Foreign direct investment (FDI) in India has increased by 16 per cent year-on-year to $27.1 billion during April-August this year, the Commerce and Industry Ministry said on Tuesday. During April-August last year, India had received FDI worth $23.35 billion. The ministry said that the total FDI, which includes reinvested earnings, grew by 13 per cent to $35.73 billion.
Credit to priority sectors as well as small and medium industries will be discussed to find ways to accelerate economic growth.
Commerce and Industry Minister Anand Sharma will be meeting Finance Minister Pranab Mukherjee to make a case for the extension of one of the most popular incentives to exporters, the Duty Entitlement Passbook Scheme (DEPB), which is slated for expiry on June 30. DEPB is a duty reimbursement scheme, launched 14 years earlier.
Exporters on Thursday demanded fiscal incentives, tweaking in customs duties on certain products and credit at affordable rates in the forthcoming Budget to boost exports and create jobs. In a pre-budget virtual meeting with Finance Minister Nirmala Sitharaman, the Federation of Indian Export Organisations (FIEO) said the depreciation of the rupee against the US dollar is affecting exports' competitiveness and the sector requires more support. "Creation of employment is the biggest challenge faced by the country...We would urge the government to provide fiscal support to units which provide additional employment in the export sector," the exporter's body said.
Batting for the worried SEZ developers who fear withdrawal of incentives in the new direct tax code, Commerce and Industry Minister Anand Sharma on Friday said his ministry would ensure that the sops continue.
Commerce Ministry has sought clarification from Finance Ministry over calculation of profits from SEZ units.
The GST Council on Saturday is expected to extend the date for IGST exemption and cess on imports
Commerce Minister Kamal Nath on Monday ruled out any differences with the finance ministry on certain provisions of the Foreign Trade Policy and said the Policy will be announced before April 10.
The finance ministry had strongly opposed the hike announced by the commerce ministry.
Earlier this year, the Union Cabinet gave the management of state-run companies the freedom to decide on divesting their subsidiaries. However, the very next day a meeting was held at the top level of the Government of India, for the presentation of proposals for more autonomy for state-run companies. Interestingly, no chiefs of any of these companies were invited. It is a problem that will stare the government in the face with the state-owned banks too, as talks have again begun for inviting strategic investments in these companies.
Samridhi Bhardwaj analyses the dynamics of duty-free liquor allowance in India.
Tata Group-owned Air India has informed the Centre that aircraft lessors wish to set up their special purpose vehicles (SPVs) outside India since they aren't enthused about the Indian 'legal structure' and are loath to take risks. Indian airlines have a combined fleet of about 700 planes; over 85 per cent are on lease. A majority of lessors are based in Ireland due to its attractive tax policy, light-touch regulations, and swift legal system.
Pakistan will buy sugar and cotton from India, newly appointed Finance Minister Hammad Azhar announced on Wednesday, lifting a ban on their import from the neighbouring country imposed in the wake of heightened tension over Kashmir in 2019. The decision was taken at the meeting of the economic coordination committee (ECC), which was chaired by Finance Minister Azhar.
Recently, the finance ministry waived off basic customs duty and health cess on imported oxygen and related equipment for three years.
"NSO is a private company, it is not a governmental project and therefore even if it is designated, it has nothing to do with the policies of the Israeli government," Israel's Foreign Minister, Yair Lapid, said at a joint press conference with Prime Minister Naftali Bennett and Finance Minister Avigdor Lieberman at the Prime Minister's Office on Saturday evening.
The government can argue the change targets only those residing abroad but the fact remains that it does affect the kin and friends in India of non-residents.
The finance ministry is considering a suggestion by the Commerce Ministry to enhance duty neutralisation rates to make up for revenue lost by exporters due to sharp appreciation in the rupee.
The recent Foreign Trade Policy announcement to waive service tax for exporters had the backing of the Prime Minister, Commerce Ministry sources said on Tuesday.
The move to resume work in ministries comes nearly a month after the government issued work from home protocols in its fight against the coronavirus pandemic.
Batting for exporters hit hard by global downturn, Commerce and Industry Minister Anand Sharma on Monday met Finance Minister Pranab Mukherjee and made out a strong case for fiscal relief for the export sector in the Budget next month.
Later, Sitharaman's office clarified that the FM had already met the industrialists, experts, and economists during the pre-budget consultations.
The expansion was the first by Sarma since he assumed chief ministership of the state about 13 months ago.
As the United States focuses on the Indo-Pacific, in particular the Quad, the Biden administration needs to address India's ties with Russia and its 'downward trend of democratic values and institutions', said a report by the Democratic Party of the Senate Foreign Affairs Committee.
But commerce ministry works on rules for exemption to contractors.
Under the scheme, also called the Export Credit Insurance Scheme, the insurance guaranteed could cover up to 90 per cent of the principal and interest.
Over 1.4 lakh jobs are estimated to be created between March 2019 and March 2021 in various central government departments, according to the Union Budget presented on Monday. The strength of government establishments was 32,71,113 as on March 1, 2019, which is estimated to increase to 34,14,226 by the first day of next month - an increase of 1,43,113, it said. The budget documents have given a break-up of the jobs estimated to be created in central government departments between 2019 and March 2021.
To address the supply crunch, CII has suggested leveraging the existing excess capacity in the Indian industry; rolling back import duty hike to look for alternative sources of imports; expanding credit to manufacturing units with quick loan sanctions, and one-time emergency waiver of non-performing asset regulations for three months.
The domestic electronic product manufacturers depend heavily on imports for hardware components like hard drive and displays.
India is one of biggest producers and exporters of agri commodities.
Sitharaman, who was holding the Commerce portfolio (Independent charge), was on Sunday promoted to the Cabinet rank as was Goyal.
The commerce ministry wants the stimulus packages for exporters to continue for some more time till the sector recovers completely.
Although India's exports have started growing again after several months of decline, commerce ministry sources told Business Standard that the extension is being considered to sustain growth and stabilise it at 15 to 20 per cent.
"In principle, the ask in return is that India should not support the G7 (Group of Seven) proposal. "A decision on this issue will be taken later following talks with all the partners," an official with the Ministry of External Affairs (MEA) said.These "substantial discounts" will be steeper than those offered by Iraq in the past two months, officials said.
In its recommendations to the finance ministry, the commerce ministry has made a strong case for helping exports, particularly in the labour-intensive sectors like leather, textile and handicrafts.
Government should make it clear as to whether the Duty Entitlement Passbook scheme will continue beyond June.
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Single-brand retailers are also allowed to take e-commerce route for such trading.
While the directorate general of foreign trade has completed consultations with the industry and exporters, it will start interacting with the different ministries like agriculture, finance, micro, small and medium Enterprises, steel and environment. Revenue department in the finance ministry holds the key for extending benefits to exporters who are facing the brunt of recession in several major economies.
In a bid to curb harassment of taxpayers, Sitharaman said, a faceless e-assessment scheme was launched in October to eliminate interface between an assessing officer and a taxpayer.
The Centre is unlikely to announce an agreement over payment mechanism with Russia until a ceasefire is declared in the Ukraine war, said people in the know. An inter-ministerial group headed by the finance ministry has been meeting regularly for over a month to analyse and discuss payment mechanisms that can work under the current circumstances and ensure the trade between India and Russia is not disrupted. The US had recently said that there would be consequences for countries actively attempting to "circumvent or backfill" American sanctions against Russia.
