EximNews

Monthly Newsletter Volume 4 No 2 • February 2009

Tracking the Rupee: March ’07-Feb ’08

Contents

TRADE STRATEGIES

• Announcement of Trade
Facilitation Measures Hit the
Right Note ..............................................2

TRADE STATISTICS
SOURCE: RBI
• Exports Register Modest
Growth for the period
April-January, 2008-09 ...........................3

TRADE ISSUES Share of Top Investing Countries, by FDI

• Report on the Diamond Industry in
Gujarat Released .....................................3

FDI NEWS

• Rs. 616 crore FDI proposals

cleared ......................................................4

IN BRIEF

• Calls for low oil prices are

short-sighted, says OPEC .....................4
SOURCE: DIPP, GoI

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 TRADE STRATEGIES
Announcement of Trade Facilitation
Measures Hit the Right Note
The Union Minister of Commerce and Industry,
Mr. Kamal Nath, announced the ‘Trade Facilitation
Measures (Supplement to Foreign Trade Policy)’ on
26 February 2009, here in New Delhi. The
announcement came in the backdrop of a global
economic crisis and some of the measures are
expected to cushion the adverse impact of declining
exports.
Highlights of the Trade Facilitation Measures;
1) Duty credit scrips under DEPB scheme to be
issued without waiting for realization of export
proceeds
2) Special package of Rs. 325 crore for leather and
textiles sector
3) STCL Ltd., Diamond India, MSTC, Gem &
Jewellery EPC and Star Trading Houses added
as nominated agencies for import of precious
metals
4) Gem and jewellery export: import restrictions
on worked corals removed
5) Bhilwara and Surat recognised as towns of export
excellence for textiles and diamonds
6) Threshold limit for recognition as Premier
Trading Houses reduced to Rs.7500 crore
7) Under EPCG scheme, export obligation extended
till 2009-10 for exports during 2008-09
8) DEPB/Duty Credit Scrip utilization extended for
payment of duty for import of restricted items
also
9) Procedure for claiming duty drawback refund &
refund of Terminal Excise Duty further simplified
10) Re-credit of 4% SAD for VKGUY, FPS AND
FMS allowed
11) Electronic Message Transfer Facility for advance
authorisation and EPCG to be established
12) Advance licenses issued prior to 1.4.2002
requiring MODVAT/CENVAT certificate
dispensed with
13) Export obligation period against advance
authorisations extended up to 36 months
14) Reimbursement of additional duty of excise
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levied on fuel to be admissible for EOUs
15) Early refund of service tax claims & further
simplification of refund procedures on the anvil
India is likely to miss its export target of US $ 200
billion this fiscal due to the global meltdown, stated
Mr. Kamal Nath, but he hoped this figure will be
achieved next year as he unveiled the new measures
to help the exporting community. The minister
hoped the country would log merchandise exports
of at least US $ 175 billion during the current fiscal,
as he reviewed the country’s long-term foreign trade
policy.
CII Welcomes the Announcements
According to Mr. Chandrajit Banerjee, Director
General, CII, the announcements by Mr. Kamal Nath
were timely and tries to address the concerns of
Indian exporters.
Mr. Banerjee said, “Announcement of the supplement
to the foreign trade policy would go a long way in
boosting employment generation in India as the
export sector is the second largest employment
generator in the country”. He further added “textiles
and leather sectors in India have been under severe
pressure in last few months and the announcement
of a special package of Rs 325 crore for the two
sectors would help in their revival”.
Mr. Banerjee also said, that reduction in recognition
slab for Premier Trading Houses to Rs 7500 crore of
the total exports turnover and reduction in export
obligation of exporters in proportion to the fall in
exports to avail the EPCG benefits, are all measures
that will help exporters to tide over the current
slowdown.
Complimenting the leadership of Mr. Kamal Nath,
Mr. Sanjay Budhia, Chairman, CII National
Committee on Trade, said, “The removal of import
restrictions on worked corals is welcome and
addresses the long standing demand of gems &
jewellery exporters”, He further added that
recognition of Bhilwara in Rajasthan as the
town of excellence for textiles and of Surat in
Gujarat as the town of excellence for diamonds
would help in bringing the two regions on a global
map.
Mr. Budhia also said that allowing a re-credit of 4
percent SAD (Single Administrative Document), in
case of payment of duty by incentive scheme scrips
such as Vishesh Krishi and Gram Udyog Yojna
(VKGUY), Focus Products Scheme (FPS) and Focus
Markets Scheme (FMS) would help in rejuvenating
India’s rural economy and further boost rural exports.
TRADE STATISTICS
Exports Register Modest Growth for
the period April-January, 2008-09
India’s cumulative value of exports for the period
April- January, 2008-09 was US $ 144 billion as
against US $ 127 billion registering a growth of 13.2
percent. Exports during January, 2008-09 were valued
at US $ 12.74 billion which was 15.9 percent lower
than the level of US $ 14.71 billion during January,
2008.
Cumulative value of imports for the period April-
January, 2008-09 was US $ 243 billion as against US
$ 194 billion registering a growth of 25.3 percent.
India’s imports during January, 2008-09 were valued
at US $ 18.45 billion representing a decrease of 18.2
percent over the level of imports valued at US $
22.57 billion in January, 2008.
Exports & Imports: (US $ Million)
(Provisional)
Exports Jan Apr-Jan
(including re-exports)
2007-2008 14717 127454
2008-2009 12381 144266
%Growth 2008-09/2007-2008 -15.9 13.2
Imports
2007-2008 22566 194285
TRADE ISSUES
Report on the Diamond Industry in
Gujarat Released
A Task Force convened by the Reserve Bank of India
to look into the distressed diamond industry in
Gujarat, has recommended measures for expeditious
restructuring which include, fresh financing of
existing borrowal accounts as per the Reserve Bank’s
guidelines, financing diamond sector units not
financed earlier, re-training/re-skilling/ rehabilitation
of displaced diamond workers and providing financial
relief to diamond workers. These measures were
recommended by the Task Force based on discussions
with various stakeholders and deliberations in the
meetings.
Exim News
Mr. Budhia, however, added that currency derivatives
continue to worry Indian exporters. He said small
and medium sized exporters have alone lost over Rs
2000 crore in these currency derivatives and there is
a need to look into the matter on a priority basis.
2008-2009 18455 243358
%Growth 2008-09/2007-2008 -18.2 25.3
Trade Balance
2007-2008 -7849 -66830
2008-2009 -6075 -99093
SOURCE: MoCI, GoI
Oil imports during January, 2008-09 were valued at
US $ 4.46 billion which was 47.5 percent lower than
oil imports valued at US $ 8.51 billion in the
corresponding period last year. Oil imports during
April- January, 2008-09 were valued at US $ 83.29
billion which was 32.4 percent higher than the oil
imports of US $ 62.97 billion in the corresponding
period last year.
Non-oil imports during January, 2008-09 were
estimated at US $ 13.99 billion which was 0.5 percent
lower than non-oil imports of US $ 14.06 billion in
January, 2007-08. Non-oil imports during April-
January, 2009 were valued at US $ 160 billion which
was 21.9 percent higher than the level of such imports
valued at US $ 131 billion in April- January, 2007-
08.
The trade deficit for April- January, 2008-09 was
estimated at US $ 99 billion which was higher than
the deficit at US $ 66.8 billion during April- January,
2007-08.
The Task Force was convened after the deliberations
at a meeting held by the RBI Governor with the
Minister of Finance, the Minister of State for Finance,
Government of Gujarat, and senior officials of
government and banks early on February 2009, to
look into the problems being faced by the diamond
industry in Gujarat.
The diamond industry in Gujarat is one the largest
contributors to Indian exports with diamond exports
(HS-7102) of US $ 14.2 billion and a share of 8.72
percent in India’s total export basket, 2007-08.
However, following the economic crisis in 2008, the
diamond industry is likely to suffer due to a global
demand slump.
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 FDI NEWS
Rs. 616 crore FDI proposals cleared been allowed to bring in Rs. 90 crore through FDI
for making downstream investments. Likewise,
Based on the recommendations of Foreign
Cinema Capital Ventures Fund — the country’s first
Investment Promotion Board (FIPB) in its meeting
regulated venture fund in the media and entertainment
held late in February 2009, Government has approved
sector — has been permitted to fetch Rs. 50 crore in
29 Proposals of Foreign Direct Investment amounting
foreign exchange for investment in the fund.
to Rs. 616.08 Crore (US $ 120 million
approximately) In the telecom sector, global leader Telcordia
Technologies of the U.S. has received consent to
Nearly 60 per cent of the proposed foreign exchange
bring in Rs. 45 crore to buy equity in Indian
inflow is accounted for by a Singapore-based
companies for carrying out mobile number
company for entering into the hotel business in India.
portability solutions.
The Government has permitted AAPC Singapore
Pvt. Ltd. to invest Rs. 365.78 crore in an Indian The Government, however, deferred decisions on
company for constructing, developing, owning and 19 other FDI proposals which include ventures by
managing low-budget hotels in the country. Hiranandani Realtors, Yamaha Motor India, BNP
Paribas Securities Services and Quippo Telecom.
Among the other major proposals was that of cargo-
Meanwhile, a proposal by ICP Investments
handling company ABG Bulk Handling which has
(Mauritius) Ltd. was rejected.

IN BRIEF
Calls for low oil prices are short-
sighted, says OPEC
The Organisation of the Petroleum Exporting
Countries (OPEC) rejected calls to keep oil prices
at present low levels, arguing this would lead to a
supply crunch.
Maintaining the current price would help stimulate
the economic recovery of oil-importing countries,
the executive director of the International Energy
Agency (IEA), Nobuo Tanaka had stated. But OPEC
secretary general Abdalla Salem El-Badri complained
that the prices of US $ 40 per barrel and more oil
industry investments wanted by the IEA were not
viable.
The oil cartel is set to meet in Vienna March 15 to
discuss possible further production cuts.
OPEC’s basket price has been around US $ 40 per
barrel despite production cuts of 4.2 million barrels
per day since last September.
According to the IEA, oil-importing economies
would receive a stimulus of US $ 1 trillion if oil
prices stayed around US $ 40 per barrel this year.

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DISCLAIMER: The data and news used here are from various published and electronically available
sources. We have taken care to verify and crosscheck the accuracy of these reports and data.
However, despite due diligence, the source may contain occasional errors. In such instances, CII
is not responsible for such errors.
Kindly send in your queries & suggestions to
Confederation of Indian Industry
International Trade Policy Division
The Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi-110 003
Tel: +91-11-2462 9994-7 • Fax: +91-11-2463 3168 • Email: eximnews@cii.in
www.cii.in
Published by Confederation of Indian Industry, The Mantosh Sondhi Centre, 23, Institutional Area, Lodi Road, New Delhi - 110 003
March 2009

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