Current Affairs for Online Crash Course for SSC CGL Exam : Economy
Current Affairs for Online Crash Course for SSC CGL (Tier -
:: Economy ::
Australia wants India to become major buyer of its cotton
Australia, the fifth-largest exporter of cotton, is looking at India to
emerge as a consistent and major buyer of the commodity.
An eight-member delegation representing the Australian Cotton Shippers’
Association held meetings in Ludhiana, Mumbai, and Coimbatore between
February 27 and March 3.
Australia has close to 1,200 cotton growers and can supply even small
quantities to India. China purchased more than 30% of Australia’s cotton
production last year. However, this was lower than its usual purchase.
Indian textile mills can use Australian cotton as a blend to produce
high-value garments. The area under cotton production was increasing in
Australia, Mr. McIntyre said.
Australia’s output was limited until last year. India is the largest
producer and consumer of cotton globally.
Services sector saw expansion in Feb
The services sector expanded in February recovering from demonetisation-related
disruption, according to a private survey.
The Nikkei India Services Purchasing Managers’ Index (PMI) rose to 50.7
in February from 49.4 in January. A reading above 50 denotes an expansion in
business activity while one below 50 implies a contraction.
The upturn in services activity follows news from the sister PMI survey
showing factory production growing for the second straight month in
With demand conditions strengthening in India, new business inflows rose
in both sectors, leading to the first increases in private sector new work
and output since October 2016. Nevertheless, growth rates were mild at best
and far from their historical averages.
The Nikkei India Services Business Activity Index signalled growth in
February as businesses recovered from the demonetisation-related disruptions
seen in each of the previous three months,” according to the report.
The index fell to 46.7 in November, the month demonetisation was
announced, the lowest it had been in almost three years. The index posted a
tad higher reading of 46.8 in December but was still firmly depicting a
contraction in business activity.
This improvement in business activity and order inflows was mostly
driven by the ‘Financial Intermediation’ and ‘Other Services’ category,
according to the report with most of the other major heads seeing a decline.
However, the report noted that the rate of contraction softened in all
Looking at employment levels in the services sector, IHS Markit said the
rate of job losses in February was only fractional. However, staffing levels
decreased in the manufacturing sector, in comparison, it noted.
e-commerce faces too many policy challenges
Exporters face restrictions in the form of poor incentives and
debilitating fees, made worse by surging global competition.
India had woken up to huge potential of e-commerce exports when the
Centre decided to provide incentives in the Foreign Trade Policy 2015-20 to
promote exports of goods hosted on a website and dispatched through courier
or postal mode.
However, exporters have now identified several ‘restrictions’ under the
FTP and related norms as ‘challenges’ that are preventing them from
maximising the potential of e-commerce exports.
The payment for goods purchased on e-commerce platform shall be done
through international credit or debit cards and as per the Reserve Bank of
There are more than 25,000 Indian companies, small and medium firms and
entrepreneurs present on the American multinational e-commerce company eBay
alone, exporting their items directly to the consumers across the world.
It is estimated that there are more than two lakh such Indian
business-to-consumer (B2C) exporters making use of their own websites or
other e-commerce platforms and social media sites.
There is intense competition in the e-commerce exports space, and
several countries are actively promoting e-commerce exports.
For instance, the U.K. government’s Department for International Trade (DIT)
has an ‘E-Exporting Programme’ to help U.K. companies sell their products or
services overseas through e-commerce.
India’s e-commerce retail exporters are also facing major competition
from their counterparts in China and South Asia. According to the World
Trade Organisation, in 2015.
e-commerce in goods and services was worth about $22 trillion globally,
and has grown the fastest in emerging economies.
As per India’s FTP 2015-20, the incentives for e-commerce exports are
under the Merchandise Export from India Scheme (MEIS).
The rewards are in the form of freely transferable duty credit scrips
(that gives duty benefits for imports of inputs / import of goods including
capital goods / domestic procurement of inputs and goods including capital
The list of items for incentives should be expanded to include jewellery,
which is among the biggest finished product exports from India, as well as
health & beauty items, auto spare parts and musical instruments.
A major disincentive is that currently, when a buyer sends an item back
to an e-commerce exporter, import duty is charged.
However, in the case of exports other than through the e-commerce route,
customs duties are exempted on return of exported goods.
Another difficulty being faced by e-commerce exporters is that such
exports through India Post or via the commercial courier mode are ticked as
“samples” or “gifts” and not as ‘Commercial Shipment’.
Sellers need to sign and attach multiple physical documents and pay a
commercial clearance charge of Rs. 1,000 to Rs. 1200 for every shipment.
A single-product shipment via private courier requires seven copies of
invoices (self-declaration), while India Post requires three copies of