Voluntary Report - public distribution

**Date:** 10/31/2003

**GAIN Report Number:** IN3107

IN3107

**India**

**Agricultural Situation**

**Weekly Highlights & Hot Bites, No. 44**

**2003**

**Approved by:**

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

U.S. Embassy, FASNEWDELHI

**Prepared by:**

A. Govindan, Santosh Kr. Singh, V. Shunmugam, Sayed Sarwer Hussain

**Report Highlights:**

\*No extension of WTO peace clause - Commerce Minister\*, \*Government
could permit 10 Bt cotton strains\*, \*India-New Zealand to cooperate on
market access issues\*, \*Fresh hike in edible oil base prices\*,
\*Egypt-STC wheat talks at an advanced stage\*, \*Bangalore wholesalers
protest against entry of German retail chain\*, \*Scary report on toxins
in food buried for ten years\*, \*Bangladesh: Dhaka, Delhi FTA soon,
three-day trade talks end\*, \*Bangladesh: US trade show begins in Dhaka
Jan 21\*.

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.

# NO EXTENSION OF WTO PEACE CLAUSE -- COMMERCE MINISTER

The Indian government is not in favor of extending the peace clause in
the WTO Agreement on Agriculture beyond the December 31, 2003, deadline,
according to Commerce Minister, Jaitley. He also denied any pressure
from the WTO for reducing subsidies extended to the farm sector, as the
country is "well within the permissible level of 10 percent of the value
of agricultural output." Commerce Ministry officials stated that India
had mooted, even after the abolition of the peace clause, that measures
taken by developing countries including those relating to domestic
support might be exempted from countervailing actions by the developed
countries. (Source: Financial Express, 10/25/03)

## GOVERNMENT COULD PERMIT 10 BT COTTON STRAINS

Agriculture Commissioner of the Government of India told reporters that
the government is expected to allow commercial planting of 10 varieties
of bioengineered Bt cotton over the next two years. According to the
media, most of these Bt cotton varieties to be launched in the next two
years would be from Indian Companies. The commissioner also said that no
bioengineered crop would be introduced into the market in the next five
years, though scientific trials are on in various bioengineered crops.
(Source: Business Line 10/28/03)

## INDIA-NEW ZEALAND TO COOPERATE ON MARKET ACCESS ISSUES

India and New Zealand have agreed to give due consideration to each
other\'s request on market access issues in the 8th India-New Zealand
Joint Trade Committee meeting. India has requested a reduction in tariff
for textiles, clothing and footwear. The New Zealand side reiterated its
request for reduction in tariff on apples, sawn timber, fiber boards,
and food processing and refrigeration equipment. India has agreed to
examine whether imports of New Zealand apples could be facilitated
during off-season. (Source: Press Information Bureau, Government of
India 10/16/03)

*Post Comment*: U.S. exports of apples to India registered \$10.6
million (40% market share) in 2002/03 (Mar-Apr), continuing its upward
trend.

## FRESH HIKE IN EDIBLE OIL BASE PRICES

In the wake of continuous increases in international prices of edible
oils, the Finance Ministry on October 29, 2003, raised the tariff value
on various imported edible oils by \$42 - \$52/ton. According to trade
sources, the government\'s reaction to the price changes in the
international markets has been quick this time and had caught many of
them by surprise. While the Solvent Extractors' Association of India,
welcomed the upward revision claiming that it will help farmers realize
better prices for oilseeds, the Indian Vegetable Oil Processors'
Association demanded: (a) a reduction in the import tariffs for edible
oils, (b) transparency in the fixation of tariff value, and (c)
restoration of duty differential between crude and refined edible oils.
(Source: Business Standard and Business Line 10/30/03)

*Post Comment*: See IN 3103 and 3105.

# EGYPT-STC WHEAT TALKS AT AN ADVANCED STAGE

The State Trading Corporation of India (STC) is holding advanced talks
with Egypt for exports of 60,000 tons of Indian wheat. The deal will be
conditional on the wheat being sourced from predominantly karnal-bunt
free areas with a tolerance limit of 0.03 percent karnal bunt. "Egypt
has asked for a firm offer for immediate sale of 60,000 tons of wheat,
and we have given them the offer. It (Egypt) is interested in spreading
its wheat purchases from a number of countries rather than restricting
it to one or two as is the case now," STC's Chairman and Managing
Director Mr. Arvind Pandalai said. (Source: Business Line, 10/30/03)

*Post Comment*: The Indo-Egypt wheat talk has been going on for past six
months (see IN 3031).

# BANGALORE WHOLESALERS PROTEST AGAINST ENTRY OF GERMAN RETAIL CHAIN

The Bangalore Agriculture Produce Marketing Cooperative (APMC) Yard has
stopped business protesting against the entry of German retail chain,
Metro Cash & Carry into their operation. Metro opened its first
wholesale outlet on October 20th amidst demonstrations by the traders.
Thousands of wholesale and retail traders in the APMC yard have been on
indefinite strike demanding Metro\'s exit. Traders contend that Metro
was violating the APMC act as the licensed wholesalers should trade
within the market yard whereas Metro\'s outlet is outside. Traders argue
that Metro is strongly under cutting the margins and will wipe out the
other traders rendering thousand of people jobless. Meanwhile, Metro
claims an overwhelming positive response from retailers, wholesalers,
distributors, and various small and medium businesses such as
restaurants. Also, Metro\'s plan for opening second outlet in Bangalore
by end of November remains unaffected by the protests. (Source: Business
Line 10/23/03)

## SCARY REPORT ON TOXINS IN FOOD BURIED FOR TEN YEARS

An 80-page report, called \"Surveillance of food contaminants in India\"
prepared by the Indian Council of Medical Research and a team of
pesticide experts was released and soon withdrawn by the government in
1993, as it contained shocking findings. Also, there was a string of
other official studies on pesticide residues which went unheard by the
concerned ministries. The Joint Parliamentary Committee, set up after
the recent Cola controversy, has asked for copies of this report, which
not only exposed the magnitude of the pesticide residue problem ten
years ago, but was also the first official report to acknowledge that no
one was measuring food safety pesticide levels in India. (Source: Indian
Express 10/29/03)

***BANGLADESH*: DHAKA, DELHI FTA SOON, THREE-DAY TRADE TALKS END**

Trade officials of Bangladesh and India reaffirmed their commitments to
conclude the much-talked-about free trade agreement (FTA), while
wrapping up a three-day joint-secretary level trade negotiation by the
two South Asian nations. The FTA negotiation is now due to start in
January next year in the Indian capital New Delhi. Joint Secretary of
India's commerce ministry termed the outcome of the negotiation a
\"significant breakthrough\" and estimates nine months to one year to
accomplish the procedures of signing the FTA. Leader of the Bangladesh
team however, made cautious remark on the proposed agreement, saying
Dhaka was skeptic about the free trade deal as it was a new thing for
the country. (Source: The Independent, 10/23/03)

# *BANGLADESH*: US TRADE SHOW BEGINS IN DHAKA JAN 21

# 

The 13th annual US Trade Show will begin at Dhaka Sheraton Hotel on
January 21 next year. The American Chamber of Commerce and Industry
(AmCham) in collaboration with the US embassy in Dhaka will organize the
three-day trade show, which will showcase US products and services (
Source: The Daily Star, 10/30/03)

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

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

  IN3104      Weekly Highlights & Hot Bites, #43      10/23/03

  IN3105      GOI Notifies Changes in Edible Oil      10/30/03
              Tariff Values                           

  IN3106      Oilseeds and Products Update - November 10/31/03
  ----------- --------------------------------------- -------------------

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