India Looking At Lowering Lng Imports From Qatar

In an interesting development, India is weighing the option of cutting natural gas import volumes from Qatar under its long-term contract.



Multiple sources said that with gas prices in the spot market being lower by almost $6 a unit (gas is measured in million British thermal units) than the prevailing long-term price it has with Qatar’s RasGas, India is looking at cutting the contracted volumes by about 10 per cent.



Petronet LNG imports 7.5 million tonnes annually from the global energy supplier, RasGas, under the long-term agreement.



The two had signed the first sales and purchase agreement (SPA) in 1999. Sources said the contract provides for flexibility of reducing the volumes on acceptable terms.



At present, this gas is priced at $13 a unit, while the spot delivers at India’s shores are at around $7 a unit. To this landed cost are added re-gasification costs, transmission tariffs, marketing margins, and local taxes/levies, before the end-user receives it.



High level talks are on between India and Qatar, though New Delhi allows companies to procure liquefied natural gas (LNG) under open general licence.



Under the open general licence, the marketer is free to purchase and sell based on commercial consideration. “The ties, which the two countries have had, make it a sensitive issue. Since this will not be a commercial decision, lot will depend on the political powers,” another official said.



“With new gas markets opening up for India, including the US, the country will have to re-align its gas import strategy and look at best deals in pure commercial terms,” the official said adding that even Qatar would like to maintain its strong position.



In December 2014, Petronet had received its 1000th cargo under this contract at its Dahej LNG Terminal. Petronet’s second terminal is at Kochi. Petronet is meeting approximately 30 per cent of the country’s gas demand.

Source:- thehindubusinessline.com

Foreign Trade Policy May Fuse Multiple Export Subsidy Schemes

Aiming to streamline export sops, the commerce ministry is likely to consolidate a host of schemes, such as focus market, focus product and market-linked focus product, as a single scheme in the foreign trade policy (FTP) to be released on Wednesday.

A government official speaking under condition of anonymity said the aim is to simplify the export subsidy regime. “At present, duty credit scrips for such schemes are around of 2-4% of the total value of exports. Scrip with a higher rate is proposed under the new consolidated scheme,” he added.

The FTP 2015-20—like the Plan document released by the erstwhile Planning Commission—charts a five-year path for boosting exports with set milestones which are reviewed every year. The previous FTP (2009-14) expired in April last year and a new policy was expected to be released after the National Democratic Alliance government took charge in May. However, differences between the finance ministry and the commerce ministry on the amount to be allocated for export schemes has delayed the FTP by a year.

The Focus Market Scheme (FMS) aims to offset high freight costs and other externalities to select international markets with a view to enhance India’s export competitiveness in these markets. The objective of the Focus Product Scheme (FPS) is to promote exports of products that have a high export intensity and employment potential, so as to offset infrastructural inefficiencies and other associated costs involved in the marketing of these products. The Market-linked Focus Product Scheme (MLFPS) is another kind of FPS but linked to exports to identified countries. Other similar schemes, such as the Special FMS and Special PMS, are also likely to be integrated into the proposed new scheme.

In the 2013-14 annual supplement to the FTP, the total number of countries under FMS and Special FMS were increased to 125 and 50, respectively. During the same year, 47 new products were added under MLFPS from the engineering, auto components and textiles sectors while Brunei and Yemen were added as new markets under the same scheme.

Independent foreign trade analyst T.N.C. Rajagopalan said there is an opportunity and scope to integrate the market and product-specific schemes as other schemes such as the interest subvention scheme and the export promotion capital goods (EPCG) scheme are time-tested schemes.

“However, the government has to keep in mind that any such integrated scheme is compatible with the World Trade Organization rules. The government may be thinking in line with the earlier duty-free credit entitlement scheme which was introduced in 2003 by then commerce minister Arun Jaitley (and later withdrawn by the United Progressive Alliance government),” he added.

Rajagopalan said the FTP may also make the right noises about integrating the export strategy with the Make in India and Digital India initiatives.

The official cited earlier also said the Duty Free Import Authorization (DFIA) Scheme, which enables duty-free import of inputs required for export production, is also proposed to be modified, while certain sections of its users may be excluded from the scheme.

India’s merchandise exports contracted for the third consecutive month in February by a record 15% to $21.5 billion. Even though the US economy is doing better than expected, uncertainty in the euro zone due to the threat of Greece exiting the economic union have affected India’s exports. The high level of rupee appreciation has also made Indian shipments uncompetitive. In the past two months, the rupee has appreciated 10-12% based on the real effective exchange rate, which has blunted India’s edge in exports.

The International Monetary Fund on Wednesday said external risks to the Indian economy emanate from a prolonged period of weak global growth, which could dampen Indian exports, apart from any unexpected developments in the course of US monetary policy normalization, particularly against the backdrop of recent large capital inflows.

Source:- livemint.com

Rupee Opens Lower At 62.59 Per Dollar

The Indian rupee on Monday weakened against the dollar, tracking the losses in the Asian currencies market. The local unit opened at 62.59 per dollar. At 9.09am, the home currency was trading at 62.57, down 0.25% from previous close of 62.42. The Sensex index rose 0.75% or 204.75 points to 27,663.39 points.

Major Asian currencies were trading lower against the dollar. The Malaysian ringgit was down 0.67%, Singapore dollar down 0.31%, Indonesian rupiah 0.19%, South Korean won 0.19%, Thai baht 0.15%, Japanese yen 0.08%, Taiwan dollar and Philippines peso fell 0.06% each.

As financial year is closing, the traders are cautious with the next week getting shortened with mere two market working days—30 March and 31 March. Bank transactions will not happened on 1 April due to annual closure of accounts while 2 and 3 April will be bank holiday for ‘Mahavir Jayanti’ and ‘Good Friday’ respectively. To add to their woes, the markets will be closed on 4 and 5 April due to weekly holidays.

The yield on India’s 10-year benchmark bond was trading at 7.77% compared with its Friday’s close of 7.777%. Bond yields and prices move in opposite directions.

Since the beginning of this year, the rupee has gained 1%, while foreign institutional investors have bought $5.77 billion from local equity and $6.88 billion from bond markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.495, up 0.21% from the previous close of 97.499.

Source:livemint.com

Indigo Gets Approval To Import 400 Aircraft Over Next 10 Year

IndiGo has received approval from the government to import 400 additional aircraft over the next 10 years. The airline already has in place an approval (granted in May 2010) to import 150 A320 neos till 2025.



If the import approvals are anything to go by, on an average IndiGo will be importing one aircraft every week for the next 10 years making it the fastest and largest fleet expansion programme for any scheduled airline in India’s civil aviation history. The country’s nine scheduled airlines operate between them around 375 aircraft currently.



To put things in perspective, IndiGo itself has inducted on an average one aircraft every month since it started operations on August 4, 2006. At present, it has an operational fleet of 93 aircraft. IndiGo had a lion’s share — 37.1 per cent — of the traffic in the domestic market as of last month.



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A senior official in the ministry of civil aviation said, “IndiGo had applied for permission to import 400 additional aircraft in December last year. The same has been granted to them. They have been given in-principle approval to import these aircraft over the next 10 years till 2025.”



A spokesperson for IndiGo confirmed the development said, “The import approval for 400 aircraft include orders for 250 planes placed in October last year, additional purchase rights for 100 aircraft and 30 optional aircraft purchase rights pending from an earlier order placed in 2011.”



In the largest single order for aircraft maker Airbus, IndiGo in October last year signed an agreement to buy 250 A320neo planes. The companies did not disclose the deal value. Going by the list price, it could be $25.7 billion, though airlines usually get a discount in such deals. The airline had options to exercise additional purchase rights for another 100 aircraft.



IndiGo president Aditya Ghosh had said the deliveries under the new order would begin from 2018 and overlap with those under the 2011 one.



Before this, IndiGo had made two mega orders for Airbus aircraft — for 100 A320s in 2005, and 180 planes (150 A320neos and 30 A320s) in 2011. The 2011 order, though, was later modified to 180 A320neos. Airbus has said the A320neos, with their new engines and enlarged wing-tip devices, will deliver fuel savings of 15 per cent from day one.



In November last year, the country’s only profitable airline had completed induction of 100 planes from its 2005 order (two years ahead of schedule). It had then decided to take 12 planes on lease from Tigerair to stay ahead of competition. The deliveries of A320neo planes under its 2011 order will begin from October 2015. No other Indian airline has such big pending orders. Among peers, GoAir has ordered 72 Airbus A320neos and SpiceJet for 42 Boeing 737 Max.



IndiGo’s massive fleet induction plans come at a time when the market is rife with speculations about a possible initial public offering later this year. According to reports, the airline is looking at raising $ 400-450 million from an IPO, which will be managed by six investments banks. The red herring prospectus for the planned debut on the stock exchange is likely to be filed by May this year.



IndiGo follows a sale-and-leaseback model. While most of its planes are on lease for six years, a few are on financial lease for 10-12 years.

Source:- financialexpress.com

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