Washington: The year-long trade war with China is pushing American companies to source more from GSP countries such as India, Thailand, Cambodia, Indonesia and Turkey, a latest report said warning that cancelling GSP benefits to India would only help China.
The Coalition for GSP, a group of American companies and trade associations, in a report on Tuesday said the latest official trade figures shows that the Generalised System of Preference (GSP) saved American companies USD 105 million in March, an increase of USD 28 million (36 per cent) from March, 2018 and the second-highest level on record.
In the first quarter of 2019, GSP saved American companies USD 285 million. That is USD 63 million more than the first quarter of 2018 — itself a record-shattering year.
GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
On March 4, President Donald Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
According to the Washington DC-based Coalition for GSP, products hit by Section 301 tariffs when imported from China account for 90 per cent of increased GSP imports in 2019.
Overall, GSP imports rose by about USD 760 million, with USD 672 million coming on products on China Section 301 lists. GSP imports of products on those Section 301 lists increased 19 per cent while GSP imports of other products increased by just five per cent.
Noting that imports from China, subject to new tariffs, are down significantly, the coalition said countries from which GSP imports of products on China Section 301 lists have increased the most in the first quarter of 2019.
According to the report, India benefits the most from this.
“For India, 97 per cent of increased 2019 GSP imports are on the China Section 301 lists. GSP imports on Section 301 lists increased by USD 193 million (18 per cent), while imports of everything else increased by just USD seven million (two per cent),” it said.
Similarly for Turkey, 97 per cent of increased 2019 GSP imports are on the China Section 301 lists. For the Philippines, GSP imports of products on China 301 lists growth helped offset declining GSP imports of all other products. South Africa, Brazil and Egypt saw similar increases in Section 301-affected products offset losses of other products, it said.
GSP imports from Indonesia grew only twice as much on affected products, the report said. Yet, even here, growth rates are faster for products on the Section 301 lists: GSP imports of products affected by new China tariffs grew by 22 per cent, while imports of other products grew by 15 per cent.
“Not only would terminating GSP for India, Turkey or others under review (Thailand, Indonesia) hurt many American companies and workers that have relied on GSP for years, it would also reduce viable sourcing options for companies looking to buy less from China in response to Section 301 tariffs—thereby undermining the president’s own objectives,” the coalition said.
In another report, the coalition said cancelling GSP for India would benefit China.
Referring to the results of a recent survey, the coalition said 30 per cent of companies would look to source more from China if GSP benefits went away.
That was about the same share of companies reporting they would source more from any of the approximately 120 remaining GSP countries and much higher than those would source more from non-China, non-GSP countries (NAFTA, EU, Japan etc.).
While President Donald Trump has tweeted about raising tariffs on China to create additional negotiating leverage, terminating GSP for India would undermine it, it said.
For some products such as luggage, simultaneously ending GSP for India and raising List 3 tariffs from 10 per cent to 25 per cent would make Chinese products more competitive compared to India, not less, it said.
That is because there is a significant overlap between products imported from India under GSP and Chinese imports targeted by the Administration for Section 301 tariffs, it said.
Over 75 per cent of India’s GSP imports are included on one of the Section 301 lists.
Given the head-to-head competition between India and China on many of these products, ending GSP for India would have the same effect as lowering tariffs on China, the report said.
“And we can see that the Administration’s tariffs on China do seem to have impacted both imports from India under GSP and from China so far in 2019,” it said.
In the first two months of 2019 (most recent data available), GSP imports from India are up significantly for products on the Section 301 lists, but down slightly for products where China does not face new tariffs, according to the coalition. It is the opposite for China: imports are down significantly for products facing new tariffs, and up slightly for those that do not, it said.
“New tariffs on China presumably would amplify these trends—but new tariffs on India would mitigate them. That puts the Administration at a crossroads: is increased leverage on China or India a higher priority? Because the data show you cannot raise tariffs on one without helping the other,” the coalition said in its report.
RBI’s vision document on payment systems to spur digital economy: Fintech firms
New Delhi: The RBI’s ‘Payment Systems Vision 2021’ document would act as a catalyst for promoting digital economy and instill confidence among the general public, fintech companies say.
Aiming at a ‘cash-lite’ society, the Reserve Bank of India last week released the vision document for ensuring a safe, secure, convenient, quick and affordable e-payment system as it expects the number of digital transactions to increase more than four times to 8,707 crore in December 2021.
The RBI has said it will implement the approach outlined in the document during the period 2019 – 2021.
COO of Payworld Praveen Dhabhai said the vision document has a focus on empowering payment system providers and at the same time providing ease to consumers.
“We are confident with our vision as a payment system provider aligned with the regulators, we will be able to contribute in increasing the digital transactions penetrations especially in the assisted segment in smaller cities and rural Indian,” he said.
Navin Surya, Chairman Emeritus, Payments Council of India said: “Clarity in defining outcomes in terms of scale of digital and overall payments vis a vis GDP is a very good measurement to look forward to and also assess the impact of work done by all stakeholders.”
However, KYC simplicity, digital KYC and KYC bureau, as well as simplification of existing policies to enable NBFCs to issue credit cards is missing from the document, said Surya, who is also the chairman of Fintech Convergence Council.
Mandar Agashe, founder and vice chairman, Sarvatra Technologies, was of the opinion that the 24X7 helpline that the RBI plans to set will help in instilling confidence in customers regarding the digital payments system.
Other than this, geo-tagging of payment system touchpoints will help companies understand where and what type of transactions are taking place, which will also lead to curtailing frauds, he added.
The document said payment systems like UPI/IMPS are likely to register average annualised growth of over 100 per cent and NEFT at 40 per cent over the vision period (up to December 2021).
The ‘Payment and Settlement Systems in India: Vision 2019 – 2021’, with its core theme of ‘Empowering Exceptional (E)payment Experience’, envisages to achieve “a highly digital and cash-lite society” through the goal posts of competition, cost effectiveness, convenience and confidence (4Cs).
Gaurav Chopra, founder and CEO, IndiaLends, said, “With growing competition, industry players will be able to offer services at an optimal cost to their customers. RBI aims to bring innovation in technology and processes that will eventually save time of end consumers.”
CEO and co-founder of NiYO, Vinay Bagri said some of the measures proposed by RBI, such as self-regulatory organisation, strengthening offline payments and feature phone-based payment services, will go a long way in democratising the payments ecosystem.
PE inflow in Indian retail real estate doubles to $1.2 bn in 2017, 2018: Anarock
New Delhi: Indian retail real estate sector attracted private equity investment worth USD 1.2 billion during 2017-18 calendar years, double from the previous two years, according to property consultant Anarock.
The consultant attributed the sharp rise in private equity (PE) inflow to further liberalisation in FDI policies such as 51 percent FDI in multi-brand retail and 100 percent FDI in single-brand retail under the automatic route.
From an investment of USD 600 million during 2015-2016 calendar years, private equity inflows in retail real estate jumped to over USD 1.2 billion between 2017 and 2018.
Of total USD 1.84 billion inflow in the last 4 years (2015-2018), tier II and tier III cities attracted nearly 48 percent funds (USD 880 million) against USD 960 million in tier 1 cities.
Top favoured tier II and tier III cities included Amritsar, Ahmedabad, Bhubaneshwar, Chandigarh, Indore and Mohali.
US-based funds like Blackstone and Goldman Sachs have invested more than USD 1 billion between 2015-2018, while UAE, Singapore, Canada and Netherlands based funds were also active.
Shobhit Agarwal, MD & CEO – Anarock Capital says, “our report highlights the fact that unlike the commercial office sector, retail is to some extent geography-agnostic because its success depends on the spending power of its target audience.?
“As a result, shopping malls in tier II and tier III cities have performed as well as, if not better than, their tier 1 counterparts. This also led to increase in rentals and profitability and caused PE investors to start considering investment options outside their accustomed tier I geographies,? he added.
Anuj Kejriwal, MD & CEO – Anarock Retail said, “the opportunity that the Indian retail sector holds in store for PE investors is more than evident – as are the geographies they must focus on for optimum returns.?
Anarock data reveals that around 39 million sq ft of organised retail space is expected to enter the market between 2019-2022. Of this supply, around 71 percent is expected to come up in tier I cities, and the remaining 29 percent in tier II and tier III cities, Kejriwal added.
Cash, goods worth Rs 3,400 crore seized during Lok Sabha elections 2019:EC
New Delhi: After the completion of the seventh and final phase of polling , the Election Commission said cash, drugs, liquor and precious metals worth Rs 3,449.12 crore were seized by enforcement agencies since the Lok Sabha polls were announced on March 10.
This is thrice of what agencies seized during the 2014 Lok Sabha poll process. In 2014, law enforcement agencies made seizures worth Rs 1,206 crore, the EC’s director general (election expenditure) Dilip Sharma said.
Law enforcement agencies between March 10 and May 19 seized Rs 839.03 crore in cash, liquor worth Rs 294.41 crore, drugs worth Rs 1,270.37 crore, precious metals, including gold, worth Rs 986.76 crore and “freebies”, including sarees, wrist watches, aimed at inducing voters worth Rs 58.56 crore were seized.
EC officials said they directed social media platforms, including Facebook, Twitter and WhatsApp, to remove several that were found to violate the EC’s code.They said social media platforms removed 909 posts. Facebook removed 650 posts, Twitter took down 220 posts, ShareChat removed 31, YouTube five and WhatsApp three.
Of the 650 posts taken down by Facebook, 482 were political messages posted during the “silence period”. The “silence period” starts 48 hours before the hour set for conclusion of polling in a particular phase. The seventh phase of polling came to a close at 6 pm on Sunday, so the “silence period” had begun at 6 pm on Friday for this phase.
As many as 73 social media posts were political advertisements in the “silence period”, two were in violation of the Model Code of Conduct, 43 were related to voter “misinformation”, 28 were dubbed as those crossing the limits of decency, 11 were related to exit polls and 11 were hate speeches, Ojha said.
There were also 647 confirmed cases of paid news, of which the maximum of 342 were reported in the first phase itself, he added. During the 2014 Lok Sabha polls, 1,297 confirmed cases of paid news were reported, Ojha said.
The EC on Sunday continued to receive criticism from the Opposition while Prime Minister Narendra Modi thanked it for granting him permission for his visit to Uttarakhand’s Kedarnath temple.
Modi visited Kedarnath on Saturday, spent the night in a cave and left for Badrinath on Sunday morning. “I did not ask for anything. I don’t believe in asking because God only wants us to give… all I want is ‘Baba’ Kedarnath bestows his blessings not just upon India but entire mankind,” he said at Kedarnath.
The PM thanked the EC for allowing him to undertake the visit, saying he got two days of “rest” there. The EC had given its nod to Modi’s visit while “reminding” the Prime Minister’s Office that the model code of conduct is still in force.
Congress President Rahul Gandhi said the Election Commission’s “capitulation” before the PM was obvious. “From electoral bonds and EVMs (electronic voting machines) to manipulating the election schedule, NaMo TV, ‘Modi’s Army’ & now the drama in Kedarnath; the Election Commission’s capitulation before Mr Modi & his gang is obvious to all Indians,” Gandhi tweeted. “The EC used to be feared and respected. Not anymore,” he said.
“Polling is over. Now, we can say that the ‘pilgrimage’ of the PM in the last two days is an unacceptable use of religion and religious symbols to influence the voting,” Congress leader P Chidambaram said.
Telugu Desam Party chief N Chandrababu Naidu wrote to the EC stating that “continuous” telecast of the PM’s “private activities” at Badrinath and Kedarnath shrines were in violation of the poll code and should be stopped.