June 2022 / India

June 16 2022

European Commission Imposes Definitive Anti-Dumping and Countervailing Duties on Imports of Certain Iron Tubes and Pipes Originating in India

On 15 June 2022, the European Commission decided to impose definitive anti-dumping and countervailing duties on imports of tubes and pipes of ductile cast iron originating in India.

The rates of the anti-dumping duty are: (i) 3% for the company Jindal Saw Limited; (ii) 0% for the company Electrosteel Castings Ltd; and (iii) 14.1% for all other companies.

The rates of the countervailing duty are: (i) 6% for the company Jindal Saw Limited; (ii) 9% for the company Electrosteel Castings Ltd; and (iii) 9% for all other companies.

These rates were determined based on the investigation carried out by the European Commission concluding that the EU industry continued to suffer material injury during the investigation period. Therefore, the European Commission decided that the previous provisional anti-dumping measures on imports of tubes and pipes of ductile cast iron should be maintained to prevent further injuries to the EU industry.

The decisions to impose definitive anti-dumping and countervailing duties on imports on the referred goods were adopted by Commission Implementing Regulation (EU) 2022/926 and Commission Implementing Regulation (EU) 2022/927, respectively, which were published in the Official Journal of the European Union (OJEU) on 16 June 2022. These Regulations will enter into force on the day following its publication in the OJEU.

June 20 2022

European Union and India Resume Negotiations for FTA

According to a press release of 17 June 2022, published by the European Commission, the European Union and India formally resumed negotiations for a free trade agreement (FTA) on the same day, in Geneva. The next round of negotiations is scheduled to take place from 27 June to 1 July 2022, in New Delhi. The parties aim to conclude the negotiations by the end of 2023. Further developments will be reported as they occur.

June 17 2022

Artificial Intelligence in Indian Agriculture

Agriculture is one of the most fertile industries there are for artificial intelligence (AI) and machine learning (ML). AI, machine learning and the Internet of Things (IoT) sensors that provide real-time data for algorithms increase agricultural efficiencies, improve crop yields and reduce food production costs. Global spending on smart, connected agricultural technologies and systems, including AI and machine learning, is projected to triple in revenue by 2025, reaching $ 15.3 billion. IoT-enabled Agricultural (IoTAg) monitoring is smart, connected agriculture's fastest-growing technology segment projected to reach $ 4.5 billion by 2025, according to PwC.

Indian Government, during 2020-21 and 2021-22, has allocated funds to the tune of INR 1756.3 cores and INR 2422.7 crores to the States for introducing new technologies including drones, artificial intelligence, block chain, remote sensing and GIS etc in agriculture. Further, the Government also allocated INR 7302.50 crores and INR 7908.18 crores in 2020-21 and 2021-22 respectively to ICAR (Indian Agricultural Research Institute) for undertaking Research and Development in Agriculture for developing new technologies, their demonstration at farmer’s field and capacity building of farmers for adoption of new technology.

In addition to due focus on ensuring improved service delivery and facilitating market access to farmers, the government also accords adequate emphasis towards reducing transaction costs, promotion of Farmer Producer Organisations (FPOs) to improve their bargaining power. Development of infrastructure has also been given due attention to ensure better connectivity of farmers to national and international markets. High-yielding, cost-saving, disease/pest resistant and climate-resilient varieties and technologies in crops, horticulture, animal and fisheries science developed by ICAR have played important role in increasing production and productivity, reducing cost of production and enhancing income of the farmers. Adoption of Farming Systems Models developed by ICAR have also enabled farmers to enhance their income and strengthen their economic condition. Besides, State specific strategies for increasing farmers income, provided to States by ICAR, are also helping farmers to increase their incomes.

Some of the areas that exhibit maximum potential to improve agriculture, with the integration of artificial intelligence are described below:

  • Cognitive computing has become the most disruptive technology in agricultural services as it can learn, understand, and interact with different environments to maximize productivity. Microsoft is currently working with 175 farmers in Andhra Pradesh to provide agricultural, land and fertilizer advisory services. This initiative has already resulted in 30 per cent higher average yield per hectare last year. The pilot project was completed using agricultural AI applications to communicate dates, soil preparation, fertilization based on soil tests, seed treatment, optimal spreading depth, and more. Further, mobile robots and field sensors support digital agricultural robots, multidisciplinary cameras and laser scanners are used for facilities and areas of radiation that cannot be measured.
  • Proximity sensing, remote sensing, Internet of Things (IoT) and image-based Precision Farming are being used for intelligent data integration related to historical meteorology, soil reports, recent research, rainfall, insect infections, along with drone imagery is being used for in-depth field analysis, crop monitoring and field surveys.
  • The artificial use of image recognition using intelligence approaches for plant identification, cation, pest infestation and disease diagnosis is also becoming prevalent. Using AI and machine learning-based surveillance systems to monitor every crop field's real-time video feed identifies animal or human breaches, sending an alert immediately can become very useful to prevent crop damages.
  • Yield mapping to find patterns in large-scale data sets and understand the orthogonality of them in real-time, and optimizing irrigation systems to measure effectiveness of frequent crop irrigation is invaluable for crop planning.
  • Today, there is a shortage of agricultural workers, making AI and machine learning-based smart tractors, agribots and robotics a viable option for many remote agricultural operations that struggle to find workers. These robots can harvest faster, locate and remove weeds more accurately, and thus reduce operating costs and dependence on labour. In the meantime, farmers are already turning towards chatbots for help. Chatbots help farmers by answering their questions and provide advice and guidance on specific agriculture and yield related quires.
  • Improving the track-and-traceability of agricultural supply chains by removing roadblocks to get fresher, safer crops to market can help reduce inventory shrinkage by providing greater visibility and control across supply chains.

Use of AI in agriculture, however promising, isn’t bereft of its challenges. Artificial Intelligence systems require a lot of data to train machines and make accurate predictions. It is difficult to find temporal data for large agricultural areas, although spatial data are easy to collect. Since data infrastructure requires maturity, it takes time to develop a powerful machine learning model. This is one of the reasons why Al is used in agricultural products like seeds, fertilizers, and pesticides, rather than in field solutions. Another important disadvantage is the inflated cost of the many different solutions available in the agricultural market. Solutions need to be more affordable and open-source so that technology can be accessed even at the farm level. With consistent efforts and scalable innovations by both public and private sector, these technological interventions can completely overhaul agriculture and change lives of farmers, for better.

Article co-authored by Ishita Sirsikar and Cherishi Maheshwari - Invest India

June 3 2022

India’s journey towards becoming a major domestic EV hub

The country’s determination to achieve a smooth transition to a green and cleaner economy has witnessed significant fervour. Significant emphasis has been laid on the transition to a carbon neutral economy and the emergence of Electrical Vehicular (EV) systems. This is the foundational step in going beyond the ‘end of pipe’ solutions to control carbon emissions and initiating efforts to prevent vehicular pollution in the country. The upcoming projects and investments in this regard are envisaged to produce significant results in the country, in addition to encouraging good practices to reduce polluting effluents. This pivot to clean mobility has become the need of the hour, considering the focus on climate change and building sustainable development goals. In the recently released World Air Quality Report 2021, 35 out of 50 cities with the worst air quality were from India. In this context, the need for heavy reliance on carbon-neutral public transport by the residents, the promotion of electrical vehicles for personal and/or commercial purposes and the need to adopt other relevant cleaner mobility practices remain at the forefront of several policy discourses. Thus, in particular for the electrical vehicular systems, the coming few years remain pivotal as the Centre targets to achieve at least 30 per cent of the on-road vehicles to be electric by 2030.

Several schemes have been put in place to incentivise companies to build EVs and batteries locally, in order to boost supply and complement a myriad of benefits for EV buyers. The country has been doubling down on its EV ambitions, focusing on cultivating demand for EVs at the domestic forefront while also developing its own locally-produced EV manufacturing industry which could cater to this demand at home and of the neighbours. For instance, initially envisioned for three years, FAME-II got a two-year extension in June 2021 owing to a number of factors including the pandemic. It aims to support 10 lakh e-two-wheelers, 5 lakh e-three-wheelers, 55,000 e-four-wheeler passenger cars and 7,000 e-buses. As a part of this, the government has made a push for indigenous manufacturing with a number of automakers answering the call. While e-two-wheelers and e-four-wheelers receive significant coverage, the three-wheeled EV is an emerging key player in the market.

Three-wheeler EVs, such as e-autos and e-rickshaws, currently account for over 65 per cent of all EVs registered in India and cater to the huge demands of public transportation in the country. Two-wheeler EVs, on the other hand, are a distant second, accounting for over 30 per cent of registrations, while passenger four-wheeler EVs account for only 2.5 per cent, as highlighted by NITI Aayog.

Furthermore, the EV registrations data for various states highlight that Assam, Bihar, Delhi, Uttar Pradesh and West Bengal account for close to 80 per cent of all e-three-wheeler registrations, with U.P. accounting for close to 40 per cent of all registrations. Of these five states, Assam, Delhi, U.P., and West Bengal have formalised EV policies while Bihar has a draft policy with a final policy due to be introduced later in 2022. E-three-wheelers, such as e-rickshaws, are now a familiar sight in these States, having been created and manufactured locally. These cars, which cost between 1 lakh and 1.5 lakh and are made by a slew of local workshops and small businesses, have dominated the e-three-wheeler industry. Local manufacturers have created a truly Indian EV with its unique design suited to Indian commuter needs, thanks to financial aid from FAME-II. Legacy automakers have been struggling to compete with these local producers with their own e-three-wheeler solutions. These states' EV regulations, implemented as part of FAME-II, have played a key role in encouraging this growth.

The goal of these five states' EV regulations is to increase consumer acceptance of EVs while also boosting local manufacturing. All five states offer a complete exemption from road taxes and registration fees. In some circumstances, Assam, Delhi, and West Bengal have tied incentives to battery size (in kWh), with extra benefits such as lower lending rates and scrappage incentives. The state of Uttar Pradesh has taken a different approach to subsidies, providing 100 percent interest-free loans to state government employees for the purchase of electric vehicles in the state, as well as a 30 percent subsidy on the road price of electric vehicles to families with a single girl child. To encourage the sale of electric vehicles manufactured in the state, the state of Uttar Pradesh exempts all such vehicles from SGST. It has established incentives to encourage the manufacture of electric vehicles in the state. Bihar's draught electric vehicle policy follows a similar pattern, focusing on uptake and manufacture. These states have done very well in the FAME-II initiative and are on track to meet the 5-lakh e-three-wheeler target.

India's success in the e-three-wheeler industry is due to the development of both the demand and supply sides. Subsidies, tax breaks, and zero-interest loans have all helped to boost demand for these vehicles. These vehicles provide a low-cost mode of transportation for millions of people, are simple to maintain, and have low operating expenses, making them extremely popular among operators. In comparison to its two-wheeler and four-wheeler counterparts, the indigenous design enables for easy local manufacturing in workshops and small businesses, as well as making them comparatively straightforward to charge and maintain. This success in the e-three-wheeler market has been difficult to reproduce in the e-two-wheeler and e-four-wheeler markets, which face demand and supply issues. Evidently, two-wheelers and four-wheelers are primarily associated with personal use, customers are understandably hesitant to accept such vehicles due to the challenges accompanied with the models. The recent occurrences of e-scooter fires have further contributed to the fear. In India, finding dependable manufacturers with proven track records in the two-wheeler and four-wheeler EV space is difficult. This exacerbates the supply shortage, and there are few economical options available to consumers.

Thus, such challenges must be given special attention in future EV policies. Local manufacturing companies may lack the resources to invest in safety-focused design developments. The lack of effective regulatory control of these producers adds to the difficulties. As a result, future practice must include suitable design and passenger safety criteria. For effective implementation, future EV policies must take into account existing and growing stakeholders on both the demand and supply sides. Given the current state of EVs, India must learn from its e-three-wheeler success story in order to maintain its EV objectives in other areas.

Several experts have further underlined the significance of priority-sector recognition for retail lending in the electric mobility ecosystem. Financial institutions play a crucial role in accelerating the adoption of EVs in India and further supporting the transition to de-carbonised Indian road transport. The central bank’s public sector lending mandate has contributed extensively in improving the supply of formal credit towards areas of national priority. It aims to facilitate a strong regulatory incentive for banks and NBFCs to scale their financing to EV producers, manufacturers and emerging entrepreneurs. Furthermore, to maximise the impact of the inclusion of EVs, several suggestions to recognise EVs as an infrastructure sub-sector by the Ministry of Finance and the incorporation of EVs as a separate reporting category under the RBI have been made. Multi-prong solutions such as these will not only aid EV penetration and businesses, but also the financial sector and India’s 2070 net-zero target.

The government’s focused efforts to establish an indigenous EV manufacturing sector in the country with a vision to cater to the clean mobility demands of the domestic and other key global markets has been readily aligned with the initiatives and schemes of various state departments, agencies and policy networks to incentivise pivotal players in the sector, in addition to urging the upcoming entrepreneurship efforts. Overall, the sector’s performance is noteworthy. As further steps, focus can be laid on establishing frameworks for quality assurance and passenger safety, particularly for personal use vehicles, in the current and upcoming vehicles and to bring such aspects of the sector at the forefront of eminent sector-focused policy discourses.

This is co-authored by Ishita Sirsikar and Srijata Deb - Invest India