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Asian shares mixed as investors await crucial central bank decisions

SYDNEY: Asian shares were mixed on Tuesday and currencies held tight ranges as nervous investors awaited several key central bank meetings that could set the tone for risk appetite heading into next year.

MSCI’s gauge of Asia-Pacific shares outside Japan recovered early losses to be 0.8% higher at 0128 GMT, with Japan’s Nikkei edging 0.2% lower and Australia’s S&P/ASX 200 down 0.6%.

The immediate focus was on the Reserve Bank of Australia’s (RBA) meeting on Tuesday, with the Federal Reserve and Bank of England due to hold their policy decisions later in the week.

“All eyes for us are on the RBA,” said Adam Dawes, an investment advisor at Shaw and Partners Ltd in Sydney.

“We expect the language will definitely start to change to be more accommodating for interest rate rises, or at least accommodating for pulling back quantitative easing.”

A drop of the RBA’s key policy measure targeting ultra low short-term rates would signal a change to the bank’s dovish stance and could be a preamble to the Fed’s meeting that markets expect will mark the start of its bond buying tapering.

Australian government bonds fell, with the 10-year benchmark yield five basis points higher at 1.973%, ahead of the RBA’s post-meeting announcement scheduled for 330 GMT.

Chinese shares opened slightly lower, with local blue chips trading down 0.09%, though the Hong Kong benchmark was up 1.8%. South Korea’s KOSPI index opened 1.50% higher.

Overnight, Wall Street advanced to record highs helped by gains for energy shares and Tesla.

The Dow Jones Industrial Average rose 0.26%, after eclipsing 36,000 points for the first time during intraday trading. The S&P 500 gained 0.18% while the Nasdaq Composite added 0.63%.

Currency moves were slight in morning trade with the dollar hovering below recent highs after posting its biggest daily rise in more than four months last Friday.

The yen was a fraction weaker at 114.11 per dollar and the greenback nursing a small overnight loss on the euro.

The Aussie, which had been steady through a week or so of wild selling in the domestic bond market, held at $0.7521, though volatility gauges point to a bumpy week.

With surging inflation looming over financial markets, the RBA leads a handful of central bank meetings set to define the near-term rates outlook.

Swaps pricing points to a better-than-even chance of the BoE hiking, while the RBA is expected to officially drop its yield curve control policy.

The Fed on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to support the economy, while investors will also focus on commentary about interest rates and how sustained the recent surge in inflation is.

“This (Fed meeting) is going to be a relatively big deal,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “We are expecting to hear the glide path for tapering the bond purchases.”

In commodities markets, a further 4% drop in Chinese coal prices on Tuesday pushed them 50% below last month’s record high.

Oil prices settled higher on Monday as expectations of strong demand and a belief that a key producer group will not turn on the spigots too fast helped reverse initial losses caused by the release of fuel reserves by No. 1 world energy consumer China.

U.S. crude was 0.2% higher at $84.25 per barrel and Brent was trading at $84.97, up 0.3%.

Spot gold was 0.1% lower to $1,789.99 an ounce. Bitcoin was 0.5% higher at $61,285.23.

Social impact investing can bridge the huge divide between prosperous & underserved India: Akanksha Sharm

The pandemic and its impact across the world is having a profound impact on how corporates operate. Today, investors are more concerned about the companies’ environmental, social, and governance conduct and intend to balance financial return with shared and inclusive values, says ESG & Policy expert Akanksha Sharma. In an interview with ET Digital, Sharma adds that judging a company merely on the profits it makes is not enough and the global investment community is taking notice. Edited excerpts.

Economic Times (ET): Why are investors extremely sensitive about Environmental, social, and governance (ESG)?
Akanksha Sharma (AS):
Environmental, social, and governance (ESG) is a strong value yardstick of any business. It tells all that balance sheets cannot. As global emergencies, like climate change, manifest into natural disasters and other such socio-ecological consequences are threatening the asset interests of profit-making ventures. It is imperative to evaluate economies and companies on their environmental, social, and governance practices instead of just profits. Also, globally, the notion of perceiving success only in terms of financial growth is also transforming. The trigger spot, of course, the global investment community.

Statistically too, ESG acquiescent companies demonstrated higher performance over average S&P 500 index members. Besides, ESG metrics are far more dependable indicators of an organization’s future earnings than traditional financial ratios. The pandemic has further illustrated the essential role of socio-environmental stewardship of companies in ensuring their fiscal sustainability and mission realization.

ET: What trends do you see in sustainable investing globally?
AS:
The pandemic and its aftermath have set many paradigms, compelling us to learn and unlearn how we perceive socio-economic relationships. It has brought to the fore an urgency to address persisting problems like climate change, social inequity, and labour rights violations, triggering an imperative to rebalance.

Today, investors are more concerned about the companies’ environmental, social, and governance conduct and intend to balance financial return with shared and inclusive values. In fact, 2021 has been hailed by researchers as an impressive year for Sustainability Funds. Morningstar reported an inflow of $185.3 billion into sustainability funds in the first quarter of 2021, a solid 17% bump over Q4 2020, as well as returned 8.76% during Q2 edging out both; the US Market Index and US Large-Mid Cap Index.
Consequently, I am pretty optimistic that globally sustainable investing will dominate the investor and corporate discourse in the days to come. I can foresee specific trends like:

  • As the interest among the investors rises to ensure greater socio-environmental- governance accountability of their funds, we will witness a surge in the ESG ratings of businesses for channelizing investments into assets with substantial ESG value.
  • With the pandemic making the risks of socio-economic pergence apparent, I think the social element in ESG should move to the forefront of policy action. How companies manage their relationships with their communities, workforces, and other critical stakeholders will determine their long-term survival and stability.
  • It is expected that investors will discard linear risk assessment models that cannot factor in non-financial impacts and adopt more forward-looking periodic modeling of the potential outcomes of future physical shocks to the financial system as part of their long-term investment strategies.

ET: How do you see ESG evolving in the Indian landscape?
AS:
India Inc. has only picked up momentum on ESG, attracting only a tiny share of the foreign equity ownership as ESG-focussed investment. However, recent studies suggest the outlook is fast-shifting, with 85% of the retail investors expressing interest in sustainable investing. Also, the Nifty 100 ESG index has outperformed both Nifty 50 (47%) and Nifty 100 peers in the last one year and five years segments, reflecting the rising confidence of the Indian investors on ESG compliant investing. As impact investing gains prominence as a viable investment conduit in India, investors are starting to back social enterprises with capital and knowledge and realize the potential of socially responsible investment asset classes.

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The pandemic and its aftermath have set many paradigms, compelling us to learn and unlearn how we perceive socio-economic relationships.

Given the complexities and risks involved in funding social initiatives, several innovations have surfaced also on Public-Private Partnership (PPP). The Ghaziabad Municipal Corporation (GMC), recently issued municipal green bonds to raise Rs 150 crores, funding a tertiary sewage treatment plant for producing drinking water, is undoubtedly one such instance that has made me incredibly hopeful about the future of sustainable investing in the country.

Though late, I feel that transformation in India has is indeed on the right track and is also accelerating. The concept of establishing a social stock exchange in the country to facilitate capital access by organizations working on the social welfare plank and SEBI’s continuous policy push for the Business Responsibility Reports (BRR) standard taking Indian sustainability reporting at par with the global reporting regime would be some great steps to further accelerate India’s pace on ESG.

ET: What is the status of social investing in the country? Does India have the requisite number of investors and bankable ideas to make an impact?
AS:
While in 2020, $2.63 billion was received by impact enterprises through 243 equity deals, an estimated $1.2 billion was received in less than six months in 2021 from just 85 deals. However, social investing through CSR is at a very nascent stage in India. We see more ESG funds emerge, but we are still far from making it a norm to drive impact in the social sector. This is something that is the need of the hour.

India has great opportunities for social investing, which are matchless due to the scale and potential for sustainable returns, regardless of market risks. And that is why we have seen social impact investments increase over the years. However, for this to really transform the development landscape, its adoption even under CSR is crucial. The recent amendments to the CSR law even facilitate this, and we need to leverage such approaches to create lasting impact.

We need to radically improve our CSR interventions in terms of quality, outreach, and access. Apart from education receiving many funds through impact investing, we have several other concerns that plague our country, including inadequate access to water and quality healthcare, carbon emissions reduction, poverty, sustained skilling, and gender inequality. Only through such innovative approaches will we be able to maintain our development trajectory and deliver inclusive growth. The transparency and result orientation that the impact investing delivers makes it an exceptional medium that can help ensure funds for nation building are spent as effectively as possible. It has immense potential to unlock the additional funding needed to enable India to accomplish the SDGs by 2030. And as far as investors are concerned, India does have a significant amount of retail investors and HNIs. Together with foundations pooling in their resources together with public and private entities, social impact investing can effectively bridge the enormous pide that exists between the prosperous and the underserved in the country.

ET: Finance minister Nirmala Sitharaman had proposed the idea of setting up a social stock exchange. What are your thoughts on it?
AS:
It is an excellent leap forward. A social stock exchange will not only boost impact investing but will also help create an unvarying framework for measuring and reporting impact, ensuring transparency in activities and utilization of funds. It will help India move forward on the social and environmental agenda by aligning norms with global standards, enabling policy advocacy and levers, and creating ecosystems for change. Overall, while it would help promote a different category of investments, it will also help innovative and tech-based social enterprises raise capital for impact-driven work while reducing duplicate efforts and streamlining capital to more beneficial and scalable programs.

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Finance minister Nirmala Sitharaman had proposed the idea of setting up a social stock exchange.

ET: The idea of a carbon border tax is gaining ground in the European Union and the United States. The Biden administration is keen to see this through. What do you think will be the likely impact of this move, if such a tax is enacted?
AS:
This will undoubtedly help the European Union become the first carbon-neutral continent by 2050, but at the same time, it would put suppliers of imported goods at a disadvantage promoting more eco-friendly products from local suppliers. Several developing countries, including India, have been majorly using fossil fuels, as renewable energy is yet not a feasible option from both cost and access perspectives, while the countries do not favor its use. If enacted, the carbon border tax will impact trade between EU countries and developing nations in a big way. But I look at it as a leap towards positive change, pushing suppliers to drive the net-zero agenda.

ET: India recently made changes to its CSR law with an aim of strengthening it. What are your views on the changes?
AS:
The recent amendments will definitely enhance transparency with a greater focus on sustainable impact and also allow greater flexibility to India Inc. to innovate for the social good. They have brought in more clarity on several aspects, like administrative spending, the role of the Board, the way such programs need to be undertaken in their entirety. There was much ambiguity earlier, which left much room for interpretation.

Innovative financing options like impact funding earlier were an issue through CSR. However, authorizing corporates to carry forward funds through an unspent account earmarked toward a particular program will encourage such alternative funding models. At this juncture, this is essential however, this is still an ambiguous space.

I feel India Inc. must pace up with the global movement on ESG not just voluntarily but the right policy measures drawing alignment between CSR and ESG is also required opening doors of immense opportunities towards sustainable finance creating scalable solutions to solve some of the country’s most pressing problems.

ET: How do you see the ESG landscape in the future?
AS:
ESG is basically an antidote to myopic management. It assures sustainable returns on investment. Being highly quantifiable, financial institutions and investors worldwide trust it. Today, several interesting financial instruments ebbed ESG, including stocks chosen by investors’ basis the sustainability performance of companies. There are many instruments too, like fixed income bonds or social bonds, particularly popular as green bonds, sustainability-linked bonds, etc. Another exciting trend is the ESG integration in mutual funds. S&P even provides various tools to support ESG investment decisions.

Increasingly, many businesses are integrating their corporate framework with ESG to mitigate sectoral risks and drive a positive development narrative. I also see innovations in the ESG space as the key to unlocking solutions to global development issues. In India’s context, we need a sustainable financing boost based on ESG to amplify not just the economy, but overall national growth and development.

No plans to bring standard products for cyber liability insurance policy as of now: Member Irdai

Insurance Regulatory and Development Authority of India (Irdai) has no plans to bring standard products for cyber liability insurance policy as of now, a senior Irdai member said on Thursday. However, the member said that guidances are given to the insurers to evaluate the risks associated with these kinds of products.

A working group was formed by the regulator for examination of bringing standardisation of cyber liability insurance policy. Irdai issued a circular earlier this month for product structure for cyber insurance.

“The working group interacted, they demonstrated amongst themselves and they also had consultations with the stakeholders. And they decided, at this juncture, we will not be advising to come out with the standardisation of the cyber liability insurance policy,” S N Rajeswari, Member, Irdai said in a webinar.

She said the decision has been taken considering the nuances of the cyber law and fast growing digital ecosystem, and the jurisdiction aspect is also involved as there are sanctions amongst the countries.

“So under the emergence of few risks, they decided it is not the correct time to come out with the standardisation, but of course instead of standardising, guidance can be given.

“A guidance document has been released by Irdai earlier this month to enable the insurers to evaluate what are the new technologies that are forcing the cyber risks and identify what is the protection gap,” Rajeswari said while speaking at the ‘National E-Summit on Cyber Insurance – Reinvigorating the Future for Bridging The Gap’, organised by industry body Assocham.

Even as cyber risk insurance products are available in the market, both for the commercial and for inpiduals, she said insurers can now identify the possible risks and the recommendations that can be implemented.

“So the insurers can identify what are the protection gaps and they can accordingly make products as per the needs of the market,” she added.

Escape clause to avoid disputes in pandemic, global response system with other agencies key: India to WTO

India has suggested the World Trade Organization (WTO) to consider possible escape clauses for countries to avoid disputes while using the flexibilities in global trade agreements in response to current and future pandemics and natural disasters.

New Delhi has also said that the WTO, along with other international organisations, needs to put in place a pandemic response system, that would map manufacturing capacities and demands, and allow special visas/permits for healthcare professionals besides creating a pool of resources of essential goods and services.

At a meeting of the General Council of the organisation a few days ago, India suggested the WTO Secretariat to catalogue the flexibilities under the existing pacts and also of those rules that can be relaxed, to enable members to respond to pandemics and natural disasters.

“We also need to identify WTO Agreements, which do not contain such flexibilities or escape clauses and examine possibility of providing flexibilities/escape clauses in such Agreements,“ India said, ahead of a key ministerial conference of the WTO in December.

On an international pandemic response system, India said during the current Covid-19 pandemic, a pool of goods such
as oxygen concentrators, essential medicines and oximetres, and services through temporary measures involving special permits for short duration supply of healthcare professionals for four to eight weeks, both physically or
remotely to address the acute shortages, could be created.

India also insisted that temporary measures such as trade facilitation measures and tariff liberalization, to handle pandemics and natural disasters, need not be made permanent as making them permanent would unnecessarily circumscribe the members’ policy space during normal times.

“Decision to take any measure permanent or not should be left to the concerned members, as per rights and obligations under the WTO” India’s representative said.

Moreover, while providing for regulatory coherence to avoid duplications and save time, due care should be taken to ensure that all regulatory authorities concerns have access to the regulatory dossiers.

Further, any WTO response to pandemics without the waiver from Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement will not be “credible”, India said .

The proposal, floated last year by India and South Africa, is now sponsored by 64 members and seeks to facilitate access to Covid medicines.

Easy cargo movement, startup collaboration key for India-ASEAN relationship: CII

Ahead of the India-ASEAN Summit next week, industry has pushed to prioritise the expansion of the scope of the Bilateral Air Services Agreement to enable easier cargo movement, and suggested collaboration between the startups of both sides in digital payments, e-commerce and cybersecurity, home healthcare, e-pharmacy, and fitness and wellness apps. The Confederation of Indian Industry (CII) has also said that India’s pharmaceutical industry can become a key supplier of generic drugs, medical devices and vaccines to the ASEAN nations.

ASEAN, or Association of Southeast Asian Nations, comprises 10 countries—Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Brunei and Laos.

“A regional approach to energy security will help manage its supply and demand m crucial requirement of these high-growth economies,” CII said in its report titled “ASEAN-India: Identifying emerging opportunities together”.

It added that India has begun collaboration with a few ASEAN countries such as Vietnam and Myanmar in areas such as renewable energy, and development of refineries.

With the success of CO-WIN app, India can support other countries who may want to use CO-WIN or design a similar digital vaccination management system, according to the industry chamber.

“An ASEAN Visa and cross-country exchanges related to cultural and leisure programmes will go a long way in increasing people-to-people connectivity and potentially boosting SME trade,” CII said in its report.

ASEAN-India trade witnessed a decline of 9.2% in FY21 owing to the pandemic and ASEAN’s trade expansion with US and China. The decline in trade and India’s increasing trade deficit in the last few years have led to a call for a review of free trade agreements (FTA) with ASEAN, as India targets better trade balance.

“The review will be aimed at issues such as removal of non-tariff measures, especially in the auto and agriculture sectors, and rules of origin,” CII said.

This is crucial as since the FTA finalisation, India’s imports from ASEAN continued to increase sharply, in comparison with exports. As a result, India’s trade deficit increased to $15.9 billion in FY21 from $4.9 billion in FY11.

WTO director-general to visit India soon

World Trade Organization (WTO) director-general Ngozi Okonjo-Iweala is likely to visit India in the next few weeks, ahead of the multilateral ministerial trade body’s key meeting.

Okonjo-Iweala may also meet indigenous vaccine manufacturers during her visit, which is expected towards the end of the month, people aware of the matter said. A final confirmation of the visit is awaited. “There is an indication she might come but nothing is confirmed yet,” said an official. As per another official, the DG is likely to visit India from October 20-22 and meet with industry leaders, especially those involved in vaccine manufacturing. The 12th ministerial conference of the WTO will take place from November 30-December 3. “India is a prominent player and has many concerns in multilateral trade talks. She might want to gauge India’s thinking before the ministerial,” said a trade expert.

At the WTO, India has been pushing for the food security programmes aimed at developing and poor countries to be allowed without any limits and for members who give trade-distorting farm subsidies above $10 billion to eliminate them within three years.

India has pitched for a reduction in fishing capacity of countries that fish in distant waters or in the territorial waters of other countries, in a bid to balance overfishing subsidy restrictions with the special needs of developing and least-developed countries.

The WTO aims to finalise disciplines to eliminate subsidies for illegal, unreported and unregulated (IUU) fishing, and prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing.

Centre imposes stock limits on edible oils to soften prices in domestic market

The Centre on Sunday imposed stock limits on traders of edible oils and oilseeds, barring importers and exporters, till March 31, in a bid to check rising domestic prices and give relief to consumers.

Already, futures trading in mustard oil on NCDEX platform has been suspended from October 8, it said.

Edible oil prices in the domestic retail markets have shot up sharply by up to 46.15 per cent in the last one year due to global factors and local tight supply situation, as per government data.

“The centre’s decision will soften the prices of edible oils in the domestic market, thereby bringing great relief to consumers across the country,” the Food and Consumer Affairs Ministry said in a statement.

As per the order issued to all states, state governments and union territories will decide the stock limit to be imposed on edible oils and oilseeds after taking into account the available stock and consumption pattern of that particular state or UT.

However, certain importers and exporters have been exempted from the stock limit.

The exemption is given to those exporters (being a refiner, miller, extractor, wholesaler or retailer or dealer) who have an Importer-Exporter Code Number issued by the Director General of Foreign Trade (DGFT) and are able to demonstrate that the whole or part of his stock are meant for exports and to the extent of the stock meant for export.

The exemption is also given to those importers (being a refiner, miller, extractor, wholesaler or retailer or dealer) who are able to demonstrate that part of his stock in respect of edible oils and edible oilseeds are sourced from imports, the ministry said.

In case, the stocks held by respective legal entities are higher than the prescribed limits then they shall declare the same on the portal (https://evegoils.nic.in/EOSP/login) of Department of Food and Public Distribution and bring it to the prescribed stock limits as decided by the states where it is conducting its business within 30 days of the issue of such notification by the said authorities.

The states have been asked to ensure stock details of edible oils and oilseeds are regularly declared and updated on the central government’s portal, it said.

The Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2021, has been issued with immediate effect from September 8, it added.

According to the ministry, high prices of edible oils in the international market have a substantial impact on the domestic edible oil prices. However, the government has formulated a multi- pronged strategy to ensure that prices of essential commodities like edible oils remain controlled.

Measures like rationalisation of import duty structure, launching of a web-portal for self-disclosure of stocks held by various stakeholders had already been taken, it said.

As per the data maintained by the Consumer Affairs Ministry, average retail prices of soya oil were ruling at Rs 154.95 per kg on October 9, this year, 46.15 per cent higher than Rs 106 per kg in the year-ago period.

Similarly, average mustard oil prices rose by 43 per cent to Rs 184.43 per kg from Rs 129.19 per kg, while that of vanaspati by 43 per cent to Rs 136.74 per kg from Rs 95.5 per kg in the said period.

In case of sunflower, its average retail price risen by 38.48 per cent to Rs 170.09 per kg on October 9 this year from Rs 122.82 per kg in the year-ago period, while palm oil prices rose 38 per cent to Rs 132.06 per kg from Rs 95.68 per kg in the said period.

India meets more than 60 per cent of its edible oil demands through imports.

Exports jump over 21% to $33.44 billion in September

India’s merchandise exports jumped 21.35 per cent to $33.44 billion in September on a year-on-year basis, mainly due to better performance by key sectors like engineering goods and petroleum products, according to preliminary data released by the government on Friday.

In September, merchandise imports stood at $56.38 billion, an increase of 84.75 per cent compared to the year-ago period. The same was at more than $30.52 billion in the same period a year ago. It is also up 49.58 per cent over September 2019 when it had totalled $37.69 billion.

The trade deficit in September was at $22.94 billion as gold imports jumped nearly 750 per cent to $5.11 billion.

As per the preliminary data released by the Ministry of Commerce and Industry, the trade deficit, which is the gap between imports and exports, works out to be $78.81 billion during April-September period.

“India’s merchandise exports in September 2021 was $33.44 billion, an increase of 21.35 per cent over $27.56 billion in September 2020 and an increase of 28.51 per cent over $26.02 billion in September 2019,” it said.

Exports of engineering goods stood at $9.42 billion, up 36.7 per cent over September 2020. The outward shipments of petroleum is estimated at $4.91 billion in September 2021, an increase of 39.32 per cent over the year-ago month.

Outward shipments of ‘gems and jewellery’ were 19.71 per cent higher at $3.23 billon. However, exports of ‘drugs and pharmaceuticals’ registered a decline of 8.47 per cent.

The imports of ‘petroleum, crude and products’ soared nearly 200 per cent to $17.436 billion in September on an annual basis.

The data also showed that imports of ‘coal, coke and briquettes’ were up 82.89 per cent at $2.18 billion in September 2021 over the same month last year.

The ministry said value of non-petroleum exports in September was $28.53 billion, a growth of 18.72 per cent over the year-ago period and 26.32 per cent higher compared to September 2019.

Value of non-petroleum imports was at $38.95 billion in September, an increase of 57.73 per cent compared to the same period a year ago, and 36.14 per cent over September 2019.

As per the data, value of non-petroleum and non-gems and jewellery exports in September was at $25.29 billion, registering a growth of 18.59 per cent year-on-year.

The exports in the first half of the fiscal (April-September 2021) stood at $197.11 billion. This is an increase of 56.92 per cent over $125.61 billion in the year-ago period and 23.84 per cent compared to April-September 2019.

Covid call: India wants WTO to consider ‘escape clauses’

India has pitched for a global pandemic response system that would map manufacturing capacities and demand of medicines and medical equipment and allow special visas or permits for healthcare professionals.

New Delhi also suggested that the World Trade Organization (WTO) consider ‘escape clause’ for countries, relying on flexibilities in trade agreements, to avoid disputes while tackling the current pandemic and any other in future.

India said during the current Covid-19 pandemic, a pool of goods such as oxygen concentrators, essential medicines and oximetres, and services through temporary measures involving special permits for short-duration supply of healthcare professionals for four to eight weeks, both physically or remotely to address acute shortages, could be created.

New Delhi asserted that any WTO response to pandemic without the waiver from Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement will not be “credible.”

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The proposal, floated last year by India and South Africa, is now sponsored by 64 members and seeks to facilitate access to Covid medicines.

At a meeting of the General Council of the organisation a few days ago, India suggested that the WTO Secretariat catalogue the flexibilities under the existing pacts and rules that could be relaxed, to enable members to respond effectively to pandemics and natural disasters.

“We also need to identify WTO agreements, which do not contain such flexibilities, or escape clauses and examine possibility of providing flexibilities/escape clauses in such agreements,” India said in its submission, ahead of a key ministerial conference of the WTO in December.

India insisted that temporary measures such as trade facilitation measures and tariff liberalisation to handle pandemics and natural disasters need not be made permanent, as that would unnecessarily circumscribe the members’ policy space during normal times.

“Decision to take any measure, permanent or not, should be left to the concerned members, as per rights and obligations under the WTO” India’s representative said.

India cuts import duty on cooking oils; September imports of palm oil are highest single month imports in

Amid persistently cooking oil prices since more than a year, the central government has reduced the import duty on crude and refined palm oil, soybean oil and sunflower oil between 16.5 % to 19.25% with effect from October 14 upto March 31, 2022. Meanwhile,

The impact of the duty reduction on crude palm oil is about Rs.14,000/- while on crude soyabean oil and crude sunflower seed oil is about Rs.20,000/- per tonne. “The total benefit of duty reduction may not fully accrue to the Indian consumer. In fact, today after the announcement of the duty reduction, the Malaysian Market has gone up by about RM 150 to 170 per tonne. Also, the rumours in the market in the last few days have already discounted the domestic price to some extent. The price of refined oil may further reduce by Rs 6 to 8 per kg,” said Atul Chaturvedi, president, Solvent Extractors’ Association (SEA).

The immediate trigger for this drastic duty reduction is largely on account of high price edible oil and onset of festive season and high food inflation. “However the timing of reduction of import duty is a cause of concern as farmers are now harvesting record kharif soya and groundnut crop and reduction in import duty may affect the farmers’ realisation for their produce,” said Chaturvedi.

According to SEA, import of vegetable oils during September 2021 is reported at 1,762,338 tons compared to 1,061,944 tons in September, 2020, consisting 1,698,730 tons of edible oils and 63,608 tons of non-edible oils i.e. up by 66%. The overall import of vegetable oils during November 2020 to September 2021 ( 11 months) is reported at 12,470,784 tons compared to 12,257,837 tons, up by 2% compared to last year.

Record Import in September 2021:
According to SEA, Import of edible oils during September, 2021 has set a new record of shipment of 16.98 lakh tons in a single month. Earlier in October ,2015 India had imported 16.51 lakh tons of edible oils. Palm Oil imports recorded in the month of September 2021 at 12.62 lakh tons is the highest in any single month since India started importing Palm Oil in 1996.

October 2021 stock at the highest level:
The stock of edible oils as on October 1, 2021 at various ports has been estimated at 845,000 tons and pipeline stock at 1,160,000 tons. Thus, the total stock is of 2,005,000 tons, mainly due to heavy import during September 2021. “The stock has increased by 255,000 tons to 20.05 lakh tons as on October 1, 2021 from 17.50 lakh tons as on September 1, 2021 and 16.02 lakh tons in October 2020,” said SEA.

Import of Palm Oil Products up due to duty advantage:
During the 11 months from November 2020 to September 2021, palm oil import has increased to 7,627,218 tons compared to 6,440,947 tons during same period of last year due to lower duty advantage compared to soft oils. Soft Oils import decreased to 4,458,029 tons compared to 5,509,554 tons due to high prices of soybean and sunflower oils in international market. Shipment of Crude Rapeseed Oil restarted from August 2021 due to high price of domestic rapeseed oil (mustard oil). Import of about 12,000 tons and 20,215 tons of rapeseed oil is reported during August and September 2021 respectively and expected increase during next 2 to 3 months to fill the shortage of mustard oil. The overall palm oil share increased to 63% compared to 54% in same period of previous year.