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8/3/2019 Collg News Project

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India, Japan open markets

NEW DELHI, August 2, 2011

India and Japan on Monday asserted that the Comprehensive Economic Partnership Agreement(CEPA), which came in to force from Monday, would give a big boost to bilateral trade,enabling it to touch the $25-billion mark by 2014.

Immediately after the first meeting of the Joint Committee of India-Japan CEPA here, JapaneseAmbassador Akitaka Saiki said business communities of the two countries should make the bestuse of this new economic arrangement. This arrangement will definitely facilitate and enhanceboth ways flow of trade and investment,'' Mr. Saiki said.

Good for commerce

CEPA comes into force with effect from Monday. It will be good for commerce, trade andinvestment for India and Japan. It is a part of the building block for much large agenda for building a comprehensive economic partnership for East Asia, which covers ASEAN, China,Korea, Japan, India, Australia and New Zealand,'' Commerce Secretary Rahul Khullar toldreporters here.

Officials said CEPA would bring immediate gains to exporters of textiles, seafood and spices toJapan, as duties on these products would be eliminated. It would ultimately result in the removalof duties on almost 90 per cent of the products traded between the countries.

Other sectors that would gain from the pact include agricultural products such as mangoes, citrus

fruit, spices and instant tea, spirits, chemicals, cement and jewellery.

Under CEPA, duties will be brought to zero in ten years on 66.32 per cent of the products tradedbetween the nations.

The exclusion list of Japan (where no duty concessions are proposed) mainly consists of itemssuch as rice, wheat, oil, milk, sugar, leather and leather products.

On the other hand, India will not reduce duties on sectors like auto and agriculture. Further, theJapanese government should accord no less favourable treatment to the applications of Indiancompanies than it accords to the like applications of its own persons for drug registration. This

will greatly help Indian pharmaceutical companies.

Under the new arrangement, Indian professionals will be able to provide their services andcontribute toward further development of IT sector of Japan. Mr. Khullar co-chaired the firstmeeting of the Joint Committee with Mr. Saiki. The current bilateral trade is a little over $12.6billion and it is aimed to touch $25 billion by 2014.


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RBI committee suggests amendments to FEMA rules

MUMBAI, August 11, 2011

The Reserve Bank of India panel to review facilities for individuals under FEMA (Foreign

Exchange Management Act) on Wednesday said the concept of non-repatriation basis' or non-repatriable funds' was outdated and all the relevant regulatory guidelines especially with

reference to investments' needed to be amended forthwith to indicate limited repatriability in

accordance with the directions and up to the limits as may be specified by the RBI from time-to-

time.

Since non-residents have been given the freedom to remit $1 million annually, it makes little

sense to maintain procedures under FEMA that continue to treat these two categories,

(repatriable and non-repatriable funds) separately, it said.

The RBI placed on its website the report of the committee to review the facilities for individuals

under the Foreign Exchange Management Act (FEMA), 1999, under the chairmanship of K. J.

Udeshi

Over a period, the FEMA rules now contain contradictory provisions and there is also a need to

make definitions uniform and consistent across FEMA. The procedural knots' in the systemneed to be untied to enable the present forex liberalisation to be effective and in the absence of

untying of these knots, any further forex liberalisation will not be meaningful.

The limit on total holding in a single company not exceeding 5 per cent of the paid-up capital

relates back to the days of the Escorts case and the imminent threat of a take-over by a non-

resident. This issue has undergone a sea-change and take-overs' are now taken care of under the

ambit of SEBI regulations and using FEMA for this purpose is superfluous and an unnecessary

cost and hassle to both the non-resident investor and the authorised dealer alike.

The same argument applies to the monitoring by RBI of the overall limit of 24 per cent

shareholding by NRIs under PIS. All that needs monitoring is the total foreign' holding

comprising FIIs, NRIs/PIOs and others and the onus for this lies squarely on the company and

not the Authorised Dealer or the Reserve Bank of India. In fact in those sectors where 100 per


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cent FDI is permissible there is no rationale for monitoring the portfolio investments of

NRIs/PIOs, the panel said.

To enable hassle-free remittances by resident individual banks may be advised by the RBI not toinsist on the submission of Form 15 CA/15 CB for any remittances under the Liberalised

Remittance Scheme (LRS). ADs may obtain a suitable self-declaration from the resident for such

remittances.

Resident individuals should be enabled to undertake any current account transaction (other than

those included under Scheme I & II of GOI Notification No. GSR 381(E) dated May 3, 2000) up

to $200,000 per financial year on the basis of a simple application form presently used for

remittances under LRS without banks insisting on any documentary evidence or a chartered

accountant's certificate in Form 15 CA/15CB.

Google to buy Motorola Mobility in $12.5 bn deal

New York/San Francisco, August 16

Google Incs biggest deal ever, acquiring Motorola Mobility Holdings Inc for $12.5 billion, is anattempt to buy insurance against increasingly aggressive legal attacks from rivals such as AppleInc.

The acquisition of one of the mobile telecommunications industry's most storied names isGoogle co-founder Larry Page's boldest move since taking over as CEO in April, launching theInternet giant into a lower-margin manufacturing business and pitting it against many of the 38other handset companies that now use its Android software.

Motorola Inc was split this year into two: Motorola Mobility, which got the faster-growing

cellphone and TV set-top box businesses; and Motorola Solutions, which sells gear like walkie-talkies to corporate and government clients.

Google is paying a massive 63 per cent premium to gain access to one of the mobile phoneindustry's largest patent libraries. The company had been under pressure to build a patentportfolio after losing out to Apple, Microsoft Corp and others in a recent auction of bankruptNortel's assets.


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Unlike the Nortel deal and others, the fact that Google avoided having to compete in an auctionfor Motorola by engaging in exclusive negotiations for the company underscores the pressure itwas under to bolster its patent portfolio. Paying such a rich premium even though it was the onlybuyer dovetails with analysts' view that the increasingly litigious posture its competitors havetaken over intellectual property left the Internet search giant with no choice but to pay up.

"No matter how you think about this, you have to look at it through the spectrum of the Androidecosystem under incredible attack from an IP (intellectual property) perspective. And this isGoogle going out and trying to fix that," said WP Stewart Advisors CIO Jim Tierney. "Thebiggest implication here is that Google wants Android to be one of the dominant phone operatingsystems for years to come."

The deal also stoked speculation that struggling Nokia and Research in Motion would becometakeover targets themselves, sending Nokia's shares up 17.35 per cent. Reuters

Google is paying a massive 63 per cent premium to gain access to one of the mobile phone

industry's largest patent libraries. The company had been under pressure to build a patentportfolio after losing out to Apple, Microsoft and others in a recent auction of Nortel's assets.

Onion export price raised to check rising retail prices

New Delhi, September 7

The government today increased the Minimum Export Price (MEP) of onion by $175 per tonneto $475 a tonne a move aimed at discouraging outbound shipments and controlling surgingdomestic retail prices of the kitchen staple.

Onion prices have gone up by Rs 10 per kg in last one-and-a-half months and it is being sold atRs 25 per kg in the national capital.

In the wholesale price index, prices of onions jumped by over 57 per cent on an annual basis forthe week ended August 20. It had contributed to food inflation that crossed double digits (10.05per cent) mark after five months.

The MEP of all varieties of onions, including Bangalore Rose Onions and KrishnapuramOnions will be $475 per tonne, the Directorate General of Foreign Trade, which comes underCommerce Ministry, said in a notification.

Earlier, the MEP was $300 per tonne for the general category onion and $400 per tonne forpremium varieties Bangalore Rose onions and Krishnapuram onions. PTI


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TRAI to look into 3G roaming pacts of mobile operatorsTribune News Service

New Delhi, September 23

The Telecom Regulatory Authority of India (TRAI) has sought information from leading serviceproviders on their bilateral agreements for entering into 3G roaming pacts. This is being done toensure that there is no violation of licence terms and conditions.

TRAI is investigating into 3G roaming agreements of telecom operators, a source in theregulator body said.

The watchdog is looking at as to how these companies are selling 3G Spectrum services underthe agreement, TRAI sources said.

The pacts were highlighted by the new tariffs announced by Idea Cellular, which were up to 50per cent cheaper than the older ones and that too in circles where it did not have a licence.

While earlier it was charging Rs 450 for 600 MB enough to cover the Internet usage from asmart-phone for a month.

Under the new scheme, it was offering services at only Rs 199 for 500 MB, or less than 40 paiseper MB.

These were also available in the Delhi and Mumbai circles where Idea did not have its 3Gservices and as such it came into the notice of DoT.

In Delhi, Idea is using Vodafones 3G network to deliver its own 3G and is much cheaper thanthe rates offered by Vodafone itself.

In July, to reduce cost and offer pan-India 3G services, Vodafone, Bharti Airtel and Idea Cellularhad started sharing their networks to provide seamless service to their customers.

These companies had entered into a bilateral roaming agreement, both inter and intra circle, toprovide 3G services to customers in the circles where they can not build their own 3G network asthey do not have the licence, to bring a pan-India experience of 3G services to their users.

Airtel, Aircel and Reliance Communications each owns 3G Spectrum licence in 13 of the 22telecom circles, while Vodafone has it in 10 circles and Idea and the Tatas has it in nine circles.


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Exporters exempted from registration for cotton waste

NEW DELHI, October 12, 2011

The Central Government has issued a notification exempting exporters from registration of

contracts for cotton waste, including yarn, with effect from October 1. Earlier, exporters had toregister their contracts with the Directorate General of Foreign Trade (DGFT) and execute theshipment within 30 days of registration. Export of cotton waste, including yarn and garnetedstock, will continue to be free. Registration of contracts for cotton waste is not required now,DGFT said in a notification here.

Toyota to export Etios to South Africa

NEW DELHI, October 7, 2011

Toyota Kirloskar Motor (TKM), a joint venture between Japan's Toyota and India's Kirloskar

Group, on Thursday said it would make foray into exports by despatching the first shipment of

its newly-launched sedan Etios and its hatchback version Etios Liva to South Africa in March

next year.

The export model of Etios will be built on the same platform as Etios and Etios Liva,

manufactured and sold in India. However, there would be a few changes in technical

specifications/features, pertaining to the different needs of each market. The export model will

be customised to suit the local requirements. The company will export only the petrol variants of

the Etios, TKM said in a statement. The Etios is currently manufactured in TKM's second plant

located at Bidadi near Bangalore. The current production capacity in the second plant is 80,000

units which will be ramped up to 1.2-lakh units by 2012 and to 2.1-lakh units by 2013. The

engine and transmission for the Etios, which are now being imported from Japan, will also be

manufactured in India. Starting next year, 1-lakh engines will be produced annually that will go

up to 2.4-lakh units by 2013.


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Eurozone crisis impacts exports

NEW DELHI, November 9, 2011

In a clear sign of the eurozone sovereign debt crisis impacting the Indian economy, growth inexports slipped to a mere 10.8 per cent at $19.9 billion in October this year, the lowest increasesince the same month in 2009 when it contracted by 6.6 per cent.

In sharp contrast, imports grew at a much faster clip at 21.7 per cent to $39.5 billion during themonth, especially owing to a spike in international prices of crude oil and vegetable oils thetwo major commodities in which domestic consumption demand is largely met through imports.As a consequence, the trade deficit for October 2011 at $19.6 billion worked out to be thehighest-ever for any single month in the last four years.

According to the provisional trade data released here on Tuesday, the slump in export growth to

10.8 per cent has been a sharp deceleration from a peak of 82 per cent in July, to 44.25 percent in August and to 36.36 per cent in September.

Commenting on the data, Commerce Secretary Rahul Khullar pointed to the grim scenario in themonths ahead and said: In any sector, it is the lowest in the last three months, deceleration isuniformThe picture is not going to be rosy for the next six months.

However, thanks to the robust performance during the earlier months this fiscal, the cumulativegrowth in exports during April-October still look healthy at $179.8 billion, marking an increaseof 46 per cent over the same period in the previous fiscal year. Alongside, imports during theseven-month period also posted a steady 31 per cent growth to $273.5 to leave a wide trade gap

of $93.7 billion.

Expressing concern over the widening trade gap, Mr. Khullar said: Balance of trade issomething to be very worried about. Because at this rate, it is going to breach [the] $150 billionmark [for 2011-12].

As per the official data, the export sectors which have performed well during the April-Octoberperiod this year are engineering with a growth of 89.6 per cent at $51.4 billion; petroleum and oilproducts 51 per cent ($31.9 billion); cotton 22 per cent ($3.99 billion); electronics 50 per cent($6.4 billion); and readymade garments 31 per cent ($7.7 billion).

However, during October alone, sectors which depend heavily on European markets have beenseverely impacted. In particular, the electronic goods sector, a major chunk of which is exportedto Europe, has witnessed a sharp dip in growth by 18 per cent. Clearly, that is where the growthhas contracted...effect of what is happening there, Mr. Khullar said.

Reacting to the sharp dip in export growth in October, Federation of Indian Export Organisations(FIEO) President Ramu Deora said that the trade numbers have not come as a surprise. For,


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looking at the global economic developments, he had projected earlier that exports would sufferduring the third and fourth quarters of the current fiscal.

Of special concern, he said, was the drop in export values of engineering and petroleumproducts. And, with the eurozone crisis spreading in the next couple of months, a pick-up in

exports would be more difficult.

Making out a case for incentives, the FIEO chief said that the government should provide fullsupport to exports by providing export credit at 7 per cent and make available foreign currencycredit at 200 basis points above Libor (London Inter-Bank Offered Rate) to help the exportingcommunity survive in tough conditions.

Exports register a meagre 10.8 % growth in October

NEW DELHI, December 2, 2011

The tremors of eurozone debt crisis as well the downslide in the U.S. economic growth and the

policy paralysis' in the government have started impacting exports, which registered a meagre

10.8 per cent growth at $19.8 billion in October, the lowest in the last two years.

The growth rate has been the lowest since October, 2009, when it contracted by 6.6 per cent.

On the other hand, imports continued their upward journey rising by 21.7 per cent at $39.5

billion during the month, leaving a trade deficit of $19.6 billion, the highest ever in any month in

the last four years. This is being attributed to expensive crude oil and vegetable oils, according to

the Commerce Ministry data released here on Thursday.

From a peak of 82 per cent in July, export growth has slipped to 44.25 per cent in August, 36.36

per cent in September and 10.8 per cent in October.

In October, oil imports grew 20.73 per cent at $10 billion, whereas non-oil imports rose by 22

per cent to $29.4 billion.


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But, for the cumulative April-October period, exports aggregated to $179.7 billion, showing a

handsome growth of 45.9 per cent, thanks to the sterling trend witnessed in the previous months

of the current fiscal. A steady rise of 30.9 per cent in imports for the seven-month period to

$273.4 billion has left the trade gap widening to $93.7 billion.

Commerce Secretary Rahul Khullar has expressed concern over the increasing balance of trade

and said at this rate, it might breach the $150-billion mark in the current fiscal.

During April-October, oil imports stood at $81.9 billion, an increase of 40 per cent. Non-oil

imports rose by 27.1 per cent to $191.5 billion.

Reacting to the sharp dip in export growth in October, Federation of Indian Export Organisations

President Ramu S. Deora said exports would suffer in the third and fourth quarters of the current

fiscal. He expressed serious concern over drop in exports in value terms for products such as

engineering.

Rs.800-cr extra interest subsidy for exporters

NEW DELHI, December 2, 2011

The Central Government on Thursday approved an additional Rs.800-crore for extending interestsubsidy to exporters till March 2012 in the backdrop of slowdown in major global markets inEurope and the U.S.

The scheme under which 2 per cent interest subvention is given to commercial banks for theirconcessional lending to exporters has been extended for the current fiscal year for handicrafts,handlooms, carpets and small and medium enterprises (SME) sectors.

The approval was given by the Cabinet Committee on Economic Affairs (CCEA).

Till date, Rs.1,654 crore has been released to the Reserve Bank of India (RBI) for reimbursementof interest subvention, whereas total requirement projected by the RBI for the period up to March2011 is Rs.3,892 crore.

As much as Rs.800 crore is required for implementation of the scheme till March, 2012.


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The eurozone crisis has been biting Indian exports which grew year-on-year by 10.8 per cent to$19.9 billion in October, the lowest in the last two years. PTI

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