Why Record FDI Inflow is Not a Cause for Celebration?

Synopsis: The record level of FDI inflows in India for the year 2020-21 does not match the development priorities of the government. Background In a recent press release, the Ministry of Commerce and Industry announced that India has attracted the highest ever total FDI inflow (U.S.$81.72 billion) during the financial year 2020-21. This is 10… Continue reading Why Record FDI Inflow is Not a Cause for Celebration?

The tussle of Digital Services Tax between India and US

Synopsis: The US has rolled back its increased tariff on products of 6 countries including India. It now wants to negotiate, over the imposition of a digital service tax by the 6 nations. It is even willing to engage in a future trade war.  Background: The six countries of Austria, India, Italy, Spain, Turkey, and… Continue reading The tussle of Digital Services Tax between India and US

Road towards a Global Minimum Corporate Tax

Synopsis: The US has proposed a 15% Global Minimum Corporate Tax that will prevent tax avoidance by companies. The tax would be beneficial for India. But many counties will not accept the tax structure. Background: The Base Erosion and Profit Shifting (BEPS) programme were initiated in 2013. It aims to curb practices that allowed companies to reduce their… Continue reading Road towards a Global Minimum Corporate Tax

“Merchandise Exports” in May surge 67% to $32.21 billion

What is the News? The Ministry of Commerce and Industry has released the preliminary data on the Merchandise exports in May 2021. What are the key findings from the data?  Merchandise Exports: India’s merchandise exports are estimated at around $32.21 billion in May 2021. This is 67.39% higher when compared to May 2020. The large… Continue reading “Merchandise Exports” in May surge 67% to $32.21 billion

FDI Inflow in 2020-21 in India

What is the News? The Ministry of Commerce released the data on the FDI (Foreign Direct Investment Inflow) in India for the Financial Year 2020-21. Key Highlights from the Data: Firstly, India has received an FDI of $81.72 billion during the financial year 2020-21. This is 10% higher than $74.39 billion received in 2019-20. Secondly,… Continue reading FDI Inflow in 2020-21 in India

India needs to be cautious before joining Global Minimum Tax rate

Synopsis: A Global minimum tax rate is beneficial for the US. But India need to rethink before joining such international tax proposals Introduction: The US Treasury’s call for a global minimum tax rate is gaining a global endorsement. But the goal of a global minimum tax is not only to end the race to the corporate… Continue reading India needs to be cautious before joining Global Minimum Tax rate

DGFT launches “Trade Facilitation Mobile App” to promote exports

What is the News? Union Minister of Commerce and Industry has launched the Directorate General of Foreign Trade’s(DGFT) Trade Facilitation Mobile Application. About Trade Facilitation Mobile Application:  Tata Consultancy Services(TCS) developed the Trade Facilitation Mobile Application. It is as per the directions of the Directorate General of Foreign Trade (DGFT). Aim: The aim is to promote… Continue reading DGFT launches “Trade Facilitation Mobile App” to promote exports

Government Releases Data on “FDI Inflows in India 2020-21”

What is the News? The Government releases data regarding the Foreign Direct Investment – FDI inflows in India from April to January 2021. FDI inflows in India from April 2020 to January 2021: India attracted a total FDI inflow of US$ 72.12 billion from April to January 2021. Significance: It is the highest ever for… Continue reading Government Releases Data on “FDI Inflows in India 2020-21”

India’s potential as a Global investment hub

Synopsis: India has the potential to become a Global Investment Hub. Its unique advantages attract global companies to invest in the country. Background In 2020, despite the sharp economic contraction, India witnessed the fastest growth in Foreign Direct Investment (FDI) inflows among all the major economies. (>60 billion) Big firms like Google, Facebook, Walmart, Samsung,… Continue reading India’s potential as a Global investment hub

What is FDI or Foreign Direct Investment?

What is the News? The Rajya Sabha has passed the Insurance (Amendment) Bill, 2021. The Bill seeks to raise the FDI in the insurance sector to 74% from the current 49%. Click Here to Read about Insurance in Amendment Bill,2021 About Foreign Direct Investment(FDI): Foreign Direct Investment(FDI) is the medium for acquiring ownership of assets… Continue reading What is FDI or Foreign Direct Investment?

Measures  to Strengthen India US economic partnership

  Synopsis: Strengthening India-U. S economic partnership will help India to become a $5 trillion economy. Background India and the US have committed to the goal of increasing the bilateral trade in goods and services to $500 billion. Currently, the bilateral trade stands at $146 billion (2019). To achieve this, the Compound annual growth rate… Continue reading Measures  to Strengthen India US economic partnership

Need of Specific Law for National Security Screening of Inward FDI

Synopsis – There is no clear law for national security screening of inward FDI in India. It is a major Introduction- As per some media reports, India may ease restrictions on FDI by Chinese companies. They will be allowed to invest up to 25 percent in a company through an automatic route. Last year India… Continue reading Need of Specific Law for National Security Screening of Inward FDI

Cabinet clears “74% FDI in Insurance Sector”

What is the news? The Union Cabinet has approved a proposal to amend the Insurance Act, 1938. It will increase the foreign direct investment (FDI) limit in the insurance sector to 74% from 49%. Conditions: The increase in the foreign direct investment(FDI) limit in the insurance sector comes with safeguards such as: The majority of… Continue reading Cabinet clears “74% FDI in Insurance Sector”

“Index of Economic Freedom” 2021 released

What is the News? The Heritage Foundation releases The Index of Economic Freedom 2021. Key Findings of  Index of Economic Freedom 2021 India ranked 121st in the index with a score of 56.5 points under the category of ‘mostly unfree’. In Asia-Pacific, India ranked 26th among the 40 countries. Other Key Findings Singapore tops the… Continue reading “Index of Economic Freedom” 2021 released

Issue of Digital Services Tax between India and US – Explained

Table of contents What is Digital Services Tax (DST)? Why India introduced the Digital Service Tax? What are the accusations mentioned by the US? What India said in reply? What are the concerns associated with DST? Suggestions Recently the U.S. determined India’s Digital Services Tax (DST) as discriminatory. It concluded that the DST is causing… Continue reading Issue of Digital Services Tax between India and US – Explained

Delhi HC stays Future-Reliance deal

What is the News? Delhi High Court has provided interim relief to e-commerce major Amazon. It directed Future Retail Limited(FRL) to maintain the status quo with regard to the transfer of its retail assets to Reliance Retail. What are the issues in the Future-Reliance deal? What is the Future-Reliance deal? In 2020, Biyani’s Future Group… Continue reading Delhi HC stays Future-Reliance deal

Trade with China shrank in 2020, deficit at five-year low

News: According to the data from China’s General Administration of Customs (GAC), India’s trade with China declined in 2020 to the lowest level since 2017, with the trade deficit narrowing to a five-year low as India imported far fewer goods from China. Facts: Source: The Hindu  Data Related to Trade between India and China: Bilateral Trade: The… Continue reading Trade with China shrank in 2020, deficit at five-year low

After rice, India’s wheat exports register highest ever export in six years: US Department of Agriculture.

News: US Department of Agriculture(USDA) has released its forecast of Indian wheat exports for 2020-21(July-June). USDA has estimated India’s Wheat Exports for 2020-21 (July-June) to be around 1.8 million tonnes (mt), as against its earlier estimate of one mt. That would be the highest ever in the last six years. Facts: India’s Wheat Exports: Source:… Continue reading After rice, India’s wheat exports register highest ever export in six years: US Department of Agriculture.

USTR slams India’s Equalisation levy

News: US Trade Representative (USTR) has released the findings of the Section 301 report.   Source: The Hindu  The report has said that India’s 2% equalisation levy is unreasonable or discriminatory potentially attracting withdrawal of US trade concessions or duties on Indian exports.   What is Equalisation Levy?  When was 2% Equalisation Levy introduced? In the Finance Bill 2020-21 a 2% digital service tax (DST) was… Continue reading USTR slams India’s Equalisation levy

UK-India Free Trade relations and Cairn Energy PLC issue

Synopsis: With the conclusion of UK-EU trade agreement, now there is an opportunity to work towards UK-India Free Trade Agreement but resolving Cairn Energy issue must be a priority for that.   Introduction   Present developments provide an opportunity for both India and UK to move the bilateral economic plan forward.    Both countries have common interest in the issues, such as climate… Continue reading UK-India Free Trade relations and Cairn Energy PLC issue

Current account surplus moderates to $15.5 bn in Q2

Source: The Indian Express News: The current account surplus moderated to $15.5 billion (2.4% of GDP) in the quarter ended September of 2020-21 from $19.2 billion (3.8% of GDP) in the first quarter this fiscal.The current account saw a deficit of $7.6 billion(1.1%) in the year-ago quarter. Facts: Why has current account surplus narrowed? The narrowing of… Continue reading Current account surplus moderates to $15.5 bn in Q2

Importance of creating Resilient supply chains

Synopsis: The Covid-19 pandemic once again proved the importance of creating resilient supply chains that can survive the tough times.   Introduction  Creating supply chains that can withstand the disruptions is extremely important. Disruptions through the times is something inevitable as it can be manmade or natural. For example, The Tahoka Earthquake of 2011, followed by the Tsunami, led to a nuclear disaster caused a… Continue reading Importance of creating Resilient supply chains

WTO rules on domestic support and food security

This article on WTO Rules on domestic support has been developed based on the Indian Express Editorial “The food security bargain”. Context: Present  World Trade Organization WTO rules are not in to support food security and rural livelihoods in India and around the world. With the initial results of National Family Health Survey (NFHS-5) between 2015… Continue reading WTO rules on domestic support and food security

WTO rulebook

Context: WTO rulebook must evolve to support food security and rural livelihoods in developing countries. What are the existing issues related to India? Whether the current farm subsidy rules provide enough room for developing countries to buy food at government-set minimum support prices as part of their public stockholding programmes. To negotiate a permanent solution. India’s farm… Continue reading WTO rulebook

Why antitrust lawsuits are being filed repeatedly against tech giants like Facebook?

The issue of anti-competitive practices by Tech giants has come into the light again as recently, an antitrust lawsuit was filed by the Federal Trade Commission (FTC) and governments of 48 US states against the tech giant Facebook, accusing it of crushing smaller competitors by abusing its dominant market position. Specific instances of acquisitions of… Continue reading Why antitrust lawsuits are being filed repeatedly against tech giants like Facebook?

Rise of corporate nationalism

Context: The Rise of ‘corporate nationalism’ empowers Indian companies at expense of consumers. Instances where the Sentiments of corporate nationalism has been raised against foreign corporates? Amazon-Reliance Dispute: The counsel for Future Retail accused Amazon of behaving like “the East India Company of the 21st century” and calling it “Big Brother in America.” Whatsapp pay… Continue reading Rise of corporate nationalism

Diversity requirements to Indian companies

Source: Click here What are the diversity requirements that Indian companies need to meet? News: NASDAQ stock exchange in the US may soon require all companies listed to include at least one female board member as well as one member from a racial minority group or from the LGBTQ community on their board of directors. Facts: Diversity… Continue reading Diversity requirements to Indian companies

Impact of the COVID-19 Pandemic on Trade and Development Report: UNCTAD

Source: Click here News: United Nations Conference on Trade and Development(UNCTAD) has released a report titled “Impact of the COVID-19 Pandemic on Trade and Development: Transitioning to a New Normal”. Facts: Aim: The report provides a comprehensive assessment of the impact of COVID-19 Pandemic on Trade and Development. Key Takeaways. The global economy would contract 4.3% this year… Continue reading Impact of the COVID-19 Pandemic on Trade and Development Report: UNCTAD

Push for Exports

Context: India needs to shed its exaggerated fears of trade agreements to create new jobs. What are the challenges facing by Indian economy? Contracting Economic growth: India is in an economic recession for the first time in its independent history. Rising Unemployment: Thousands of people lost their jobs due to the slowing economy in 2018-19 and… Continue reading Push for Exports

Time for an Asian Century

Context: In a phase, where the west is adapting to Asian rules, RCEP will have immediate geopolitical and economic implications. India’s challenge will be in securing an ‘Atmanirbhar Bharat’ in this phase. What is Asian centrality? ‘ASEAN centrality’ rejects the current frame of the West setting the agenda while allowing the West to adapt Asian rules… Continue reading Time for an Asian Century

Trade openness and globalization

Context- India’s External Affairs Minister believes that the economic growth that has accrued from globalization is not a good enough outcome for India. What are the views of External Affairs Minister on globalization and trade pacts? Trade pacts and globalization have allowed other countries ‘unfair’ trade and manufacturing advantages “in the name of openness”. The effect of past… Continue reading Trade openness and globalization

FTA’s and its significance

Context: India’s External Affairs Minister recently disapproved of free trade and globalisation. Background: On November 15,15 countries of the Asia-Pacific region signed the Regional Comprehensive Economic Partnership (RCEP) agreement while India refused not to sign RCEP. What were the rational arguments given by the government to walk away from RCEP? In the name of openness… Continue reading FTA’s and its significance

Lessons from Vietnam and Bangladesh

Context: Learning through the success stories of Vietnam and Bangladesh More in News Bangladesh has become the second largest apparel exporter after China. Vietnam’s exports in apparel sector has grown by about 240% in the past eight years. Vietnam’s success stories Duty free exports: Signing of Free Trade Agreements (FTAs) with important trading partners like… Continue reading Lessons from Vietnam and Bangladesh

Virtual Global Investor Roundtable (VGIR) for Foreign Investment in India

Context- Prime Minister has chaired the Virtual Global Investor Roundtable (VGIR), with an aim to attract investment. What Virtual Global Investor Roundtable (VGIR) 2020 conference? It is an exclusive dialogue between leading global institutional investors, Indian business leaders and the highest decision-makers from the Government of India and Financial Market Regulators. Organized by– Ministry of Finance and the National Investment and… Continue reading Virtual Global Investor Roundtable (VGIR) for Foreign Investment in India

How the US economy and its policy choices likely to affect India

Context: How a Biden presidency likely to benefit India’s economy More in News “In a democracy, someone who fails to get elected to office can always console himself with the thought that there was something not quite fair about it”-Thucydides 431 BC. What is the Significance of U.S to India’s Economy? Trade: India enjoys a trade… Continue reading How the US economy and its policy choices likely to affect India