Mumbai :Market access restrictions in China and lack of manufacturing capability in technology items such as semiconductors could deprive India from taking advantage of the trade war between the US and China, which officially kicked in from . However, the industry is hoping that imports of several commodities may become cheaper as a result.
The US imposed up to 25 per cent import tariff on 818 Chinese products. The move is set to affect around $34 billion worth of US imports, mainly intermediate capital products, including industrial magnates, semiconductors and printed circuit boards that are used by American companies to assemble engineering goods. These are used for making electronic equipment and LED panels, among others.
Beijing retaliated, by slapping tariffs on 545 US products, including soyabean, pistachio, rice, salmon and cigars, worth up to total $34 billion in imports. China accounts for $12 billion of America’s total soybean exports of $21 billion.
According to data from the commerce ministry, India’s trade gap for electronics products doubled in the last five years to $38.94 billion in 2017-18 from $18.86 billion in 2013-14. India’s ambitious scheme to promote electronics manufacturing failed to bring in the desired results since many companies opted out of their planned investments due to the slow pace of approvals for disbursement of incentives. For instance, investments committed under the Modified Special Incentive Package Scheme (M-SIPS) reduced to Rs 914 billion as on April 2018, against the earlier proposals of Rs 1.57 trillion.
“Our exports will gain depending on specific products and their competitiveness in both markets. But since India’s exports are more attuned to global growth, any negative movement is likely to affect us badly,” according to Ajay Sahai, director-general, Federation of Indian Export Organisations (FIEO). India stands to gain little as barriers to trade remain high, especially with regard to those that are non-tariff in nature. India currently only has rights to export rice to China, of which the offtake hasn’t increased much.
For instance, government data on India’s overall exports to China in the fruit and nuts category includes a lot of items on which China has raised duties for the US. It shows exports fell to a low $6.37 million in 2017-18, a more than 60 per cent drop from $15 million a year ago.
China allowed India market access after 13 years. “After a persistent push from our side, China allowed market access to three Indian food products, mangoes, grapes and rice, back then. Even among these, China later introduced further subcategories for rice, and basmati varieties faced difficulties in exports,” a senior official from Agricultural and Processed Food Products Export Development Authority said.
Fears of China devaluing the yuan further are becoming more real. “Devaluation of the currency is one policy tool the Chinese have in their arsenal while dealing with the US. If that happen, pressure will be on the rupee as well,” said Tushar Arora, senior economist at HDFC Bank.
Although the rupee is on the verge of breaching 70 to a dollar, its fall vis-a-vis that other emerging market currencies is slightly more. This gives it a small advantage over its competitors, Arora said.
But there may be a silver lining for India. US exports to China currently under threat make up for nearly a fifth of total US exports in those categories, according to Washington DC. With that huge a market at risk, US sellers will now offer attractive selling prices, according to Indian businesses. According to the FIEO, consumer demand for many of these commodities have pushed up imports in recent years.
RBI needs to ensure stability: Shaktikanta Das
New Delhi: The head of the Reserve Bank of India (RBI) said he would take the steps necessary to maintain financial stability in the country and help create favourable conditions for growth.
India’s economy has grown because of measures such as the nationwide goods and services tax and the insolvency and bankruptcy code that prevents wilful defaulters from bidding for stressed assets, Shaktikanta Das said in his address to an investor roundtable.
The country’s growth story is backed by its strong domestic fundamentals, he said, citing lower inflation.
Annual retail inflation rate dropped to an 18-month low of 2.19 per cent in December, strengthening the views of some economists that the central bank could ease monetary policy next month.
India’s top business groups on Thursday urged the central bank to cut its benchmark interest rate by at least half a percentage point and lower the cash reserve ratio it imposes on banks.
The country also needs to watch out for any sudden turbulence in the gloal financial market, Das said.
Centre removes two PNB executive directors for lapses in Rs 13,500-cr fraud
Chennai:The Central government has removed two Punjab National Bank (PNB) Executive Directors — Sanjiv Sharan and K.Veera Brahmaji Rao — for the lapses in the Rs 13,500 crore fraud allegedly perpetrated by absconding diamantaire Nirav Modi.
The PNB has intimated the action to the stock exchanges.
“We welcome the Central government’s action to dismiss the two Executive Directors. The scam of such proportions could not have happened without the knowledge of the top management,” C.H. Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA), told IANS.
“Perhaps for the first time, the Centra has removed the Executive Directors of a nationalised bank under the Nationalised Banks (Management and Miscellaneous Provision) Scheme, 1970. All these days it was said the top management of government-owned banks — Chairman, Managing Director, Executive Directors — are governed only by the contract of appointment.
“It is also good that the central government has followed the due process of giving the two PNB Executive Directors opportunity to put forth their views before dismissing them,” Venkatachalam added.
According to the Central government’s notification, on July 3, 2018, Sharan and Rao were issued a show cause notice as to why they could not be removed from office for having failed to exercise proper control over the functioning of PNB, thus enabling the fraud through the misuse of SWIFT at the bank’s Brady House branch in Mumbai.
After considering Sharan and Rao’s replies and the comments of the bank’s Board, the Centre removed them from office as it found it was expedient in the interests of PNB.
According to the notification, the dismissal of Rao is subject to the outcome of a plea in the Delhi High Court.
“We are happy to see some action being taken. Whether it is only the two Executive Directors and other officials are also involved in the scam has to be probed in full,” Venkatachalam said.
According to him, in the past, low-level officers would have been the scapegoats for such massive scams.
“With the action taken on the top management, people will be satisfied that public sector bank officials are answerable for their lapses,” Venkatachalam added.
In this new world, data is the new wealth: Ambani
Mumbai: Reliance Industries chairman and managing director Mukesh Ambani urged Prime Minister Narendra Modi to take steps against ‘data colonisation’, specially by global corporations, stating that Indian data must be owned by Indians.
Invoking Mahatma Gandhi’s movement against political colonisation, Ambani said India now needs a new movement against data colonisation.
“Gandhiji led India’s movement against political colonisation. Today, we have to collectively launch a new movement against data colonisation,” he said Gandhinagar at the Vibrant Gujarat Global Summit.
Stressing that, in this new world, data is the new wealth, Ambani said, “India’s data must be controlled and owned by Indian people and not by corporate, especially global corporations.”
He further said, “For India to succeed in this data driven revolution, we will have to migrate the control and ownership of Indian data back to India. In other words, give Indian wealth back to every Indian.”
Stating that the “entire world has come to recognise” Modi “as a man of action”, Ambani said, “Honorable Prime Minister, am sure you will make this one of the principal goals of your digital India mission.”
Later in the day, countering Ambani’s call, Governor – Commonwealth of Kentucky, Matthew Griswold, asked Modi “to think in the opposite” in order to realise the tremendous opportunity that lies in Indo-US partnership.
“Honorable prime minister you have been asked from this stage to think about limiting the amount of competition, limiting the exchange of ideas, information and goods. I would encourage you to think in the opposite,” he said.
While stating that it is important to put the people of India first, Griswold said, “It is also important to put their opportunity and our opportunity as citizens of the world to trade with one another and exchange ideas because iron sharpens iron.”
The greatest possibility comes from the exchange of these idea, he added.
“If we can cut the regulations, cut the bureaucracy, cut the red tape, the opportunity is enormous between our nations,” he added that India is now the 10th largest trading partner for the US and “climbing quickly”.
“The opportunity before us between India and the United States is incredible, but responsibility falls on each of one us, those of us in elected positions, those of you in the industry, those of you who represent various constituencies, we have much work to do…we must do this, ” Griswold said.