At an average of 7.5 pc, India is truly a bright spot in the global economy

India’s GDP growth is expected to remain flat at 7.4 per cent, according to the latest HSBC report.

The Reserve Bank of India in April had said that the economy is likely to grow by 7.6 per cent in the current fiscal on the back of a favourable monsoon forecast. The Finance Ministry has projected the economy to grow 7-7.75 per cent in the current fiscal. The Asian Development Bank (ADB), too, had projected India’s economic growth for the current fiscal at 7.4 per cent.

Govt focused on facilitating shipping & shipbuilding

The government recently highlighted in Parliament the steps it has taken to encourage the shipping and shipbuilding sectors in the country.

The Institutional Mechanism on Infrastructure, working under the Department of Economic Affairs, has recommended inclusion of standalone shipyards undertaking shipbuilding and ship repair in the Harmonised List of Infrastructure sectors.

To promote shipbuilding and repair in Indian shipyards, the Union Cabinet has approved the Shipbuilding Financial Assistance Policy for Indian yards, for contracts signed during the ten year period from 2016-2026. The Cabinet has also approved that all government departments or agencies, including CPSUs, have to provide Right of First Refusal to Indian shipyards while procuring or repairing vessels meant for governmental or own use till 2025.

To provide a level playing field for indigenously-built ships vis-à-vis imported ships, the government has exempted Customs and Central Excise duty on inputs used in the manufacture of ships and relaxed the limitation to operate shipyards under Customs control in terms of Section 65 of the Customs Act, 1962.

To promote ease of doing business in the sector, the Union Budget 2016-17 laid out a simplified procedure for tax compliance for the shipyards while procuring duty-free goods for shipbuilding and ship repair.

To bring down the cost of construction of barges, river sea vessels (RSV Types 1 & 2) and port and harbour crafts, and to meet the demand for steel by ship and barge builders, the government has decided that the re-rolled steel obtained from recycling yards/ship breaking units would be certified for use in construction of these vessels, said a release.

Govt plans to further reduce coal imports

The government aims to save Rs 40,000 crore in foreign exchange on account of lower coal imports this year, Mr Piyush Goyal, Coal and Power Minister, told reporters after the launch of the web portal on ‘Contract Labour Payment Management System’ here.

This is attributed to Coal India Ltd’s (CIL) output for this fiscal being fixed at 598 million tonnes. CIL accounts for over 80 per cent of the domestic coal production, and helped reduce the country’s import bill by around Rs 28,000 crore last fiscal, he said.

There is not a single coal-based power plant in the country which has critical coal stock position. The thermal power plants have an average coal stock of 26-27 days, the Minister added.

India’s ratification of WTO Trade Facilitation Agreement to boost ease of doing business

The government’s ratification of the Trade Facilitation Agreement (TFA) of the WTO is expected to expedite the movement, release and clearance of goods, including goods in transit, it is learnt.

"India has ratified the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO), and the instrument of Acceptance for Trade Facilitation Agreement was handed over to WTO Director-General by India on April 22," the Minister of State for Commerce and Industry, Ms Nirmala Sitharaman, told Parliament earlier this week.

The pact will come into force once two-thirds of WTO members have completed their domestic rectification process, she added.

Addressing the Consultative Committee meeting attached to her Ministry on the subject, the Minister said that the TFA envisages faster clearances and reduction of red tapism at the borders and would thereby help in ease of doing business. She said that ratification of the TFA is bound to change the Indian trade and would bring more transparency in the trade process. She pointed out that after TFA ratification, the best trade practices worldwide would be shared among the member countries.

She made the point that while India has made rapid strides in streamlining its processes on the lines of international best practices, in several areas it needs to ensure speedy legislation so that there are visible beneficial outcomes. The Minister said that industry and its various associations would be involved in the consultation process while implementing the different provisions of the TFA.

She stressed that through trade facilitation member countries would seek to simplify trade procedures and help promote cross-border trade, bring greater predictability to traders and help improve the overall climate for trade and investment. She explained that TFA is supposed to enable domestic manufacturers, particularly small and medium enterprises, connect more easily to regional and global value chains, as it contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between Customs and other appropriate authorities on trade facilitation and Customs compliance issues.

Ms Sitharaman emphasised that these objectives of TFA are in consonance with India’s ease of doing business initiative.

Earlier, a detailed presentation on the TFA and the issues concerning its implementation, etc. was made by Mr Dammu Ravi, Joint Secretary, Ministry of Commerce. He gave a detailed presentation highlighting the important provisions of TFA. He also gave a brief background on TFA of WTO, its importance, important provisions under TFA and various provisions with regard to its implementation, among others.

He pointed out that TFA is divided into three parts. Section 1 contains provisions on simplification of border clearance procedures and adoption of new transparency measures and consists of 12 Articles. These 12 Articles extend to several agencies such as Customs, Border Control, Shipping, Plant and Animal Quarantine, etc., all of which require inter-ministerial cooperation and coordination. Section 2 of TFA is focused on special needs and requirements of developing country members and Least Developed Country (LDC) members for its implementation. Such a member country would have flexibility to determine which commitments to implement immediately upon entry into force of the TFA and which it wants to implement in a phased manner.

Section 3 deals with institutional mechanism for setting up a National Committee on Trade Facilitation for domestic cooperation and implementation, he said.