Important Events held on 15th and 16th May
India’s Exports Experience 12.7% Decline in April, Trade Deficit at 20-Month Low
⦁ Merchandise exports in April witness a sharp decline, reaching a six-month low, due to sluggish demand and easing commodity prices affecting India’s trade basket.
⦁ The value of outbound shipments from India contracts by 12.7% to $34.66 billion, marking the third consecutive month of export contraction.
⦁ Inbound shipments see a sharper decline, contracting by 14% to $49.9 billion, resulting in a 20-month-low trade deficit at $15.24 billion.
Important Events held on 15th and 16th May – 01
⦁ Director General of Foreign Trade (DGFT) expresses a lack of optimism regarding demand in the next few months, with reduced demand observed from major export markets like the United States and Europe.
⦁ Recession in developed economies and the lingering impact of the Russia-Ukraine conflict contribute to the downturn, coupled with cooling commodity prices affecting both imports and exports.
⦁ April sees a significant contraction in imports, primarily due to cooling commodity prices and reduced demand for items such as gems and jewellery.
⦁ Non-oil items drive the decline in the merchandise trade deficit, partly offsetting the fall in crude oil prices with higher volumes.
⦁ On a sequential basis, imports and exports contract by 17.2% and 16.8%, respectively, in April.
⦁ Core exports, including non-petroleum products and non-gems and jewellery, contract by 9.2% to $25.76 billion, accompanied by a 12.5% decline in imports to $31.49 billion.
⦁ Analysts predict an overall contraction of 5% in merchandise exports for FY24 due to the weak global growth outlook.
⦁ Non-oil and non-gold imports, which reflect domestic demand, experience a year-on-year contraction for the fourth consecutive month, raising concerns.
⦁ India’s merchandise exports witness contraction in 19 out of 30 sectors in April, with petroleum products, plastics, linoleum, gems and jewellery, engineering goods, and cotton yarn experiencing significant declines.
⦁ Sectors such as electronic goods and drug and pharmaceuticals demonstrate positive growth during the same period.
⦁ Merchandise imports contract in 23 out of 30 items, including coal, crude petroleum, chemicals, precious stones, transport equipment, electronic goods, and gold.
⦁ The United Nations Conference on Trade and Development warns of headwinds facing world trade, indicating weaker economic activities globally leading to subdued international trade.
Table of Contents
India and EFTA Engage in Discussions for a Trade and Economic Partnership Agreement
Important Events held on 15th and 16th May – 02
⦁ Union Minister of Commerce & Industry Piyush Goyal visited Brussels to engage in discussions with representatives from the European Free Trade Association (EFTA) states: Iceland, Liechtenstein, Norway, and Switzerland.
⦁ The purpose of the discussions was to work towards the establishment of a comprehensive Trade and Economic Partnership Agreement (TEPA) between India and EFTA.
⦁ The bilateral free trade agreement is expected to bolster trade, encourage investment flows, stimulate job creation, and foster economic growth.
⦁ The implementation of TEPA holds significant potential for integrated and resilient supply chains, new opportunities for businesses and individuals, increased trade and investment flows, job opportunities, and overall economic growth.
⦁ The ministerial meeting in Brussels was attended by Indian Commerce Minister Piyush Goyal and representatives from EFTA member countries.
⦁ The leaders discussed strategies to advance the comprehensive TEPA and built upon prior expert meetings conducted online.
⦁ The discussions emphasized the mutual recognition of trust and respect as the foundation for achieving a fair, balanced, and equitable agreement.
WHAT IS TEPA
⦁ TEPA is a comprehensive agreement between nations or economic blocs aimed at enhancing trade relations and promoting economic cooperation.
⦁ It covers aspects such as reducing or eliminating trade barriers, facilitating trade and investment, protecting intellectual property rights, and promoting regulatory cooperation.
⦁ TEPA aims to create a favorable environment for businesses by providing increased market access, a level-playing field, and encouraging the flow of goods, services, and investments.
⦁ The prime goal of TEPA is to foster economic growth, job creation, and mutual benefits for the countries or regions involved.
About EFTA:
⦁ EFTA countries are not part of the European Union (EU).
⦁ EFTA is an inter-governmental organization that promotes and intensifies free trade, serving as an alternative for states not wishing to join the European Community.
⦁ India is the 9th largest trading partner of EFTA, accounting for around 2.5% of India’s total merchandise trade in 2020-21.
Objectives of the agreement:
⦁ Discussions are based on modalities of engagement for a comprehensive Trade and Economic Partnership Agreement (TEPA) with representatives from EFTA states: Iceland, Liechtenstein, Norway, and Switzerland.
⦁ The delegations are committed to increasing efforts and continuing discussions at a steady pace, with further meetings planned to address critical issues related to TEPA.
⦁ The agreement emphasizes the importance of trust, respect, fairness, equity, and balance in building a common understanding.
Significance of the agreement:
⦁ The agreement has the potential to bring significant economic benefits, including integrated and resilient supply chains, new opportunities for businesses and individuals on both sides, increased trade and investment flows, job creation, and economic growth.
⦁ Such agreements often involve a substantial reduction or elimination of customs duties on traded goods, as well as eased norms to promote trade in services and investments.
Kandela IAS recognizes the value of keeping abreast of current events and offers a diverse range of courses to help you stay informed of the latest developments and trends. Kandela IAS team of experienced faculty members is committed to delivering top-quality education that equips you with the knowledge and skills necessary to succeed in your profession. Our blog post, “Important Events held on 15th and 16th May,” provides you with valuable information about significant happenings worldwide. Moreover, Kandela IAS provide comprehensive current affairs courses that encompass a broad range of topics, including politics, economics, sports, and entertainment.
So, if you want to achieve your career objectives, enroll in our courses today and take advantage of the learning opportunities we provide. And also Subscribe for our Youtube Channel Kandela IAS For more updates