Several key persons connected with agriculture in India have been talking of ways and means to improve crop production of agricultural commodities like pulses and edible oils in which India remains heavily dependent on imports. They have been giving the example of remarkable growth output achieved in the sugarcane production to argue that if such growth in output can be achieved in one crop, it can very well be achieved in other crops as well. In this regard, some overzealous ‘experts’ came with several ideas including inter-cropping of oilseeds with other oilseeds in the agricultural land as a solution to enhance production. They even went ahead with planning out steps to educate the farmers about future benefits that can be derived from inter-cropping. In the last TPCI newsletter (Vol. I, Issue 7 dated November 1, 2018), we had argued whether these steps alone will lead to enhanced production, on the lines of success achieved in sugar output. We concluded that “there is more sugar production because the purchase price of sugarcane is much higher than any other crop. A farmer gets 50-60% more remuneration on sowing sugarcane than most other crops… Therefore, in order to make farmers sow a particular crop, the purchase price of that crop will have to be increased.” There were few other reasons cited but the purchase price, as perceived by TPCI’s research team, was the chief reason why farmers were reluctant to sow certain crops. Out write-up had said: “Sugarcane has an assured buyer which is not the case with other crops. Farmer has to go to mandis to sell his crop where at most times he does not even get the minimum fixed price. With FRP being fixed in case of sugarcane, the farmer is sure he will get the assured price.” As if taking cue, the Narendra Modi government has taken a very commendable step of approving a proposal to hike the minimum support price (MSP) for Rabi crops. The government has announced a 6 percent hike in wheat support price to Rs. 1,840 per quintal and up to 21 percent increase in other Rabi crops, a move that will give farmers Rs. 62,635 crore additional income and help contain the unease that was prevailing among them over high input cost and low returns. Few months back, the government had announced higher MSP for Kharif (summer) crops, to fulfill its promise of giving farmers 50 percent more price than their cost of production. MSP is a price at which the government buys crops from the farmers. The farm advisory body Commission for Agricultural Costs and Prices (CACP), which works under the Ministry of Agriculture, determines MSP for some 25 agriculture commodities ahead of the Kharif and Rabi seasons every year. According to agriculture minister Radha Mohan Singh, the MSPs for all Rabi crops are now higher than the cost of production ranging from 50-112 percent. As per the new CCEA approved MSP, wheat MSP has been raised to Rs. 1840 for Rabi season of 2018-19 crop year, which is a Rs. 105 per quintal hike. Likewise, barley MSP has been raised to Rs. 1440 per quintal, a hike of Rs. 30 per quintal, while that of gram (chana) has been raised by Rs. 220 per quintal to Rs. 4620 per quintal. Masur’s MSP has been raised to Rs. 4475 per quintal, a hike of Rs. 225 per quintal while rapeseed/mustard MSP has been raised to Rs. 4200 per quintal, a hike of Rs. 200 per quintal and safflower MSP has been increased to Rs. 4945 per quintal, a hike of Rs. 845 per quintal. The farmer will now be getting a return of 112.5 percent per quintal on wheat, since his production cost has been calculated to Rs. 866 per quintal. In case of gram, the MSP is higher by 75 percent than the cost of production while mustard MSP is now nearly 90 percent more than the cost of production. For barley, return will be 67.4 per cent on the production cost of Rs. 869 per quintal and in case of safflower the return will be 50 percent higher than the production cost. This significant increase is a welcome step by the government as it will reduce the distress on the farmers sowing these crops. It is now time to put in a mechanism where the farmer actually gets the full amount fixed by the government.
Making India more business friendly
India is on course to becoming more business friendly with each passing year, courtesy a series of reforms that have enabled India to climb up the ladder on the World Bank’s Doing Business Index for the second successive year. As Mr. Suresh Prabhu, Union Minister for Commerce & Industry puts it, “India’s phenomenal rise in the Ease of Doing Business Rankings is the result of the focused teamwork between the Government, our various States and all Ministries under the Government,” adding further that “we shall now strive to do much more under able guidance of Hon’ble PM Mr. Narendra Modi.” When the World Bank had issued the ranking for 2018 around this time last year, India had seen a remarkable jump of 30 positions to become the top 100th country in terms of ease of doing business ranking. The World Bank had then attributed the change in India ranking to the sustained business reforms it had undertaken ever since Modi government took charge in 2014. But what none might have thought of then was that India would jump another 23 places in the Ease of Doing Business Ranking when the same list will be released for 2019. Upon the release of 2018 ranking last year, Junaid Ahmed the Country Director of World Bank had said while the time needed to register a new business in India had got reduced to 30 days from 127 days 15 years ago, the number of procedures were still cumbersome for local entrepreneurs who had to go through 12 procedures to start a business in Mumbai, which was significantly higher than in OECD high-income economies, where it took five procedures on average. Junaid Ahmed had then said: “Tackling these challenging reforms will be key to India sustaining the momentum towards a higher ranking. To secure changes in the remaining areas will require not just new laws and online systems but deepening the ongoing investment in the capacity of states and their institutions to implement change and transform the framework of incentives and regulation facing the private sector. India’s focus on ‘Doing Business’ at the state level may well be the platform that sustains the country’s reform trajectory for the future.” Taking cue from the suggestions, India continued on reform process to register a jump of 23 spots over the 2018 rankings, thus becoming one of the only two countries (out of 190) to figure in the top 10 improving nations for two successive years. This is a remarkable performance considering the fact that India was steadily losing rank in previous years – from 131 in 2012 to 142 in 2014. In 2017, India had moved just one point, from 131st position among 190 countries to 130th position, which had led some experts to question the credibility of World Bank’s ranking process. While in 2014, all the BRICS countries were far ahead, India in 2019 listing stands well ahead of South Africa (82) and Brazil (109), and is fast closing the gap on China (46) and Russia (31). India is now the best ranked country in South Asia and is fast catching up with countries like Indonesia (73) and Vietnam (69). A variety of reforms, including the introduction of the goods and service tax (GST) and the Insolvency and Bankruptcy Code (IBC) apart from reforms in the labour regulation are being seen as key attributes that led to rise in ranking. Consequently, India witnessed improved performance in areas like starting a business, access to credit, getting construction permits, getting electricity, paying taxes, and in trading across borders. This speaks of India’s unhindered commitment to pursue a stronger reform agenda and to improve the business environment. It indicates India’s endeavour to further strengthen its position as a preferred place to do business globally.
Major shift towards construction and infrastructure development all across the GCC countries
Ever since oil first spurted from a well in Bahrain in 1931 and it was subsequently discovered throughout the Gulf, the focus in all the nations that are now called Gulf Cooperation Council (GCC) remained on ways to extracting oil, refining it and transporting it. With time, new technologies were introduced and the processes became more and more sophisticated. That helped the energy industry in the Middle East to grow to such a size that by 2013, according to the IMF figures, the income generated from it accounted for more than 60% of the GCC country’s fiscal revenues. According to a report, there are currently 456 active projects in the oil and gas sector in the Middle East, with a total value of around $540 billion. Though dependence on oil and gas sector still remains, as this continues to be the major source of wealth generation for the GCC countries, a major shift can be seen in focus towards construction and infra development all across the GCC countries. The growth in the economy, due to sudden oil-begotten wealth, was so stupendous that for many decades the GCC countries thought of no other alternative source for wealth generation other than oil and gas. But things are changing now! There is an increasing concern now among the GCC nations to diversify their economies by developing alternative sources of wealth. These changing priorities are particularly visible since the fall in oil prices since 2014. The countries are fast realizing that they have to come out of their dependence on oil income; and the sooner it happens, the better. Result: construction and infrastructure projects today account for the biggest proportion of project spending in the region. According to figures referenced in Deloitte’s GCC Powers of Construction, GCC nations combined together boast of a pipeline of construction, transport and energy projects worth $2.4 tn out of which active civil building projects requiring the latest PM technologies and techniques alone are worth $1.35 tn. Though there had been some drop in the construction activity when oil prices slumped, leading to severe cash crunch, this drop in prices led to increased realization that alternative avenues have to be found as early as possible. According to a report, the Middle East’s thriving construction sector alone is expected to post an annual growth rate of 3.5 per cent over the next five years to place ahead of Europe and North America and third behind Asia. The pickup in oil prices since the middle of 2017 as a result of the agreement between OPEC and non-OPEC oil-producing countries to place a temporary cap on oil production has been a big catalyst for change. This is boosted further by the announcement of the new mega projects, particularly in Saudi Arabia, as part of its Vision 2030 economic restructuring program, but also in Abu Dhabi and Dubai and the rest of GCC countries. The construction and transport project activity is set to increase significantly across the GCC in the near future, with the return to spending on construction projects in Saudi Arabia in particular, gaining momentum. Saudi Arabia’s wealth fund, the Public Investment Fund (PIF), has been slowly taking over the development of major infrastructure projects. Its portfolio includes the development of Entertainment City, Jeddah Waterfront, the Medina development, NEOM City and various other turnkey projects. According to a report published in India’s premier financial daily, The Financial Express, “the Vision 2030, announced by the young Saudi Crown Prince Mohammad bin Salman, has a potential to expand the Kingdom’s economy through major changes and mega projects like NEOM, new railroads, airports and sea ports and Qiddiya entertainment city.” This is expected to open up new opportunities for Indian companies and professionals in various sectors including railways, hospitality, tourism, airport, housing, IT and entertainment. In recent past, Saudi Arabian General Investment Authority has issued more than 400 licenses to Indian firms and there is greater scope for Indian companies to participate in the high speed 450-km railway line linking Mecca and Medina and a new airport in Jeddah. To tap into the $500 billion mega city projects launched by Saudi Arabia, representatives of top 30 Indian infra companies, housing and allied sectors are set to visit Saudi Arabia later this month, under the umbrella of the Ministry of External Affairs (Economic Diplomacy Division), the Indian Embassy in Saudi Arabia and Trade Promotion Council of India (TPCI), wherein “the industry honchos will interact with the key decision makers of the Saudi Government and business community.” Some of these companies who are heading to Saudi Arabia to explore possible contracts and investment opportunities in the $500 billion futuristic mega city Project “NEOM” and the Red Sea Tourism Project include Hiranandani Group, L&T, Tata Projects, Afcons, Waaree, VA Tech Wabag, NMS Enterprises Ltd., Shalimar Corp Ltd., S3 Infrareality, ICMC Projects, Consistent Consultants and ACME Group. Though Saudi Arabia is the unrivalled leader in shifting its focus towards generating alternative sources of wealth and consequently going for heavy spending in construction activities, other GCC countries are not far behind. In Bahrain, projects worth $8.3bn are either in pipeline or are in design or prequalification phases. Manama is utilizing money from the Gulf Development Fund, sovereign wealth fund Mumtalakat and the country’s pension fund to carry out construction activity. Kuwait too is spending KD2.5bn ($8.3bn) this year on the development of infrastructure, road networks, its new airport and power generation. Oman too has allocated projects worth RO12.5bn ($32.5bn) this year whereas $2.5bn worth of construction contracts are undergoing in the UAE. In Qatar, the spending got impacted due to transport blockade but didn’t stop the Government from enhanced spending due to the Football World Cup. Apart from this, QR42bn ($11.5bn) has been allocated for infrastructure and transportation projects. Scope that exists for Indian companies can be gauged from the fact that at the start of the current financial year, about $715 bn of construction and transport projects were under construction, or at the design or tendering stage
“Czech government interested to boost bilateral trade & investment”
India’s Ambassador to The Czech Republic Mrs. Narinder Chauhan with Mr. Andrej Babis, Prime Minister of the Czech Republic H.E. Mrs. Narinder Chauhan is a seasoned and dynamic diplomat with more than three decades of active service in various key assignments, both in India and abroad. She is presently posted as Ambassador Extraordinary and Plenipotentiary of the Republic of India to The Czech Republic, in which capacity she recently played host to the visit of Hon’ble President of India Shri Ram Nath Kovind to The Czech Republic. The Hon’ble President’s visit to The Czech Republic was also accompanied by a delegation of businessmen wherein some TPCI members accompanied the Hon’ble President to The Czech Republic. Publicity Division of TPCI interviewed this experienced and talented Indian face in The Czech Republic and sought her views on bilateral historical relations between India and The Czech Republic and ways and means to increase the bilateral trade relations between the two countries. Present here are H.E. Mrs. Narinder Chauhan’s views on the highlighted subject: 1. Bilateral Historical Relations : India-Czech Republic India’s trade and cultural relations with Czech Republic have a long history. In the medieval ages the Kingdom of Bohemia (now a part of Czech Republic) traded with India. There are records stating that precious goods including Indian spices were brought to Czechoslovakia from east through marine and land routes as early as 9th and 10th centuries. During the Austro-Hungarian Empire, the Charles University in Prague, the second oldest university in Central Europe, had many Sanskrit scholars. India’s relations with the former Czechoslovakia, and with the Czech Republic, have always been warm and friendly. Gurudev Rabindranath Tagore visited Czechoslovakia in 1921 and 1926. A bust of Tagore is installed in an exclusive residential area in Prague named after Tagore. The Indian leader, who visited Czechoslovakia the most times between 1933 and1938 was Netaji Subhash Chandra Bose. He founded the Indo-Czech Association in Prague in 1934 and met Edvard Benes several times as Foreign Minister and President. Pandit Jawaharlal Nehru accompanied by his daughter Indira Gandhi visited Prague in 1938, and subsequently influenced the strong condemnation of the 1938 Munich Pact by the Indian nationalist movement. Diplomatic relations with Czechoslovakia were established on November 18, 1947. Since then high level visits have been exchanged with Prague, the most recent being the State visit of Rashtrapatiji Shri Ram Nath Kovind in September, 2018 and that of Shri C R Chaudhary, MoS(C&I) in October 2018. 2. Bilateral Trade relations India’s trade links with Czech Republic, formerly Czechoslovakia, predate our independence. Czechoslovakia established its Consulate in Bombay (October 1920) and in Kolkata (December 1929). The famous Czech shoe company Bata Works had 120 Czechoslovak nationals employed in Batanagar in the 1930s. For almost four decades after India’s independence, Czechoslovakia was one of the leading trading partners of India among the East-European countries. Czech companies established a number of major industrial projects in India in the fields of Energy, metallurgy, machine tools and transportation and had about 60 major projects in India before 1990. With the formation of the Czech Republic from January 1, 1993, our trade with the country was switched to freely convertible currencies. The change over and the transformation in economic policies and practices both in India and the Czech Republic resulted in initial slowing down of trade and economic activities between the two countries. New mechanisms and diversified interaction thereafter have resulted in revival of bilateral trade to around USD 1.5 Billion in 2017 from just USD 86 million in 1993. Since 2008, bilateral trade amounted to more than one billion U.S. dollars. In 2013, for the first time in our long history of economic relations, the balance of bilateral trade tilted in India’s favour when Indian exports reached USD 642 million against Czech exports of USD 563 million. Year India’s Exports to CR India’s Imports from CR Bilateral Trade 2014 USD 692 mi USD 589 mi USD 1281 mi 2015 USD 667 mi USD 541 mi USD 1208 mi 2016 USD 734 mi USD 624 mi USD 1358 mi 2017 USD 797 mi USD 670 mi USD 1467 mi (Source: Czech Statistical Office) 3. Factors that could lead to further expansion of trade ties? We consider CR as a leading economic partner. India’s growth story and Czech technological expertise and manufacturing prowess make the two natural partners. Significant Complementarities in economies: India has expertise in fields of IT, Infrastructure, Pharmaceuticals, automobiles and services. Czech companies have expertise in heavy engineering, defence, advanced manufacturing, automotive and energy fields. Technology building: The Czech Republic has niche technological competencies in industrial machinery and plants, machine tools and engineering, and has extensive research and development in areas like nanotechnology, robotics, cybernetics, and lasers. We must also take advantage of these opportunities, through technology tie ups in applied science and engineering fields with the institutions of Czech Academy of Sciences and leading universities. Our Government’s bold reforms that include ‘Make in India’, ‘Skill Development’, ‘One Nation, One Tax’, Simplification of procedures and Removal of obsolete laws, GST should be leveraged that have led to ease of doing business in India India’s huge consumer based market is a factor that would drive the expansion of trade. The recent visit by Rashtrapatiji to the Czech Republic has further provided a platform for expansion of trade ties since both countries have committed to strengthen the economic partnership between India and EU, both countries have committed to oppose trade protectionism, expressed readiness to work together in favour of a fair, transparent and rule-based multilateral trading system and agreed to enhance awareness of existing business opportunities and build B2B contacts through undertaking business missions, participating in trade fairs and exhibitions (like in Brno Engineering Fair). These measures should form the bed rock for further trade engagement. Opening of direct flights, negotiations on which are under way is expected to be a major factor in expansion of trade ties and tourism. Czech government’s decision to create a special window w.e.f 1st October, 2018
Preparing to meet global trade challenges
It was in early June this year that former Secretary of the Department of Commerce of the Indian Ministry of Commerce and Industry, Rita Teaotia, outlined the challenges facing global trade, including protectionism and threats to the World Trade Organization (WTO) system, when Asian countries of the Commonwealth gathered in New Delhi to deliberate on how to respond to major shifts in the global trade landscape. She also highlighted the opportunities for Commonwealth countries to collaborate and sustain an open and inclusive trading system, adding that “services exports and the development of the services sector should be a major focus of future Commonwealth collaboration.” The meeting discussed need to address systemic issues that impact on the participation in the multilateral trading system and WTO negotiations proactively so as to enable the Commonwealth developing countries adapt to emerging trade issues such as climate change, e-commerce, implementation of the SDGs, and the role of Micro, Small and Medium-sized enterprises and GVCs. Asian countries account for 41 per cent of intra-Commonwealth trade, while India is the leading country for attracting new foreign direct investment, not only from the Commonwealth but from across the world. India, Malaysia and Singapore are emerging as major players in driving trade and investment flows among the Commonwealth nations. Keeping the recommendations of the conference in mind and with a view to look into the challenges emanating from the current global trade scenario and suggest ways to boost the country’s goods and services exports, the Ministry of Commerce and Industry has constituted a High Level Advisory Group (HLAG) comprising of S. Jaishankar (former Foreign Secretary and now a key official with Tata Sons), Rajeev Kher (former Commerce Secretary and Member, Competition Appellate Tribunal), Sanjeev Sanyal (Principal Economic Advisor, Government of India), Adil Zainulbhai (Chairman, Quality Council of India), Dr. Harsha Vardhana Singh (former DDG, WTO and now Executive Director of Brookings Institution India Center), Dr. Shekhar Shah (DG, NCAER), Dr. Vijay Chauthaiwale (Foreign Policy Advisor and the man responsible for success of BJP’s Overseas Friends initiative), Dr. Pulok Ghosh (IIM, Bangalore), Jayant Dasgupta (former Ambassador of India to the WTO and now associated with International Center for Trade and Sustainable Development, Switzerland), Rajiv K. Luthra of Luthra & Luthra and Chandrajit Banerjee (DG, CII). The Panel will be headed by SS Bhalla of Oxus Investments. According to a communiqué from the office of Mr. Suresh Prabhu, the Union Minister for Commerce and Industry, this HLAG has been created to work out ways for boosting India’s share and importance in global merchandise and services trade, managing pressing bilateral relations and mainstreaming new age policy making. It will meet regularly to formulate specific recommendations to facilitate the formulation of future trade policies through examining the prevailing international trade dynamics, the rising protectionist tendencies, non-engagement by some countries on outstanding trade negotiation issues and their insistence on pursuing negotiating mandates. The Panel will also suggest a pragmatic framework for India’s future engagement in international trade, and the manner in which it can play a proactive and constructive role in exploring and building consensus on resolving trade related issues. Experts opine it to be a commendable step towards building consensus around common issues and sharing experience on trade issues so as to formulate specific recommendations. Several barriers have lately emerged in international trade due to weakening of the WTO system and the consequent mechanisms to settle disputes because of ambitious posturing by few powerful countries. Emerging trade issues such as e-commerce and digital economy, including how to better harness new technologies to promote greater trade, investment and innovation, especially micro, small and medium enterprises too need policy framework. India need to cash on the tremendous opportunities that exist to promote service exports, including through improved market intelligence and better services data. While there are major differences in the region regarding specialization in goods and services, we can consider proactive policy measures to boost trade, investment and innovation by leveraging new technologies, especially digitization, promoting services exports, including through improved market intelligence and better services data and strengthening our domestic trade governance to further reduce costs and to foster new trade and investment.
Country profile- Germany
Germany is located in the Centre-Western Europe. It is one of the most populous countries in the European Union. The United Nations Development Programme ranks Germany, 5th in terms of Human Development Index with the value of 0.936. It is ranked 20th in ‘Ease of Doing Business’ by World Bank with 5th rank in getting electricity and 4th in resolving insolvency. As per World Economic Outlook Database, 2018 estimate Germany is ranked 5th in world in GDP in PPP terms at a value of US$ 4.3 trillion while ranked 4th in GDP in nominal terms at a value of US$ 4.2 trillion. The per capita GDP of Germany in PPP terms is estimated to be US$ 52801 and in nominal terms it is estimated to be US$ 50841 in 2018 by World Economic Outlook Database. TRADE STATISTICS In 2017, Germany imported US $1.17 trillion worth of goods. Its export was over US $ 1.45 trillion in value in 2017 which accounted for 8.2 % of the total exports in the world. As per ITC trade map Germany ranks 3rd among the top world exporters, list is led by China. The top trading partner of Germany was China, followed by USA and France. India does not rank in the list of top 10 trading partners of Germany, but has a significant trade with Germany with an export by India to Germany of US$ 8.2 billion, while imports by India from Germany was at US$ 12.6 billion, resulting into a trade deficit of US$ 4.4 billion for India. GERMANY’S MERCHANDISE TRADE WITH WORLD Germany’s exports from the world have followed its path of imports throughout, as can be seen in the graph below. The country has maintained a trade surplus throughout the past decade. In 2017 it had a trade surplus of US $ 276.5 billion, the trade balance is positive but doesn’t follow an increasing trend. In the last 10 years trade surplus was highest in the year 2014 at US$ 283.2 billion, it has remained steady on an average throughout the decade. GERMANY’S EXPORT TO THE WORLD Germany’s total export in 2017 amounted to US $1.45 trillion. Its top export product at HS-6 digit level last year was motor cars and its parts, immunological products, aeroplanes and its parts and medicaments with a total share of 13% of the top 5 products in its export basket. GERMANY’S IMPORT FROM THE WORLD Germany’s import basket is primarily led by crude petroleum oil, Natural gas, Medium oils, Motor cars and its parts and Medicaments which together made up the Top 5 imports of Germany with a 10% share in its total imports (US $ 1.17 Trillion) at HS-6 digit level. INDIA-GERMANY MERCHANDISE TRADE India’s trade balance with Germany saw an (negative) upward trend till 2012 reaching a deficit of US$ 7.6 billion, declining since then. In the last decade it primarily stayed in the range of US$ 7.6 to 4.3 billion. India’s export and import followed a similar trend year on year in the last decade barring 2012 in which export from India to Germany saw a dip. INDIA’S EXPORT TO GERMANY India’s total exports to Germany amounted to US $ 8.2 billion in 2017. Its top five exports at HS-6 digit level were turbojets, motor vehicles and parts, t-shirts, singlet, other cotton vests, footwear and with outer soles of plastic or rubber and parts of tractors and motor vehicles. It amounts to 14% of the total export to Germany from India. INDIA’S IMPORT FROM GERMANY India’s total import from Germany in 2017 was US $ 12.6 billion. India’s import was dominated by Aeroplanes and parts, motor vehicle and parts, surgical and medical instruments, static convertors and parts of tractors and other appliances. The import basket of India for the products imported from Germany is highly diversified, such that the top 5 products amount to just 8% of total imports by India from Germany. Germany is India’s largest trading partner in Europe. As per MOCI report 2012-13, Germany ranks 9th among India’s 10 top trading partners, with accumulated FDI by Indian companies in Germany exceeding 6 billion Euros. Germany is the 8th largest foreign direct investor (FDI) in India. Approximately, 17% of India’s total outward foreign direct investment (FDI) projects in Europe flowed to Germany, between the years 2010 to 2016. Indian investors appreciate Germany’s high-quality infrastructure, business friendly governance, favourable R&D and innovation environment, political stability, and the workforce’s high skill and educational levels. Britain’s exit from European Union has increased Germany’s importance as a gateway to Europe. The signing of Agenda for Indo-German Partnership in early 2000s and later in 2007 a Joint Statement on the Further Development of the Strategic and Global Partnership between Germany and India cemented the India-Germany relations. Greater push for technology transfer and emulation of the successful SME model of Germany may further boost the role of Germany in India’s economic growth.
Mandatory for exports of food products to the US to put new labels
If you are exporting food products to the US, you must know that it has been made mandatory by the U.S. Food and Drug Administration (FDA) to put new labels on food products in the U.S. The changes have been made with an aim to keep the end consumer better informed about details of the food that she and her family eats so as to enable them to make healthier choices. With nearly 40 percent of American adults falling under obese category, which increases the chances of heart diseases, stroke, certain cancers, and diabetes, the new label specifications have been designed more scientifically to provide greater understanding of the links between diet and chronic disease. They enable a person or her family in counting calories by putting up details like the calories, the number of servings and the serving size in larger, bolder type. The new label specifications adjusts serving size requirements to reflect more recent consumption data, thus making the nutrition information provided for each serving more realistic. For packages that contain more than one serving, nutrition information per serving as well as per package will be available; thereby meaning while calories and nutrients are listed for one serving of ice cream, the same will also be listed for the entire container. The new label design specifications also make it mandatory to specify the added sugars content, keeping in mind the 2015-2020 Dietary Guidelines for Americans which recommends consumption of less than 10 per cent of calories per day from added sugars for the U.S. citizens. Additionally, the daily values for nutrients like sodium, dietary fiber, and Vitamin D have been updated and are used to calculate the % Daily Value (DV), printed on the label. The % DV helps a person understand the nutrition information in the context of a daily diet. The footnote at the bottom of the label also explains the meaning of the % DV. Specifications regarding information related to calories from fats have been removed in the new label design. This has been done in the light of new research as per which the type of fat consumed is more important than total fats. For example, monounsaturated and polyunsaturated fats, such as those found in most vegetable oils and nuts, can reduce the risk of developing heart disease when eaten in place of saturated and trans fats. The list of nutrient requirements too has been updated to include Vitamin D and Potassium because it has been found that the Americans normally lack adequate presence of these nutrient; Conversely, listing Vitamins A and C is no longer required, because deficiencies in these vitamins are not common, but the manufacturers of food products can still list them voluntarily. Manufacturers with $10 million or more in annual food sales have until 2020 before the new label becomes mandatory, and manufacturers with less than $10 million in annual food sales have to comply to new; regulations by 2021. Some manufacturers have already started using the new label. Due to this, presently two different versions on labels can be seen on packages in the shelves of departmental stores. As per FDA claims, the new label design has been prepared keeping the latest scientific findings pertaining to requirement of right nutrients for the body to function correctly and to fight chronic diseases like obesity, heart disease, certain cancers, and type II diabetes.
Product profile- Sesame seed
Sesame or sesamum indicum L. is commonly known as ‘Till’ in India. Sesame seed is one of the oldest oilseed crops known. It was domesticated over 3000 years ago. It was a major summer crop in the Middle East for thousands of years. Sesame has one of the highest oil contents of any seed. Sesame is drought-tolerant, primarily due to its extensive root system. However, it requires adequate moisture for germination and early growth. While the crop survives drought, as well as presence of excess water, the yields are significantly lower in either conditions. Moisture levels before planting and flowering impact yield most. It is a short duration crop grown throughout the year. TRADE STATISTICS Sesame exports sell across a wide price range. Quality perception, particularly how the seed looks, is a major pricing factor. The major sesame seed exporting nations are- The major sesame seed importing nations are – India is the leading producer and exporter of sesame seed. India produces a wide range of sesame seed varieties and grades each peculiar to the region where they are grown. Two distinct types of seed are widely recognized- the white and the black. There are also intermediate coloured varieties varying from red to rose or from brown or grey. The white and other lighter-coloured sesame seeds are common in Europe, the Americas, West Asia, and the Indian subcontinent. The black and darker-coloured sesame seeds are mostly produced in China and south east Asia. With an annual all season acreage of about 18-20 lakh hectares, India ranks first in both acreage and production (about 8 lakh MT) of sesame in the world. Sesame seeds production is primarily distributed in the states of Gujarat, West Bengal, Karnataka, Rajasthan, Madhya Pradesh, Maharashtra, Tamil Nadu and Andhra Pradesh. India’s trade trend analysis over the years India exported US$ 435.6 million while imported US$ 42.9 million of sesame seeds in 2017. India’s sesame seed export to the world saw an upward trend till 2014. In the last decade India’s export reached to US$ 813.6 million in 2014 afterwards it dipped to US$ 477.6 million in 2015 and from there on, it is picking up. As production varies considerably over the years it significantly impacts the prices. Hence the prices in the Indian markets are determined by demand and supply situation. The export trade needs a reliable forecast of production every year coinciding with the commencement of harvesting operations i.e. in the last week of September. In addition to production figures, the trade also needs information on the quality of the produce which is often adversely affected by the vagaries of weather prevailing during field, harvest and post-harvest stages of the crop. With respect to kharif-2016, a decrease by 14.1% in acreage was observed in kharif-2017 at the national level. Thus such variance adversely impact the price forecast since India is a key player in global sesame seed market. Better mechanism to forecast the production of sesame seed accurately may significantly boost India’s exports apart from the measures to boost its yield.
WTO norm and Indian practice on food security: An angle of dichotomy
The Agreement on Agriculture (AoA) was considered to be the starting point for liberalizing trade in agriculture. This framework consists of three main pillars i.e. market access, domestic support, export subsidies. Domestic support measures are basically categorized in three different general boxes, depending on their trade distortive potential. Domestic support measures in the green box shall meet the fundamental requirement that they have no, or at most minimal, trade-distorting effects on production. To meet this requirement, the AoA stipulates general and policy-specific criteria. According to the 2017 Goble Hunger Index score, India ranked 100 out of the 119 countries listed and at the same time, Food and Agriculture Organization of the United Nations (FAO) concluded that there has been a rise in world hunger. The absolute number of undernourished people, i.e. those facing chronic food deprivations has increased to nearly 821 million in 2017, from around 804 million in 2016. In the light of above conclusion, food security for mankind’s still a challenge at world level. All the institutions including the State, UNO as well as WTO are under the moral obligation to facilitate the food security for all. Overall, India’s stake is much higher than developed nations as 55 percent of Indian population is directly employed in agriculture sector. At present all support to farmers is covered by the domestic support categories which are exempt from reduction commitments under the AoA. New MSP and government plan to double the income of farmers may be critical in the context of WTO norms. Public stockholding issue is a major challenge in WTO forum and the amendment proposed by India in AoA must be considered at global platform as a desirable change. Government of India enacted National Food Security Act, 2013 with the objective to provide food and nutritional security to the citizens of India. Under this Act, Targeted Public Distribution System (TPDS) includes up to 75% of the rural population and 50% of urban population, with uniform entailment of 5 kg per person per month at the subsidized price of Rs.3, 2 and 1 per kg for rice, wheat and coarse grains respectively. The Act is now being implemented in all the States/UTs and more than 80 crore people are covered under the Act. Although developing countries have the option of a wide range of domestic support exemptions in the WTO, AoA as it stands now, Indian food security law is considered contrary to the norm of WTO. Therefore issue regarding public stockholding in WTO becomes an unresolved question at WTO level and the amendment proposed by India in AoA is considered by developing countries as a desirable change. The conflict of viewpoints of developed and developing countries is based on very clear reasons. It is thus important for us to present justification for establishing as to how Indian food security scheme is excluded from the reduction commitments. In this context present paper highlights the Dichotomy between WTO Norm and Indian Practice on Food Security and also attempts to find out a proper formula for resolving the issues regarding public stockholding for the purpose of food security at WTO level. The existing WTO disciplines on agriculture, and some proposals to strengthen these, are far from perfect. The subsidies provided to farmers include first, Non-Product Specific subsidies such as those provided for irrigation, electricity, credit, fertilizers, seed etc. and Second, Product Specific Subsidies (price support). The sum of these two is termed as Aggregate Measurement of Support (AMS), also called Amber Box. The Amber Box subsidies are considered to be trade distorting and were entitled to progressive reduction commitments, base year being 1986-87. The maximum limit for the total AMS is fixed at 5 percent of the value of domestic agricultural output for developed and 10 percent for developing countries. Clear difference between WTO norm and Indian practice exist in the context of food security and public stockholding. In reference to public stockholding, the AoA stipulates general and policy-specific criteria in Annex 2, para 3 which include First, the accumulation and holding of private or governmental stock must be purchased by the government at the current market price and not sold below the current domestic market price; Second, there must be predetermined targets for stock accumulation relating solely to food security objectives; and, Third, there must be financial transparency. In reference to expenditures on domestic food aid programs policy-specific criteria in Annex 2 para 4 includes First, to provide domestic food aid to sections of the population in need, Second, eligibility to receive the food aid shall be subject to clearly-defined criteria related to nutritional objectives; Third, food purchases by the government shall be made at current market prices; and fourth, the financing and administration of the aid shall be transparent. For the purpose of food aid sales at subsidies prices is permitted under WTO. Regardless of WTO norms, the National Food Security Act (NFSA) provides for legal rights and entitlements of up to 75% of the rural population and up to 50% of the urban population. Apart from this, all the children below the age of 14 years and every pregnant woman and lactating mother have statutory right to food under the Act. For the purpose of food aid subsidized prices are `3, `2 and`1 per kg for rice, wheat and coarse grains respectively. Food grains are procured in India at the Minimum Support Price (MSP) fixed by the Government. For Khariff Marketing Season (KMS) 2018-19, the MSP for Common and Grade ‘A’ paddy is fixed at ` 1750/- and ` 1770/- per quintal respectively. The MSP of wheat for RMS 2018-19 has been fixed at ` 1735/- per quintal. Government of India for the purpose of stockholding as well as food aid always perches the food grains at administrative price and sell below the market prices. This practice is contrary to the WTO norm. Therefore, India argue that the requirements of these policy measures under the AoA are excessively restrictive. WTO norm should not be considered just in the context of developing
Bilateral trade target of USD 15 billion will be met before 2020: Vietnamese minister Tran Thanh Nam
Mohit Singla, Chairman TPCI with the Head of visiting Vietnamese delegation, Tran Thanh Nam, Deputy Minister of the Ministry of Agriculture and Rural Development of Vietnam Bilateral ties between India and Vietnam have strengthened in recent years with a shared focus on regional security issues and trade. India and Vietnam have traditionally been good friends ever since Vietnam’s independence in the 70s. Defense ties have grown in recent years to include not just the traditional components in this realm of ties like exchanges and port calls but also the training of personnel, capacity-building funding and equipment, coast guard collaboration, and pacts on areas such as white shipping and outer space. Bilateral trade too has continued to grow at fast pace in recent years, particularly after the relationship between the two countries were elevated to a comprehensive strategic partnership in 2016. Target fixed is USD 15 billion worth of bilateral trade by 2020 but judging by the pace of growth so far, it is most likely that the targets will be achieved much before 2020. With a view to discuss “business opportunities and future cooperation between India and Vietnam”, a visiting high level delegation from Ministry of Agriculture and Rural Development met a delegation of senior Trade Promotion Council of India (TPCI) officials in the Vietnamese embassy recently where avenues to enhance bilateral trade between the two countries were discussed. The Vietnamese delegation was led by H.E. Mr. Tran Thanh Nam, Deputy Minister of the Ministry of Agriculture and Rural Development and was accompanied by senior government officials and 25-30 Vietnamese businessmen associated with the agriculture sector. The TPCI delegation was led by its Chairman Mr. Mohit Singla and was accompanies by Mr. Suresh Kumar Makhijani (Jt. DG), Mr. Kapil Gupta (Jt. DG), Mr. Aziz Haider (Director-CorpComm) and Mr. Sagar Bansal (Consultant). The focus, as evident, was food and agri sector in which TPCI, jointly with Department of Commerce, Ministry of Commerce & Industry, Govt of India organizes Indusfood – India’s biggest flagship event for the food & beverage industry. Mr. Tran Thanh Nam confirmed that a strong delegation from Vietnam will be visiting Indusfood to source the requirements of F& B products from India. He said he had come with a mission to promote agriculture and talked about trading of fruits, including pomegranate, mango and oranges from India and Dragon fruit, Longan fruit, Vietnamese pepper and coffee to India. Tran Tranh Nam also talked of ways and means to promote investment in Vietnam of Indian companies in Food Processing Technology and IT sectors and said great room for two way trade between the two countries has been created courtesy the advanced SEZs that Vietnam has developed. Vietnam has acquired great competence in sea-food processing and it can readily contribute its expertise in this field, if desired, said he. Tran Thanh Nam informed that Dragon fruit was Vietnam’s GI; the country was the key exporter of fruits to the U.S. Mechanisms to facilitate exchange of agriculture enterprises too were discussed. Vietnam requires technological assistance for its socio-economic and trade logistics development for which India is an appropriate partner. Both countries have identified biotechnology in agriculture and healthcare, technology for new materials, IT and electronics, super-computing, nuclear energy for peaceful uses, science and technology, remote sensing and non-traditional energy for expanding trade and investment and achieving the target of USD 15 billion worth of bilateral trade by 2020.
