Import/Export Industry Notifications

Imports from Hong Kong are likely to draw greater scrutiny as China, under pressure to narrow its trade gap with India, is increasingly routing exports via Hong Kong. Beijing has imposed a security law that undermines Hong Kong city’s autonomy from the Communist Party rule. While India has been trying to narrow its trade gap with China, its trade balance with Hong Kong has swung from a surplus to a deficit for the first time in the year. Chinese imports face new scrutiny in India after a tense border standoff that left 20 Indian soldiers dead. India is aiming at dismantling trade links with China as part of a policy to cut dependence on the country.

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In fresh inputs now available, China and Iran are on a course to chalk out a comprehensive 25-year strategic partnership based on an agreement signed during the visit of Chinese President Xi Jinping to Teheran in January 2016. Iranian President after the visit had stated it to be the beginning of a “new chapter” aimed to build economic ties worth up to $600 billion within the next 10 years. From the Indian perspective growing Iran, China relationship is a reason for worry and changing strategic landscape. It points to growing Chinese dominance in alignment with Pakistan which threatens its relations with Afghanistan.

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Pakistan will allow Afghanistan to send goods to India using the Wagah border from July 15. The decision is part of Islamabad’s commitment under the Pakistan-Afghanistan Transit Trade Agreement. This is expected to boost Afghanistan’s exports to India. At the Afghanistan government’s request and to facilitate its transit trade, Pakistan decided to resume Afghan exports through Wagah border crossing after implementing COVID-19 related protocols.

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Though weak domestic demand has prompted Indian steel producers to look at exporting the commodity, rating agency Icra is of the view that large volumes of steel exports from India are not sustainable in the near term. India’s finished steel exports grew 76 per cent during April-May 2020 and stood at 1.71 million tonnes, as against the domestic demand, which contracted by 69 per cent during the same period. If both finished steel and semis are combined China would become the largest export destination for India during Apr-May 2020 with a nearly 48 per cent share.

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An unexpected rise in diesel prices despite slower demand has put the transport sector at a big disadvantage as rising fuel cost has further shrunk its margins. With 11 paisa hike in diesel price in New Delhi, while petrol prices remained steady, the gap between the two auto fuels has further widened in the national capital. Last month, diesel prices overtook that of petrol in the national capital in an unprecedented development. Along with the Capital, diesel prices marginally increased in other metro cities as well.

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Commerce and Industry Minister Piyush Goyal said that certain sectors have been identified as having huge potential for India to cut its import dependence, boost exports and promote domestic manufacturing. He said that work has been moving at a faster pace in 12 sectors. The minister added that COVID-19 pandemic has taught a big lesson that over-dependence on certain geographies can cause a lot of difficulties in the time of stress.

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State-owned Jawaharlal Nehru Port Trust (JNPT) has won large rate hikes from the tariff regulator. This has come at a time when its volumes have plummeted by 31.38 per cent during the first quarter, putting the port authority in a dilemma over implementing the hike. The Tariff Authority for Major Ports (TAMP) has approved a rate hike of 19.03 per cent in vessel-related charges (VRC). A hike of 22.56 per cent has been approved for each in the container, bulk and liquid cargo related charges. The TAMP has approved these hikes for three years starting from 3rd August 2020.

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To cut dependency on imports and align with the government’s self-reliance objective domestic companies have been asked to step up manufacturing of critical products like cranes for cargo handling at ports. They must also virtually interact with select CEOs from the northern region in an event organised by CII. Mr Mansukh Mandaviya, Union Minister of State for Shipping (Independent Charge) pointed out that rather than spending a significant amount annually to import cranes, Indian industry should come forward in this area and build the equipment in joint ventures. This will not only create employment but would also result in self-sufficiency.

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Odisha's Paradip Port has commenced EXIM service (freight), which will help reduce logistics costs for the industries of Odisha. For the first time, a regular EXIM service is starting from Paradip to Port Klang, Malaysia. And this service will reduce logistics costs for most of the industries of Odisha. Currently, most of the container movement is moving from Odisha into Vizag or Kolkata, which will shift soon. The newly launched service will be a 'game-changer' for the industries in Odisha and will further the economic development of the state.

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