Exports decline by 1.7% in January and trade deficit widens to $15bn. Government orders telcos to clear dues by March 17th. India reportedly offers to open up poultry and dairy markets in bid for trade deal with US. Karnataka High Court stays Competition Commission’s probe into Amazon, Flipkart. US House Speaker Nancy Pelosi warns nations against doing business with Huawei.
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China Sneezes and India Catches A Cold
India’s exports fell by 1.7% in January, while imports fell by 0.75%, leading to a trade deficit of $15bn, according to Ministry of Commerce figures released on Friday. Imports fell for eight months in a row while merchandise exports fell for the sixth consecutive month.
The trade deficit itself is now at a seven-month high.
Trade could continue to tread in negative territory due to the coronavirus outbreak in China, which has put large swathes of the country in lockdown and hurt its economy. India is a greatly dependent on its northern neighbour, with Indo-Chinese trade having grown from $4.8bn in 2002-03 to $87bn in 2018-19. [Livemint]
And Now, This
Yesterday, at an interactive session with professionals from asset management, wealth advisory, tax consultancy and other related industries, Finance Minister Nirmala Sitharaman said that if required the Government would take steps beyond the announcements made in the 2020-21 Union Budget. [ET]
The Supreme Court recently came down heavily on the Government for putting on hold the recovery of dues from telecom companies. The apex court had asked telcos to clear their dues – totalling about ?1.47Lcr ($20.56bn) – before March 17th.
Bharti Airtel, which owes ?35,586cr ($4.97bn) has said it will pay ?10,000cr ($1.39bn) by February 20th and the remaining before the deadline. Vodafone Idea, however, has remained mum over the issue. It owes ?53,000cr ($7.41bn) in dues. [News18]
Remember the plan to merge 10 public sector banks into four? It was announced six months ago – and the deadline to merge the balance sheets of these lenders is barely one and a half months away.
According to a Business Standard report, the Government is treading cautiously and a “cloud hangs over April 1st deadline”. The Prime Minister wanted to see the “outcome of the amalgamation of Bank of Baroda (BoB)” before taking a final call on the merger of the 10 lenders “He wants to review the outcome of the BoB merger and know in detail what benefits it has entailed.” [BS]
India and US
India has reportedly offered to partially open up its poultry and dairy markets in a bid to secure a limited trade deal with the US. India, the world’s largest milk-producing nation, has traditionally restricted dairy imports to protect the livelihoods of 80m rural households involved in the industry.
US President Donald Trump is slated to visit India from February 24th to February 25th. Last year, Washington suspended a special trade designation for India that was reserved for developing countries. Since then both sides have been engaged in talks to reach a comprehensive trade agreement. [Livemint]
US and Europe
The US has said that it will hike tariffs on planes imported from the European Union (EU) from 10% to 15% over a long-running feud regarding aircraft subsidies.
The increase in duty on European manufacturer Airbus would be effective from March 18th. In October, the Trump administration had imposed 10% in tariffs on Airbus planes after the WTO ruled in favour of its ability to compensate for its losses by taxing c. $7.5bn of European exports annually. [NYT]
Breathe for Now
In some good news for e-commerce majors, the Karnataka High Court has stayed the Competition Commission of India’s (CCI’s) investigation into alleged anti-competitive practices like predatory pricing and preferential treatment of sellers by players like Amazon and Flipkart.
The court granted e-commerce firms eight weeks’ time to file their responses, following which the hearing will be resumed. The stay follows a February 10th writ petition by Amazon against the CCI’s decision to launch a probe. [Livemint]
War Against Fakes
Tech companies like Facebook and Twitter have had their platforms plagued by misinformation. Amazon is no different. Fake product reviews are omnipresent on its website, and this has been attracting more attention from the media and regulators of late.
As a measure against fake reviews, Amazon has sought to drown them out by encouraging genuine ones. It has done so by recently introducing a feature wherein shoppers can provide one-tap star ratings for products without needing to write a review to accompany it. This has already led to an increase in overall customer feedback, and the company hopes it will also solve its fake reviews problem. [Vox Recode]
Huawei vs A United Washington
Tensions between Chinese telecomunications giant Huawei and the US government were on full display at a recent global security gathering in Munich. The event was held on Friday, a day after American prosecutors charged Huawei with racketeering and conspiracy to steal trade secrets.
John Sufflock, Huawei’s Senior Vice President, dismissed the charges as meritless and said they were recycled from civil disputes over the last two decades that had been litigated and settled. [WSJ]
The American response has been firmly united, an anomaly at a time when American politics is brutally fractured. Politicians from both major parties have united in their push against Huawei and China in general.
US House Speaker Nancy Pelosi, for example, is no fan of Donald Trump – she had just led the campaign to impeach the President – but Huawei is one area where she agrees with the White House.
Pelosi warned nations against doing business with the telecom giant and called on them to work with the US to develop 5G networks. “This is the most insidious form of aggression, to have that line of communication, 5G, dominated by an autocratic government that does not share our values,” she told an audience at the Munich Security Conference. “If you want to build a collective conscience of values and respect for human rights and the rest, don’t go near Huawei and instead, let’s internationalise and build something together that will be about freedom of information.” [CNBC]
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