India’s sugar production is forecast to grow 17% to 33.7 million tonnes in the year ended September 2021. Indian sugar mills may achieve their target of exporting 6 million tonnes of the sweetener by the end of June, three months before September
The surge in exports is mainly due to firm global prices and subsidy, which have made the overseas markets lucrative.
The government is also encouraging sugar mills to divert excess sugar and sugarcane for the production of ethanol, which is blended with petrol. This is a step towards improving the liquidity position of sugar mills, which are grappling with a cash crunch.
Steel & Iron Ore Industry
China is the world’s top steel producer and biggest consumer of iron ore, the key steelmaking ingredient. A recent spike in prices for the material, partly fuelled by supply concerns, continued with a 10% limit-up surge on Monday.
China announced a series of measures on Friday to tighten controls on steel capacity, in an effort to curb pollution in key areas as well as reduce “blind investments and disorderly constructions”. The commodity exchanges on Monday moved to raise trading limits and margin requirements for some iron ore contracts and reinstated fees on steel futures as a blistering rally in the ferrous metals complex showed no signs of stopping
India’s exports grew by 80 percent to $7.04 billion during the first week of this month. Imports too rose by 80.7 percent to $8.86 billion during May 1-7, 2021 as against $4.91 billion in the same period last year
Major export commodities which are recording healthy growth include gems and jewellery, jute, carpet, handicrafts, leather, electronic goods, oil meals, cashew, engineering, petroleum products, marine products and chemicals.
The board of directors of InterGlobe Aviation Limited, which operates the country’s largest domestic airline IndiGo has approved raising up to ₹3,000 crores through a Qualified Institutions Placement (QIP) process.
QIPs are a way to issue shares to the public without going through standard regulatory compliance.
The latest decision by IndiGo’s board of directors comes at a time when airlines are struggling with a declining passenger demand due to an unabated rise in fresh covid cases across the country.
The second wave of Covid-19 is spreading beyond urban areas to rural belts, resulting in automobile registrations across the country.
Automobile registrations across the country dropped by 32 percent last month as compared to April 2019 with passenger vehicles showing a decline of over 11 percent.
Commercial vehicles witnessed a downswing of 34.58 per cent to 51,436 registrations versus 78,630 in the same period.
Two-wheeler registrations totaled 8.65 lakh last month compared to 13.38 lakh in April 2019, marking a downturn of 35.35 percent. Passenger vehicle registrations edged lower by 11.56 percent to 2.08 lakh from 2.36 lakh in the two-year-ago period.
However, tractor registrations rose by 3.52 percent to 38,285 last month compared to 36,984 in April 2019. That took overall vehicle registrations to 11.85 lakh in April 2021, down 31.83 percent from 17.38 lakh in April 2019.
Foreign Trade Policy:
The government on Wednesday extended the existing foreign trade policy (FTP) for six more months amid the coronavirus outbreak. The current policy will now be valid up to September 30, 2021.
The foreign trade policy is essentially a set of guidelines for the import and export of goods and services.
Covid-19 was catastrophic for international trade. Exports during April-February this fiscal dipped by 12.23% to $256 billion. Imports during the period too declined by 23.11% to $340.8 billion, leaving a trade deficit of $84.62 billion. The country mainly exports petroleum oils (13.2%), diamonds (6.8%), medicaments (4.5%), articles of jewelry (4.2%), and motor vehicles (2.2%), while it imports petroleum oils (21.3%), gold (6.5%), coal and similar solid fuels (4.7%), diamonds (4.6%), petroleum gas and other gaseous hydrocarbons (3.6%).
Gold imports rose by 22.58% to USD 34.6 billion (about Rs 2.54 lakh crore) during 2020-21 due to increased domestic demand. The demand for gold would further increase on account of forthcoming auspicious Akshaya Tritiya and marriage season
The government is likely to waive a 10% customs duty levied on imported vaccines in a bid to keep low the cost of overseas vaccines that are being eyed to supplement domestically made shots ahead of opening COVID-19 vaccination to all citizens over 18 years of age. The government presently levies 10% customs or import duty plus a 16.5% IGST and social welfare surcharge on vaccines coming from overseas.
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Expectations from FTP 2021-2026
- A long-standing demand of exporters, especially MSMEs, is credit access. Formal financial institutions such as banks are reluctant to lend to MSMEs due to their lack of adequate collateral. The policy can help open up alternate credit avenues, such as financial technology start-ups.
- The advisory group suggests raising borrowing limits at the Export-Import Bank of India.
- If India were to do away with subsidies, exporters would still need some form of government support. Easier and lower taxes are a way of filling this gap. The reduction of corporate tax rates and simplification of duty structures are long-standing demand
- The existing FTP focuses on the Merchandise Exports from India Scheme (MEIS), an incentive scheme, where exporters receive duty credit scrips for a percentage of the value of the goods exported.India has decided to withdraw the MEIS and replace it with a Remission of Duties or Taxes on Export Products (RoDTEP) scheme.
1. Vi 5G Rollout, Fund Raising
Vodafone Idea Ltd (Vi) on Monday said it is prepared for the rollout of 5G wireless service and plans to fold up its 3G services by FY22 as it bids to move towards becoming a 4G-focussed telco in a bid to boost revenue, although it would keep its 2G services running for years given that it has a large segment of basic phone subscribers.
The cash-strapped telco had announced its fundraising plans in September 2020. It’s in active discussions with potential investors for proposed fundraising of up to ₹25,000 crores in debt and equity. a consortium led by US-based Oaktree Capital, including a few other private equity firms such as Varde Partners, has proposed investing up to $2.5 billion in Vi through hybrid debt papers.
The consortium is said to have offered $2-2.5 billion of capital to the Birla group company that faces tens of billions of rupees in government dues.
2. Four Government Banks Shortlisted for privatisation
The government has shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues.
The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India. Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April.
The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years, it could also look at some of the country’s bigger banks. However, the government will continue to hold a majority stake in India’s largest lender State Bank of India, which is seen as a ‘strategic bank’ for implementing initiatives such as expanding rural credit.
3. Amazon sought $40 million to let Future-Reliance deal proceed
American e-commerce giant Amazon sought $40 million from Future Retail in exchange for the Future Group and Reliance Industries going ahead with the “disputed transaction”.
In August 2020, over two phone calls … Abhijeet Mazumdar on behalf of the claimant… asked for $40 million as compensation in exchange for the Future Group and Reliance proceeding with the disputed transaction,” a document submitted by the Future Group to the arbitrator in late 2020 said.
Amazon, which owns a 49 percent stake in Future Coupons, an unlisted company, has challenged the Future Group-Reliance Retail deal, claiming it did not consent to such a transaction. It said the deal breached some existing agreements
- The chief investment officer of SBI Funds Management Navneet Munot has resigned from the organization and is set to join HDFC Mutual fund as MD & CEO. HDFC Mutual Fund has announced that its board of directors had given their final nod to the appointment of Navneet Munot as its next managing director and chief executive officer. He will be succeeding the present managing director Milind Barve said HDFC Mutual Fund in a filing to the stock exchanges.
- The Tata Group and Singapore Airlines promoted Vistara sees a top-level exit with its Chief Information and Innovation Officer Ravinder Pal Singh resigning from the airline. He will be leaving the organization on 15th January 2021. This would be a second top level exit in the airline in a little over a year. In December 2019, its then Chief strategy and commercial officer Sanjiv Kapoor had resigned from the airline. Kapoor was replaced by Vinod Kannan, who took responsibilities of key revenue functions of the airline.
- US President-elect Joe Biden on Thursday (local time) announced a USD 1.9 trillion plan to revive the country’s economy and combat the coronavirus. The team said that Biden’s USD 1.9 trillion ‘American Rescue Plan’ is ambitious, but achievable, and will rescue the American economy and start beating the virus. The Biden plan will ask Congress to approve up to USD 400 billion to combat the novel coronavirus so it can establish community vaccination sites across the United States and boost testing and tracing. The plan has also proposed to provide eligible individuals with USD 1,4000 in stimulus payments. The plan seeks to provide USD 130 billion to help US schools safely reopen within the first 100 days of Biden’s presidency.
- Swiss multinational investment bank UBS Group AG is pursuing to invest $400 million in India’s most valuable startup Paytm. A fund run by UBS’s asset management arm is in talks to buy a stake in Paytm. UBS is reportedly negotiating the purchase of Paytm stock from a group of Indian fintech company employees. While UBS wishes to finalise an agreement in the month of January itself, talks could still be delayed or fall apart. Paytm however isn’t raising any new capital as part of the deal. Both Paytm and UBS have declined to comment on the matter.
- Nokia on Thursday partnered with Alphabets Google Cloud unit to build 5G core network infrastructure and allow business customers to offer services such as smart retail and automated manufacturing. While Nokia will bring its 5G expertise, Google Cloud will serve as the platform for launching applications and assist customers in building an ecosystem of services.
- IDFC First Bank is offering a credit card allowing cash withdrawal and interest-free. The lender is set to levy finance charges at an annual rate of 9% for the best-rated customer, climbing up to 36% for lower-rated customers. Generally, the annual percentage rate for other banks ranges from 34-40%. Customers can also use interest-free cash withdrawal facilities at ATMs of up to 48 days. They will have to pay a nominal fee of Rs 250 per transaction against Rs 500 charged and interest charges levied by other major lenders. Currently, the credit card membership is only open to existing IDFC First Bank customers and will be thrown open to others from April 2021. The bank will offer a standard reward point structure with 10X reward points for incremental spends of over Rs. 20,000 in a billing cycle and 3X reward points on all spends, 6X on all online spends. There will be no cap or expiry on the reward points earned by the customer. The bank is also offering dynamic interest rates starting at 9% based on the customer’s credit assessment.
- Ed-tech startup Unacademy, which was recently valued at $2 billion, said its top investors Tiger Global, Dragoneer Investment Group, Steadview Capital and General Atlantic have bought another $50 million worth of shares in the firm from existing investors through a secondary share sale. In a secondary share sale, the money does not come to the company but goes to the investors selling their stake.
- India’s biggest automakers are yet to take a call on the quantum of price increase they will take on their popular models in the aftermath of significant input cost pressures, with the mass-market leader Maruti Suzuki launching a ‘price protection scheme’ to give its cars at old prices to customers. Carmakers have confronted elevated pricing pressures as a result of BS-VI emission conversion, security rules and rising input costs.
- The Internet and Mobile Association of India (IAMAI) on Thursday said that it has appealed to the government to reduce TDS on e-commerce platforms to 0.25 percent from 1 percent to give much-needed relief to small sellers in the Union Budget 2020-21. IAMAI had earlier shared with the authorities an illustration that suggested for merchants who have a turnover of up to Rs 1.25 crore, 1 percent TDS under the new provisions would exceed their total tax liability, resulting in an unnecessary refund position.