External Sector

Recent developments in the external sector are as follows:

• India and the European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. The TEPA, approved by the Union Cabinet, aims to enhance trade and economic collaboration between India and EFTA countries, including Switzerland, Iceland, Norway, and Liechtenstein. The FTA will provide a window to Indian exporters to access large European markets.
• On February 21, 2024, the Union Cabinet, chaired by Prime Minister Mr. Narendra Modi, approved amendments to the Foreign Direct Investment (FDI) policy on the space sector, allowing 100% FDI and liberalized entry routes for various activities such as satellite manufacturing, launch vehicles, and spaceports. These reforms aim to attract investors, boost private sector participation, create employment opportunities, and promote self-reliance in line with the Indian Space Policy 2023.
• In January 2024, the Union Cabinet approved the proposal for the signing of a protocol to establish a Joint Economic and Trade Committee (JETCO) between India and the Dominican Republic, signifying the strengthening of bilateral relations, between the two nations. The establishment of JETCO will bolster economic ties and serve as a platform for discussions, information exchange, and collaboration between India and the Dominican Republic and is also expected to open doors to broader markets in Latin America and the Caribbean.
• On January 16, 2024, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Mr. Piyush Goyal, chaired the second meeting of the reconstituted Board of Trade in New Delhi. He announced the initiation of the Trade Connect ePlatform, facilitating connections between Indian exporters and international trade stakeholders.
• In January 2024, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Mr. Piyush Goyal, aspired to elevate India-UAE bilateral trade to US$ 100 Billion. Speaking at the 'UAE India Business Summit' during the 10th Vibrant Gujarat Global Summit, he underscored the broad collaboration areas between the two nations, including space exploration, security, education, and climate action.
• In December 2023, India and Oman held second round of discussion on bilateral trade and investment relations. The leaders expressed satisfaction at the pace of ongoing negotiations for signing an India-Oman Comprehensive Economic Partnership Agreement (CEPA)
• In November 2023, The Commerce Ministry announced that it is partnering with e-commerce companies to boost exports from districts through the "Districts as Export Hubs" initiative. This collaborative effort aims to empower MSMEs by leveraging e-commerce platforms. The Directorate General of Foreign Trade (DGFT) has signed a Memorandum of Understanding (MoU) with Amazon, focusing on capacity building for MSMEs in specific districts. This strategic collaboration seeks to enhance the export capabilities of MSMEs in identified areas through the facilitation and support of e-commerce platforms.
• On October 9, 2023, the Commerce Ministry announced that the export status certificate will now be issued based on the available electronic data and traders will not have to apply to get the recognition.
• In September 2023, it was announced that, under the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Corporation (BIMSTEC), India will be annually exporting eggs worth Rs. 350 crore (US$ 42.1 million) to Sri Lanka’s State Trading Corporation to help the island nation tide over the crisis.
• On September 11, 2023, it was notified that India and Saudi Arabia have begun discussions on settling their trade in local currencies.
• In September 2023, India agreed to bring down the import duty to 5-10% on some fresh and processed food items as part of a larger dispute settlement between New Delhi and Washington at the World Trade Organization (WTO). 
• In August 2023, Minister of Commerce and Industry, Mr. Piyush Goyal and US Trade Representative Ms. Katherine Tai discussed ways to promote trade and investments between the two countries.
• As notified in August 2023, India’s toy exports increased by 60% from US$ 203.46 million in 2018-19 to US$ 325.72 million in 2022-23.
• On July 25, 2023, the 8th Foreign Office Consultations between India and Brunei were held in Bandar Seri Begawan. The two sides reviewed their bilateral relations and discussed ways to strengthen cooperation including in trade, commerce, investments, defense, and space. 
• As reported in July 2023, Germany's Vice Chancellor and Minister of Economic Affairs and Climate Action Mr. Robert Habeck highlighted that India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies. 
• The government, on July 17, 2023, simplified norms for exporters to avail benefits of an advance authorization scheme under which free imports of input materials are allowed. The eligibility of inputs is determined by sector-specific norms committees based on input-output norms.
• India and Indonesia were working on a real-time payment mechanism and trading in local currencies, the two countries announced. The two countries launched an Economic and Financial Dialogue that will focus on enhancing bilateral trade and investment, financial services, and infrastructure development, among others.
• In July 2023, Finance Minister Ms. Nirmala Sitharaman and Canadian Deputy Prime Minister Ms. Chrystia Freeland discussed the progress being made on ongoing bilateral trade negotiations between the two countries.
• As reported in June 2023, India and Israel were planning a slew of initiatives to bolster their cooperation in agriculture. The two countries are planning to push high-level agricultural technology cooperation between Israeli institutions and the Indian Council of Agricultural Research (ICAR). 
• The Sharjah Chamber of Commerce and Industry (SCCI) successfully concluded its trade mission to India in June 2023, after five days of fruitful meetings and discussions with Indian business and industrial associations in New Delhi and Mumbai. The trade mission, organized by the Sharjah Exports Development Centre, visited the Indian Capital and commercial hub to discuss potential investment advantages and lucrative opportunities to further strengthen bilateral ties.
• Mango exports to the US from India witnessed unprecedented success in 2023 and are expected to double this year. The presence of a substantial Indian diaspora, numbering 4.7 million strong, has been the primary driving force behind the surge in demand for Indian mango varieties in the North American country.
• On May 29, 2023, India and Singapore agreed to create opportunities for lifelong learning, building a future-ready workforce, and making knowledge and skill development a key pillar of strategic partnership.
• The government on May 24, 2023, allowed the exports of broken rice based on permission given by the government for shipments to other countries to meet their food security needs, although the export of broken rice is banned in general.
• In May 2023, Prime Minister Mr. Narendra Modi and his British counterpart Mr. Rishi Sunak reviewed the progress of the ongoing free trade agreement (FTA) negotiations and agreed for their trade teams to continue at pace towards an "ambitious" deal.
• Exports of engineering goods to Russia jumped eleven times in April 2023 to US$ 133.6 million as compared to the year-ago month.
• To boost ties between India and Egypt, the Academy of Scientific Research and Technology (ASRT), - an Egyptian council of planning just like NITI Ayog in India, has appointed Dr. Abdul Rehman Ilyas as an advisor to the President of ASRT thereby promoting and propagating the bilateral relationship in different spheres between the two nations.
• The Netherlands emerged as India's third largest export destination after the US and UAE during 2022-23, according to the commerce ministry's data. India's exports to the Netherlands rose by about 48% to US$ 18.52 billion during 2022-23 as against US$ 12.5 billion in 2021-22.
• India became Europe’s largest supplier of refined fuels in April 2023.
• Electronics export from India became the sixth largest export commodity segment surpassing the readymade garment basket, according to a government estimate for selected major commodities.
• On April 25, 2023, the Indian Apex exporters body- the Federation of Indian Export Organizations (FIEO) announced that it signed a memorandum of understanding (MoU) with Business Russia to promote trade and investments between the two countries. The two organizations will cooperate to arrange exhibitions, buyers-sellers meetings, workshops, and seminars, and encourage enterprises to work in tandem with their counterparts for joint ventures.
• On April 12, 2023, India and Italy discussed the progress of talks on the proposed free trade agreement between New Delhi and the EU and hope for its early conclusion.
• In March 2023, the Government approved the export of 3.5 lakh tonnes (LT) of broken rice to Gambia and Senegal, as earlier, in September 2022, the broken rice shipments were banned. 
• In March 2023, India, and the European Union (EU) concluded the fourth round of talks for a comprehensive free trade agreement (FTA) in Brussels.
• In March 2023, India announced wheat assistance of 20,000 million tonnes (MT) to Afghanistan in partnership with the United Nations World Food Programme (UNWFP) through Iran’s Chabahar Port.
• In February 2023, India and Iraq discussed ways to further increase and diversify the trade from oil to non-oil sectors to have an economic partnership and technology engagement.
• As reported in February 2023, India, Brazil, and the US, as leading biofuel producers and consumers, will work together during the next few months towards setting up a global biofuel alliance along with other interested countries.
• As of January 2023, the UAE was in early discussions with India to trade non-oil commodities in Indian rupees. The UAE’s trade deal with India aims to increase bilateral non-oil trade to US$ 100 billion in the next five years.
• As reported in January 2023, India’s two recently signed Free Trade Agreements (FTAs) with the UAE and Australia resulted in strong double-digit growth in exports to these countries. After the operationalization of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), the gems and jewellery industry witnessed a 25% growth in exports to the UAE.
• During April-December of FY23, the Netherlands emerged as India’s third largest export destination after the US and the UAE on account of an increase in shipments of goods such as petroleum products, chemicals, electronic items, and aluminium goods.
• In April-December of the fiscal year 2022-23, the US emerged as India's top destination for merchandise exports at US$ 59.7 billion.
• In December 2022, India extended its policy to allow imports of lentils and vegetable oils such as palm oil, soy oil, and sunflower oil at lower taxes by a year until March 2024. 
• In December 2022, India exported the first consignment of jewellery products made up of gold, silver, and imitation jewellery to Australia worth about Rs. 2,400 crore (US$ 300 million) under the Economic Cooperation and Trade Agreement. The ECTA is expected to double the bilateral gem and jewellery trade from the present US$ 1.27 billion to US$ 2.5 billion over the next three years.
• In December 2022, Bangladesh approached India to source at least 0.5 million tonnes (MT) of parboiled rice on a government-to-government (G2G) basis for distribution through ration shops.
• As of December 2022, Indian banks started looking at the possibility of initiating rupee trade with Bangladesh and African countries like Egypt to make the rupee an international currency. The overseas trade in the rupee would safeguard the external sector from fluctuation in the forex market.
• In November 2022, nine special Vostro accounts have been opened with two Indian banks after permission from the Reserve Bank of India (RBI) to facilitate overseas trade in the Indian rupee. 
• In November 2022, India said it would allow cargoes of white and brown rice backed by letters of credit issued before September 9 to be shipped overseas, a measure that provides some relief to exporters grappling with fresh government curbs.
• As reported in September 2022, India’s non-petroleum exports to the United Arab Emirates (UAE) grew 14% on year to US$ 5.92 billion during June-August, from US$ 5.17 billion a year ago, because of the CEPA agreement.
• In September 2022, GREENEST, a leading plant protein food brand, shipped India’s first plant-based meat export consignment of 5,000 Kg to the USA from Gujarat.
• In September 2022, the government amended the Foreign Trade Policy to allow international trade invoicing, payment, and settlement in the Indian rupee, activating the mechanism announced by the Reserve Bank of India (RBI) to facilitate trade in the domestic currency.
• In August 2022, Bangladesh announced deals with Vietnam and India to import a total of 330,000 tonnes of rice as it races to replenish reserves and cool domestic prices.
• In August 2022, Tripura exported nearly 9,909 tonnes of pineapples worth Rs. 14 crore (US$ 1.71 million) to Dubai, Qatar, and Bangladesh.
• In August 2022, the EU announced the ending duty benefits for 1,800 goods under the Generalised Tariff Preference Scheme. India's exports of plastics, stone, machinery, and mechanical appliances worth US$ 7.9 billion to the EU will no longer be eligible for low or zero-duty concessions from January 2023.
• In August 2022, the Minister of State for External Affairs and Education met with the visiting Minister of Commerce of Kiribati to discuss strengthening bilateral ties between the two nations.
• In July 2022, 29 non-official members from large and small enterprises and different sectors in the Board of Trade which includes participants from states, union territories, and senior officials from public and private sectors, provide a platform to discuss ways to boost manufacturing and exports.
• In July 2022, The Ministry of Food Processing Industries (MOFPI) signed a Memorandum of Understanding (MoU) with Japan, Italy, Vietnam, and Taiwan for the promotion of investment in the food processing sector, including cold chain.
• In July 2022, the bilateral trade between India and Thailand reached an all-time high of around US$ 15 billion in 2021-22 as the domestic market remains attractive for Thai investors.
• In July 2022, the Federation of Indian Export Organisations (FIEO) signed a Memorandum of Understanding (MoU) with Rubix Data Sciences to facilitate Legal Entity Identifier (LEI) issuance to Indian exporters and entities.
• In July 2022, the 13th session of the India-Uzbekistan Inter-Governmental Commission (IGC) was held in which 7 emerging areas were identified for increased cooperation such as digital payments, space, agriculture, dairy, and pharma.
• In July 2022, India signed MoUs with Myanmar, Malawi, and Mozambique to increase pulse import.
• In June 2022, ahead of a key ministerial meeting of the World Trade Organization (WTO), at least 60 countries including India, China, Pakistan, Egypt, Indonesia, and South Africa have proposed a new method to calculate subsidies given to purchase, stockpile and distribute food to ensure food security for developing and poor nations.
• As reported in June 2022, India was providing safety certification for dozens of ships managed by a Dubai subsidiary of top Russian shipping group Sovcomflot, enabling oil exports to India and elsewhere after Western certifiers withdrew their services due to global sanctions against Moscow.
• In June 2022, the Centre for Global Affairs and Public Policy hosted a round table conference on "G-20, the Indo-Pacific and the Regional Economic Order: Collaborative Synergies between India and Indonesia" in New Delhi.
• In June 2022, After a nine-year lull, India, and the EU re-launch negotiations for the India-EU Free Trade Agreement.
• In June 2020, Iran’s state-run shipping company said it started its first transfer of Russian goods to India, using a new trade corridor that transits the Islamic Republic. 
• In June 2022, The Indian Cabinet approved the proposal for signing a bilateral MoU between India and the United Arab Emirates (UAE) on Cooperation in the field of Industries and Advanced Technologies to push commercial ties.
• In May 2022, the Comprehensive Economic Partnership Agreement between India and the UAE will come into effect. The agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs.
• In May 2022, India and Germany committed to reforming the WTO to strengthen its principles and functions as well as preserve the autonomy of the two-tier appellate body of the global trade organization.
• In May 2022, Prime Minister Narendra Modi held a series of bilateral meetings with his counterparts from Norway, Sweden, Iceland, and Finland during which he discussed the ways to further deepen bilateral ties and exchanged views on regional and global developments.
• In May 2022, Primark, one of Europe's biggest fast fashion chains, pledged to train an additional 125,000 smallholder cotton farmers in more sustainable farming methods in India, Pakistan, and Bangladesh by the end of 2023.
• In May 2022, Russia offered to export 25 million tonnes of grain to India from August 1, 2022.
• In April 2022, Luxembourg announced its plans to collaborate with India with a focus on sustainable finance. an>
• In April 2022, India agreed to launch the EU-India Trade and Technology Council eyeing closer cooperation on strategic aspects of emerging technologies and building trusted partnerships.pan>
• In April 2022, the government amended the rules of the Foreign Exchange Management Act (FEMA), paving the way for up to 20% foreign direct investment in the insurance behemoth LIC. The government is planning to dilute its stake in LIC through the Initial Public Offering (IPO).
• In April 2022, British Prime Minister Mr. Boris Johnson visited India and announced a raft of commercial agreements and hailed a "new era" in bilateral trade and investment ties during his visit to India.