Saudi Arabia seeks OPEC+ oil quota cuts while some members resist
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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The producers were progressing toward a compromise on this matter before the weekend, but have yet to clinch an agreement, delegates said.
Saudi Arabia is asking others in the OPEC+ coalition to reduce their oil-output quotas in a bid to shore up global markets but some members are resisting, delegates said.
The OPEC+ leader has been making a largely unilateral supply cutback of 1 million barrels a day since July, and is now seeking further support from across the Organization of Petroleum Exporting Countries and its partners, said the delegates, asking not to be identified because the information is private.
The Saudi proposal comes amid difficult talks for the producers’ group, which was forced to delay its policy meeting by four days to November 30 as Angola and Nigeria resist reductions to their own quota limits for 2024, which were set out at the cartel’s last conference in June.
The producers were progressing toward a compromise on this matter before the weekend, but have yet to clinch an agreement, delegates said.
The 23-nation OPEC+ alliance faces pressure to intervene in crude markets, following a 17% drop in prices over the past two months amid plentiful supplies and a darkening economic backdrop. Markets could weaken further in early 2024, when forecasters including the International Energy Agency anticipate the emergence of a new supply surplus.
“With fundamentals softening and market sentiment bearish, OPEC+ may need to announce another formal cut,” analysts at Eurasia Group led by Raad Alkadiri said in a report. Anything short of a 1 million barrel-a-day reduction could send prices to the low $70s, they added.
Saudi Arabia’s voluntary production cut of 1 million barrels a day, implemented in tandem with a 300,000 barrel-a-day export reduction from Russia, is currently set to continue until the end of the year. Most analysts expect Riyadh and Moscow to extend those curbs into 2024.
Market watchers such as JPMorgan Chase & Co. have flagged the possibility that OPEC+ may cut deeper, and some — such as Commerzbank AG and hedge fund manager Pierre Andurand — have warned that prices may buckle further if they don’t. Brent futures traded near $80 a barrel on Monday.
Supply reductions across the alliance would probably win back oil bulls, but they could be hard to orchestrate. Iraq, Russia and Kazakhstan have recently been pumping over their quotas, while others like the African members have lost so much production capacity they’re in no position to cut further.
It’s also unclear whether the United Arab Emirates, a key member, will be under pressure not to proceed with a quota increase of 200,000 barrels a day permitted from January. Abu Dhabi secured the dispensation at the last OPEC+ gathering in June, in order to finally make use of recent investments in new capacity.
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Credible solution for food security, functional dispute resolution forum: More about India’s aims at WTO MC-13
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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The 13th Ministerial Conference of the World Trade Organization is scheduled to be held in UAE’s Abu Dhabi in February 2024. India’s Commerce Ministry said that discussions were also held on “Trade and Industrial Policy” and “Trade and Environmental Sustainability”, terming the topics as agenda driven by developed countries.
The 13th Ministerial Conference (MC) of the World Trade Organization (WTO) is scheduled to be held in UAE’s Abu Dhabi from February 26-29, 2024. In the run up to MC-13, a Senior Officials Meet (SOM) was held in Geneva on October 23-24, 2023, with an aim to draft the agenda for a fruitful and positive outcome.
India’s Commerce Ministry said that discussions were also held on “Trade and Industrial Policy” and “Trade and Environmental Sustainability”, terming the topics as agenda driven by developed countries.
Major agendas of SOM:
1. Agriculture (including food security) 2. Dispute Settlement Reform 3. Trade and Development 4, Fisheries Subsidies Negotiations 5. E-Commerce Moratorium
1. Agriculture
The necessity of making concrete progress was stressed upon for agricultural negotiations including issues like public stockholding, domestic support, market access and Special Safeguard Mechanism. While senior officers emphasised more engagement in favour of credible food security outcomes at MC-13, India emphasised that a permanent solution to stockholding is a mandated issue from the earlier Ministerial Conferences that should be given topmost priority.
2. Dispute Settlement Reform
Members have reaffirmed the MC-12 commitment of having a fully and well-functioning dispute settlement system, accessible to all members by 2024. India wants informal discussions to be brought before the formal Committees, i.e. the General Council.
3. Trade and Development
While the ongoing reform discussions on the G90 proposal were supported, Trade and Environmental Sustainability and Trade and Industrial Policy were pushed by the European Union (EU). Many members stressed upon discussing these issues in the relevant committees first, before bringing them up at the MC-13.
4. Fisheries Subsidies
Two-fold directions for fisheries negotiations were provided by senior officials. The first is the stress on effective disciplines to meaningfully reduce subsidies contributing to overcapacity and overfishing. Next was that special and differential treatment will continue to remain an integral part of negotiations.
5. E-Commerce Moratorium
Many members emphasised on the need to extend the moratorium, while others wanted to lift it. However, India said that this needs to be discussed further before raising it to the level of Ministers.
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Abu Dhabi weighs investment pledges worth $50 billion for India
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Both India and the UAE have been seeking to bolster ties over the past decade and aim to increase non-oil bilateral trade to $100 billion. PM Modi’s recent visit to Abu Dhabi marked his fifth trip to the Gulf nation since he took over as prime minister in 2014. The last Indian premier to visit the UAE before him was Indira Gandhi in 1981.
The United Arab Emirates is considering investing as much as $50 billion in India, its second-largest trading partner, as part of a broader bet on the world’s fastest-growing major economy.
Provisional pledges from the UAE could be announced early next year, people familiar with the matter said, asking not to be named as the information is not public. Any new investments would follow Narendra Modi’s meetings with UAE President Sheikh Mohammed bin Zayed in July.
The countries have been seeking to bolster ties over the past decade and aim to increase non-oil bilateral trade to $100 billion. Modi’s recent visit to Abu Dhabi marked his fifth trip to the Gulf nation since he took over as prime minister in 2014. The last Indian premier to visit the UAE before him was Indira Gandhi in 1981.
Deals being discussed include stakes in key Indian infrastructure projects and state-owned assets, with announcements likely before Modi seeks a third term in federal elections due next year, the people said. Some of the investments could involve sovereign wealth funds such as the Abu Dhabi Investment Authority, Mubadala Investment Co. and ADQ, they said.
The pledges are unlikely to have clear timelines for a large chunk of the investments, the people said. No final decisions have been made on the size or timing of the announcements.
As part of the push, entities overseen by Sheikh Tahnoon bin Zayed Al Nahyan have held early-stage talks on investing billions of dollars in India, one of the people said. Sheikh Tahnoon is the UAE president’s brother and chairman of International Holding Co., which disclosed a 5% stake in Gautam Adani’s flagship conglomerate last month. That came days after IHC sold down holdings in two Adani firms, though the firm reiterated its commitment to India at the time.
Representatives for India’s finance and trade ministries, the UAE government, and Sheikh Tahnoon’s private investment firm Royal Group didn’t respond to requests for comment. ADIA, ADQ, and Mubadala declined to comment.
Growth engine
Royal Group has long prized India, and executives there have called the country a potential growth engine of the next decade, Bloomberg has reported. Sheikh Tahnoon is also chairman of ADQ as well as ADIA, one of the world’s largest wealth funds, with close to $1 trillion in assets.
Lured by a rising middle class and seeking to diversify away from traditional investment destinations like Europe, Gulf state-backed investors have boosted ties with India. Others, including the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund, have also emerged as prominent investors in the country.
The UAE’s plan is a further indicator of the government’s push to position itself as a country that avoids taking sides in a world increasingly split between Washington and Beijing.
As one of the few countries to manage close to $1.5 trillion in sovereign wealth, the UAE is a vital ally to the world’s most populous nation, which is seeking to bridge infrastructure gaps. For India, any large foreign investments would help Prime Minister Modi highlight his efforts to bolster the economy ahead of the 2024 vote.
Earlier this year, the UAE announced plans to support Turkey’s embattled economy with a $51 billion investment pledge, including about $30 billion in energy. Talks over one deal in that sector—just one part of the broader bilateral push—have collapsed, Bloomberg News has reported.
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Hamas- Israel war: Here is how Middle East countries are reacting to conflict
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Most of the Middle Eastern countries have been showing major support for the pro-Palestinian forces since the airstrike.
In the ongoing war between Palestinian Islamist group, Hamas, and Israel, yet another incident has shaken al-Ahli Hospital in Gaza City, where a huge number of civilians have been impacted. The incident took place on Tuesday, October 17 which Hamas attributed to Israeli airstrike while on the other hand, the Israeli military said that the rocket had been misfired by the Palestinian militants. The Israeli military reportedly presented evidence on Wednesday to support their claim, according to a Guardian report.
While both sides are continuing to blame each other for the huge civilian casualties in the Gaza hospital strike, US President Joe Biden arrived in Tel Aviv in Israel and mentioned that he is “sad and outraged” by the recent blast. On the other hand, the Middle East country Lebanon’s Iran-backed Hezbollah movement called for a “day of rage” in countries like Jordan, Lebanon, Libya, Tunisia, Turkey, Morocco, Iran and Yemen. Additionally, thousands of students initiated rallies at the Egyptian universities to condemn the airstrikes in Gaza.
Most Middle Eastern countries have been showing major support for the pro-Palestinian forces since the airstrike. According to a Reuters report, Turkey’s President, Recep Tayyip Erdogan on Wednesday, called the Gaza hospital strike “the latest example of Israeli attacks devoid of the most basic human values”. A massive crowd gathered outside the Israeli Embassy in Ankara in protest against the Gaza hospital airstrike on Tuesday.
Apart from that, the United Arab Emirates and Bahrain, which have had ties with Israel since 2020, have also condemned the attacks by Israel in response to Hamas’ attack on October 7.
While several Western countries are supporting Israel including France, Germany, Norway, Australia, Austria, the United States, United Kingdom, most of the Middle Eastern countries have been praising Hamas for initiating the surprise attack on Israel. Though many countries have not officially declared their support for Palestinian militant group Hamas, the citizens have been supporting them by holding rallies and protests against Israel.
Countries like Iran, Saudi Arabia and Qatar have openly backed the militant group and condemned Israel for the attack on Gaza.
Additionally, other countries have been expressing their solidarity with Hamas and the Palestinian people of Gaza. Such countries include Bahrain, Morocco, Turkey, Yemen, Tunisia, and Kuwait.
Meanwhile, Israeli intelligence has also accused Syria and Lebanon of sending militants to the Gaza Strip to join Hamas and launch attacks on their country. In view of the same, Israel has also launched missile strikes against Syria and the Lebanese militant group Hezbollah, according to reports.
The Hamas-Israel war has entered its 12th day since the surprise attack by Hamas on October 7. As per recent reports, around 3,478 people have been killed with over 12,000 others injured in the Gaza Strip.
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India, UAE sign RuPay domestic card scheme agreement, move aims to raise uptake of digital payments in UAE
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Over 750 million RuPay cards are in circulation as of date, and RuPay cards comprise over 60% of the total cards issued in India.
NPCI International Payments Ltd (NIPL), a wholly-owned subsidiary of the National Payments Corporation of India (NPCI), has entered into a strategic partnership agreement with Al Etihad Payments (AEP) for the implementation of the Domestic Card Scheme (DCS) in UAE. AEP is an indirect subsidiary of the Central Bank of UAE (CBUAE). As per the agreement; NIPL and AEP will work together to build, implement, and operationalise UAE’s national DCS.
NIPL will also assist AEP in formulating the operating regulations for their domestic card scheme. Apart from facilitating the growth of e-commerce and digital transactions in the UAE, DCS aims to bolster financial inclusion, support the digitisation agenda, increase alternate payment options, reduce the cost of payments and enhance the Middle Eastern nation’s competitiveness as a global payments leader.
The DCS solution provided by NIPL consists of a RuPay stack and value-added services like fraud monitoring services and analytics. A widely accepted card payment network in India; RuPay cards have debit, credit, and prepaid propositions. Over 750 million RuPay cards are in circulation as of date, and RuPay cards comprise over 60% of the total cards issued in India. These cards are issued through the entire banking spectrum, including public sector, private, and small banks.
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Rs 200-crore UAE wedding that exposed the Mahadev online scam linked to Bollywood celebs
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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The ED is currently investigating the Mahadev Online Betting scandal. Many celebrities are being looked into for promoting this betting platform and performing at events organised by the app’s promoters and others involved. Recently, a Rs 200-crore wedding in the UAE caught ED’s attention as it was entirely paid for in cash. This has raised even more questions for financial investigators about the source of the funds and their connection to the app.
The Enforcement Directorate (ED) is currently conducting an in-depth investigation into the Mahadev Online Betting scam. Numerous celebrities have come under scrutiny for their involvement in endorsing this betting platform. Subsequently, these celebrities were reported to have performed in various events organised by the app’s promoters and other accused.
The payment made to these celebrities is layered through dubious transactions but ultimately paid in cash from the proceeds of online betting, the ED has alleged.
Recently, a lavish Rs 200-crore wedding held in the United Arab Emirates (UAE) again cast a spotlight on the app. The development unfolded as the entire extravagance of the event was paid in cash, further drawing the attention of financial investigators.
The Mahadev Online Book App Investigation: Key Details
Sourabh Chandrakar, one of the promoters of the controversial online betting platform, tied the knot in a grand ceremony in Ras Al-Khaimah in the United Arab Emirates in February. The wedding was attended by several Bollywood celebrities, who also performed at the event, with private jets reportedly ferrying family members and guests to the UAE.
Image: @garg_trupti/X
In September, the ED disclosed details of its investigation into the online money laundering case linked to the Mahadev Online Book betting app. The probe revealed that wedding-related expenses, including payments to planners, dancers, and decorators, were made in cash via hawala channels originating from Mumbai.
The hawala system is an informal method used to move money between different places, involving service providers called hawaladars. This system operates without strict regulations, allowing funds to be transferred regardless of the transaction’s nature or the countries involved.
The ED’s investigation revealed that the Mahadev Online Book app operated from a central head office in the UAE. The app expanded by franchising “panel/branches” to known associates, with a profit-sharing ratio of 70-30, allowing large-scale hawala operations to transfer betting proceeds to offshore accounts.
In a statement, the ED expressed concern “sudden and illegal riches are being openly flaunted by them.”
The agency’s investigation exposed that Sourabh Chandrakar and Ravi Uppal, both originally from Chhattisgarh’s Bhilai, are the primary promoters of the Mahadev Book app, operating their business from Dubai.
The Mahadev Online Book app offers online casino and betting platforms—activities that are illegal in India. The ED’s recent searches at 39 locations across cities like Raipur, Bhopal, Mumbai, and Kolkata led to the seizure of illegal assets worth Rs 417 crore.
“ED has recently conducted widespread searches against the money laundering networks linked with the Mahadev App in cities like Kolkata, Bhopal, Mumbai, etc., and retrieved large amounts of incriminating evidence and has frozen/seized proceeds of crime worth Rs 417 crore,” the agency informed in a statement.
The company operated from Dubai, using the online book betting application to enroll new users, create user IDs, and launder money through a complex web of benami (made, done, held or transacted in the name of another person that’s considered fictitious) bank accounts.
“The app is an umbrella syndicate arranging online platforms for enabling illegal betting websites to enroll new users, create user IDs and launder money through a layered web of benami bank accounts,” the ED informed.
The app also incurred substantial cash expenditures in India for advertising betting websites, aimed at attracting new users and franchise (panel) seekers.
Bollywood celebrities entangled in the scandal
The opulent UAE wedding not only attracted attention to the Mahadev Online Book app but also implicated several celebrities in its web of opulence. Digital evidence reportedly shows the presence of singers Neha Kakkar and Vishal Dadlani, as well as Sunny Leone, Tiger Shroff, and other prominent figures from the entertainment industry at the extravagant event, according to Economic Times.
How the Syndicate Operates, as per ED
The ED’s investigation has unveiled the modus operandi of the syndicate behind the Mahadev Online Book app.
Promotional advertisements for the app display a WhatsApp number, through which potential users are directed to a call centre. The call centre then forwards the user’s information to a panel operator, who guides the person in opening an account, placing bets, and receiving money.
The probe further revealed that there are approximately 4,000-5,000 panel operators, primarily located in Chhattisgarh, Mumbai, and Delhi. The profit-sharing ratio between the founders of the Mahadev app and panel operators stands at 70:30, while the ratio between customers and the app is 60:40.
Ranbir Kapoor’s involvement in the case comes from his appearance in social media ads promoting the Mahadev app and accepting payments in cash, which the agency alleges are proceeds of crime.
According to CNBC-TV18 sources, the ED wants to know whether Ranbir Kapoor was aware that the payments he was accepting were proceeds of crime or not and whether he knew that the app was illegal.
The investigation has also uncovered that the Mahadev app founders operate 4-5 similar apps in India and have launched a similar app in Pakistan. Call centres managing potential customer inquiries are located in Nepal, the UAE, and Sri Lanka.
Many Other Celebrities and Influencers Under Scrutiny
The Enforcement Directorate suspects the involvement of around 12 A-list film celebrities from Bollywood, Tollywood, and other regional film industries, as well as some sports personalities, in promoting the app and accepting payments in cash.
Additionally, about 100 social media influencers are also suspected of promoting the Mahadev app and accepting proceeds of crime as payment.
Politicians are also under the ED’s radar, as the agency recently questioned Chattisgarh CM Bhupesh Bagel‘s advisor and two of the CM’s OSDs in connection with the case.
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Piyush Goyal co-chairs meeting of India-UAE high-level Joint Task Force on investments
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Union Minister Piyush Goyal will hold bilateral meetings to enhance general trade, investments and areas of cooperation for strengthening the ties between the two countries.
Union Minister Piyush Goyal co-chaired the 11th Meeting of the India-UAE High Level Joint Task Force on Investments (HLTFI) along with Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi. An Indian delegation led by Goyal is visiting the UAE on October 5 and 6 to engage with industry representatives.
Goyal will hold bilateral meetings to enhance general trade, investments and areas of cooperation for strengthening the ties between the two countries.
The two delegations will discuss issues and challenges pertaining to existing investments by UAE-based companies in India and Indian companies in UAE. The meeting will also review the outcomes achieved through the work of the JTF till date.
The JTF was established in 2013 as a key forum to promote trade, investment and economic ties between the UAE and India. This is the first meeting post the one year celebration of the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
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Auto parts maker Samvardhana Motherson expands operations in UAE with new unit in Ras Al Khaimah
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Motherson now has eight facilities in the UAE, the others being in Dubai and Sharjah. Shares of Samvardhana Motherson International Ltd ended at Rs 99.26, up by Rs 0.15, or 0.15 percent on the BSE.
Auto components maker Samvardhana Motherson International Ltd (SAMIL) on Thursday (September 7) said UAE Supreme Council Member Sheikh Saud bin Saqr Al Qasimi inaugurated the company’s wiring harness facility in the Ras Al Khaimah (RAK), which is one of the seven emirates that make up UAE.
Specialising in the manufacture of wiring harnesses for commercial vehicles and other special-purpose vehicles, SAMIL’s facility will also export them to its customers in Europe.
With a 11,000 square-metre built-up area, the facility employs around 500 people and is built with an initial investment of about 10 million euros. Sheikh Saud also toured the unit and was briefed on its advanced manufacturing technologies.
With this, Motherson has eight facilities in the region, the others being in Dubai and Sharjah.
Motherson Chairman Vivek Chaand Sehgal said Ras Al Khaimah continues to serve as a strategic base for its operations, and serves to bring the company closer to its European wiring harness customers.
RAKEZ Group CEO Ramy Jallad said, “This state-of-the-art facility represents Motherson’s commitment to innovation and quality, showcasing Ras Al Khaimah and RAKEZ as key strategic hubs for their global operations.”
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PM Narendra Modi leaves for India after ‘productive’ visit to UAE
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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“Concluding a productive UAE visit. Our nations are working together on so many issues aimed at making our planet better. I thank HH Sheikh Mohamed bin Zayed Al Nahyan for the warm hospitality,” Modi said on Twitter.
Prime Minister Narendra Modi on Saturday concluded his day-long “productive” visit to the UAE during which he held bilateral talks with President Sheikh Mohamed bin Zayed al Nahyan.
“Concluding a productive UAE visit. Our nations are working together on so many issues aimed at making our planet better. I thank HH Sheikh Mohamed bin Zayed Al Nahyan for the warm hospitality,” Modi said on Twitter.
The two leaders agreed to start trade settlements in local currencies, link the Fast payment systems of India and the UAE and open IIT-Delhi campus in the Gulf country.
The Prime Minister departed for India after a banquet hosted in his honour by the UAE President.
“A visit defined by transformative outcomes. PM @narendramodi emplanes for New Delhi after wrapping up a successful visit to UAE,” Ministry of External Affairs Spokesperson Arindam Bagchi tweeted.
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Analysing India-UAE CEPA: Trade soars to new heights as trade deficit woes persist
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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In India, sectors like mineral fuels; electrical machinery (particularly telephone equipment); gems & jewellery; automobiles (transport vehicles segment); essential oils/perfumes/cosmetics and others witnessed significant export growth.
The Comprehensive Economic Partnership Agreement (CEPA), which was signed between India and the United Arab Emirates (UAE) a year ago, is currently being reviewed by the key officials of the countries. The pact inked after 88 days of negotiations has been a success with concerns of India’s widening trade deficit still hovering over it. A closer look at its fineprint highlights the hits and misses of this mechanism.
The landmark agreement, which was signed in February 2022, aims to boost merchandise trade between the two countries to US $100 billion over the next five years. In the first 11 months of the implementation itself, the non-oil trade hit the US $45.4 billion mark. According to the data by the Ministry of Commerce and Industry (MOCI), the total trade between India and UAE jumped over US $84 billion in March 2023 from US $73 billion in March 2022. The 16 percent YoY increase was despite the downturn in global trade.
In India, sectors like mineral fuels; electrical machinery (particularly telephone equipment); gems & jewellery; automobiles (transport vehicles segment); essential oils/perfumes/cosmetics and others witnessed significant export growth.
By removing or reducing tariffs on over 80 percent of the product line, CEPA prompted investment in priority sectors like petrochemicals, pharmaceuticals, metals (e.g. aluminum, copper), agricultural products and intellectual property. It also offered a platform for cooperation and expansion of small and medium-sized enterprises (SMEs) with the elimination of unnecessary barriers to trade.
A lot of labour intensive sectors like pharmaceuticals have been benefitted by the elimination of certain tariffs, believes Jehil Thakkar, Partner, Deloitte India. “For instance in the pharmaceutical industry the tariffs were around 10-15 percent but they are removed now. In terms of gems and jewelleries, the 7.5 percent custom duties on a site have been eliminated. So, overall, I believe the benefits are starting to roll through,” he adds.
Speaking after the first meeting of the joint committee of India-UAE on CEPA, commerce minister Piyush Goyal said that the central banks of both nations are actively discussing rupee trade under this mechanism.
“Given the acceptability of Indian payment systems like UPI in many countries now, the possibility is certainly there,” says Thakkar. He added that such payment mechanisms lower costs and offer ease in doing business. Clearly such an arrangement will benefit India, he believes.
Additionally, the UAE has promised to grant 1.40 lakh visas to highly skilled Indian workers by 2030. Also, export-oriented industries like textiles, handlooms, and footwear are expected to create over 1 million jobs.
Although this arrangement has been a success, the concerning factor from India’s point of view is its widening trade deficit, which has gone beyond US $15 billion. India’s exports to the UAE grew by 11 percent to US $20.25 billion and at the same time, imports climbed by 24.4 percent to US $ 36.23 billion. A year ago, the trade deficit number was at US $10.89 billion.
While addressing this concern, India’s ambassador to the UAE, Sunjay Sudhir had said that widening trade deficit is a result of spiking oil prices.
“The trade deficit by itself is not a massive concern,” mentions Thakkar. He adds that if looked at in context of our overall trade deficit, like India has with China or other nations, it is not a big figure. According to him, it is important to look at the whole picture that is created by this agreement.
Overall, this agreement remains progressive and it will keep refining itself to make trade easier for both the nations.
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