Tag: imports

India’s March trade deficit narrows to $15.60 billion; exports up, imports fall

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s merchandise trade deficit in March narrowed substantially to $15.60 billion, according to the data released by the Ministry of Commerce. India’s merchandise exports rose to $41.68 billion in March 2024, while imports declined to $57.28 billion.

#TradeData | March #TradeDeficit At $15.60 Bn Vs $18.70 Bn (MoM), Exports At $41.68 Bn Vs $41.40 Bn (MoM) pic.twitter.com/pfIwPEEewo

— CNBC-TV18 (@CNBCTV18Live) April 15, 2024

In the previous month, merchandise exports were $41.40 billion, while imports were $60.11 billion. In March, services exports were $28.54 billion against February’s $32.35 billion, while imports were $15.84 billion compared to the previous month’s $15.39 billion.

Addressing a media briefing, Commerce Secretary Sunil Barthwal said, “The previous fiscal year was difficult from a trade point of view since not only did the Ukraine-Russia conflict continue, but other conflicts came up. There were huge issues with the Red Sea as well as recessionary trends globally. But India has beaten all the odds. India’s FY24 trade deficit has narrowed substantially.”

Barthwal also said that the country is closely tracking the impact of the Iran-Israel conflict on trade.

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Govt makes it mandatory to register import of yellow peas under import monitoring system till March 2024

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government has made it mandatory to register import of yellow peas under the import monitoring system till March 31 next year, according to a notification.

The move is aimed at increasing domestic availability of the commodity.

From April 1, 2024, the Directorate General of Foreign Trade (DGFT) said that the restricted import policy and associated policy conditions will come into effect.

“Imports of yellow peas… is free subject to registration under the import monitoring system with immediate effect for the period up to March 31, 2024. MIP (Minimum Import Price) conditions and port restrictions shall also not to be applicable to such yellow peas import for the period up to March 31, 2024,” the DGFT notification has said.

Till now, the import was subject to an annual (fiscal year) quota MIP of Rs 200 and above CIF (cost, insurance, freight) per kilogramme, and import is allowed through Kolkata Sea port only.

India imported USD 0.14 million worth of yellow peas in 2022-23, all from Russia.

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India is emerging as a major manufacturer when it comes to laptops, tablets, and servers, says Ashwini Vaishnaw

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India can replicate the success achieved in mobile phone manufacturing into the domain of laptops and tablets, said Union IT and Telecom Minister Ashwini Vaishnaw on Thursday, while also highlighting the country’s growing prominence as a significant manufacturer of laptops, tablets, and servers.

On August 3, India imposed import restrictions on a wide range of IT hardware products, including laptops, personal computers (including tablet computers), microcomputers, large or mainframe computers, and certain data processing machines. The primary objective of these measures is to boost domestic manufacturing and reduce reliance on imports from China. These regulations are set to come into effect on November 1 and will remain valid until September 30, 2024.

Under the revised system, importers will be required to obtain import authorisations, which can be acquired by furnishing comprehensive information about the value and quantity of their imports. To support these transformations, the DGFT has launched a comprehensive online platform, highlighting its commitment to a ‘seamless’ and ‘hands-free’ approach, thus enhancing the efficiency and accessibility of import management.

Arun Venkatraman, the US Additional Secretary for Commerce, emphasised the importance of meaningful consultation between governments and stakeholders before implementing changes to import policies. The United States is supportive of India’s efforts to secure and enhance supply chain resilience but emphasises the necessity for India to clearly articulate its objectives in its import authorisation policy for Information and Communications Technology (ICT). Several American companies, such as Tesla, Micron, and First Solar, are actively collaborating with the Indian government to contribute to India’s growth story. It is crucial to prudently manage tariffs on essential inputs to avoid discouraging manufacturing.

In the fiscal year 2022-23, India imported personal computers, including laptops, worth $5.33 billion, a decrease from the $7.37 billion imported in the previous fiscal year (2021-22).

The Director of the IMF acknowledged India’s remarkable progress in various sectors and emphasised that restricting imports of laptops and IT equipment might not be the most effective strategy. To fully realise its potential, India should concentrate on trade liberalisation and eliminate unnecessary restrictions.

The Ministry of Electronics and IT (MeitY) is actively addressing industry concerns regarding import restrictions. MeitY has expressed its reluctance to impose unwarranted constraints that could lead to artificial scarcity. The Ministry is of the view that the current mechanisms adhere to WTO compliance standards, thereby reinforcing India’s stance on the matter. They also stated that they will consider the possibility of imposing additional restrictions on laptops, tablets, and PCs after assessing import data up to September 30, 2024.

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IT hardware import curbs: Government may push deadline by a year as laptop makers seek time to find ‘trusted sources’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government on Friday (September 22) has assured IT hardware industry stakeholders that it will consider pushing back the deadline for import restrictions by a year, till November 2024, provided certain conditions are met. Last month, the government had set an October 31 deadline to implement the import restrictions on laptops, tablets, and personal computers.

Sources told CNBC-TV18 that the government, in a meeting with industry stakeholders, has also proposed a middle ground, allowing unrestricted imports against registration and disclosure of import details. Any restrictions, if introduced, could be done in a staggered manner, sources said. This also allows laptop manufacturers a year or more — as was their request — to find trusted import sources, rejig their supply chains and properly implement the Impot Management System, as well as establish indigenous manufacturing facilities to dampen the blow before the restrictions kick in.

The government has already clarified that these are not blanket curbs on imports, but rather, restrictions on the sources from which companies import components to manufacture these devices. Essentially, the government wants original equipment manufacturers (OEMs) to source their hardware from trusted sources for security reasons, as well as promoting domestic manufacturing.

This can be seen as an attempt by the government to reduce the reliance on China, which is a major exporter of electronics and IT hardware components. In addition to laptops, personal computers, and servers, the directive has the potential to encompass a wide variety of finalised IT hardware devices, including 5G sensors, which are primarily sourced from China.

China and security concerns

Chinese giant Huawei, which, apart from consumer electronics, also manufacturers network hardware, was recently found shipping Chinese-made chips for surveillance cameras, circumventing US export controls. In 2019, the Donald Trump administration had blacklisted Huawei over concerns that China could be using its equipment to spy on the US.

India and China, in numbers

According to the most recent data released by the Ministry of Commerce and Industry, India witnessed a substantial increase in laptop imports during the first nine months of 2022, totaling $5.24 billion. A significant majority of these imports, approximately 75 percent, originated from China.

Furthermore, in the initial nine months of 2022, India’s laptop imports from just China reached approximately $3.82 billion, accounting for 72.9 percent of the nation’s total laptop imports for the year. This figure represents a 9% percent increase compared to the $3.5 billion worth of laptop imports from China during the equivalent period in 2021.

India’s import restrictions

On August 3, the Ministry of Commerce issued an notification restricting the import of “laptops, tablets, and certain types of computers with immediate effect”, sending ripples of concern through the industry. A day later, the government relaxed the deadline to October 31, giving the industry a breather.

Government officials subsequently held meetings with stakeholders in which they assured the latter that these were not “import curbs”, but an “import management system”.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Industry supports India’s decision to curb import of laptops and PCs, assures of no price rise or disruption

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The industry has supported the government’s recent decision to curb the import of laptops and PCs, assuring that there will be no resultant price rise or supply chain disruption in the market.

National President of the Indian Cellular and Electronics Association, Pankaj Mohindroo told CNBC-TV18 that the “policy announcement seems to be based on the premise of providing secure digital access to the burgeoning number of digital citizens in the country.”

“We are confident that valid licenses will be provided to trusted industry partners which will enable Ease of Doing Business (EoDB) and unrestricted access to trusted brands for digital consumers,” he added assuring consumers that all their loved brands will be available as always.

CMD of Lava Mobiles, Hari Om Rai also supported the government’s decision and termed it pro-consumer, stating that the government will not allow any disruption in the market. He added that the supply chain will continue as usual as there are set processes to ensure that.

Government sources had indicated that the decision is aimed to promote Make In India, attract investment and companies to India to produce domestically. Sources added that the government wants to replicate the iPhone model for domestic production to get a competitive advantage in laptops and PCs by using India’s strength in the assembly segment of the value chain.

A government official stated on the condition of anonymity that the move was also aimed at checking India’s trade imbalance with China as most of these products were imported from there. The government official assured that this decision will neither jack up prices of electronic products as there is excess capacity available in India for production, nor will it violate India’s commitment to the ITA as those who still want to import laptops and PCs are free to take licenses.

Also Read: Laptop Import Curbs: Dixon Technologies shares gain over 15% in two sessions

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India to push back import licence restriction for laptops, tablets by a month: Sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Indian government is reportedly considering a delay in imposing the new import restrictions on laptops, personal computers (PCs), and tablets by a month, allowing companies more time to apply for the necessary licenses in this regard, according to sources privy to the matter.

In the meantime, the goods in transit will not be impacted, they said, adding that the extension, if approved, is expected to provide companies with at least an additional month to apply for the required licenses. Leading industry players have been actively engaged in discussions with government representatives to address their concerns.

In a bid to provide further clarity, the Directorate General of Foreign Trade (DGFT) is set to release a clarification, which aims to alleviate industry concerns by explicitly stating that there will be no restrictions on the number of products, the quantum of imports, or the number of licenses issued per entity.

Under this scheme, licenses will be issued within minutes and prices are unlikely to be hiked, the sources said.

It has also come to light that the government’s reservations about equipment from a specific geographic region have played a role in shaping these discussions. While the details of these reservations remain undisclosed, sources believe that the government is taking a cautious approach to ensure the security and integrity of technology imports given the increasing number of cyber attacks in the country.

These recent developments are also separate from the response received for the Production-Linked Incentive (PLI) for IT Hardware 2.0 scheme. Government sources have reported positive feedback regarding this scheme, with a total of 44 players having registered their interest. Notably, tech giant HP and another industry player have already submitted their applications under this scheme.

Also Read: India imposes curbs on import of laptops, tablets, and computers

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold imports fall 17% in April-October to $24 billion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold imports, which have a bearing on the current account deficit, declined 17.38 per cent to about $24 billion during April-October due to fall in demand, according to the data of the commerce ministry.

Imports of the yellow metal stood at $29 billion in the corresponding period of 2021-22.

The imports during October this year also contracted by 27.47 per cent to $3.7 billion, the data showed.

Silver imports during the month too dipped 34.80 per cent to $585 million. Cumulatively, the imports, however, jumped to $4.8 billion as against $1.52 billion during April-October 2021-22.

The merchandise trade deficit for April-October 2022 was estimated at $173.46 billion as against $94.16 billion in the year-ago period.

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonne of gold annually.

Gems and jewellery exports rose marginally by 1.81 per cent to $24 billion in April-October 2022.

According to industry experts, demand will start picking up from January.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US becomes India’s biggest trading partner in FY22; surpasses China

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The US surpassed China to become India’s top trading partner in 2021-22, reflecting strengthening economic ties between the two countries. According to the data of the commerce ministry, in 2021-22, the bilateral trade between the US and India stood at USD 119.42 billion as against USD 80.51 billion in 2020-21.

Exports to the US increased to USD 76.11 billion in 2021-22 from USD 51.62 billion in the previous fiscal year, while imports rose to USD 43.31 billion as compared to about USD 29 billion in 2020-21. During 2021-22, India’s two-way commerce with China aggregated at USD 115.42 billion as compared to USD 86.4 billion in 2020-21, the data showed.

Exports to China marginally increased to USD 21.25 billion last fiscal year from USD 21.18 billion in 2020-21, while imports jumped to USD 94.16 billion from about USD 65.21 billion in 2020-21. The trade gap rose to USD 72.91 billion in 2021-22 from USD 44 billion in the previous fiscal year. Trade experts believe that the trend of increasing bilateral trade with the US will continue in the coming years also as New Delhi and Washington are engaged in further strengthening the economic ties.

Also Read | India remains open on issue of trade and services at WTO, but committment will depend on ‘give-and-take’: Sources

Federation of Indian Export Organisations Vice President Khalid Khan said India is emerging as a trusted trading partner and global firms are reducing their dependence only on China for their supplies and are diversifying their business into other countries like India. “In the coming years, the bilateral trade between India and the US will continue to grow. India has joined a US-led initiative to set up an Indo-Pacific Economic Framework (IPEF) and this move would help boost economic ties further,” Khan said.

Rakesh Mohan Joshi, Director of the Indian Institute of Plantation Management (IIPM), Bangalore, too said that India is home to 1.39 billion people with the world’s third-largest consumer market and the fastest-growing market economy with unparalleled demographic dividend provides enormous opportunities for the US and Indian firms for technology transfer, manufacturing, trade and investment.

“Major export items from India to the US include petroleum polished diamonds, pharmaceutical products, jewellery, light oils and petroleum, frozen shrimp, made-ups etc. whereas major imports from the US include petroleum, rough diamonds, liquified natural gas, gold, coal, waste and scrap, almonds etc,” Joshi said.

Also Read | View | The road to a $2 trillion export target

America is one of the few countries with which India has a trade surplus. In 2021-22, India had a trade surplus of USD 32.8 billion with the US.

The data showed that China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21. Before China, the UAE was the country’s largest trading partner. In 2021-22, the UAE with USD 72.9 billion, was the third-largest trading partner of India. It was followed by Saudi Arabia (USD 42,85 billion), Iraq (USD 34.33 billion) and Singapore (USD 30 billion).

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Pakistan bans import of non-essential luxury items under ’emergency economic plan’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Pakistani government on Thursday imposed a ban on the import of all non-essential luxury items like cars, mobile phones, home appliances and weapons under an “emergency economic plan”.

Information Minister Marriyum Aurangzeb confirmed the ban shortly after Prime Minister Shehbaz Sharif took to Twitter to announce the decision, saying the move would “save the country precious foreign exchange”.

“We will practice austerity and financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI government,” the prime minister tweeted, adding that the nation would overcome these challenges with “resolve and determination”.

My decision to ban import of luxury items will save the country precious foreign exchange. We will practice austerity & financially stronger people must lead in this effort so that the less privileged among us do not have to bear this burden inflicted on them by the PTI govt.

— Shehbaz Sharif (@CMShehbaz) May 19, 2022

The decision comes as the dollar has witnessed a meteoric rise against the rupee over the past few weeks on account of the country’s rising import bill, growing current account deficit and depleting foreign exchange reserves, Pakistan’s Dawn newspaper reported.

The dollar on Thursday, shattering all records, soared to Rs 200 in the interbank market.

The information minister during a press conference assured the nation that the Pakistan Muslim League-Nawaz (PML-N) premier was “working day and night to stabilise the economy”.

Aurangzeb said the banned items included cars, phones, dry fruits, home appliances, weapons, frozen meat, fruits, furniture, make-up, shampoos, cigarettes, and musical instruments that were not used by the general public.

Citing an “emergency situation”, the minister said Pakistanis will have to make sacrifices under the economic plan, and that the impact of the banned items would be around USD 6 billion.

“We will have to reduce our dependence on imports,” she stressed, adding that the government was now focusing on exports.

The minister said that under the government’s economic plan, local industries would prosper while employment opportunities would also arise.

Criticising the PTI led former government, the PML-N minister said the cricketer-turned-politician Imran Khan had put all the cases against his own regime on the backburner.

Terming it “economic terrorism”, the minister held the PTI government responsible for the exponential rise in inflation. “He promised an unfunded [fuel] subsidy and played with the economy. He tried to trap the incoming government,” she claimed, adding that Imran was woefully unaware of the country’s economic problems.

“We have the capacity and experience to fix the current economic issues. The step taken to ban imported items is aimed at stabilising the economy,” she added.

PTI leader Hammad Azhar, however, questioned the government’s move, arguing that these items only made up a small percentage of the country’s import bill.

“Millions of traders and shopkeepers will be affected by these steps and it will also have an effect on bilateral trade,” he tweeting, adding that the move would lead to a rise in smuggling.

“Non-oil current account deficit stands at just under USD 1 billion. These measures to ban items will be inconsequential,” he predicted.

The curbs on non-essential imports came as Pakistani officials and the representatives of the International Monetary Fund commenced talks in Doha on Wednesday for revival of the stalled USD 6 billion Extended Fund Facility (EFF) programme.

Its revival has been termed crucial for Pakistan’s cash-strapped economy, which has seen its foreign exchange reserves plummet in recent weeks amid import payments and debt servicing.

Foreign exchange reserves held by Pakistan’s central bank decreased another USD 190 million to USD 10.31 billion last week, lowest since June 2020, with the level staying at less than 1.5 months of import cover.

With the dollar rising to uncharted heights, stakeholders warn that a weakening rupee could open up Pakistanis to a second round of inflationary impact, which will hit the lower and middle classes the hardest.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow