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Union Cabinet approves Agreement between India and Uruguay for Cooperation in Customs Matters

The Union Cabinet has approved signing and ratifying an Agreement between India and Uruguay for cooperation and mutual assistance in Customs Matters.

The Agreement will help both countries in the availability of relevant information for the investigation and prevention of Customs offences.

Key Facts
  • The Agreement is also expected to facilitate trade and ensure efficient clearance of goods traded between both countries.
  • It also takes care of concerns and requirements of Indian Customs particularly in area of exchange of information on correctness of the Customs value declared, description of the goods traded between the two countries and the authenticity of certificates of origin of goods.
  • It will provide a legal framework for sharing of information and intelligence between the Customs authorities of the two countries.
  • It will also help in the proper application of Customs laws, prevention and investigation of Customs offences and the facilitation of legitimate trade.
Background

Uruguay is one of the important trading partner of India among members of the MERCOSUR, a trading block in Latin America. India has signed a Preferential Trade Agreement (PTA) with the MERCOSUR which came into effect in June, 2009.  Trade between India and Uruguay has been expanding gradually.

About Mercosur

Mercosur is a sub-regional political and economic bloc of South American countries. It calls itself the common market of the South America. At present, it is a full customs union and a trading bloc. Its full members are Argentina, Brazil, Paraguay and Uruguay. Its purpose is to promote free trade and the fluid movement of goods, people, and currency. It was established in 1991 and its headquarters are located at Montevideo (Uruguay). Its associate countries are Chile, Bolivia, Peru, Colombia, Ecuador and Suriname. Besides, New Zealand, Mexico are observer countries.

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China agrees to import rice from 17 mills in India

China has agreed to import rice, non-basmati and basmati varieties from 17 registered mills in India. These mills are in Punjab, Haryana, Uttar Pradesh and Madhya Pradesh.

It is considered as a major breakthrough in India’s efforts to ensure market access for Indian products (especially rice) in China as it is the world’s largest rice importer.

What is the issue?

  • India had repeatedly sought market access for Indian products citing the country’s widening goods trade deficit with China.
  • The products included non-basmati rice, pharmaceuticals and many fruits and vegetables among others.
  • However, China had not granted market access to India’s non-basmati rice claiming that it failed to meet Chinese norms on quality, safety and health standards.
  • China’s apprehensions included the possibility of the cabinet beetle (or Khapra beetle) pest getting transported along with Indian non-basmati rice consignments to China.
  • In India, China’s objection to Indian non-basmati export was seen more political in nature than anything else as it imports non-basmati rice from its all weather friend Pakistan.

Note: India’s goods trade deficit with China has ballooned to $52.7 billion in 2015-16 from $1.1 billion in 2003-04.

Background

  • After numerous requests from Indian side, Chinese officials had visited India in September to inspect 19 rice mills registered with National Plant Protection Organization (NPPO).
  • NPPO had assisted its Chinese counterpart AQSIQ during inspection for plant quarantine purposes and pest-risk analysis to ensure that non-basmati consignments from India will be pest-free, of good quality and safe.
  • The Agricultural and Processed Food Products Export Development Authority (APEDA) under the Indian Commerce Ministry was also involved in the process.
  • Besides, India also had earlier sent the information sought by AQSIQ regarding the quality protocol and standard operating procedures.

NPPO is the nodal government agency for inspecting mills and granting certificates on plant health for export purposes. It is mandatory for Indian rice exporters to get registered with NPPO.

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Iran becomes India’s top crude oil supplier  

Iran for the first time ever has surpassed Saudi Arabia to become India’s top crude oil supplier. It was revealed by ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.

Earlier, Iran used to be India’s second-biggest oil supplier after Saudi Arabia till 2010-11. However, it had ceded its position to Iraq after the tougher western countries sanctions imposed on Iran over its nuclear development programme.

Key Facts

  • India’s oil imports from Iran have shot up after sanctions were lifted in January 2016. In October 2016, oil imports from Iran surged more than threefold as compared October 2015.
  • In October 2016, India imported 7,89,000 barrels per day (bpd) from Iran compared to 6,97,000 bpd supplied by Saudi Arabia.
  • In the January to October 2016 period, Saudi Arabia still holds India’s top supply spot, at an average of 8,30,000 bpd against Iraq’s 7,84,000 bpd and Iran’s 4,56,400 bpd.

What are reasons for sudden surge?

  • Iran produces almost 4 million bpd of oil and exports 2.4 million bpd. Its arch rival Saudi Arabia, has increased its capacity to refine oil rather than exporting more crude.
  • Iranian price discounts has attracted purchases from India’s programme to build up its strategic petroleum reserves (SPR).
  • For the SPR stocks, India imported 2 million barrels of Iran and is going to import another 4 million barrels in November 2016.
  • Besides, buyers of Iranian oil which had stopped imports during the sanctions period again have returned. It includes, Indian refiners including Reliance Industries Ltd, operator of the world’s biggest refinery complex at Jamnagar.

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