China emerges as a major destination for engineering exports

China has emerged as a major destination for engineering exports, occupying its place among the top four ports of call for the Indian shipments , hugely steered by non-ferrous metals, an EEPC India data analysis for August shows.
In fact, China accounted for the maximum and whopping 266 per cent growth in India's engineering exports in August to $257 million against a meagre $70 million a year ago.
It has come to occupy the fourth largest destination for the engineering exports, thanks to a scorching pace of its imports of non-ferrous metals from India. Though the USA remains India's number one destination for engineering exports at $782 million , logging in year on year growth of 34 per cent in August,2017, expansion in shipments to China were unmatched by another country, the EEPC India analysis showed.
Boosted by expansion of its economy, China's imports of engineering goods from India were largely accounted by non-ferrous metals. Of the total engineering shipments of $257 million , this segment accounted $150 million for the month under review , said EEPC India chairman Mr T S Bhasin.

Engineering Exports

Export logs 6-month high growth of 25.6% in September

India's export soared by 25.67 per cent to USD 28.61 billion in September, logging its highest growth in last six months on the back of expansion in shipments of chemicals, petroleum and engineering products, official data released today said.
This is the highest export growth rate since March 2017 when shipments grew by 27.5 per cent.
Import too rose by 18.09 per cent to USD 37.6 billion in September from USD 31.83 billion in the year-ago month, according to the data released by the commerce ministry.
Trade balance stood almost flat at USD 8.98 billion in September 2017 against USD 9 billion in September 2016.
Commerce minister Suresh Prabhu in a tweet said, "Indias growth story is back! Exports grow by 25.6% in September 2017 as compared to September 2016." During September 2017, all the top ten commodity groups of export exhibited positive growth over September 2016 comprising 82.14 per cent share in total exports, he tweeted further.
The trade data showed a decline of 5 per cent in gold import at USD 1.71 billion in September 2017. Oil and non-oil imports grew by 18.47 per cent and 17.98 per cent to USD 8.18 billion and USD 29.4 billion, respectively in the month.
Cumulative exports during April-September 2017-18 increased by 11.52 per cent to USD 147.18 billion, while imports grew by 25.08 per cent to USD 219.31 billion, leaving a trade deficit of USD 72.12 billion. "In continuation with positive growth exhibited by exports for the last thirteen months, exports during September 2017 have shown growth of 25.67 per cent in dollar terms," the commerce ministry said in a statement.
Commenting on the data, exporters body FIEO said that the growth rate would further increase in the coming months as the government has addressed their concerns related with the Goods and Services Tax (GST).
"Though global uncertainties, rupee volatility and protectionism are still some of the major hurdles to our current growth in exports," Federation of Indian Export Organisations (FIEO) President Ganesh Gupta said in a statement. He also expressed hope that the country's exports would touch USD 310 billion by the end of the current fiscal.
In September, petroleum, engineering and chemicals exports grew by 37 per cent, 44.24 per cent and 46 per cent, respectively.
However, sectors which recorded negative growth includes handicrafts, iron ore, and fruit and vegetables.

PM Modi promises steps to reverse GDP slowdown, lashes out at critics

NEW DELHI: Lashing out at critics of his economic policies, Prime Minister Narendra Modi on Wednesday said the Indian economy was on firm footing and that he will never jeopardise the country's future for immediate gains.
In an over hour long speech, punctuated with sharp comments and comparisons with track record of previous UPA regime, Modi told a gathering of company secretaries that his government will continue reforms and will not hesitate to take decisions to reverse the GDP slowdown witnessed in the last two quarters.
In the same vein, he said his government will graciously accept criticism on economic front and will make amends wherever necessary.
Inaugurating the Golden Jubilee Year Celebrations of the Institute of Company Secretaries of India (ICSI), Modi said he has asked the GST Council to identify bottlenecks and technological hurdles faced by businesses especially small and medium enterprises.
"I will not jeopardise the future of the country for my present gains," he said, adding the government would focus on structural reforms rather than giving doles to win praises.
Modi said his critics were seeing slowdown in the last two quarters but were ignoring the fact that the BJP government had brought down inflation from 10 per cent in the UPA regime to 2.5 per cent, shrunk Current Account Deficit to near 1 per cent from 4 per cent and brought down fiscal deficit to 3.5 per cent from 4.5 per cent.
GDP growth was 5.7 per cent or less than that on eight occasions during previous UPA government, he said, lamenting how pessimists were describing the April-June growth of 5.7 per cent as doomsday.
Modi made comments days after senior BJP leader Yashwant Sinha in an article headlined "I need to speak up now", described the economy as a "mess" that will not resuscitate before the next general elections.
"The government is committed to reverse this trend ... we are capable of that and ready to take decisions," Modi said, adding the decisions taken by the government will take India to a new growth trajectory.
Noting that his government has been criticised on economic front, Modi said: "We are a sensitive government. We accept the strongest criticism and we have considered them with humility ... 125 crore people have expectation of high growth".
Quoting the RBI, the prime minister said the growth is expected to improve to 7.7 per cent in the last quarter of the fiscal.
According the RBI, the economic growth, which had slipped to 5.7 in the first quarter, is likely to improve to 6.4 per cent in second, 7.1 per cent in third and 7.7 per cent in the last quarter.
Observing that the number of EPFO subscribers has gone up from 3.26 crore in 2014-end to 4.80 crore, the prime minister said this cannot happen without increase in job creation.
Modi further said the NDA government in the last three years has undertaken 87 reforms in 21 sectors and the country has come out of "policy paralysis" to become a nation of "policy maker and policy implementor".
The prime minister said there was a time when India was part of 'fragile-5' and the BJP government pulled it out to make it the fastest growing economy for most part of its three-year rule.
The government, he said, was aware that the growth has slowed and is taking steps to improve it.
The government, he said, is ready to make amends to help small traders.Modi said registration of 2.1 lakh out of 3 lakh suspected shell companies identified post note ban have been cancelled in a crack down on the blackmoney.
Modi assured the traders that the government will not re-open their records if they join mainstream of the economy.
"In the changing economic scenario, honesty will command a premium and the government will protect the interest of honest persons," he said, and called upon the company secretaries to encourage their clients to honestly pay taxes.
The prime minister also said his government had the courage to take bold decision like demonetisation and implementation of GST, which the previous government lagged.

PM Modi's oil diplomacy: India's move to import crude oil from US significant, may ignite price war in international markets

As domestic retail oil prices continue to grab headlines for all the wrong reasons, the arrival of the first shipment of crude oil from the US at Odisha’s Pradip Port on Monday marks an end to the US’ oil export hiatus since 1975, and signals significant impact on India in terms of cost, its oil dependence as well as trade ties with the US. Crucially, it helps India undercut much of OPEC’s control on matters related to oil in our country, the third largest oil consumer in the world.
Although the impact of India diversifying its oil portfolio to the US will be visible over a period of time, its long-term benefits can be immense. Besides furthering  ties with the US – the deal was finalised when Prime Minister Narendra Modi met US President Donald Trump at the White House in June this year – it provides India the leeway to cut its dependence from its biggest oil suppliers Iraq and Saudi Arabia, giving it a stronger foothold on geopolitical influences.
The development comes at a crucial time for India, with OPEC nations deciding to substantially cut down oil production over the coming months and reduce shipments to Asia and the US. In September 2016, the Organization of the Petroleum Exporting Countries decided to cut crude oil production by 1.2 million barrels per day (mbpd). This had triggered fears of a rise in price and the subsequent subsidy burden on the government’s finances.Though petrol and diesel prices are decontrolled, the government continues to subsidise the price of LPG and kerosene.  India, being the fourth largest importer of crude oil, imports 85 per cent of total oil and 95 per cent of gas from OPEC nations. Given India’s dependence on oil imports for meeting its needs, the impact of the production cut by OPEC was expected to be significant. Note that the impact of Saudi Arabia’s oil prices also affects the cost of other West Asian producers. With Saudi Arabia’s Aramco upping crude price by 60 cents per barrel for Asian buyers, US crude, which has seen a boost in production, became a better option.
The current economic dynamics signify much of the sway that OPEC still holds on the government’s finances. We know by now that taxes levied by states and central governments make for much of the retail prices that consumers have to shell out. While these details have been written about extensively, understanding the impact of higher crude oil prices requires an understanding of the windfall that the Centre has made in times of low crude oil prices.A total of 12 increases in central excise duty have been effected by the government since November 2014, resulting in the government making Rs 5.24 lakh crore as revenue from petroleum products in 2016-17, up from Rs 3.32 lakh crore in 2014-15. States also receive 42 per cent of the Excise Duty charged by the Centre, according to Oil Minister Dharmendra Pradhan, signifying the importance of revenue from oil on states as well.
While one may argue that lower price of crude oil has not translated into benefits for the common man, its impact on the economy is significant. It is in this context that India’s move to import crude oil from the US is significant. Some of the impact started getting visible soon after the deal was finalised in June.

Crude Oil Imports

An Economic Times report cited Indian Oil officials as saying that soon after India had secured its first US buy, Iraq, India’s biggest crude oil supplier decided to lower its prices in a bid to retain its hold on India’s immense demand for oil. West Asian imports currently make up for 73 per cent of India’s imports, with Brent making up for the rest.Other than the OPEC factor, and the leeway this energy mix gives India to press for better prices from its supplier nations, the basic cost factor also makes US crude a viable option. As per officials, the US crude oil is $2 per barrel cheaper to India as compared with the most-imported West Asian crude.
Indian officials say that even after factoring in the distance, US oil is working out to be cheaper than Middle East oil. India now wants to leverage its status as a major energy buyer to get a better price, but also more importantly, to make a political point to its suppliers.
Tougher oil supplying partners like Iran can also be pressed into better prices. This, after India dropped its intake of oil from Iran over Tehran's non-cooperation on a promised gas field.

Mary Kay Carlson, Charge d’Affaires at the US Embassy in India said that the shipment comes as a milestone in the blooming bond that India and the United States are experiencing at present.
She said that both the countries are cooperating in improving the condition of the energy sector by opting to move towards cleaner fossil fuels, nuclear, renewable and energy efficiency technologies.
The US Embassy said that they are looking forward to increasing the sale of the US crude oil to India and exploring the opportunities that would lead to an expansion in the role of natural gas in the country.
At their meeting on June 27 at the White House, PM Modi said India had one of the world's fastest growing energy demands, in response to Trump's line about reviving American energy exports. Modi responded that India would consider it if the price was right. The two countries also entered into a Strategic Energy Partnership for increasing the bilateral energy cooperation between the two countries.
Energy trade between the nations is set to expand as India takes steps to enhance the use of natural gas in its energy mix. India is also expanding its infrastructure for piped natural gas and liquefied natural gas used in cooking.  It is in the context of future prospects of India-US energy ties that this recent import marks significance.
Though Indian Oil's consignment is worth only $100 million, a miniscule fraction of India's $70 billion oil import bill for 2016-17, it has a potential to grow into a $2 billion trade. Significantly, the import indicates the strategic ties between India and the US are expanding beyond defence and intelligence to energy.


How will India use US Crude?
State-owned Indian Oil Corporation Ltd imported 1.6 million barrels at the Paradip Port in Odisha. Indian Oil will process this crude at its refineries in the East: at Paradip, Haldia, Barauni, and Bongaigaon.
“IndianOil, which became the first Indian public sector refiner from India to source US crude, has placed a cumulative order of 3.9 million barrels from the US,” Indian Oil said.
Public sector refiners Bharat Petroleum and Hindustan Petroleum have also placed orders from the US for about 2.95 million barrels and 1 million barrels respectively, for their Kochi and Vizag refineries.
The total volume of the crude presently contracted by Indian public sector refineries is, therefore, 7.85 million barrels. The three refiners are sourcing sweet, sour and heavy crude for their refineries which are equipped to handle complex mix of crude oils.
Indian oil companies have already invested over $5 billion in US shale assets. Indian companies have also contracted MMTPA of LNG from the US and the first shipment is expected to be delivered to India in January 2018.

India receives first-ever shipment of US crude oil at Odisha's Paradip Port

India on Monday received its first ever shipment of US crude oil with state-owned Indian Oil Corp (IOC) importing a 1.6 million barrels parcel at Paradip in Odisha.
MT New Prosperity, a very large crude carrier (VLCC), with a capacity to haul two million barrels of crude, left US Gulf Coast on August 19 and arrived at Paradip port.
"IOC will process the crude at its refineries located at Paradip, Haldia (in West Bengal), Barauni (in Bihar) and Bongaigaon (in Assam)," the company said in a statement.
A function was held at the Paradip port to mark the arrival, which was attended by officials of IOC, oil ministry and the US Embassy.
"IOC, which became the first Indian public sector refiner to source US crude, has placed a cumulative order 3.9 million barrel (of US crude)," it said.
State-owned Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have also placed orders for about 2.95 million barrels and 1 million barrels of US crude respectively for their Kochi and Vizag refineries.
"The total volume of the crude presently contracted by Indian public sector refineries is, therefore, 7.85 million barrels," the statement said.
This is one of the first shipments to India since the United States stopped oil exports in 1975, and follows recent commitments to US oil purchases by Indian state refiners, a separate statement issued by US Embassy said.
"US crude oil shipments to India have the potential to boost bilateral trade by up to $2 billion," the Embassy statement said.
Indian companies, both public and private, have invested about $5 billion in US shale assets. They have also contracted 5.8 million tonnes per annum of liquefied natural gas (LNG) from the US and the first shipment is expected to be delivered to India in January 2018.
The Indian government has encouraged state-controlled refiners to buy US and Canadian crude from the US Gulf coast as it looks at cheaper alternatives that have emerged due to global supply glut.
While in the first purchase IOC is importing 1.6 million barrels of high sulphur crude Mars from the US and 400,000 barrels of Western Canadian Select oil, in the second it has bought 1.9 million barrels of US crude, half of it being shale oil. The second shipment is expected in a months time.
India, the world's third-largest oil importer, joins Asian countries like South Korea, Japan and China to buy US crude after production cuts by oil cartel OPEC drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
Buying US crude has become attractive for Indian refiners after the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in western world) and Dubai (which serves as a benchmark for countries in the east) has narrowed.
Even after including the shipping cost, buying US crude is cost competitive to Indian refiners, an industry official said.
The IOC deal cames within weeks of Prime Minister Narendra Modi's June-end visit to the US when President Donald Trump talked of his country looking to export more energy products to India.
MaryKay Carlson, Charge d'Affaires at the US Embassy, termed the oil imports as a significant milestone in the growing partnership between the US and India.
"The United States and India are elevating our cooperation in the field of energy, including plans for cleaner fossil fuels, renewables, nuclear, and cutting edge storage and energy efficiency technologies. We look forward to working together on further sales of US crude and exploring opportunities to expand the role of natural gas in India," Carlson said.
During their June 26 meeting in Washington, Trump and Modi committed to expanding and elevating bilateral energy cooperation through a strategic energy partnership.
The leaders called for a rational approach that balances environment and climate policy, global economic development, and energy security needs, the US Embassy statement said.
"President Trump affirmed that the United States continues to remove barriers to energy development and investment in the United States and to U.S. energy exports so that more natural gas, clean coal, and renewable resources and technologies are available to fuel India's economic growth and inclusive development," it added.
To encourage US crude purchases, the government has allowed refiners to use a foreign rather than an Indian-owned vessel for the purchase. Indian refiners typically have to use domestic vessels for their crude imports.