New Delhi, Banking issues like reluctance to process <keyword id="6358355" type="General" weightage="20" keywordseo="forex" source="Orion">forex</keyword> received through alternate channels and high processing fees are hindering the growth of <keyword id="7848945" type="General" weightage="20" keywordseo="e-commerce-exports" source="Orion">e-commerce exports</keyword> from India, and there is a need to bring mindset change to unlock the sector's potential, a report by think tank GTRI said on Monday. Unlocking India's e-commerce export potential to USD 350 billion by 2030 requires addressing banking issues that hinder growth and increase operational costs, the Global Trade Research Initiative (GTRI) said. "To initiate change, both the RBI and banks must shift their mindset towards treating small-value exports differently from larger ones. This shift is essential to prevent misuse while streamlining processes. Without this fundamental change, any reforms attempted by the RBI and banks will fall short," it said. Small e-commerce businesses often face challenges because banks are not equipped to handle low-value transactions efficiently, it added. The key issues include reluctance to process forex through alternate channels, high processing fees, incorrect purpose code allocation, and limitations in the RBI's EDPMS (Export Data Processing and Monitoring System). The Reserve Bank of India tracks export payments and reconciliation through its Export Data Processing and Monitoring System. "Banks are happy to process forex received through bank transfers but reluctant to process forex received through foreign currency cheques, payment gateways like PayPal, credit cards, <keyword id="151105" type="General" weightage="20" keywordseo="western-union" source="Orion">Western Union</keyword>, cash receipt when a buyer selects item live in the retail shop," it said. Banks delay crediting forex received in a firm's account when payments are received through such channels, and this affects cash flow and hampers business operations, the report noted. Banks charge money multiple times at different stages for the same small-value shipment, it added. Elaborating this, it said that essential charges include charges for submitting shipping bills (Rs 80 to Rs 2,000) at the time of forex realisation (1-to-2.5 per cent of value), intermediary bank charges during forex transfers (USD 10 to USD 55 per transaction), penalties for bills pending at EDPMS (Rs 100 per shipping bill per month). "Most charges are fixed for a transaction irrespective of value. Bank charges can exceed 50-60 per cent of the shipment value. This makes e-commerce exports commercially unviable," it said, adding banks allocate purpose codes for each remittance but frequently issue incorrect codes. For example, purpose code P0103, meant for advance payments, is often assigned even when exports have already occurred and the firm has submitted proof. Incorrect allocation of purpose codes by banks leads to reconciliation problems, EDPMS pendency issues, and issuance of notices and fines on exporters. The RBI issues notices to exporters for EDPMS defaults but does not give them direct access to view their records, as per the report. "Exporters must rely on banks/DGFT for critical data, leading to unnecessary delays and complications," GTRI co-founder <keyword id="504704" type="General" weightage="50" keywordseo="ajay-srivastava" source="Orion">Ajay Srivastava</keyword> said. The report suggested eight action points, such as the creation of a single window platform for e-commerce and small-value shipments, standardise bank charges, defining a time limit for banks to complete all small export-related requests by the RBI, and exempting shipment value up to USD 1,000 per shipment from monitoring till the single window is implemented. It also pitched for an extension of the timeline for EDPMS closure from the current nine months to 24 months and redesign the courier shipping bill to reflect correct payment terms. On the single window, Srivastava called for integrating the RBI, banks, Customs, DGFT, India Post, courier companies and exporters. "This platform should cover all realisation methods other than bank transfers. The exporter should be able to conduct all transactions online. SW will automate the EDPMS reconciliation process," he added. He said that high processing fees and multiple charges at different stages of exporting hurt small businesses the most, and the banks should charge a one-time fee for each shipment instead of further charges at various stages. "The government could subsidise these fees to ease the financial burden on small exporters," the report said, adding there is a need to raise the export realisation variation limit from 25 per cent to 100 per cent.

Banking issues hinder growth of exports through e-commerce: GTRI report

Manufacturing of electric vehicles (EVs) in <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword> will increase its dependence on <keyword id="1334" type="General" weightage="80" keywordseo="china" source="Orion">China</keyword> for raw materials, mineral processing, and battery production, according to a report of by the economic think tank <keyword id="15910220" type="General" weightage="100" keywordseo="gtri" source="Orion">GTRI</keyword>. The Global Trade Research Initiative (GTRI) also said that there is a need for life cycle impact evaluation for the EVs sector EVs result in the release of pollutants during battery making, disposal, and charging and about 70 per cent of materials used to manufacture EVs in India are imported from China and a few other countries, it said. "EVs will increase India's dependence on China for raw materials, mineral processing, and battery production," it said. China has bought the largest lithium mines in Australia and South America. It processes more than 60 per cent of the lithium produced globally. It also processes 65 per cent of cobalt and 93 per cent of manganese. China makes three out of four batteries produced globally, it said, adding over 100 Chinese battery units make 60 per cent of the cathodes and 80 per cent of the anodes used in lithium-ion cells. The report pointed out that EVs have implications for jobs and pollution and it identified 13 issues related to the interests of consumers, industry, and the government for an evaluation. The issues include the high prices of these vehicles, the fitness of EVs for a long journey, performance under extreme weather, increase in power demand, less fit for public transport, increased dependence on China, no reduction in pollution, disruption of the auto component sector, and inadequate availability of lithium. "EVs with lithium-ion batteries are at best a work-in-progress innovation. We must understand the long-term impact of EVs on jobs, pollution levels, imports, and economic growth," GTRI co-founder <keyword id="504704" type="General" weightage="50" keywordseo="ajay-srivastava" source="Orion">Ajay Srivastava</keyword> said. On the pollution issue, it explained that a typical 500-kilogram lithium car battery uses 12 kg of lithium, 15 kg of cobalt, 30 kg of nickel, 44 kg of copper, and 50 kg of graphite. It also uses about 200 kg of steel, aluminium, and plastics. Mining extraction, transport, and processing of these materials release pollutants and CO2, leading to air and water pollution, it added. "The battery's life is 6-7 years; after which it needs to be recycled. Recycling is complex as the battery contains many toxic materials that are challenging to dispose of. Firms promoting EVs talk about zero tail-pipe emissions but are silent on mining and disposal costs," the report said. Further, it said that EVs will only increase pollution as the batteries are charged from coal-generated electricity. India generates 60 per cent of its electricity from fossil fuels like coal and petroleum, and of this, coal accounts for 50 per cent. "Electric cars only make sense when most power comes from renewable energy," it said, adding that EVs will disrupt India's auto-component industry with 700 organised and 10,000 unorganised manufacturers. It also said that EVs will end the existence of lakhs of shops/garages selling spare parts, changing oil, and servicing vehicles. Further, it said that EV is not a global phenomenon and the push for it is coming from Europe, which is introducing the Carbon Border Adjustment mechanism to protect their polluting industry and disrupt global trade. "There is no standardisation in the charging port for electric scooters. Each firm issues its charging port model. Unless the charging ports are standardised, each maker has to set up separate charging infra across the country," it added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/imdb-shares-top-rated-indian-films-nominated-for-oscars/slidelist/98470341.cms">Two-decade-old Lagaan outscores RRR amongst Oscar-nominated Indian movies on IMDb</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/world-faces-biggest-cholera-surge-in-20-years/articleshow/98470190.cms">World faces biggest cholera surge in 20 years</a>

EVs will increase India's dependence on China for raw materials, battery production: GTRI report

<keyword id="20037655" type="General" weightage="100" keywordseo="India-Bangladesh-trade" source="keywords">India-Bangladesh trade</keyword>, which was disrupted in the wake of the unrest in the neighboring country and the resignation of embattled prime minister <keyword id="20024637" type="General" weightage="20" keywordseo="sheikh-hasina" source="keywords">Sheikh Hasina</keyword>, remained stalled on Tuesday, traders said. <keyword id="22687819" type="General" weightage="20" keywordseo="West-Bengal-Exporters-Coordination-Committee" source="keywords" meta.keywordsubtype="org" meta.entityname="West Bengal Exporters Coordination Committee" meta.hostid="261" meta.entityid="West Bengal Exporters Coordination Committee">West Bengal Exporters Coordination Committee</keyword> secretary Ujjal Saha said trade through <keyword id="20031482" type="General" weightage="20" keywordseo="land-ports" source="keywords">land ports</keyword> in the state has been halted due to "non-clearance of goods by Bangladesh customs, resulting in hundreds of trucks being lined up in parking lots". Trade between the two countries through land ports at Petrapole, Gojadanga, Mahadipur, and Fulbari in <keyword id="19896517" type="General" weightage="20" keywordseo="West-Bengal" source="keywords">West Bengal</keyword> has been affected, while some passenger movement has been reported but turnout remains low, sources said. Saha noted that a Bangladesh government notification issued on Sunday declared a three-day holiday till Wednesday, except for essential services. Trade through Petrapole in North 24 Parganas district, the largest land port, remains halted as the Benapole customs in Bangladesh remained non-functional. Security at the land ports has been increased in response to the situation, he added. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), emphasised the need to protect factories in Bangladesh and maintain supply lines to sustain trade and economic activities. "As Bangladesh is experiencing political turmoil, it is essential for all political factions to protect garment and other factories and keep supply lines open across the border," he said. Engineering Export Promotion Council chairman Arun Kumar Garodia expressed concern over the political developments in Bangladesh, noting the significant impact on Indian exporters. Bangladesh, a key destination for Indian engineering products, saw a drop in exports to $542.1 million during the April-June period of the 2024-25 fiscal, a decrease of 8.2% from the previous year. Bangladesh is India's largest trade partner in South Asia, and India is the second-largest trade partner for Bangladesh in Asia. India's exports to Bangladesh fell to $11 billion in 2023-24 from $12.21 billion in 2022-23, while imports decreased to $1.84 billion from $2 billion in the same period. India's main exports to Bangladesh include vegetables, coffee, tea, spices, sugar, confectionery, refined petroleum oil, chemicals, cotton, iron and steel, and vehicles, while major imports are fish, plastic, leather, and apparel. Bangladesh's exports to India are heavily concentrated in textiles and garments, which constitute 56% of their exports. Hasina landed at the Hindon airbase on the outskirts of Delhi on Monday, hours after she resigned as the prime minister, following weeks of deadly anti-government protests that killed nearly 300 people.

Trade via Bengal land ports disrupted amid unrest in Bangladesh

The <keyword id="19952901" type="General" weightage="20" keywordseo="DPIIT" source="keywords">DPIIT</keyword>'S withdrawal of the September 2016 office memorandum regarding extending the scope of a <keyword id="42436" type="General" weightage="100" keywordseo="copyright" source="Orion">copyright</keyword> rule to <keyword id="22883009" type="General" weightage="20" keywordseo="internet-transmissions" source="keywords">internet transmissions</keyword> would bolster the position of <keyword id="22919376" type="General" weightage="20" keywordseo="copyright-owners" source="keywords">copyright owners</keyword> and aid them in negotiating better <keyword id="20776884" type="General" weightage="20" keywordseo="royalty-rates" source="keywords">royalty rates</keyword>, according to experts. Last week, the Department for <keyword id="7682327" type="General" weightage="20" keywordseo="Promotion-of-Industry-and-Internal-Trade" source="Orion">Promotion of Industry and Internal Trade</keyword> (DPIIT) withdrew an office memorandum regarding extending the scope of Section 31D to internet transmissions. In 2016, through an office memorandum, the government decided to include Internet broadcasting under the purview of the Copyright Act. DPIIT has said that in light of the decision of the Division Bench of the High Court of Bombay in the matter of Tips Industries Ltd vs Wynk Music Ltd, the office memorandum issued by the department on September 5, 2016, is "hereby rescinded". This section talks about statutory licences for the broadcasting of literary and musical works and sound recordings. Abhay JV, Partner, Shardul Amarchand Mangaldas &amp; Co said that the withdrawal of the office memorandum will be welcomed by the owners of copyright (record labels etc) since it will strengthen their position in negotiations with organisations desirous of streaming works on the internet. "The major advantage to the owners of copyright will be that they will now be able to negotiate the royalty rates, without being anxious of such rates being decided by the commercial court," he said. However, he added that the action of the DPIIT also underscores the need for India to have a balanced framework where both copyright owners and organisations desirous of using copyrighted works on the internet can benefit. "This is especially required considering that India has a large internet subscriber base and OTT market and generates substantial revenue. The need for amendment of the existing legislation to keep pace with technological evolution and to deal with complex issues arising therefrom is also imminent," Abhay said. Explaining the rule, he said Section 31D (inserted after the 2012 amendment) of the Copyright Act, 1957, provides that any <keyword id="22919377" type="General" weightage="20" keywordseo="broadcasting-organisation" source="keywords">broadcasting organisation</keyword> desirous of communicating a work to the public by way of a broadcast or a performance can acquire a statutory license to do so, by giving prior notice and paying royalty to the owner of copyright at the rate fixed by the commercial court. In other words, it created a statutory licensing regime whereby a broadcaster was allowed to communicate work after paying royalty to the owner of the copyright, he said. "The right to broadcast works online through internet transmission is, however, missing from the ambit of Section 31D. Transmission through the internet may include online music streaming services or other related streaming services and OTT platforms," Abhay said. This absence of transmission through the internet benefited copyright owners as they were able to exploit the ever-expanding online market through individual licensing agreements and without depending upon statutory licenses issued by the relevant authority. On September 5, 2016, the DPIIT thought it apt to issue an office memorandum stating that Section 31D, which refers to 'any broadcasting organisation desirous of communicating to the public', may not be restrictively interpreted to cover radio and TV broadcasting, but appears to include internet broadcasting as well. "While there were concerns expressed by the industry, especially the music industry, the memorandum was not rescinded. The notification has now been rescinded by the DPIIT on August 21, 2024, on account of the decision of the division bench of the Bombay High Court disposing of the appeal in Wynk Music Ltd. v. TIPS Industries Ltd. on the basis of a settlement between the parties," he explained. Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said that the rescinding of the order marks a significant legal development in India's <keyword id="20354989" type="General" weightage="20" keywordseo="digital-content" source="keywords">digital content</keyword> and copyright landscape. "It underscores the judiciary's role in interpreting statutory provisions and the importance of ensuring that digital platforms comply with the correct licensing frameworks," he said. Srivastava added that the decision is expected to have a lasting impact on the digital music industry, influencing how music is licensed and distributed online while encouraging fair compensation for artists and rights holders. "For copyright holders, the decision is a victory that strengthens the protection of their rights in the digital age. It emphasises the importance of securing proper licenses before distributing copyrighted content online, which could lead to more stringent compliance practices within the industry," he said. On the other hand, digital music platforms have expressed concerns about the potential increase in licensing costs and the challenges of renegotiating agreements, he said adding the decision may also influence the availability of certain music on these platforms, as the cost of obtaining licenses could affect their business models.

DPIIT's withdrawal of a copyright rule order to strengthen rights owners' position: Experts

<keyword id="20037655" type="General" weightage="20" keywordseo="India-Bangladesh-trade" source="keywords">India-Bangladesh trade</keyword>, which was disrupted in the wake of the unrest in the neighbouring country and the resignation of embattled prime minister Sheikh Hasina, remained stalled on Tuesday, traders said. <keyword id="19896517" type="General" weightage="20" keywordseo="West-Bengal" source="keywords">West Bengal</keyword> Exporters Coordination Committee secretary Ujjal Saha said trade through <keyword id="20031482" type="General" weightage="20" keywordseo="land-ports" source="keywords">land ports</keyword> in the state has been halted due to "non-clearance of goods by Bangladesh customs, resulting in hundreds of trucks being lined up in parking lots". Trade between the two countries through land ports at Petrapole, Gojadanga, Mahadipur, and Fulbari in West Bengal has been affected, while some passenger movement has been reported but turnout remains low, sources said. Saha noted that a Bangladesh government notification issued on Sunday declared a three-day holiday till Wednesday, except for essential services. Trade through Petrapole in North 24 Parganas district, the largest land port, remains halted as the Benapole customs in Bangladesh remained non-functional. Security at the land ports has been increased in response to the situation, he added. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), emphasised the need to protect factories in Bangladesh and maintain supply lines to sustain trade and economic activities. "As Bangladesh is experiencing political turmoil, it is essential for all political factions to protect garment and other factories and keep supply lines open across the border," he said. Engineering Export Promotion Council chairman Arun Kumar Garodia expressed concern over the political developments in Bangladesh, noting the significant impact on Indian exporters. Bangladesh, a key destination for Indian engineering products, saw a drop in exports to USD 542.1 million during the April-June period of the 2024-25 fiscal, a decrease of 8.2 per cent from the previous year. Bangladesh is India's largest trade partner in South Asia, and India is the second-largest trade partner for Bangladesh in Asia. India's exports to Bangladesh fell to USD 11 billion in 2023-24 from USD 12.21 billion in 2022-23, while imports decreased to USD 1.84 billion from USD 2 billion in the same period. India's main exports to Bangladesh include vegetables, coffee, tea, spices, sugar, confectionery, refined petroleum oil, chemicals, cotton, iron and steel, and vehicles, while major imports are fish, plastic, leather, and apparel. Bangladesh's exports to India are heavily concentrated in textiles and garments, which constitute 56 per cent of their exports. Hasina landed at the Hindon airbase on the outskirts of Delhi on Monday, hours after she resigned as the prime minister following weeks of deadly anti-government protests that killed nearly 300 people. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank">Unicommerce eSolutions IPO – Price band to risk factors, all you need to know</a><a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms" target="_blank">Neeraj Chopra’s Paris Olympics journey to begin with qualification round today – top rivals to look out for</a><a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank">Electric two-wheeler sales cross the 1 lakh mark after four months, Ola Electric leads the market</a>

<keyword id="22626803" type="General" weightage="20" keywordseo="Strategic-reforms" source="Orion">Strategic reforms</keyword> are needed to enhance <keyword id="22626802" type="General" weightage="20" keywordseo="Indias-appeal" source="Orion">India's appeal</keyword> to <keyword id="20632552" type="General" weightage="20" keywordseo="global-investors" source="keywords">global investors</keyword> as despite having huge potential, <keyword id="19946824" type="General" weightage="20" keywordseo="FDI" source="keywords">FDI</keyword> data shows that the country has not fully capitalised on its opportunities, think tank <keyword id="19962754" type="General" weightage="20" keywordseo="GTRI" source="keywords">GTRI</keyword> said on Thursday. Suggesting a four-step plan, the <keyword id="15543637" type="General" weightage="20" keywordseo="Global-Trade-Research-Initiative" source="Orion">Global Trade Research Initiative</keyword> (GTRI) said that measures which can help India position itself as a leading choice for foreign investors include reducing cost disadvantages for companies relocating to India, improving the Ease of Doing Business throughout the business lifecycle, and establishing a framework for evaluating investment proposals. India attracted USD 44.4 billion in FDI (foreign direct investment) in FY2024, which is only 1.1 per cent of its GDP. The country lagged significantly behind countries like China (USD 189.1 billion), Brazil (USD 86.1 billion) , Australia (USD 61.6 billion), and Canada (USD 52.6 billion) as noted in the World Development Report 2023, it said. It suggested that India must offer a more competitive cost structure to attract businesses shifting from China or considering alternative production locations. For this, India needs to address the four cost-related components - labour, rate material, energy and financial costs. "In India, raw material costs are higher for non-traditional productions due to import dependence and high tariffs. China benefits from lower costs due to large-scale local production and efficient supply chains, while Vietnam offers competitive costs with low or zero tariffs on imports," GTRI Founder Ajay Srivastava said. He said that the financial costs in India are the highest, with lending rates around 9-10 per cent, while China enjoys lower interest rates at 4-5 per cent, and Vietnam's rates are moderate at 7-8 per cent. "India needs to address these costs and strive to be the most cost-effective option," Srivastava added. To further improve the ease of doing business, the GTRI suggested the identification of priority sectors, particularly those where India's manufacturing and export capabilities are currently weak, such as electronics, computers, telecom, precision equipment, and factory machinery. Secondly, invite top global firms as anchor manufacturers. These firms can drive technological innovation and improve productivity across sectors. "Additionally, there is a need to ensure quick factory-to-ship movement. Improving logistics through dedicated freight corridors and strategically locating industrial zones near ports will streamline port and customs processes, facilitating faster shipments," it added. Recommending to create a framework for evaluating investment proposals, it said investments involving technology transfer must be assessed for their potential to enhance local technological capabilities, especially in high-tech areas where India aims to close gaps.

Strategic reforms needed to enhance India's appeal to global investors, attract FDI: GTRI

India's gold and silver imports from its free trade agreement (FTA) partner UAE have skyrocketed 210 per cent to USD 10.7 billion in 2023-24 and there is a need to potentially revise the concessional customs duty rates under the pact to mitigate the arbitrage driving this surge, a report said on Monday. Economic think tank Global Trade Research Initiative (<keyword id="15910220" type="General" weightage="20" keywordseo="GTRI" source="Orion">GTRI</keyword>) said this sharp rise in gold and silver imports is primarily driven by import duty concessions granted by India to the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). India allows 7 per cent tariffs or customs duty concessions on import of unlimited quantities of silver and a 1 per cent concession on 160 metric tonnes of gold. CEPA was signed in February 2022 and implemented in May 2022. Additionally, India facilitates gold and silver imports by allowing private firms to import from the UAE through the India International Bullion Exchange (IIBX) in Gift City. Previously, only authorised agencies could handle such imports, the report said. "While India's total imports from the UAE fell 9.8 per cent from USD 53.2 billion in FY23 to USD 48 billion in FY24, imports of gold and silver skyrocketed 210 per cent, from USD 3.5 billion to USD 10.7 billion," it said. "Import of all remaining products fell 25 per cent, from USD 49.7 billion in FY23 to USD 37.3 billion in FY24," it said. GTRI Founder Ajay Srivastava said the current import of gold and silver from the UAE is unsustainable as the UAE does not mine gold or silver or add sufficient value to imports. "High import duties in India on gold, silver, and jewellery at 15 per cent are at the root of the problem. Consider lowering tariffs to 5 per cent. This will cut large-scale smuggling and other misuse," Srivastava said. Trade in gold, silver, and diamonds has been prone to misuse due to their low volume but high value and high import duties in India. Low tariff imports of gold, silver only benefit few importers who keep all profits arising through tariff arbitrage and never pass it to consumers, he said. Srivastava suggested the government implement certain measures to help India balance its <keyword id="21681862" type="General" weightage="20" keywordseo="trade-policies" source="keywords">trade policies</keyword>, protect domestic revenue, and ensure fair competition in the import of precious metals and jewellery. It suggested reassessing and potentially revising the concessional duty rates under CEPA to mitigate the arbitrage driving the surge in imports of gold and silver. "At least, implement yearly import quotas (tariff rate quotas) for silver, similar to those for gold, to control the volume of imports and prevent revenue loss," it said, adding that India should rigorously verify the claimed value addition by Dubai-based refiners in gold and silver imports to ensure compliance with CEPA rules of origin. It also asked to tighten regulations around the India International Bullion Exchange (IIBX) at Gift City to control the volume and nature of <keyword id="22080399" type="General" weightage="20" keywordseo="precious-metal-imports" source="keywords">precious metal imports</keyword> and the exchange should not allow country-based exemptions. As increased imports contribute to a higher current account deficit and since gold and silver act more like financial instruments than regular trade items, India should avoid including them in any FTA. "India has granted <keyword id="20542001" type="General" weightage="20" keywordseo="tariff-concessions" source="keywords">tariff concessions</keyword> for these items in many FTAs and under the DFTP (duty-free tariff preference) scheme, so a comprehensive review is needed. India announced the scheme for LDCs (least developed countries) in 2008. Under this, India provides duty free/preferential market access on about 98.2 per cent of India's tariff lines (or product categories). Further, the report stated that silver imports from the UAE increased multifold to USD 1.74 billion in 2023-24 from a meagre USD 29.2 million in 2022-23 due to India charging an 8 per cent duty under the CEPA versus a 15 per cent duty from other countries. "The large 7 per cent tariff arbitrage resulted in a loss of revenue for India of Rs 1,010 crore in FY24. Revenue loss will increase as India has committed to make tariffs zero on unlimited quantities of silver from the UAE within next 8 years," it added. It said this trade is unusual because the UAE just imports large silver and gold bars, melt and convert these into silver grains and unwrought gold for exports. "A check with global refiners will show that value addition in such process is much less than 1 per cent as opposed to 3 per cent required under the FTA," it said. On gold bars, the report said India agreed to import 200 metric tons of gold annually from the UAE with a 1 per cent tariff concession and due to this gold imports rose 147.6 per cent from USD 3 billion in FY23 to USD 7.6 billion in FY24, causing India to lose Rs 635 crore in revenue in FY24. Similarly, India's jewellery imports have increased 187.6 per cent from USD 1.1 billion in FY23 to USD 3.3 billion in FY24, whereas these imports from the UAE have increased 290 per cent from USD 347 million in FY23 to USD 1.35 billion in the last fiscal.

Gold, silver import from UAE surged 210% in 2023-24; Need duty revision in FTA: GTRI

Last week, the President of the United States, <keyword id="19919748" type="General" weightage="20" keywordseo="joe-biden" source="keywords">Joe Biden</keyword>, announced significant tariffs on a range of <keyword id="20139085" type="General" weightage="20" keywordseo="Chinese-products" source="keywords">Chinese products</keyword> to protect American workers from unfair trade practices. The targetted measures include a 100% tariff on <keyword id="6354973" type="General" weightage="20" keywordseo="electric-vehicles" source="Orion">electric vehicles</keyword>, a 50% tariff on semiconductors and solar cells, and a 25% tariffs on batteries, steel and aluminium products, some critical minerals, and essential health equipment like medical gloves, syringes and needles. In his address from the Rose Garden of the White House, Biden said America can continue to buy any kind of car they want, "but we're never going to allow China to unfairly control the market for these cars. Period." He claimed that the Chinese government has been investing state funds in various Chinese companies for years, spanning industries across the above-mentioned sectors. How does this brewing geopolitical <keyword id="20736760" type="General" weightage="20" keywordseo="trade-war" source="keywords">trade war</keyword> impact <keyword id="20742235" type="General" weightage="20" keywordseo="Indian-firms" source="keywords">Indian firms</keyword>? Experts say the impact could be in two ways, benefitting some sectors, while harming the few others. Let’s start with the bad news. <cmsannotation type="cmsannotation" annotationid="Threat to Indian firms" comment="subhead" text="Threat to Indian firms">Threat to Indian firms</cmsannotation> Beijing offers significant subsidies on most of these products, leading to surplus production that exceeds domestic and even regular export demand. Subsequently, Chinese companies are known to flood the global markets with surplus products at unreasonably low prices, forcing local manufacturers out of business in many countries, including <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>. A prime example of this in practice can be found in the steel sector, where weak domestic demand is pushing the world’s largest steel producer China to offload surplus production into Indian markets at cheaper prices. Indian steel manufacturers are already struggling to compete with a glut of cheaper Chinese steel, with shipments nearly doubling year-on-year in the financial year ending March 2024. “India is already under grave threat of import because all major steel consuming economies are shutting their doors on these steel producing countries. We are highly vulnerable to surging and predatory import,” said Alok Sahay, secretary general of the Indian Steel Association, to Reuters. Global trade experts say that a majority of Chinese products are sold at unreasonably low prices in global markets because the companies in these sectors do not have to worry about profits. They are heavily subsidised by the Chinese government. <keyword id="20279291" type="General" weightage="20" keywordseo="Steel-Authority-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Steel Authority of India" meta.hostid="261" meta.entityid="Steel Authority of India">Steel Authority of India</keyword>’s (SAIL) chairman Amarendu Prakash also said that they are keenly watching Chinese imports after the US tariff increases. Additionally, China has been accused of employing anti-competitive strategies like compelling foreign companies to transfer their technology in order to operate in China. These factors have led to the US effectively shutting its door on several Chinese products through heightened tariffs, and other developed markets like Canada are also likely to follow suit. White House also emphasised that it continues to consult with its partners and allies who are facing similar threats from China’s unfair trade practices and are keen on taking action. If more and more global markets restrict entry of Chinese products, the risk of the majority of such products being dumped in neighbouring India increases drastically. Trying to block Chinese excess production "is like squeezing a balloon. It shrinks in one place and pops out in another," William Reinsch, a trade expert at the Center for Strategic and International Studies in Washington, tells Reuters. <cmsannotation type="cmsannotation" annotationid="An opportunity also arises" comment="subhead" text="An opportunity also arises">An opportunity also arises</cmsannotation> While some products risk being dumped into the Indian market, in a few other cases, Indian firms could benefit from fresh openings in the lucrative US market. "Of the products affected, India has opportunities in face masks, PPE, syringes &amp;needles, medical gloves, aluminium, iron, and steel. Opportunity may come in China also with retaliation, provided we have market access in products targeted by China," Ajay Sahai, Director General of the Federation of Indian Export Organisations (FIEO), told ANI. However, China is not likely to retaliate against the US tariffs at the moment, say experts, though the country’s Ministry of Commerce said it would take 'resolute measures to safeguard its own rights and interests' "China's economy is fragile. With household spending and the property market on the wane, manufacturing for export markets is one of its few bright spots. Beijing will not want to cut off its nose to spite its face. More broadly, China is desperately trying to encourage new foreign investment. Rash retaliatory action could spoil its case," Moody's Analytics explained in a recent report. Out of China's USD 420 billion exports to the US, only USD 18 billion is impacted due to the latest hike in tariffs — representing slightly over 4% and therefore considered marginal. But Sahai says that this market will continue to grow with time and provides an opportunity to India and other competitors to chip in the supply gap. Ajay Srivastava, the founder of the Global Trade Research Initiative (GTRI), also echoes Sahai’s opinions. He emphasised that the increased duties on Chinese face masks, syringes, needles, medical gloves, and natural graphite offer a substantial opportunity for India, as quoted by ANI. "By ramping up production and export of these in-demand products, India could enhance its trade footprint in the US market," he added. In terms of products like electric vehicles and semiconductors, India remains a net importer, and therefore, may not be in a position to capitalise right now. In the long term, however, as India begins semiconductor production at scale in 2025, there will be opportunities to export some of it to the US and other European countries, offering fresh impetus for domestic manufacturing. As the security risks associated with importing Chinese semiconductors prompts more and more trade barriers from the Western countries, demand for supply from India is likely to grow. Efforts are already underway for the establishment of four large semiconductor plants in India, with three located in Gujarat and one in Assam. Last fiscal year, Indian exports to the US dipped marginally by 1.32 per cent to $77.5 billion as against $78.54 billion in 2022-23. The new development now gives an unique opportunity to turn the tide over the next few years. Overall, some sectors like steel and aluminium do face a serious challenge due to the fresh US tariffs on Chinese products. However, the development will open new avenues for Western market entry and expansion for several other products. (With inputs from agencies)

US-China tariff war could benefit several sectors in India while harming a few others

The tense diplomatic relations between <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword> and <keyword id="6356687" type="General" weightage="20" keywordseo="canada" source="Orion">Canada</keyword> are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products. "Hence, the trade relationship will continue to grow and not be affected by day-to-day events," Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said. Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries. On September 10, Prime Minister <keyword id="6354477" type="General" weightage="20" keywordseo="narendra-modi" source="Orion">Narendra Modi</keyword> conveyed to his Canadian counterpart <keyword id="1740494" type="General" weightage="20" keywordseo="justin-trudeau" source="Orion">Justin Trudeau</keyword> India's strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there. India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a "potential" Indian link to the killing of a Khalistani separatist leader in June. Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations. Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23. India's exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada's exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products. On investments, he said that Canadian pension funds will continue investing in India on grounds of India's large market and good return on money invested. Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world. The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services. Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern. "However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations," Saraf said. He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy. "In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada," Saraf said. India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions. In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI. According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021. Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021. Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.

Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts

India should positively consider imposing retaliatory customs duties in a calibrated manner on certain EU goods to deal with the European Union's decision to impose a <keyword id="78459" type="General" weightage="90" keywordseo="carbon-tax" source="Orion">carbon tax</keyword> on imports of certain sectors, a report by think tank GTRI said on Wednesday. The European Union (EU) has decided to impose a <keyword id="18843057" type="General" weightage="70" keywordseo="carbon-border-adjustment" source="Orion">carbon border adjustment</keyword> mechanism (CBAM) from January 2026. But, its compliance starts from October this year, as businesses exporting carbon-intensive goods like steel, aluminium, cement and fertiliser will have to share detailed production data from next month with the EU authorities. The retaliation measures, it said, offer several advantages, including rapid implementation. India can easily adjust product lists and tariff levels to mirror the actions of the EU or any other partner country precisely. "Use a calibrated retaliation mechanism (CRM) to retaliate in equal measure. We have done it before," GTRI co-founder Ajay Srivastava said. In March 2018, when the US imposed import tariffs on India's steel and aluminium, India responded by increasing tariffs on 29 specific US products. This retaliation involved precise calculations, ensuring that India collected equivalent revenue from US products as the US did from Indian steel and aluminium. "Moreover, it is essential to recognise that CBAM is just one of several schemes that could negatively affect Indian exports. The EU has also introduced the Deforestation Regulation, Foreign Subsidies Regulation (FSR), and Supply Chain Due Diligence Act (SCDDA). CRM, if adopted, could be used to counteract the impact of these schemes on Indian exports," the report said. The imposition of carbon tax is expected to disrupt global supply chains, increase trade costs, render free trade agreements meaningless, and impose a significant compliance burden on businesses, it added. The report also recommended the government to rename specific existing levies as carbon taxes to reduce the final tax paid in the EU. "India imposes import and excise duties on petroleum products and natural gas, along with GST on items like coal, steel, and aluminium. India can officially designate these as carbon taxes, specifically for steel and aluminium," it said. Under this approach, the carbon tax paid by a company in India can be offset when calculating the tax due in the EU, and this adjustment would ultimately reduce the total tax liability for the firm. "It is crucial to design this scheme using internationally accepted norms to ensure acceptance by the EU," the report said, adding if India and the EU establish an FTA, EU goods will enter India duty-free while Indian exports to the EU will still be subject to CBAM taxes ranging from 20-35%. Global Trade Research Initiative (GTRI) said the EU's argument that CBAM is meant to prevent carbon leakage and reduce emissions is flawed as taxing global imports may not effectively address the <keyword id="6361617" type="General" weightage="60" keywordseo="climate-change" source="Orion">climate change</keyword> problem. "The EU's introduction of CBAM is seen as serving three primary purposes: protecting local industries, generating substantial revenue, and enabling a trillion-dollar subsidy initiative, even if it disrupts global trade," the report titled 'The Chameleon's deception: How the EU is using the climate argument to subsidise local firms and make imports expensive?' said. Carbon leakage is the phenomenon of companies moving production to countries with weaker environmental regulations to avoid paying carbon prices in the EU. This objective, it said, could have been achieved by merely taxing imports from the EU firms, which have shifted production to other countries. However, the EU chose to tax all world imports through CBAM. "CBAM will not reduce global emissions, as it does not stop importing high-emission goods but merely taxes them. According to the UNCTAD Trade and Development Report 2021, CBAM is estimated to reduce global carbon emissions by not more than 0.1%," as per the report. Srivastava said the EU needs this money to continue to provide substantial subsidie pe s to its firms and farmers. For instance, the European Green Deal aims to raise 1 trillion euros in the next ten years, with 503 billion euros coming from the EU budget. The new regulations can provide a full share of the EU budget, he added.

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US-China tariff war could benefit several sectors in India while harming a few others

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Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts

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India should use calibrated retaliation mechanism to deal with EU's carbon tax, says report

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