian gas. This will also boost liquefy natural gas imports via Spain. Around a quarter of Europe’s regasification capacity is in Spain

In the future, the pipeline can also be helpful to facilitate other types of fuels like hydrogen to flow through it.