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PHD Research Bureau - PHD Chamber of Bureau-2014/TIFF-2016/TIF-May-2016.pdf · PDF filePHD Research Bureau ... 2015-16 – According to Soybean Processors Association of India (SOPA),

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  • PHD Research Bureau

    May 2016

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    May 2016

  • PHD Research Bureau

    May 2016

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    Executive Summary

    (TIF May 2016)

    This is following the declining trend of last sixteen months, Indias exports have registered a negative exports growth during the April, 2016 which is highly disappointing for different segments of the country. Indias exports for the month of April 2016 stands at around USD 20.5 billion as compared to USD 22 billion in April 2015 registering a growth of around (-) 6.74%. Commodity-wise, several major export commodities viz. agriculture, gems and jewellerry , soymeal etc. have registered a negative growth rate. Soymeal exports registered a fall of 74%, Agri-product exports fell by (-)20% and Gems and jewellery exports declined by (-)5.30% in FY2016. Pertaining to bilateral relations our Honble Prime Minister Shri Narendra Modi marked a two days visit at Iran to create synergy between the two countries. The two countries have signed several MOUs/Agreements including bilateral contract on Chabahar Port for port development and operations. India and Mauritius signed the Protocol for amendment of the Convention for the Avoidance of Double Taxation. The Protocol will tackle the long pending issues of treaty abuse and round tripping of funds among others. At the international forum India has formally ratified the World Trade Organizations (WTO) trade facilitation agreement, which aims at easing customs procedures to boost trade and commerce. Furthermore, the Government has decided to set up a trade facilitation panel for implementing a WTO pact which aims at easing customs norms for faster clearance of goods to boost exports. Relating to policy developments Government has decided to remove the requirement of Landing Certificates under Merchandise Export from India Scheme (MEIS) with effect from 4th May, 2015. The central government has withdrawn the productionlinked subsidy of Rs 4.50 a quintal that it transfers directly into the bank account of sugarcane farmers on the condition that the mills to which they sell have exported 80% of their prescribed quota of sugar. India has imposed anti-dumping duty on import of telecom gear from China to protect domestic industry from cheap shipments. Minister of State for Commerce and Industry Smt Nirmala Sitharaman launched EXIM Analytics Dashboard. This is simple to use Analytics Dashboards which would facilitate the general public to have an accurate perspective on the facts around the trade performance of India. A step forward to boost trade Indian has hosted an India-Myanmar Business Conclave at Yangon on 18-20 May 2016 as part of its Act East policy. A 25 member business delegation from India attended the Conclave led by Minister of State (Independent Charge) for Commerce & Industry Smt. Nirmala Sitharaman and more than 40 top CEOs from Myanmar attended the Conclave.

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    Contents

    S. No.

    Topic

    Page No.

    1 Developments in Indias Foreign Trade 5

    2 Developments in Indias Foreign Investments 6

    3 Developments in Bilateral Trade and Investments 7

    4. India and WTO 8

    5. Policy Developments 8

    6. Miscellaneous 9

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    1. Developments in Indias foreign trade

    1.1 Exports 1.1.1 Merchandise exports decline by (-) 6.74% in April 2016 - Indias exports for the month of April 2016 stands at around USD 20.5 billion as compared to USD 22 billion in April 2015 registering a growth of around (-) 6.74%. During April 2016, the imports are registered at around USD 25.4 billion as compared to USD 33 billion in April 2015, registering a growth of (-) 23 %. The balance of trade stands at around USD (-)4.8 billion during April 2016 as compared to USD(-)11 billion for April 2015.

    Value of Foreign Trade (USD Billion) Period April 2016

    Exports FY17 20.5 Growth (%) (-) 6.74% Imports FY17 25.4 Growth (%) (-) 23.1 Trade balance FY17 (-) 4.8

    Source: PHD Research Bureau, compiled from Ministry of Commerce and Industry, Govt of India 1.1.2 March, 2016 Services Exports stood at USD 12.8 billion - Indias services exports for the month of March 2016 stand at around USD 12.8 billion and services imports stand at USD 7.9 billion in March 2016. The trade balance in services stands at USD 4.9 billion for the month of March 2016. 1.1.3 Agriculture exports fell 10% in 2015-16 - According to Agricultural and Processed Food Products and Export Development Authority (APEDA), the value of agri-product exports fell by 20% to Rs. 1.05 lakh crore in FY2016 against Rs. 1.31 lakh crore reported in FY2015. The fall in shipments is mainly because of lower global commodity prices and sluggish demand abroad. This has resulted in decline in shipments of major exportable items such as rice, buffalo meat and guargum in 2015-16. 1.1.4 India' soymeal exports fell 74% in 2015-16 According to Soybean Processors Association of India (SOPA), soymeal exports in FY2016 fell 74% from a year ago to 387,297 tonnes. This is on account of rise in soybean prices in India resulting from lower production in the domestic market.

    1.1.5 Cashew exports declined by 20% in 2015-16 - Cashew exports from the country declined by 20% in 2015-16. Total shipments of cashew stood at 94,150 tonnes, worth Rs.4,850.39 crore against 1,18,820tonnes, valued at Rs.5,431.30 crore during the previous year.

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    High Raw Cashew Nut (RCN) prices and the closure of the factories in Kerala following a hike in wages, has contributed to this decline in exports of the commodity. 1.1.6 Gems, jewellery exports fell 5.30% in FY2016 According to Gem Jewellery Export Promotion Council (GJEPC), Gems and jewellery exports have declined by 5.30% during 2015-16 financial year to Rs 2.09 lakh crore as compared to RS.2.21 lakh crores during the previous year. This is mainly due to weak international demand and high rough diamond prices. 1.1.7 Onion exports fell 6.75% in April-January of 2015-16 - According to National Horticultural Research and Development Foundation (NHRDF), onion exports fell by 6.75% to 8.28 lakh tonnes in the first ten months of 2015-16 fiscal due to restrictions on its overseas sale . However, in terms of value, exports rose over 35% to Rs 2,161.70 crore in April-January as against Rs 1,597.99 crore in the same period a year ago on higher realization. 1.1.8 Grape exports to Europe doubled Exports of grapes from India touched an all-time high in 2015-16, with exports to Europe more than doubling compared to that in the previous financial year. India had exported 84,482 tonnes of grapes to Europe compared to 41,783 tonnes exported a year ago, a growth of around 102%. This is on account of Maharashtra, which accounted for nearly 98% of grapes shipped during the fiscal, exported grapes at a price cheaper than that charged by Chile. 1.1.9 Tea exports to Pakistan up 60% to Rs 161 croreAccording to the Tea Board, Indias tea exports to Pakistan rose by 60% to Rs 160.82 crore in the first 10 months of the current fiscal. The overall outward shipments of tea, surged by just 11% to Rs 3,597.41 crore from Rs 3,240.90 crore in the April-January period of the 2014-15 fiscal. The total tea exported from India in the period under review rose to 186.63 million kg as against 164.88 million kg a year earlier. The increase in tea exports was seen in major tea-importing countries such as the CIS countries, the UK, Germany, Poland, the UAE, Bangladesh and Sri Lanka. 1.2 Imports 1.2.1 Indias April gold imports down 67.3% - Gold imports fell sharply by 67.33% to 19.6 tonnes in April 2016 as against 60 tonnes in the year ago period. This is majorly attributed to jewellers strike opposing one per cent excise duty on non-silver jewellery in the domestic market. 1.2.2 Import of pulses up 26% to 5.79 mt in FY2016 - Import of pulses rose 26% to 5.79 million tonnes (mt) last financial year to meet rising domestic demand. There has been a gap between the demand and supply of pulses in the country as the domestic demand for pulses is higher than the domestic production. The demand was estimated at 23.66 MT as against the total availability of 22.86 MT. 2. Developments in Indias Foreign Investments 2.1 Net FII investments stands at about USD 2234 million in April 2016 - The net FII investments in the month of April 2016 stands at USD 2234 million as against USD 2441 million in April 2015 representing a y-o-y growth of about (-) 8.5%. The net FII investments in March 2016 stands at USD 2938 million and registered a y-o-y growth of around (-) 12% in March 2016.

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    3. Bilateral Trade and Investment Developments 3.1 Honble Prime Minister Shri Narendra Modi visit to Iran Honble Prime Minister of India during his visit to Iran (22nd May-23nd May, 2016) expressed that there is a great synergy between India and Iran. In this light, the two countries have signed several MOUs/Agreements for different objectives including bilateral contract on Chabahar Port for port development and operations, establishing a framework of cooperation between ECGC and EGFI in supporting and encouraging foreign trade and foreign investment between India and Iran and enhancing cooperation between the two parties for training of diplomats and exchange of eminent speakers among others. 3.2 The Government approved signing of MoU on tech cooperation between India and Bhutan - The government approved signing of a Memorandum of Understanding (MoU) with Bhutan on technical coopera

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