India’s exports rise faster than imports in September

NEW DELHI: India’s external trade turned positive, perhaps for the first time, with growth in exports surpassing that of imports for the first time, in September 2017, bringing festive cheer for exporters and policy-makers. Merchandise exports from the country moved to a higher growth trajectory of 25.67 per cent with September exports reaching $28.61 billion, helped by better performance by all the top 10 commodity groups, ranging from engineering items to textiles. Although exports have been in the positive zone for the past 13 month, it is for the first time that growth in exports surpassed that of imports. The trade deficit, too, narrowed in September by 0.95 per cent to $8.98 billion against 9.07 billion in September last year, but the overall trade deficit during the April-September 2017-18 period stood at $72.13 billion. Cumulative exports during April-September 2017-18 stood at $147.19 billion against cumulative imports of $219.32 billion, leaving a gap of $72.13 billion.
Import growth rate was slightly lower than export growth, with gold imports declining by 5 per cent. Imports into the country increased 18.09 per cent in September 2017 to $37.59 billion, according to an official data released on Friday. Imports during September 2017 were valued at $37.60 billion (Rs242,282.96 crore) which was 18.09 per cent higher in dollar terms and 14.02 per cent higher in rupee terms over the level of imports valued at $31.84 billion (Rs212,486.28 crore) in September 2016. Cumulative value of imports for April-September 2017-18 stood at $219.32 billion (Rs141,1872.70 crore) against $175.34 billion (Rs1,173,664.70 crore), recording a positive growth of 25.08 per cent in dollar terms and 20.30 per cent in rupee terms over the same period last year. Exports during September 2017 were valued at $28.61 billion (Rs. 184387.36 crore ), showing a growth of 25.67 per cent in dollar terms and 21.35 per cent in rupee terms compared to exports valued at $22.77 billion (Rs151,950.74 crore) in September 2016. Apart from engineering goods exports, which posted a sharp increase of 44 per cent during the month to $7.32 billion, other sectors that registered growth included gems and jewellery, petro products, organic and inorganic chemicals, readymade garments, drugs and pharmaceuticals, cotton yarn/fabs/made-ups, handloom products, marine products, rice and electronic goods. Oil imports, at $8.18 billion were 18.4 per cent higher than in September 2016. Non-oil imports, at $29.40 billion, were 17.9 per cent higher. Gold imports came in at $ 1.71 billion.

India Exports Imports

Oil imports: India readies to play hardball with suppliers over pricing

New Delhi: After telling Organization of the Petroleum Exporting Countries (Opec) members on Sunday that India has other options to buy oil at competitive prices, New Delhi is set to play hardball with its traditional suppliers from the Middle East on pricing.

India is reworking its import strategy by stepping up the share of short-term contracts to take advantage of the bear market and is exploring long-term supply deals at discounted price with its newest oil trade partner, the US, the re-entry of which in global oil markets last year has stepped up competition among suppliers.

“The economics of oil is very dynamic. We have some long-term contracts with the Middle East (suppliers) which we will continue with. Wherever we get competitive prices, we will buy. Price is very sensitive to us,” oil minister Dharmendra Pradhan said at a press conference.

In the medium term, India’s negotiating power on oil will get extra muscle when its under-construction liquefied natural gas (LNG) import terminals will start meeting part of its energy requirement in transportation, power generation and in fertilizer production. Two LNG terminals of 5 million tonnes each are coming up at Ennore in Chennai and at Dhamra in Odisha.
The likely expansion of the electric vehicle industry too is expected to give India extra negotiation power in its oil trade.

Pradhan had last Sunday told Sanusi Mohammed Barkindo, the visiting secretary general of Opec, that New Delhi has other buying options, an oil ministry statement said on that day.

Pradhan’s message to the 14-member producers’ grouping urging “responsible pricing” came after the first shipment of US crude reached Indian Oil Corp. Ltd’s Paradeep refinery on 2 October at a $2 per barrel discount compared to Dubai crude. Opec accounts for 86% of crude oil, 75% of gas and 95% of liquefied petroleum gas (LPG) that India imports.

It is economics that is driving purchase decisions as a discount of $2 a barrel could bring huge gains, said an Indian Oil Corp. official on condition of anonymity.

“Whatever can be saved in the price of crude, automatically goes to the refiner’s bottom line as crude accounts for the biggest cost in refining business,” said the official. Indian state-owned refiners have already placed a cumulative order 7.85 million barrels from the US.
The entry of the US in the oil exports market has increased competition among suppliers, said Richard Joswick, managing director-oil group, PIRA Energy, a forecasting and analytics unit of S&P Global Platts.

“The US entering the global crude export market, along with the surging growth in US shale oil production, will result in one of the largest changes in oil trade in many years. In a few years time, the US gross exports should hit 3 million barrels per day or more. That would put it ahead of most of the Opec countries,” said Joswick.

Experts also said that a persistent oversupply situation has rendered crude oil a buyer’s market, curtailing the ability of Opec members to influence pricing by adjusting supplies. Recent efforts of cutting output by Opec has also failed to prop up prices as US shale producers are continuously adding more output to the market.

Rahul Prithiani, director of Crisil Research, said that countries like India, China and Japan have raised their imports of US crude in recent months.

China imported an average of 100,000 barrels of crude a day from the US during the first five months of 2017, 10 times the level for the same period last year, increasing its share of US imports to 2% from 0.1% last year, said Prithiani. In the same period, the share of Chinese oil imports from Middle East has declined to 41% from about 47%.“With more competition in the market and weak demand growth, pricing will be competitive which is great for buyers like India,” he said.

Govt to fix 300,000 tonne import Quota for Sugar Mills in Southern India

India will soon permit import of 300,000 tonnes of raw sugar at a concessional rate of 25 per cent import duty against normal 40 per cent duty. Import is most likely to be permitted to sugar-starved mills in the southern states, where prices are Rs 2-2.50 higher than in Maharashtra.

Ramvilas Paswan, Union Consumer Affairs, Food and Public Distribution minister tweeted on Monday night that India will soon take a decision on sugar imports. He, however, did not share details of the quantum of imports to be allowed or the duty rates that would be imposed on them. 
However, sources close to the development said that the government will allow sugar imports up to a certain limit. 
"South Indian mills will get the permission to import 3 lakh tonnes of sugar to be refined and sold by mid-October," said a source. He added that a new crop sugar would enter the market by October-end and import supplies would not be able to help the mills in terms of managing the supply balance.
The government allowed import of raw sugar to mills and refineries three months back and a quota of 500,000 tonnes was fixed, along with a zero import duty to help address the crisis. While the industry is still waiting for a government notification, sources close to the development said the mills are expected to be allocated quota as last time, owing to the region's insufficient refining capacities.
As of now, sugar from Maharashtra is sold in Tamil Nadu as prices are over 5 per cent higher in the former state.

According to some industry experts, the import quota is not so high and smaller mills would be able to fire boilers just for a few days before they come to a halt again as boilers need to be fired three weeks before the usual crushing time in the region that begins from November-end and is over by December. As a result of this, not all mills might opt for the quota.

Another issue that has raised concerns among industry players is that refining raw sugar is less viable for smaller firms because it leads to higher wastage, as compared to making sugar from juice.
Last month, mills in south India had requested the government to permit them to import sugar. However, instead of allowing imports, the government had imposed a stock limit for mills last week. Sugar prices in the region, however, continued to be high, thereby, compelling the government to reconsider its position.
An indenting agent said: "The arrival of raw sugar across ports in southern India may not take much time as sugar imported by Bangladesh may be diverted to Indian ports. Moreover, raw sugar lying in customs bonded warehouses, which are typically outside domestic tariff area, will also enter south Indian mills."

Sugar Mills

India exports AYUSH products to 100 countries, ties up with US on R&D

India has exported AYUSH products, including extracts of medicinal herbs, to about 100 countries in the last three years with a total value in excess of $1,100 million, Minister of State (Independent Charge) for AYUSH, Shripad Yesso Naik said in a written reply to a question in parliament on Friday.

India’s exports included extracts of medicinal herbs, Ayurveda medicines, dietary supplements, nutraceuticals and herbal supplements. The data presented by the minister show a gradually increase of AYUSH products in foreign countries.

 


The minister also informed that India has for the first time successfully engaged with United States in the field of traditional medicine.
An India-US workshop on traditional medicine with special focus on cancer was organised on 3-4 March, 2016 at New Delhi. A US team comprising of experts from National Cancer Institute (NCI) took part in the two-day exhaustive deliberations that have resulted into significant leads.

“A productive bilateral dialogue with Department of Health and Human Services (DHHS), National Institute of Health (NIH) and National Cancer Institute (NCI) team is ongoing,” Naik said.

Giving details of the drug standardisation, the minister said the Ministry of AYUSH has set-up Central Council for Research in Ayurvedic Sciences (CCRAS) as the apex body for formulation and development of Ayurvedic medicines for various diseases.

As many as 88 singles drugs and 33 compound formulations were carried out under drug standardisation in the year 2016-17, according to the minister.

Why It’s Important for India to Trade With Latin America

Many believe that trading with Latin America is expensive and therefore should not be a priority. But statistics tell a different story.

For those who think that Latin America is too far and the cost of freight too high, and therefore that the region should be less important for India’s trade, here is an eye opener from the 2016-17 (April-March) statistics of the commerce ministry of India.

In 2016-17, India exported more to Mexico ($3.5 billion) than to neighbours such as Thailand ($3.1 billion), Myanmar ($1.7 billion) and Iran ($2.4 billion) or traditional trade partners Russia ($1.9 billion) and Canada ($2 billion).

India’s exports to Colombia ($787 million) were more than the exports to some West European countries such as Austria, Ireland and Scandinavian countries.

Guatemala imported more from India ($243 million) than some Central Asian and East European countries.
India’s trade with the Dominican Republic ($900 million) was more than the trade with Portugal, Greece and some other European countries.

For those who think that it is very difficult for India to compete with Chinese exports, here is another piece of information:
India beat China in export of pharmaceuticals to Latin America. India’s exports were $651 million in comparison to China’s $404 million in 2016. In fact, in the last five years, India has been exporting more pharma to Latin America than China. What is even more interesting is the fact that India imports a bulk of its raw materials from China, converts them into finished formulations and exports them.
Trade in 2016-17

India’s trade with Latin America in 2016-17 was $30 billion, of which export was $10.4 billion and imports $19.6 billion. The trade has gone up slightly from $29.7 billion in 2015-16 but is down from $43 billion in 2014-15. The main reasons for the decrease in trade are the fall in commodity prices imported by India from Latin America and the recession of the region in 2015 and 2016. India’s import of crude oil from the region fell to $9.5 billion in 2016-17 from $20 billion in 2014-15, thanks to the decrease in oil prices from over $100 dollars to less $50. The volume of crude imports had, in fact, increased.

In 2016-17, Brazil was the largest trading partner at $6.5 billion, followed by Mexico ($6.4 billion), Venezuela ($5.6 billion), Argentina ($3 billion), Chile ($1.9 billion), Peru ($1.8 billion), Colombia ($1.4 billion) and the Dominican Republic ($900 million).

India’s exports

Mexico was the largest destination of India’s export, valued at $3.5 billion, followed by Brazil ($2.4 billion), Colombia ($787 million), Peru ($699 million), Chile ($676 million) and Argentina ($512 million). Export to Mexico has increased by 21% from last year, while it declined in the case of the other large markets such as Brazil, Argentina, Colombia, Peru and Chile.

Latin America was the leading destination of India’s vehicle exports with a share of 23% of India’s global exports. Mexico continued to be the main buyer of Indian cars with $1.6 billion accounting for 25% of India’s global exports. Vehicle exports to Mexico have been steadily increasing in the last three years and the increase from last year was an impressive 39%. Colombia, which was the number one buyer of Indian motorcycles came down to the third rank in 2016-17 with imports of $185 million, after Bangladesh and Sri Lanka. In 2016-17 Latin America imported motorcycles worth $354 million from India in 2016-17, which was 25% of India’s exports to the world.
Imports

Major sources of imports were: Venezuela ($5.5 billion), Brazil ($4.1 billion), Mexico ($2.9 billion), Argentina ($2.5 billion), Chile ($1.2 billion), Peru ($1 billion), Dominican Republic ($675 million) and Colombia ($594 million).

The main imports were crude oil ($9.5 billion), vegetable oil ($2.9 billion), gold and precious stones ($1.7 billion), copper ($1.7 billion), raw sugar ($1 billion) and wood ($309 million). The revenue through sugar imports is generated by mainly by refining and re-exporting to other countries.

The imports are set to increase given the growing demand for these items in India, driven by the increasing population and consumption as well as the high economic growth rate.

Outlook for 2017-18

This trade should go up next year, with the recovery of the economies of the region in 2017. The GDP of Latin America had shrunk by 1.1% in 2015 and 0.5% in 2016. The GDP is expected to grow by 1.1% in 2017, helped by the recovery of global commodity prices. Except Venezuela, all the countries of the region have shown positive GDP growth. Even Brazil, which continues to suffer from political crisis, has turned around with positive growth this year.

Latin America will continue to contribute to India’s energy security with the supply of crude oil. The region has large reserves and the capacity to increase production and exports to meet the increasing crude imports from India. South America has started supplying pulses, which India has been importing more and more with the growing gap between consumption and domestic production.

The collapse of the Trans Pacific Partnership following the withdrawal of the US is good for India. The TPP had extra clauses for patent protection, going beyond the WTO standards, and this would have affected India’s generic medicine exports to Latin America.

The expanded Preferential Trade Agreement signed by Chile and India in 2016 has come into force from May 2017. Peru and India have agreed to start negotiations for a free/preferential trade agreement and this should also help in boosting the trade with the region.

Indian exporters should focus on the markets in the Pacific Alliance (Mexico, Colombia, Peru and Chile) whose economies are growing more and whose trade policies are more stable, transparent and predictable, with the least protectionism.

Latin Americans have started paying more attention to India, especially after arrogant and insulting remarks from Donald Trump against Mexicans and his protectionist trade policies. They also want to reduce the over-dependence on China, which has used its dominance to hurt the region’s industries and given rise to other risks. They attach importance to India, which has overtaken China in terms of GDP growth rate, and see India as a non-threatening trade partner in the long term.

India’s exports could be doubled to $20 billion in the next five years if exporters target Latin America more seriously and systematically.

Vegetable oil import up 15 pc in June at 13.44 lakh tonnes

India's imports of vegetable oils increased by 15 per cent in June at 13.44 lakh tonnes, according to industry data."Import of vegetable oils during June 2017 is reported at 13,44,868 tonnes compared to 11,69,456 tonnes in June 2016, up by 15 per cent," Solvent Extractors' Association (SEA) said in a statement.In the first eight months of the current 2016-17 oil marketing year, the country's import of vegetable oils (comprising edible oil and non-edible oils) rose marginally at 98,63,572 tonnes compared to 97,63,043 tonnes, it added.Oil year runs from November to October. India imports about 60 per cent of its edible oil requirement. The country imported about about 14 million tonnes of vegetable oil in 2015-16 marketing year.

India's imports of vegetable oils