Voluntary Report - public distribution

**Date:** 1/16/2004

**GAIN Report Number:** IN4003

IN4003

**India**

**Agricultural Situation**

**Weekly Highlights and Hot Bites, #2**

**2004**

**Approved by:**

![](media/image1.wmf)Chad R. Russell

U.S. Embassy, FASNEWDELHI

**Prepared by:**

A. Govindan, Santosh Kr. Singh, V. Shunmugam

**Report Highlights:**

\*New rules throw farm imports out of gear\*, \*CMIE raises GDP forecast
to 8.2 percent\*, \*EU standards likely only for soft drinks\*,
\*Imported liquor to be cheaper\*, \*BJP recommends election as early as
possible\*, \*Wal-Mart CEO sees retail boom in India\*, \*Del Monte to
can food in India\*, \*Bt cotton acreage doubles to 100,000 hectares\*,
\*Gujarat asked to control spurious Bt cotton seeds\*, \*Gene campaign
moves Supreme Court for right biotech policy\*, \*M.K. Bhan is new
Secretary of the Department of Biotechnology\*.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

New Delhi \[IN1\]

\[IN\]

Welcome to Hot Bites from India, a weekly summary of issues of interest
to the U.S. agricultural community. The report includes information that
has been garnered during travel within India, reported in the local
media, or offered by host country officials and agricultural analysts.
Press articles are included in this report. Significant issues will be
expanded upon in subsequent reports from this office.

DISCLAIMER: Any press summary contained herein does NOT reflect USDA's,
the U.S. Embassy's, or any other U.S. Government agency's point of view
or official policy.

# NEW RULES THROW FARM IMPORTS OUT OF GEAR

Agriculture commodity importers are in a fix since the beginning of the
year over a new set rules and regulations governing the import of a wide
range of agricultural products. However, most big players in the
commodity markets are still unaware of the government's new regulations.
The new "Plant Quarantine (Regulation of Imports into India) Order,
2003", establishes procedures and quarantine requirements for plants,
planting materials, and various agricultural products imported into
India. The notification contains new Additional Declarations regarding
pests and conditions for imports. Many of the conditions are impossible
to comply with, and reveal a lack of understanding of business
procedures on the part of the bureaucrats, according to some traders.
(Source: Business Line, 01/14/04)

*Post Comment*: For additional details, see IN3126. Post continues to
reach out to relevant interlocutors in the Indian Ministries of
Agriculture and Commerce, seeking further clarification on the new rules
and striving to ensure that they will not cause a problem to pending
U.S. shipments and future imports.

## CMIE RAISES GDP FORECAST TO 8.2 PERCENT

The Center for Monitoring Indian Economy (CMIE), an Indian economic
think tank, has raised India's GDP growth forecast for FY 2003/04
(Apr-Mar) upward to 8.2 percent. The forecast for agriculture growth
remains at 10.7 percent. (Source: Business Line, 01/13/04)

## EU STANDARDS LIKELY ONLY FOR SOFT DRINKS

In a knee-jerk reaction to the controversy over the high pesticide
residues in cola drinks, the government issued a draft notification
setting EU standards for all beverages, including carbonated drinks,
fruit juices, tea, and coffee (see IN3085). However, now the Ministry of
Health wants to have these standards for only carbonated drinks, and not
for other beverages, which include fruit and vegetable juices. Consumer
groups seem to be supporting this change. In a letter reportedly written
to the Bureau of Indian Standards, the Ministry of Health has
recommended that specifications for each product should be separate.
According to the new recommendation by the Ministry of Health, products
containing fruit juices up to 20 percent, or beverages with tea/coffee
base, need not conform to the stringent pesticide residue prescribed.
"Our views are that the requirement prescribed for packaged drinking
water should be applicable to those products where water is the
principle ingredient," says the recommendation. (Source: Indian Express,
01/09/04)

*Post Comment*: This reported move by the Health ministry has not yet
been officially notified.

## IMPORTED LIQUOR TO BE CHEAPER

The GOI has reduced the import duty on spirits from 166 percent to 150
percent. Importers of foreign spirits are also likely to benefit from
the recent removal of the 4 percent Special Additional Duty.
Bacardi-Martini India's Managing Director, Jayant Kapoor, said that he
expects prices of bottled-in-origin brands to come down by 10 percent.
(Source: Business Standard, 01/09/04)

## BJP RECOMMENDS ELECTION AS EARLY AS POSSIBLE

The national executive meeting of the Bhartiya Janata Party (BJP) has
recommended to call for general elections as early as possible. The BJP
leads the ruling coalition government, called the National Democratic
Alliance. Responding positively to the BJP recommendation, the Prime
Minister expressed hope that a new government will be in place by April
2004. (Source: Business Line 1/13/04)

## WAL-MART CEO SEES RETAIL BOOM IN INDIA

Speaking at the National Retail Federation convention, the CEO of
Wal-Mart observed that India, with its huge middle class, was ripe for
expansion. However, India continues to ban foreign direct investment in
its retail sector. (Source: Business Line 1/13/04)

## DEL MONTE TO CAN FOOD IN INDIA

Del Monte Pacific Ltd, an affiliate of the US food giant Del Monte
Corporation, is planning to set up a manufacturing facility in India to
produce fruits and vegetable products. Del Monte has reportedly
approached the Foreign Investment Promotion Board, seeking permission to
set up a processing unit to manufacture, distribute, and market
processed food (including ketchups, sauces, condiments, juices, jams,
processed fruits, etc.). The Indian market for processed food is
estimated at around \$3.2 billion, 75 percent of which are unorganized
small players who process less than one metric ton per day. (Source:
Financial Express 1/13/04)

## BT COTTON ACREAGE DOUBLES TO 100,000 HECTARES

A Manila-based research firm, International Service for the Acquisition
of Agri-biotech Applications, reports that India has doubled its Bt
cotton-cultivated area to 100,000 hectares in 2003, after planting it
for the first time in 2002. The report states that farmers in India have
made up their minds, as they continue to adopt Bt cotton because of
significant agronomic, economic, and environmental advantages. (Source:
Financial Express 1/14/04)

## GUJARAT ASKED TO CONTROL SPURIOUS BT COTTON SEEDS

India's agriculture ministry has asked the Gujarat state government to
take action against the manufacturers and vendors of spurious Bt cotton
seeds. There are reports of illegal sowing of Bt cotton seeds in Gujarat
and parts of northern India. There are also reports of unapproved Bt
seeds allegedly being sold by a local seed company in Gujarat. This has
prompted the agriculture ministry to seek stringent action against the
illegal sowing of Bt cotton. (Source: Financial Express 1/14/04)

**GENE CAMPAIGN MOVES SUPREME COURT FOR RIGHT BIOTECH POLICY**

Gene Campaign, a leading voluntary organization, has urged the Supreme
Court of India through a Public Interest Litigation (PIL) to bring the
existing biotech regulations in line with the constitution of the
country. Pending a verdict on this, the petition called for a moratorium
on permissions, approvals, and trials of genetically engineered crops.
(Source: Financial Express 1/10/04)

*Post Comments*: Post's agbiotech industry contacts indicated that their
field trials are currently taking place as per schedule, and that they
do not foresee any such bans to be imposed on their trials in the near
future. They indicated that, in a previous PIL by another NGO, the
Supreme Court affirmed its faith in the existing laws and scientific
institutions administer govern those laws.

**M.K. BHAN IS NEW SECRETARY OF THE DEPARTMENT OF BIOTECHNOLOGY**

Dr. Maharaj Kishan Bhan has been appointed as Secretary of the
Department of Biotechnology (DBT), replacing Dr. Manju Sharma, who is
retiring. A press release of January 13, 2004, said that the Cabinet
approved his appointment recently. (Source: Financial Express 1/14/04)

*Post Comments***:** Dr. M.K. Bhan is currently a senior Professor in
the Department of Pediatrics in the All India Institute of Medical
Sciences, and is expected to take charge as Secretary, DBT, on March 1,
2004. Official contacts revealed that he is a pediatrician by training,
and has conducted some experiments in pharmaceutical biotechnology in
collaboration with the DBT. Dr. Bhan is from the Department of Health,
and he succeeds two consecutive past secretaries from the agri-biotech
field. His appointment is further significant in light of the perceived
health issues relating to consumption of genetically engineered food
products, which are currently being raised by activists.

**RECENT REPORTS SUBMITTED BY FAS/NEW DELHI**

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  **REPORT    **SUBJECT**                             **DATE SUBMITTED**
  \#**                                                

  IN4001      Weekly Highlights & Hot Bites, #1       01/12/04
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