Samsara Newsletter

Week 15, 2022 (Apr 09 – Apr 15)

Policy & Economy News

India's GDP Expected To Grow 9% in FY22, May Clock Over 8% Growth in FY23: PHDCCI

Ease of doing business: Govt eases norms under export incentive scheme

Business News - The India Boom Factor

Exports begin new fiscal with a bang

India to export 30-35 lakh tonnes of Wheat in April-July: Food Secretary

Trade Agreements signed with Australia and UAE will open infinite opportunities: Piyush Goyal

India, Malaysia vow to deepen ties, intensify cooperation in various fields

Shipping News

Govt facilitating foreign/private investment in maritime sector: Minister

Kerala Maritime Board plans big-ticket projects to improve infrastructure

Logistics News

Air cargo demand up

Indian Port News

Vizag port handles 69 million tonnes cargo

JNPA highlights its projects as the Sagarmala programme completes 7 years

DP World, JSW Infra, JM Baxi & Bollore Africa Logistics bid for box terminal tender at VOC Port

Policy & Economy News

India's GDP Expected To Grow 9% in FY22, May Clock Over 8% Growth in FY23: PHDCCI

Nerws18 – April 11 Top
India's gross domestic product (GDP) is expected to have grown nine per cent in the financial year 2021-22, which is the highest among the leading economies, and the growth is likely to be over eight per cent in the current financial year, according to the PHD Chamber of Commerce and Industry. "India's growth trajectory is expected to remain steady in 2022-23, supported by various dynamic reforms undertaken by the government during the past two years," Pradeep Multani, president of PHD Chamber of Commerce and Industry, said in a statement on Monday.

He added that among the major worrying factors in 2022-23 are geopolitical conflicts, high inflation and renewed coronavirus variants. "At this juncture, the percolation of ease of doing business at the factory level would go a long way to enhance the size of the economy to USD 5 trillion by 2026-27."

Industry body PHDCCI in its report, titled 'Economy to Resume Normal Growth Curve in 2022-23', envisaged that the nominal GDP will grow at 12-12.5 per cent (8 per cent real GDP and 4-4.5 per cent inflation) in the current financial year and the economy will attain a size of USD 3,350-3,400 billion in 2022-23."

The size of the economy is expected to touch USD 5 trillion by 2026-27, said the report adding that the agriculture and food processing sector has emerged as one of the most prominent sectors to achieve the goal. "The sector is growth promising both in production and exports."

The nominal GDP is expected to grow at more than 12 per cent (average) in the next five years, said the report. However, the inflation scenario has been stoked by rising international commodities prices particularly crude oil prices.

Multani said Indian economy is expected to remain resilient despite geopolitical conflicts that are likely to undermine the world GDP growth by 0.5 percentage points. This is due to the Indian economy's "inherent strengths, strong economic fundamentals and growth promising sectors".

The industry body has suggested a 10-prolonged strategy to strengthen the economic growth and to achieve USD 5 trillion in the next five years by 2026-27.

The report said that refueling of consumption demand will have a multiplier effect on production possibilities, private investments and employment creation. "Accommodative policy stance should be continued by the RBI to strengthen the growth till it becomes more strong and sustainable."

It added that speedy infrastructure investments give a multiplier effect and the robust growth of infrastructure is the key ingredient to realize the vision to become Atmanirbhar Bharat.

"PLI scheme will become more robust — more and more sectors should be covered under the PLI scheme. PLI scheme has to be instrumental in accelerating domestic manufacturing capabilities and strengthening economies of scale," it added.

Level-playing field for the Indian industry should be focused on the competitiveness of enterprises. Free-trade agreements must be looked into the scenario of market access opportunities in the destination economies.

It said that the economy should be supported with continued reforms for the businesses, particularly for the MSMEs and agriculture sectors.

It also urged the government to increase public investments in the agriculture sector, address the high commodity prices and shortages of raw materials, reduce the costs of doing business, and decriminalize minor offences.
Ease of doing business: Govt eases norms under export incentive scheme

The Economic Times – April 15 Top
In a move to reduce compliance burden and facilitate ease of doing business, the government has relaxed certain procedures under the Export Promotion Capital Goods (EPCG) scheme that allows duty free capital goods imports subject to an export obligation.

Exporters have to export finished goods worth six times of the actual duty saved in value terms in six years.

As per the changes notified by the commerce and industry ministry, requests for export obligation extension should be made within six months of expiry instead of the earlier prescribed period of 90 days. However, applications made after six months and upto six years are subject to a late fee of Rs 10,000 per authorization.

The changes also include annual reporting of export obligation (EO) by June 30 every year instead of April 30 with specified information but any delay would be subject to a late fee of Rs 5,000.

"With a view to enhance ease of doing business and reduce complaince burden, certain provisions of chapter 5 related to the EPCG scheme of the Handbook of procedures (2015-20) are amended for EPCG authorizations issued under Foreign Trade Policy (2015-20)," the Directorate General of Foreign Trade said in a public notice.

Further, requests for block wise export obligation extension need to be made within six months of expiry but applications made after six months and upto six years are subject to a late fee of Rs 10,000 per authorization.

Applications made after six years will be subject to a fee of Rs 5,000 per year. Earlier, no specified time limit was prescribed leading to discretionary interpretations.

Further the facility to pay customs duty through scrips (MEIS/RoDTEP/RoSCTL) for default under EPCG has been withdrawn.

Business News - The India Boom Factor

Exports begin new fiscal with a bang

Exim News Service: New Delhi, April 11 Top
India's exports grew by 37.57 per cent to a value of $9.32 billion, while imports were up by 8.29 per cent during April 1-7, 2022, according to preliminary data from the Commerce Ministry.

Exports excluding petroleum increased by 24.32 per cent. Merchandise exports had soared to a record high of $418 billion in the 2021-22 fiscal on higher shipments of petroleum products, engineering goods, gems and jewelry and chemicals, as per a report.

India to export 30-35 lakh tonnes of Wheat in April-July: Food Secretary

Daily Shipping Times – New Delhi, April 11 Top
Traders have entered contracts for the export of 30-35 lakh tonnes of wheat during the April-July period, buoyed by increasing demand for the commodity in the world market, Food Secretary Sudhanshu Pandey said recently.

The country's wheat exports crossed 70 lakh tonnes in 2021-22 as against 21.55 lakh tonnes in 2020-21, according to the official data.

"The trade estimate is that about 30-35 lakh tonne of wheat has been contracted for export during the April-July period of this year," Pandey told reporters.

The maximum quantity of wheat will be shipped from Gujarat, Rajasthan and Madhya Pradesh because of proximity of these states to ports and easier logistics, he told reporters.

As a result, private traders are procuring wheat for export from these states. If international prices rise further, traders may buy the grain from other states like Haryana and Uttar Pradesh, he said.

With private trade procuring wheat for export, there may be reduction in government procurement but it is too early to say. The government is, however, monitoring the situation regularly, he added.

Last week, Commerce and Industry Minister PiyushGoyal had said that the country's wheat exports could cross 100 lakh tonnes during the 2022-23 fiscal.

Many countries are sourcing wheat from India and other countries after Russia's invasion of Ukraine and the subsequent Western sanctions against Moscow curtailed their wheat supplies.

Indian Government plans to promote wheat exports to cash in on higher wheat prices in the global market. India is the second-biggest producer of wheat in the world.

Trade Agreements signed with Australia and UAE will open infinite opportunities: Piyush Goyal

IBEF - April 13 Top
Union Minister of Commerce and Industry, Consumer Affairs, Food, Public Distribution, and Textiles, Mr. Piyush Goyal, said that new Economic Cooperation and Trade Agreements with Australia and the United Arab Emirates would provide Textiles Handloom and Footwear with limitless potential. He stated that Indian textile exports to Australia and the United Arab Emirates would be duty-free. He expressed optimism that Europe, Canada, the United Kingdom, and the Gulf Cooperation Council countries would soon follow suit.

Trade agreements will help increase exports from labour-intensive businesses. He went on to say that India must be open to obtaining new technologies, rare minerals, and raw resources that are in short supply in India at reasonable prices from the rest of the globe. This will only enhance our output, productivity, and quality, resulting in increased demand for our products worldwide, he said.

He also stated that the Indian textile industry has the potential to export US$ 100 billion by 2030. He praised CITI-CDRA for directly engaging roughly 90,000 cotton farmers in developing a robust cotton ecosystem. He stated that our textiles must become a symbol of Quality, Reliability, and Innovation to achieve atmanirbharta in the textiles sector.

It should be mentioned that India's textile sector accounts for roughly 10% (US$ 43 billion) of the country's overall merchandise exports. According to the Minister, India is the world's largest cotton producer, accounting for 23% of worldwide production and employing 65 lakh people directly and indirectly.

India, Malaysia vow to deepen ties, intensify cooperation in various fields

IBEF - April 13 Top
India and Malaysia reviewed their whole range of bilateral relations and expressed hope for a faster recovery in the post-Covid period, taking into account both sides' shared determination to increase collaboration in a wide range of areas.

According to the statement, the Foreign Office Consultations gave an opportunity to assess the full range of bilateral relations as well as exchange opinions on current regional and global problems of mutual concern. Both sides expressed satisfaction with the developing economic and commercial ties and voiced hope for a faster rehabilitation of relations in the post-Covid period, the statement said, citing both sides' shared determination to further increase cooperation in a wide range of areas.

The two sides decided to work together to reactivate bilateral mechanisms in various areas and present the outcomes at the next Joint Commission Meeting at the ministerial level, which will be held on mutually agreeable dates.

Shipping News

Govt facilitating foreign/private investment in maritime sector: Minister

Exim News Service: New Delhi, April 11 Top
Union Minister for Ports, Shipping & Waterways, Mr Sarbananda Sonowal, highlighted in Parliament that several measures have been introduced by the government to attract foreign/private investment in the Indian maritime sector.

He pointed out that bidding documents like Request for Qualification (RFQ), Request for Proposal (RFP) and Model Concession Agreement (MCA) have been standardised. The MCA has also been revised time to time to adapt to the dynamic business environment.

Up to 100% Foreign Direct Investment (FDI) under the automatic route is allowed for port development projects. Besides, income-tax incentives are allowed as per Section 80-IA of Income Tax Act, 1961 - 100% income tax exemption available for a period of any 10 consecutive assessment years out of fifteen years beginning from the year in which the enterprise starts the development or operation and maintenance of the infrastructure facility.

Consequent upon the Major Port Authority Act, 2021 coming in force, new PPP concessionaires now have the liberty to frame their own scale of rates for any/all services (including combination of services) they perform/provide to their users/customers.

Various technological/digital processes have been introduced to maintain smooth functioning without human interference viz. E-invoice, E-payment and E-DO at PCS1x.

The formation of SAROD-Ports aims at enhancing confidence of the concessionaire and promoting ease of doing business in the maritime sector.

It was also pointed out that currently there are 46 PPP projects, at an estimated investment of Rs 36,765.58 crore (Rs.367.6 billion), at the Major Ports. Under the Sagarmala Programme, there are 123 PPP projects at an estimated investment of Rs 2.63 lakh crore (Rs.2.6 trillion). Of these, 29 projects with investment of Rs 44,961 crore (Rs.449.6 billion) have been completed and 31 projects worth Rs 50,942 crore (Rs.509.4 billion) are under implementation. The remaining projects are at various stages of development, informed a release.

Kerala Maritime Board plans big-ticket projects to improve infrastructure

India Seatrade News - April 11 Top
The Kerala Maritime Board (KMB) is planning to implement a slew of projects to improve the coastal infrastructure so that the state can reap the benefits of Vizhinjam Deepwater Sea Port, which is expected tobe commissioned in May 2023.

The Prism Online Investors' Meet was held on Wednesday towards achieving this goal, said KSEB former chairman NS Pillai, who took over as the chairman of Kerala Maritime Board on Thursday.

As many as 120 investors from countries like the UAE, Qatar and Malaysia and NRI investors attended the meet, in which the port department announced a slew of projects the state plans to develop through public private partnership or revenue-sharing model.

The projects include establishment of ship building and ship repair yards, dry docks, offshore wind energy projects, water sports and tourism projects. "The Kerala Maritime Board has got infrastructure facilities at Neendakara in Kollam, which can be utilised to start a maritime institute. The Kerala Maritime Academy can impart skill-based training. We are planning to explore the coastal and marine resources to tap the potential of blue economy," said Pillai.

"There is a mechanical engineering workshop at Kollam port which we want to develop into a ship repairing yard. There is tremendous scope for a repairing yard catering to small ships. Another project is to establish a ship building yard at Poovar in Thiruvananthapuram. There is immense potential for the yard as the opening of Vizhinjam port will bring new opportunities. In Ponnani, there is potential for a floating terminal and cruise vessels can be operated from here," said PT Joy, private secretary to Ports Minister Ahamed Devarkovil.

Logistics News

Air cargo demand up

Exim News Service: New Delhi, April 12 Top
The International Air Transport Association (IATA) has released data for global air cargo markets showing that demand increased in February 2022 despite a challenging operating backdrop.

It said in a release that several factors benefited air cargo in February compared to January. On the demand side, manufacturing activity ramped-up quickly after the early February Lunar New Year holiday. Capacity was positively influenced by the general and progressive relaxation of Covid-19 travel restrictions, reduced flight cancellations due to Omicron-related factors (outside of Asia), and fewer winter weather operational disruptions.

IATA has now returned to year-on-year traffic comparisons, instead of comparisons with the 2019 period, unless otherwise noted. Cargo demand is tracking above pre-Covid-19 levels, although capacity is still constrained.


    * Global demand, measured in cargo tonne-kilometres (CTKs), was up 2.9% compared to February 2021 (2.5% for international operations).

    * Adjusting the comparison for the impact of the Lunar New Year (which can cause volatility in reporting) by averaging January's and February's performance, demand increased 2.7% year-on-year. While cargo volumes continued to rise, the growth rate decelerated from the 8.7% year-on-year expansion in December.

    * Capacity was 12.5% above February 2021 (8.9% for international operations). While this is in positive territory, compared to pre-Covid-19 levels capacity remains constrained, 5.6% below February 2019 levels.

    * Several factors in the operating environment should be noted:

    * General consumer price inflation for the G7 countries was at 6.3% year-on-year in February 2022, the highest since late 1982. While inflation normally curtails purchasing power, this is balanced against higher savings levels coming out of the pandemic.

    * The Purchasing Managers' Index (PMI) indicator tracking global new export orders fell to 48.2 in March. This was the lowest since July 2020 indicating that a majority of surveyed businesses reported a fall in new export orders.

    * The zero-Covid policy in mainland China and Hong Kong continues to create supply chain disruptions as a result of flight cancellations due to labour shortages, and because many manufacturers cannot operate normally.

    The impact of Russia's invasion of Ukraine had limited effect globally on February's performance as it occurred very near the end of the month. The negative impacts of war and related sanctions (particularly higher energy costs and reduced trade) will become more visible from March, the release informed.

    "Demand for air cargo continued to expand despite growing challenges in the trading environment. That is not likely to be the case in March as the economic consequences of the war in Ukraine take hold. Sanction-related shifts in manufacturing and economic activity, rising oil prices and geopolitical uncertainty will take their toll on air cargo's performance," said Willie Walsh, IATA's Director General.

Indian Port News

Vizag port handles 69 million tonnes cargo

DECCAN CHRONICLE – Visakhapatnam, April 9 Top
Visakhapatnam Port handled 69.03 tonnes of cargo during the last financial year as against 69.84 million tonnes during the corresponding period of previous year. This was one per cent less due to the Covid-19 pandemic, said Visakhapatnam Port Authority chairman K. Rama Mohan Rao.

Addressing a press conference here on Friday, the chairman said Vizag port ranked fourth among the major ports after Paradeep, Kandla and JNPT and second in east coast in terms of volume of cargo handled. This was despite stiff competition from the private port next door which handled around 40 million tonnes.

He said the port handled 70.05 lakh tonnes of steam coal, 38 per cent more than the previous financial year. Thermal coal was 25.9 lakh tonnes, 100 per cent more than the last year and 85.83 lakh containers five per cent more than the previous year.

There was a decline in handling of crude oil which was 142.49 lakh tonnes, 11 per cent less than the previous year, iron ore and pellets 145.59 lakh tonnes, 23 per cent less than the previous year and coking coal was 44.28 lakh tonnes, 18 per cent less than the last financial year.

"We hope to reach 71 million tonnes during the current financial year. We have tied up with Anrak which would import bauxite from South Africa and crude import that would increase after HPCL completes its expansion,'' the chairman said.

He said the port invested Rs 3,769 crore (Rs.37.6 billion) on expansion projects, most of which have been completed. Among them the fishing Harbour is being upgraded as a world class facility with an investment of Rs 150 crore (Rs1.5 billion).

JNPA highlights its projects as the Sagarmala programme completes 7 years

Exim News Service: Mumbai, April 10 Top
Jawaharlal Nehru Port Authority (JNPA), India's premier container port, organised a media meet on Friday, chaired by Mr Sanjay Sethi, IAS, Chairman, JNPA, in the presence of Mr Unmesh Sharad Wagh, IRS, Deputy Chairman, on the completion of seven years of Sagarmala - the flagship programme of the Ministry of Shipping initiated by the Government of India in 2015. JNPA has undertaken various projects aligning with the five pillars of the Sagarmala Programme - Port Modernisation & New Port Development, Port Connectivity Enhancement, Port-Led Industrialisation, Coastal Community Development and Coastal Shipping, highlighted a release.

The Sagarmala initiative has successfully enabled Indian ports to handle large volumes by making them more efficient and reducing the turnaround time of containers. Numerous projects have been undertaken across various categories such as port modernisation, rail, road, cruise tourism, RoRo, RoPax, fisheries, coastal infrastructure and skill development. Due to the immense potential in Maharashtra's coastal region, 131 projects worth Rs 1.05 lakh crore (Rs.1.05 trillion) have been proposed to be implemented in the state.

Mr Sanjay Sethi said, "JNPA plays a pivotal role in the government's initiative of Sagarmala to boost the port-led industrialisation. JNPA has multiple projects under Sagarmala based on the following: to change dynamics & reduce logistics costs in India, boost overall economic development through ports, and empower coastal communities…

"Acting as the major catalyst for the trade and shipping industry, JNPA's projects like the fourth container terminal, JNPA SEZ, Dry Ports at Wardha and Jalna, additional liquid cargo jetty and many more will foster the port's ease of doing business and take Indian Ex-Im trade to greater heights," he added.

JNPA Projects

JNPA Container Top
Terminal 4 – Phase I Bharat Mumbai Container Terminals Pvt. Ltd (PSA) was awarded the development of the Fourth Container Terminal on DBFOT basis through a Concession Agreement in May 2014.

Project Features: The project comprises two phases -1,000 m quay length, dredging of manoeuvring area, 90 Ha. reclamation for railyard, stackyard with 12 RMQCs, 36 RTGCs and 4 RMGCs generating capacity of 2.4 million TEUs each (total of 4.8 m TEUs). The cost of Phase I was Rs 4,719 crore (Rs.47.1 billion)

As per schedule, the work of Phase I was completed in December 2017 and put into operation with a capacity of 30 MTPA.

Project Cost: Rs 4,719 crore (Rs.47.1 trillion). Impact: Capacity Addition by 2.4 Million TEUs per annum. No waiting period for vessel berthing. More terminal operators provide more options for the Ex-Im trade.

JNPA Container Terminal 4 - Phase II
Project Features: Phase II has an additional 2.4 m TEUs (30 MTPA). The work is likely to commence by April 2022 and get completed by April 2025.

Project Cost: Rs 3,196 crore (Rs.31.9 billion). Impact: Capacity addition by 2.4 million TEUs per annum; no waiting period for vessel berthing; more terminal operators provide more options for the Ex-Im trade.

Development of SEZ at JNPA
In line with the objective of port-led industrialisation, JNPA has developed the basic infrastructure facilities in the SEZ by investing around Rs 565 crore (Rs.5.6 billion) in the project. In the Processing Area, all activities as per SEZ Acts & Rules are permissible like manufacturing, logistics, warehousing, trading, IT/ITES services, etc.

Project Features: It is incorporated in the Land-use Plan of the port and would be developed on 277.38 Ha of freehold land of JNPA.

Project Cost: Rs 565 crore (Rs.5.6 billion) Impact: Generation of Rs 10,000 crore (Rs.100 billion) investments; job creation direct & indirect - more than 10,000.

Construction of Coastal Berth
Project Features: The capacity of the berth is 2.5 MTPA, L.O.A. 250 m and it can berth 30,000 DWT vessels, Depth11 m. The coastal berth will cater to the coastal movement of cement and edible oil under the new policy, in which a green channel is provided for coastal cargo, which is not possible in the Customs notified area.

Project Cost: Rs 170.32 crore (Rs 1.7 billion) Impact: Reduced dependence on rail and road; lower fuel consumption; cheaper mode of transport; eco-friendly mode.

During the conference, a video and presentation on the numerous projects undertaken by JNPA under the Sagarmala programme were made to the media, followed by an interactive session with the Chairman.

Maritime infrastructure plays a vital role in the nation's economy; aligning with the Maritime India Vision 2030, Sagarmala initiatives will further boost infrastructure and drive investments to improve regional connectivity to aid trade. They will further enable the ports to meet global standards and play a crucial role in bolstering India's economic development, the release emphasised.

DP World, JSW Infra, JM Baxi & Bollore Africa Logistics bid for box terminal tender at VOC Port

India Seatrade News - April 14 Top
Dubai-based port operator DP World Ltd, JSW Infrastructure Ltd, International Cargo Terminals and Infrastructure Pvt Ltd (J M Baxi Group) and a consortium led by Bollore Africa Logistics SAS have placed price bids on a global tender issued by Centre-owned V O Chidambaranar Port Authority for converting a bulk cargo berth at the port into a container terminal.

Notably, Adani Ports and Special Economic Zone Ltd (APSEZ) backed out of the tender without placing a price bid when the deadline ended on Wednesday, VOC Port officials said. This is one of the rare instances when APSEZ decided not to bid for a cargo handling tender issued by a public port authority.

Singapore's PSA International Pte Ltd, Essar Ports Ltd and Bothra Shipping Services Pvt Ltd also opted out of the race at the price bid stage.

Typically, price bids are opened on the day they are submitted to reveal the name of the highest bidder. But, for this tender, the price bids will be opened by the port authority after receiving security clearance for the bidders from the Centre, a mandatory requirement for port tenders.

The security agencies at the Centre are yet to grant clearance to the bidders that have qualified to bid, VOC Port officials said.

PSA International's decision to back out of the tender without placing a price bid is surprising, given that the Singapore-based port operator had secured approval from a court in Tamil Nadu to bid after it was disqualified by VOC Port Authority citing multiple adverse court orders against it.

The order by the Madurai bench of the Madras High Court led the Centre-owned port authority to annul its earlier decision to disqualify the Singapore-based port operator.

PSA Sical Terminals Ltd, the entity that has been running the container terminal from Berth No 7 at VOC Port since 1998, owes some Rs 1,250 crore (Rs.12.5 billion) in royalty arrears to the port authority.

On January 20, VOC Port issued a termination notice on the terminal operator following an adverse ruling by the Madras High Court on January 19 on a petition brought by the entity seeking to settle royalty payment issues.

PSA Sical is 51 per cent owned by PSA International Pte Ltd, a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.

The privatisation of Berth No 9 into a container terminal with an investment of Rs 434.17 crore (Rs.4.3 billion) will boost VOC Port's container handling capacity by 6 lakh twenty-foot equivalent units (TEUs) a year to 1.8 million TEUs a year.

The consortium comprising Bollore Africa Logistics, India Ports and Logistics Pvt Ltd and Highgate Terminals Pvt Ltd was also excluded by VOC Port Authority from the tender but the decision was overturned by the Madurai bench of the Madras High Court.

India Ports and Logistics is a joint venture 51 per cent owned by Star Ports Ltd, a unit of Mumbai-listed Starlog Enterprises Ltd (earlier known as ABG Infralogistics Ltd) and 49 per cent by Bollore Africa Logistics.

Cumulatively, Bollore Africa Logistics will hold a 63 per cent stake in the bidding consortium for the VOC Port tender.

The same consortium also runs the Dakshin Bharat Gateway Terminal Pvt Ltd from Berth No 8, one of the two container terminals operating at VOC Port.

The Dakshin Bharat Gateway Terminal will now come under the majority control of Geneva-based Mediterranean Shipping Co S A after it signed an agreement on 1 April to buy 100 per cent of Bollore Africa

Logistics, the African transport and logistics business of Bollore SA, for 5.7 billion euros ($6.3 billion) including debt, in a global deal.

MSC has agreed to go head with a price bid for the tender that closed on Wednesday after acquiring Bollore Africa Logistics, sources said