Inspiring an ambitious target, India’s merchandise exports exhibited a double-digit growth of 17.48% y-o-y to $24.5 billion in February 2017. A double-digit jump in exports was last recorded in June 2014. Interestingly, exports grew for the sixth straight month marking a heartening recovery from the contraction in shipments last year. It must be recalled that due to weak global demand and slide in oil prices,  merchandise exports started steadily shrinking from December 2014, raising concerns among the foreign trade community. The recent upswing in export shipments also raises hopes of India’s exports closing the fiscal year on a positive note. So, what lifted India’s export numbers?

According to Ministry of Commerce, GoI, data, engineering exports helped spike-up the figures as the sector’s exports swelled 47% to $6.6 billion. What’s more? The month witnessed 23 of 30 exporting sectors registering a growth. However, a steeper jump in country’s imports of 21.76% y-o-y took the trade deficit to $8.88 billion. A 147% jump in gold imports lead to an increase in the overall import bill to $33.38 billion. The solace was that the trade balance in February narrowed down as against January’s $9.84 billion.

Now can this recovery be sustained and built upon? We will have to wait and watch.  

Araku Coffee

RETAIL STORE IN PARIS


To Paris with love

Joining the hip fashion stores and high-end restaurants in the high streets of Paris, Andhra Pradesh’s Araku coffee made its global debut by opening its flagship retail store in the upscale city. With the backing of top corporate honchos including Mahindra & Mahindra Chairman Anand Mahindra, Infosys Co-founder Kris Gopalkrishnan and Dr. Reddy’s Laboratories Chairman Satish Reddy, the Indian coffee brand will retail its homegrown blend of Arabica coffee under the ‘Araku’ brand at a premium pricing. For Araku, a coffee that is cultivated by the tribals in the picturesque Araku Valley of Vishakhapatnam district, the opening of the flagship store is a big leap. The company has also expanded the brand’s operations in other countries. With a GI tag in its kitty, the coffee brand is also available in Switzerland and is looking to expand operations in Europe.

Japan-India

TRADE DISPUTE  

 
At loggerheads

WTO has recently accepted Japan’s request and has set up a dispute settlement panel to determine if India indeed broke rules by putting in place safeguard duties on steel imports from Japan. Coming to defence of an industry that sells half of its products overseas, Japan had taken the steel trade dispute with India to the World Trade Organisation, calling upon it to set up a dispute settlement panel to examine India’s safeguard duties on steel imports. Alleging that India’s safeguard duties on steel imports from Japan violated global trade rules, world’s second largest steel producer claimed that India’s measures were inconsistent with WTO rules. India, in September 2015, had imposed duties of upto 20% on some hot-rolled flat steel products and set a floor price in February 2016 on some steel products. The move contributed to the steep fall in Japan’s hot-rolled coil exports to India that also dropped India to 8th position in 2016 from Japan’s largest buyers list as against its third spot in 2015. Interestingly, Tokyo usually manages to sort trade disputes through bilateral talks.

Steel

EXPORTS OVERTAKE IMPORTS


Reversing the trend

The outlook for the steel sector in the country looks bright and how! While India is on course to becoming the second-largest steel producer, exports of steel for the first time in four years, surpassed imports. Reasons: A rebound in global product prices, policy and regulatory measures taken by the Indian government and production cuts by China. According to the Steel Ministry data, steel exports surged 77.48% y-o-y to 6.62 million metric tonne (MMT) during April-February period of current financial year. Imports, on the other hand, were down 39% y-o-y to 6.59 MMT during the same period, reflecting the path of recovery and growth in the sector. The recovery comes after India steel makers battled a flood of cheap steel exports of China in the domestic as well as global market. To save the domestic steel industry from cheap products dumped by China, the government in May 2016 had imposed provisional anti-dumping duties on selected imported steel products. In February 2017, it had extended the duties till 2021 as steel imports surged. However, with exports surpassing steel imports, the prospects of the sector look optimistic.



USFDA-Sun Pharma

IMPORT BAN

A new lease of life

India’s largest drug maker Sun Pharma got a breather in March after US Food and Drug Administration (USFDA) lifted an import ban on its Mohali (Punjab) manufacturing facility. The move paves the way for this pharmaceutical giant (whose Halol facility is still under USFDA scanner) to resume exports to the US market. The USFDA not only lifted the import alert imposed on the Mohali plant four years ago, but also removed the facility from the Official Action Initiated (OAI) status. The Mumbai-based drug maker had inherited the Mohali Plant as part of the acquisition of Ranbaxy Laboratories in April 2015. In 2013, USFDA had banned imports of drugs from four of Ranbaxy’s plants including the Mohali plant and ordered the Mohali facility to be fully subject to Ranbaxy’s Consent Decree of Permanent Injunction. With the lifting of the ban after four years, the drug major would be looking at boosting its business in the American market.  


Patanjali products

OVERSEAS EXPANSION

Patanja-Li or Patanja-Lee?
 
This news piece might set alarm bells ringing for Chinese manufacturers! Having taken the Indian FMCG market by storm, Yoga guru Baba Ramdev’s Patanjali Ayurveda is all set to take the fight to overseas market. According to reports, Patanjali Ayurveda – that sells everything from biscuits to beauty cream – plans to set up a production unit in Jharkhand’s Sahibganj district to export its products to East Asian countries including China, Myanmar and Bangladesh. It must be recalled that the central government has plans to turn this district of Jharkhand into a multi-modal hub with direct connectivity with neighbouring countries through air, land and water routes. If the reports are any indication, company’s overseas expansion plans are in line with the government’s ‘Act East’ policy. Patanjali Ayurveda has already been shipping selected products to United States, Canada, Mauritius and UK. In addition, it has received offers from UAE, Iran and others to retail its products in those markets.


India-Vietnam

Trade bans


Tit for tat

Instant coffee making companies in India woke up with a jolt as India temporarily suspended the entry of six agri-commodities including coffee beans, black pepper and bamboo from Vietnam. The decision, that came into effect from March 7 due to “repeated interception of quarantine pests”, also targets cinnamon, cassia and dragon fruit. Vietnam has been requested not to issue phytosanitary certificates for these six commodities for export. The import ban of coffee beans from Vietnam, which is the world’s largest producer of robusta coffee, would in all possibilities hurt the manufacturing and export of value-added instant coffee in India, since the low-priced imported robusta is used in making soluble coffee and its re-exports. India’s ban on Vietnamese agri products comes close on the heels of Vietnam announcing to suspend import of five agricultural products from India in 60 days starting March 1. Within 60 days, Vietnam will stop the permit for peanuts, cocoa beans, tamarind, cassia seeds and haricot beans. It must be recalled that Vietnam had in April 2015 suspended the import of peanuts from India and the ban was lifted in January 2016. It’s worth noting that the bilateral trade between the two countries in FY2016 stood at about $8 billion.