Denial of Entry to 2100 Batches of Indian Goods by US
Denial of Entry to 2100 Batches of Indian Goods by US
According to Import Refusal Report data available on the US FDA website (http://www.accesdata.fda.gov/scripts/importrefusals), 1150 refusals of Indian products were recorded in the last 6 months, i.e., from January to June, 2015.
The products from India which were refused entry included fried snack foods, bakery products, spices (ground, mixed) and seasonings, tamarind and other pastes, basmati rice, food with supplemental nutrients added, soft drinks, shrimps and prawns, harvested fisheries, herbals and botanicals, miscellaneous patent medicines, generic medicines, bath soaps and detergents etc. The reasons given for the refusals vary from problems in packaging, labelling, misbranding, alleged contamination, and residue levels etc.
Among the steps taken by the Government include tightening labelling rules and making it mandatory for companies to clearly mention the dates of manufacturing, best before use and expiry, improving pre-export inspection, greater emphasis on standards through sensitization of exporters for compliance of regulatory issues through export promotion agencies and also taking up at bilateral trade forums wherever appropriate.
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Commerce Secretary Ms Rita Teaotia meets US Under-Secretary for Commerce Mr Stefan Selig
Commerce Secretary Ms Rita Teaotia met US Under Secretary for Commerce today on his visit to India as part of an inter-ministerial discussion to deliberate on the agenda,structure, side line events and deliverables for the first Ministerial Level Meeting of the elevated “Strategic and ‘Commercial’ Dialogue” (SCD) in US, on 22nd of September, 2015.
The Strategic Dialogue steered by MEA and the India-US Commercial Dialogue in existence since 2000 and steered by Department of Commerce were clubbed as one Dialogue under the Delhi Declaration released during President Obamas visit to India in January 2015. The composite Dialogue will be co-chaired by External Affairs Minister and CIM on the Indian side and US Secretary of State Mr John Kerry and US Secretary of Commerce Ms Penny Pritzker on the US side.
The issues that are likely to be taken up for discussion at the next MinisterialLevel Meeting of the SCD from both sides were also deliberated at length under the aegis of each of the 6 Joint Working Groups- 4 of which on Infrastructure, Cooperation on Services, Cooperation on Standards, Collaboration on Technical Textiles and Guargum are coordinated by Department of Commerce and the other 2 Joint Working Group on a) Business Climate and b) Innovation, Entrepreneurship and Skill Development are steered by DIPP.
Discussion was held regarding holding of the India-US CEOs Forum Meeting on the side lines of the SCD Meeting on the 21st of September, 2015 in US.
NASSCOM is bringing out a “Report on the Contribution of Indian IT Companies to US Economy” which is likely to be released jointly by Commerce and Industry Minister Ms Nirmala Sitharaman and US Secretary of Commerce Ms Penny Pritzker during the SCD, for which Commerce Secretary Ms Teoatia extended the proposal to Mr Stefan Selig in the Meeting today.
Ms Teaotia flagged key issues that India would like to take up at the next meeting of the SCD. Sheparticularly highlighted the need to cooperate in the areas of Standardsbetween Institutions of repute on either side like BIS (India) and ANSI (USA)and also stressed the importance of Technical Cooperation and Exchange between Regulators and the need for establishing a technical dialogue. India also suggested the need to look at procedural and product specific (especially on marine products) conformity assessment issues.
Indian side also suggested also mentioned sectors of Collaboration on Services, particularly on cooperation on a whole host of other services India would share a Concept Note on both Cooperation on Standards and Services with the US side.
India also suggested for Cooperation in Technical Textiles and Guargum for which Concepts Papers have been readied and in the process of being shared with US side.
Joint Secretary DIPP briefed progress made under the two Joint Working Groups under DIPP.
Both sides agreed to convene the remaining Video Conferences under the various Joint Working Groups and to begin to work out the deliverables for the SCD.
The Meeting was held in a cordial atmosphere and lasted for around two hours.
The SCD preparatory Meeting was preceded with a Bilateral Meeting between Commerce Secretary Ms Teaotia and Mr Stefan Selig.
In the afternoon, Commerce Secretary also co-chaired the 2nd Roundtable on “Investment Promotion Strategies”organized jointly by USIBC, AMCHAM and FICCI under the Terms of Reference of the extended India-US Commercial Dialogue (2014-16) along with Under Secretary Mr Selig and Secretary DIPP, Mr. Amitabh Kant.[The 1st Roundtable was held last year in November on Corrosion Technologies and Standards in partnership with NACE and FICCI].
Ms Teaotia gave an in depth overview of the work done by the present government to create conducive ecospace for Businesses to operate and invest in India. In her address to the industry she urged them to come up with specific recommendations that could yield concrete and tangible results, as a run up to the Ministerial Level SCD in US.She also emphasized how both countries were at the cusp of learning from each other and participating in each other’s growth story through the global reaching out that was happening in India through the Make in India initiative and Select USA initiative in the USA, where India Industry was the largest participant for two consecutive years. Secretary DIPP Mr Amitabh Kant mentioned about the demographic advantages of India and how India could enter a sustainable growth path through its reforms and “Make in India” initiative. Executive Director Select USA Mr Vinai Thummalapally also spoke at the Roundtable.
The Strategic Dialogue steered by MEA and the India-US Commercial Dialogue in existence since 2000 and steered by Department of Commerce were clubbed as one Dialogue under the Delhi Declaration released during President Obamas visit to India in January 2015. The composite Dialogue will be co-chaired by External Affairs Minister and CIM on the Indian side and US Secretary of State Mr John Kerry and US Secretary of Commerce Ms Penny Pritzker on the US side.
The issues that are likely to be taken up for discussion at the next MinisterialLevel Meeting of the SCD from both sides were also deliberated at length under the aegis of each of the 6 Joint Working Groups- 4 of which on Infrastructure, Cooperation on Services, Cooperation on Standards, Collaboration on Technical Textiles and Guargum are coordinated by Department of Commerce and the other 2 Joint Working Group on a) Business Climate and b) Innovation, Entrepreneurship and Skill Development are steered by DIPP.
Discussion was held regarding holding of the India-US CEOs Forum Meeting on the side lines of the SCD Meeting on the 21st of September, 2015 in US.
NASSCOM is bringing out a “Report on the Contribution of Indian IT Companies to US Economy” which is likely to be released jointly by Commerce and Industry Minister Ms Nirmala Sitharaman and US Secretary of Commerce Ms Penny Pritzker during the SCD, for which Commerce Secretary Ms Teoatia extended the proposal to Mr Stefan Selig in the Meeting today.
Ms Teaotia flagged key issues that India would like to take up at the next meeting of the SCD. Sheparticularly highlighted the need to cooperate in the areas of Standardsbetween Institutions of repute on either side like BIS (India) and ANSI (USA)and also stressed the importance of Technical Cooperation and Exchange between Regulators and the need for establishing a technical dialogue. India also suggested the need to look at procedural and product specific (especially on marine products) conformity assessment issues.
Indian side also suggested also mentioned sectors of Collaboration on Services, particularly on cooperation on a whole host of other services India would share a Concept Note on both Cooperation on Standards and Services with the US side.
India also suggested for Cooperation in Technical Textiles and Guargum for which Concepts Papers have been readied and in the process of being shared with US side.
Joint Secretary DIPP briefed progress made under the two Joint Working Groups under DIPP.
Both sides agreed to convene the remaining Video Conferences under the various Joint Working Groups and to begin to work out the deliverables for the SCD.
The Meeting was held in a cordial atmosphere and lasted for around two hours.
The SCD preparatory Meeting was preceded with a Bilateral Meeting between Commerce Secretary Ms Teaotia and Mr Stefan Selig.
In the afternoon, Commerce Secretary also co-chaired the 2nd Roundtable on “Investment Promotion Strategies”organized jointly by USIBC, AMCHAM and FICCI under the Terms of Reference of the extended India-US Commercial Dialogue (2014-16) along with Under Secretary Mr Selig and Secretary DIPP, Mr. Amitabh Kant.[The 1st Roundtable was held last year in November on Corrosion Technologies and Standards in partnership with NACE and FICCI].
Ms Teaotia gave an in depth overview of the work done by the present government to create conducive ecospace for Businesses to operate and invest in India. In her address to the industry she urged them to come up with specific recommendations that could yield concrete and tangible results, as a run up to the Ministerial Level SCD in US.She also emphasized how both countries were at the cusp of learning from each other and participating in each other’s growth story through the global reaching out that was happening in India through the Make in India initiative and Select USA initiative in the USA, where India Industry was the largest participant for two consecutive years. Secretary DIPP Mr Amitabh Kant mentioned about the demographic advantages of India and how India could enter a sustainable growth path through its reforms and “Make in India” initiative. Executive Director Select USA Mr Vinai Thummalapally also spoke at the Roundtable.
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Direct Purchase of Land by SEZ Promoters
As per Entry No. 18 of the State List in the 7th schedule of the Constitution of India, land is a State subject. Land for Special Economic Zones (SEZs) is provided by the concerned State Governments. The Board of Approval (BoA) on SEZs only considers those proposals which have been duly recommended by the State Governments and if land is in the possession of the Developer. Since land is a State subject, State Governments are free to frame any law/rule on the subject. During the last six months, the Board of Approval on Special Economic Zone(SEZ) has approved for setting up of following three SEZs:-
Sl. No.
|
Name of Developer
|
Location of SEZs
|
Sector
|
1
|
M/s. Infosys Limited
|
Sector -85, Noida, Gautam Budh Nagar District, Uttar Pradesh
|
Information Technology/ Information Technology Enabled Services (IT/ITES)
|
2
|
M/s. Adani Ports and Special Economic Zone Ltd.
|
Mundra Taluka, Kutch District, Gujarat
|
Multi Product
|
3
|
M/s. Infosys Limited
|
Gokul village, Dharward District, Near Airport Hubli, Karnataka
|
IT/ITES
|
4
|
M/s. Mantri Developers Private Limited
|
Nanakramguda village, Serilingampally Mandal, Ranga Reddy District, Telangana
|
Electronic Hardware and Software including IT/ITES
|
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Steps to Boost Exports
India’s merchandise Exports, Imports as well as Trade Deficit during the last three years have shown a mixed trend as evident from the table below:-
Values in US $ Billion
| ||||||||
Export
|
Growth %
|
Import
|
Growth
%
|
Trade Deficit
|
Growth
%
|
* GDP
|
Trade Deficit as % of GDP
| |
2012-13
|
300.4
|
-1.8
|
490.7
|
0.3
|
190.3
|
3.8
|
1835.8
|
10.4
|
2013-14
|
314.4
|
4.7
|
450.2
|
-8.3
|
135.8
|
-28.6
|
1875.2
|
7.2
|
2014-15
|
310.5
|
-1.2
|
447.6
|
-0.6
|
137.1
|
1.0
|
2051.1
|
6.7
|
*Source: CSO, New Series Estimates( 2012-13, 2013-14), DGCI&S
| ||||||||
It would be seen from the Table above that Trade Deficit as % of GDP has shown a continuously declining trend. The major contributors for the trade deficit are imports of Petroleum and Gold (contributing for nearly 80% or more of total trade deficit). Whereas the import of Petroleum is critical for the growth of economy and meeting the energy needs of the country, the government introduces various policy measures from time to time, for managing imports of gold, keeping in view the overall economic and Current Account Deficit (CAD) situation of the country.
The government has taken a number of measures to restore the positive growth rate in exports and manage imports, in order to manage the Trade deficit. The main steps taken are:
i) Government performs import appraisal to evaluate the quantum of imports on a periodic basis. In order to control imports of gold and silver the Government gradually increased customs duty on gold from 2 per cent in January 2012 to 10 per cent in August 2013. In the month of April, 2015, the Government raised import tariff value of gold to $388 per 10g from $375 per 10g and of silver to $524 per Kg from $512 per Kg.
ii) Government has recently released the Foreign Trade Policy (FTP) 2015-20, which has introduced two new schemes, namely, ‘Merchandise Exports from India Scheme’ (MEIS) for incentivising export of specified goods to specified markets and ‘Service Exports from India Scheme’ (SEIS) for increasing exports of notified services from India for diversification of India’s export markets and products and give a boost to India’s exports. This also includes goods and services from MSME Sector.
iii) The Foreign Trade Policy 2015-20 has also introduced several measures for facilitating trade and improving `Ease of doing business’ by reducing the number of mandatory documents required for export and import to three each. In order to facilitate faster processing and enable working in 24*7 mode, DGFT has facilitated submission of various applications and documents in online mode, as well as online payment of application fees through credit/debit cards and electronic fund transfer from 53 banks. CBEC has also facilitated integration of Plant Quarantine and FSSAI with EDI system of Customs, for purposes of export and import. These measures will facilitate trade by reducing transaction cost and time.
iv) In order to provide Indian exporters better access to various markets, the government is engaged in regional, bilateral and multilateral trade negotiations with various countries and trade blocks.
v) In order to promote exports, the State governments have been requested to develop their export strategy, appoint export commissioners, address infrastructure constraints restricting movement of goods, facilitate refund of VAT/Octroi/State level cess, and address other issues relating to various clearances etc. and build capacity of new exporters.
vi) The government continuously monitors the export performance of different sectors to different countries and takes need based measures from time to time, keeping in view the emerging global financial situation and overall economic implications.
The quantity of incense sticks exported during the last three years are as under: (Quantity in thousand kgs)
Year
|
2012-13
|
2013-14
|
2014-15
|
Incense Sticks
|
42220.29
|
40092.04
|
42423.33
|
The top ten countries to which the incense sticks have been exported are United States of America, Ethiopia, Nigeria, Egypt, United Arab Emirates, Nepal, Brazil, Malaysia, Chile and Iran.
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Setting up of State Trade Policy
A Council for Trade Development and Promotion has been constituted on 3rd July, 2015 to ensure a continuous dialogue with State Governments and UTs on measures for providing an international trade enabling environment in the States and to create a framework for making the States active partners in boosting India’s exports. All the States /UTs have been requested to use this Council for articulating their perspective on the trade policy, outline the assistance needed for their export promotion initiatives and to send their suggestions for setting the agenda for the first meeting of the Council. This will be an institutional mechanism for regular communication with the stakeholders.
Department of Commerce has identified some key initiatives to be taken by States/UTs such as preparation of Export Strategies, appointment of Export Commissioners and institution of Export Awards etc. Till date, 15 States/UTs have prepared their Export Strategies, 24 States/UTs have appointed Export Commissioner and 6 States/UTs have instituted the Export Awards.
Department of Commerce has identified some key initiatives to be taken by States/UTs such as preparation of Export Strategies, appointment of Export Commissioners and institution of Export Awards etc. Till date, 15 States/UTs have prepared their Export Strategies, 24 States/UTs have appointed Export Commissioner and 6 States/UTs have instituted the Export Awards.
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Cancellation of Approval of 22 SEZs
Recently the Board of Approval (BoA) on Special Economic Zones (SEZs) in its meeting held on 19th May, 2015, has approved for cancellation/de-notification of formal approval/notified, as the case may be, in respect of 22 SEZs as the progress made by the Developers of said SEZs are not satisfactory. The approval is subject to the concerned Development Commissioner of SEZ furnishing a certificate in the prescribed format that the developer has not availed any tax/duty benefits including Service Tax Exemptions, if any, under the SEZs Act and Rules, or has refunded any such benefits availed by it and no objection certificate from concerned State Government. State-wise distribution of number of said SEZs approved for cancellation/de-notification is as under:-
States
|
Numbers
|
Andhra Pradesh
|
3
|
Haryana
|
7
|
Maharashtra
|
1
|
Tamil Nadu
|
7
|
Uttar Pradesh
|
4
|
Grand Total
|
22
|
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Dispute Case at WTO Over Solar Mission Programme
WTO is likely to circulate the WTO panel ruling in the dispute concerning domestic content requirement in the procurement of solar cells and modules in some tenders under the Jawaharlal Nehru National Solar Mission (JNNSM), by September/October 2015. The United States (US) has claimed that the domestic content requirement clause appears to be inconsistent with GATT 1994 and TRIMs Agreement of WTO. India has defended its claims in WTO as per the provisions contained under Article III: 8(a) and General Exemption clauses of GATT 1994.
The WTO dispute case of poultry imports is distinct from the present solar dispute. The WTO Rulings in poultry imports case in itself will not have any impact on the solar dispute case.
The European Union (EU) is a ‘third party’ in this WTO dispute on JNNSM programme. As a third party, the EU has made its submissions before the WTO panel in support of the US and against India’s domestic content requirements.
The WTO dispute case of poultry imports is distinct from the present solar dispute. The WTO Rulings in poultry imports case in itself will not have any impact on the solar dispute case.
The European Union (EU) is a ‘third party’ in this WTO dispute on JNNSM programme. As a third party, the EU has made its submissions before the WTO panel in support of the US and against India’s domestic content requirements.
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Share of Manufacturing Sector in GDP
Central Statistics Office (CSO) has adopted methodological changes and started providing share of sectors in Gross Value Added (GVA) at basic prices instead of shares in Gross Domestic Products (GDP) from 2011-12 onwards. The share of manufacturing GVA at current prices is given in the table:
Sector
|
2010-11
|
2011-12
|
2012-13
|
2013-14
|
2014-15
|
Share of manufacturing GVA in total GVA (%)
|
14.8
|
18.1
|
17.9
|
17.3
|
17.2
|
Share of manufacturing GVA for 2010-11 is at factor cost, while from 2011-12 to 2014-15 it is at basic prices. The share of manufacturing GVA in 2010-11 is not strictly comparable with the share during 2011-12 to 2014-15.
The Government has taken measures including administrative and regulatory, to accelerate the growth of industrial sector. Global economic scenario as well as the steps taken by the Government impact performance in the manufacturing sector in the short, medium and long term. For creation of conducive business environment, the Government is constantly simplifying and rationalizing the processes and the procedures for boosting investor sentiment, simplifying the Foreign Direct Investment (FDI) policy and correcting the inverted duty structure. Some of the recent initiatives towards this end include pruning the list of industries that can be considered as defence industries requiring industrial license, two extensions of two years each permitted in the initial validity of three years of the industrial license to take it up to seven years, removal of stipulation of annual capacity in the industrial license, and deregulating the annual capacity for defence items for Industrial License. The recent amendments in FDI policy include allowing FDI in Defence up to 49%, in Railway infrastructure up to 100%, in Insurance and Pension Sector upto 49%. The investment limit requiring prior permission from Foreign Investment Promotion Board (FIPB)/Cabinet Committee of Economic Affairs has been increased from Rs. 1200 crore to Rs. 3000 crore. The definition of investment by Non Resident Indians (NRIs), Person of Indian Origin (PIOs) and Overseas Citizen of India (OCIs) in FDI policy has been revised. Further, except for Defence and private sector banking for which specific conditions apply, composite caps on foreign investment have been recently allowed so that uniformity and simplicity are brought in across the sectors in FDI policy for attracting foreign investment.
The Government has launched the e-biz Mission Mode Project under the National e-Governance Plan which has simplified procedures and as on date provides 14 services online. The Delhi Mumbai Industrial Corridor (DMIC) project is under implementation. In addition, the Government has conceptualized Amritsar Kolkata Industrial Corridor, Chennai-Bengaluru Industrial Corridor, Bengaluru Mumbai Economic Corridor and the Vizag-Chennai Industrial Corridor (as the first phase of an East Coast Economic Corridor), and setting up a National Industrial Corridor Development Authority (NICDA) for coordinating and overseeing progress of the various industrial corridors.
The Government has also launched “Make in India” programme with 25 thrust sectors to provide a major push to manufacturing in India. An Investor Facilitation Cell has been created in ‘Invest India’ to assist, guide, handhold and facilitate investors during the various phases of business life cycle. This Cell provides necessary information on vast range of subjects; such as policies of the Ministries and State Governments, various incentive schemes and opportunities available, to make it easy for the investors to make necessary investment decision. Information on 25 thrust sectors has been put up on ‘Make in India’s web portal (http://www.makeinindia.com) along with details of FDI Policy, National Manufacturing Policy, Intellectual Property Rights and Delhi Mumbai Industrial Corridor and other National Industrial Corridors.
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Relaxation in FDI Sectoral Cap
FDI policy is reviewed on an ongoing basis and significant changes are made in the FDI policy regime, from time to time, to ensure that India remains increasingly attractive and investor-friendly investment destination. Changes are made in the Policy after having intensive consultation with stakeholders including concerned Ministries/ Departments, Apex Industries Chambers and other organization.
FDI up to 100% is allowed on the automatic route in most sectors/activities subject to applicable laws/ regulations; security and other conditionalities.
During 2014-15 and 2015-16, the Government announced key FDI reforms in the defence and railways sectors. The entire range of rail infrastructure was opened to 100% FDI under the automatic route, and in defence, sectoral cap was raised to 49%. To boost infrastructure creation and to bring pragmatism in the policy, the Government reviewed the FDI policy in the construction development sector also by creating easy exit norms, rationalizing area restrictions and providing due emphasis to affordable housing. To give impetus to the medical devices sector, a carve out was created in FDI policy on the pharmaceutical sector and now 100% FDI under automatic route is permitted. The Government, in order to expand insurance cover to its large population and to provide required capital to insurance companies, raised the FDI limit in the sector to 49%. Pension sector has also been opened to foreign direct investment up to the same limit. The FDI policy provisions pertaining to NRI investment have also been clarified by providing that for the purposes of FDI policy, investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.
To bring uniformity and simplicity in the FDI policy, the Government has introduced composite caps on foreign investments in the country. Composite cap is applicable across the sectors and is meant to attract foreign investment.
These measures are expected to increase FDI, which complements and supplements domestic investment. Domestic companies are benefited through FDI, by way of enhanced access to supplementary capital and state-of-art-technologies; exposure to global managerial practices and opportunities of integration into global markets resulting into accelerated domestic growth of the whole country including Karnataka.
FDI up to 100% is allowed on the automatic route in most sectors/activities subject to applicable laws/ regulations; security and other conditionalities.
During 2014-15 and 2015-16, the Government announced key FDI reforms in the defence and railways sectors. The entire range of rail infrastructure was opened to 100% FDI under the automatic route, and in defence, sectoral cap was raised to 49%. To boost infrastructure creation and to bring pragmatism in the policy, the Government reviewed the FDI policy in the construction development sector also by creating easy exit norms, rationalizing area restrictions and providing due emphasis to affordable housing. To give impetus to the medical devices sector, a carve out was created in FDI policy on the pharmaceutical sector and now 100% FDI under automatic route is permitted. The Government, in order to expand insurance cover to its large population and to provide required capital to insurance companies, raised the FDI limit in the sector to 49%. Pension sector has also been opened to foreign direct investment up to the same limit. The FDI policy provisions pertaining to NRI investment have also been clarified by providing that for the purposes of FDI policy, investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.
To bring uniformity and simplicity in the FDI policy, the Government has introduced composite caps on foreign investments in the country. Composite cap is applicable across the sectors and is meant to attract foreign investment.
These measures are expected to increase FDI, which complements and supplements domestic investment. Domestic companies are benefited through FDI, by way of enhanced access to supplementary capital and state-of-art-technologies; exposure to global managerial practices and opportunities of integration into global markets resulting into accelerated domestic growth of the whole country including Karnataka.
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Introduction of e-Nivesh
Project Motoring Group in Cabinet Secretariat has set up an online digital platform (e-Nivesh) through which it proposes to monitor the processing of 88 different types clearances / approvals granted by various Central Government Ministries/Department. The exact number of clearances required by investor depends on a number of factors including investment in plant & machinery, member and class of employees, and the sector concerned.
Out of the 88 clearances, 80 clearances have been digitized and 4 clearances in respect of Ministry of Defence and Ministry of Home Affairs are not proposed to be digitized due to security reasons. Digitization of the remaining 4 clearances is nearing completion by various Ministries and Departments. In addition to the above mentioned 88 clearances, 5 clearances are available on the portal of Department of Industrial Policy and Promotion.
Out of the 88 clearances, 80 clearances have been digitized and 4 clearances in respect of Ministry of Defence and Ministry of Home Affairs are not proposed to be digitized due to security reasons. Digitization of the remaining 4 clearances is nearing completion by various Ministries and Departments. In addition to the above mentioned 88 clearances, 5 clearances are available on the portal of Department of Industrial Policy and Promotion.
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