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Aviation pollution and environmental issues

Aviation has several environmental impacts faced basically by the residents and that’s why many activists
around the world have started focusing on this matter. There are immediate demand and an urgent
need to address the environmental effects with the growth in demand for aircraft and airplanes.

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INTRODUCTION

 Aviation is one of the most important parts of our national economy which provides people an option to move throughout the world. Recently, the outlook of the Government of India towards the Aviation industry has undergone many changes in almost every area; the emerging trends in the industry include new and totally different concepts of ownership, finance, operations, and free hassle free management. The new emerging trends in this industry in a global scenario are the increased globalization of economies, liberalization of aviation policies, developments in civil aviation, privatization of airlines, open skies bilateral agreements, etc.

 In the wake of the increasingly organized movement of goods and services globally, there is rising pressure in civil aviation as well, to grow as a super-fast mode of transportation and that’s how the Civil aviation has transformed itself from a mode of transformation to an essential part of our life from past few years, our overall growth is at the cost of our own environment, no doubt this is one of the fastest-growing industry in the global market and is experiencing growth all over the world but at the same time, commercial aviation consumes good amounts of nonrenewable fuels which leads to their depletion. According to one of the reports from Airports is too important to Privatize – a letter to the editor, 1992. Wall Street Journal, over the past 50 years, around 9 % demand for air travel has risen per annum globally and growth at a reduced rate of around 3-7% is predicted for the next coming 20 years.

 Growth of Aviation Industry and Environmental Hazards 

The increasing demand for air services in India is the reason for the deregulation of the airline industry, according to a report, by 2017 the growth in India’s air traffic was expected to increase in around 52.31 million domestic passengers and by 32.98 million in international passengers and by 2020 it was expected by The Centre for Asia Pacific Aviation that the Indian commercial fleet will grow by 1000 aircraft from 380 aircraft and which will lead to automatically growth of fuel consumption to 3-3.5% and somehow will reach between 461 Mt. by 2036. According to a report by ICAO 2010, Environment Report 2010, Domestic and International operations will account for 38% and 62% of global fuel consumption respectively. Globally, the Aviation industry has a much positive economic and social impact on our society from making our lives convenient to travel the world to have a source of income from tourism; there have been several benefits.

 According to Intergovernmental Panel on Climate Change established by United Nations Environment Programme and Meteorological Organisation, around 4.9% of humans caused climate change, which includes greenhouse gases and the emission of Carbon dioxide, which is contributed by the air transportation system. According to research done by Airbus, in the Middle East, the air traffic will double by the year 2034 and the number of passenger’s fleet of airlines will grow by 2365 new passenger aircraft. With the increase in demand for air travel, there is now a greater need to examine ways to reduce its potentially damaging effects on our planet. 

Causes of Environmental Issues in Indian Aviation 

Industry Aviation has several environmental impacts faced basically by the residents and that’s why many activists around the world have started focusing on this matter. There are immediate demand and an urgent need to address the environmental effects with the growth in demand for aircraft and airplanes and the emission of some pollutants. As a result of these factors and with the rising value being placed on environmental quality, there are increases in constraints on mobility, economic vitality as well as the nation’s security. The environmental issues of the aviation industry can be classified into the following categories. 

Airlines Environmental issues

 Airport Environmental issues

 Environmental Pollutions Health Hazards

 Airlines Environmental Issues or Climate Change impacts of aviation emission: Atmosphere can be categorized into five spheres i.e. Troposphere (0-7 miles from ground level), Stratosphere (7-31 miles from ground level), Mesosphere(31-50 miles above the ground level), Thermosphere( 50- 440 miles above the ground level), Exosphere( 440-6200 miles from the ground level) and lastly Ionosphere ( it overlaps both the thermosphere and exosphere, it is ionized by solar scattering and contains magnetic powers and enhances radio waves propagation to distant places to earth) the pollution by aircraft can be categorized into different atmosphere layers like Carbon dioxide (CO2), NOX, Ozone layer and the last one is ground-level pollution. Carbon Dioxide (CO2): 

Nowadays many aircraft generally travel at the height of 35000 feet and their engines emit exhaust which contains CO2 which is generally heavier than the air. According to the Intergovernmental Panel on Climate, Change CO2 is the most important gas which emits from the aircraft due to the combustion of fossil fuel which largely contributes to more greenhouse effect and climatic change. The level of CO2 emission is expected to increase more and more in the upcoming decade, and the level of toxic elements generated by this emission is very high regardless of the altitudes, but the effect of this greenhouse gas is more effective at the level of the Stratosphere than lower altitudes.

 Sometimes at the altitude at which the commercial airlines fly, CO2 which is released by the aircraft does not condense because the temperature varies from -35 degree C to -50 degree C which is warmer than the freezing point of this gas which is 56 degrees C and therefore it will disperse slowly because of the pressure of the gas at that temperature is 101 PSIG which will descend the lower altitudes which causes slow descending nature of these gases. The elevation below which the air and the pollutants mix is known as Mixing height and the emission at this height mainly contributes to the groundlevel air pollution and climate change as well when emissions are above the level of mixing height.

 NITROGEN OXIDE (NOx)

 At the layer of Troposphere this gas emits at a large amount by jet airline ranging from subsonic, supersonic was known for more than 20 years ago by Hidalgo and Cruten which are effective information of ozone (O3) in the upper layer of troposphere, and could damage the ozone layer. Volatile organic compounds also play a significant role in hampering the functions of the ozone layer which is basically present in the aircraft’s emissions, at the altitude of 8-13 km, these gases are in dominant nature and hence increased the concentration of O3 enhances the effect of global warming. 

The emission of NOx results in reducing the ambient levels of methane in the atmosphere which affects globally and the lifetime is around 8-12 years. There is an emission of around 5-25 kg of NO2 per kg burning of fuel. Direct aircrafts emissions include some harmful pollutants such as Carbon Dioxide and Water that can affect the climate along with some other effects like the production of ozone in the troposphere layer alteration of methane lifetime, contrail and cirrus cloud formation, etc. No doubt that Nitrogen oxide has a cooling effect in the atmosphere by reducing the greenhouse and other gases like methane but still at the same time it doesn’t counterbalance the warming effect which is caused by the formation of Ozone and the overall effect is increasing the temperature of earth’s atmosphere. 

CONTRAILS AND CIRRUS CLOUD FORMATION

 Contrails generally formed at altitude where the temperature is very cold and hum, and in turn it may lead to the formation of cirrus clouds, sometimes the lifetime of contrails vary from seconds to hours. But the warming effects are highly dependent on altitude, location, and atmospheric conditions, there is no such particular report on the extent of the enhanced cirrus that arises from aircraft contrails and particle emission is also not well quantified but at the same time, there is some evidence which shows that cirrus clouds and air traffic are interrelated.

 SOOT AND AEROSOLS

 Soot basically traps outgoing infrared radiation and has a small warming effect, and the overall effect is regional and not global, Aerosols are totally different from soot, it reflects the solar radiation and have some cooling effects and has same regional effect as same as soot.

 Airport Environmental Issues

 Airports have also been accused of degrading the environment because of various factors. Even the slightest variations in terms of going against the environmental norms could lead to suspension of operations, which we don’t expect and are striving towards a friendly approach. a serious role for pollution caused at airports is by ground access vehicles (GAV) and ground support equipment (GSE). of these vehicles include; the staff jeeps; cars; heavy-duty pushback trucks; ground power units; passenger terminal buses; catering trucks; cleaning trucks; mobile airconditioning units. Apart from the above, this also contributes to the pollution crisis at the airports especially during peak hours within the morning and evening, because the aircrafts lineup expecting take-off clearance while others have their engines idling and one clearly figure out the foggy, hazy and smoky environment at the airport’s tarmacs and thresholds of the runways.

 Even when present on the bottom, the emissions from different categories of aircraft and airport vehicle emissions include harmful NOx, CO2 compounds that have very serious consequences on the health of individuals residing nearby, and also to those lying directly below the flight path (during take-off and landing). These compounds are carcinogenic in nature. Another defying aspect of airport pollution is that the biodiversity that has plants/ tree plantations and avian (birds) and has become at the brim of destruction while an airport is freshly under construction. the development of the airport involves clearing of planted lands that are usually spoken over vast areas and hectares (as 5500 Acres) of fields of plantations like rubber or filling from marsh areas with an incredible amount of sand and concrete like just in case of Singapore’s Changi Airport or Bangkok’s Suvarnabhumi Airport, this sort of destruction creates an enormous imbalance within the ecosystem and should cause disturbances within the ecological good chain. But even after the completion of the airport project, they still pose threat to biodiversities like bird strikes or bird hits and safely recycle techniques of airport waste and water. 

ENVIRONMENTAL POLLUTIONS

 Aviation Air Pollution: Change in average weather is termed as climatic change. There are many types of air pollution at different elevations caused by airports and airplanes, aircraft emits many toxic elements while flying overhead in large amount and these emissions are spread over an area of 12 miles long and 12 miles wide on takeoff. Emissions from aircraft below 1000 feet above the ground somehow cause bad air quality. The concern for aviation air quality is basically related to the areas connected with airports and around them. 

The chief local air quality relevant emissions attributed to aircraft operations at airports are Nitrogen oxides, water vapor, Sulphur Dioxide, Carbon dioxide, Carbon monoxide, etc. According to a report, aviation account for around 2% of the total CO2 emission globally, and 50% more emissions from aviation are expected by this current year 2020 with the increase in fuel in around 50%. In 2009, India has totally revised the national ambient air quality standards. The notified ambient air quality standards in India are equivalent to the European level and exceed the standards prevalent in the US according to the Ministry of State for Environment and Forests. In India, it was decided under the report of revised National Ambient Air Quality that 12 pollutants in total will be measured to calculate the level of air pollution as compared to earlier which was 6 pollutants and the distinction between both industrial and residential areas have also been removed which means now the industries have to conform to the same standards as residential areas and will be compelled to take necessary measures to check air pollution. 

AVIATION WATER POLLUTION

 It is a well-known fact that airports are known as to be the major source for water pollution, they used to dump all toxic chemicals, de-ice airplanes during winter storms into water. During de-icing, the airline mixes around 55% of glycol and around 45% of water at 185 degrees F heat and spray the planes down with it. Ethylene glycol is a more toxic substance and consumes high levels of oxygen during decomposition which is also one of the reasons for the depletion of freshwater and is harmful to aquatic animals.

 AVIATION NOISE POLLUTION 

It is another very important issue airport noise and noise due to overflying at low heights had led some local people to even protest leading to night curfews in some developing countries, but such unilateral decisions by municipalities are not good for the overall growth and it curfews continue then it will become very difficult to manage and even getting land slots at the airport. 

CURRENT SCENARIO IN INDIA

 In ancient times in India, men lived close to forests and loved their surroundings. Today, however, man has only plans for constant air travel, spoiling the fragile mother Earth. 

The Rabindranath Tagore saga 

Commercial aviation had begun in 1911 in India and construction of civil aerodromes was first started at Dum Dum in Calcutta following in Baramati in Allahabad and Gibbert Hill in Bombay in 1924, in total 44 airports were being operated by the Civil aviation department during Independence in 1947. The Indian aviation sector has transformed itself from an over-regulated and the managed sector to a more liberal and investmentfriendly one in the past few years, which at present is undergoing several developments according to the current scenario of our country. Even though it is estimated that the Indian aviation sector would be the world’s fastest-growing sector over the next few years both in the terms of passenger and cargo traffic as well as an area of equipment supply, maintenance, repair, and overhaul, etc, still there are no prescribed standards to noise pollution around the airports, it a fact that noise pollution is bound to have higher at airports as compared to other places. 

A petition was filed before the Delhi High Court on March 3, 2010, by the Indian Spinal Injuries Centre and an NGO named Bijwasan Gram Vikas Samithi to direct the Directorate General of Civil Aviation ( DGCA) with no deadlines fixed to implement some measures to check the growing level of noise pollution near Delhi airport and Delhi International Airport pvt.ltd was barred from using two runways that were being used at the IGI airport. The DGCA is looking for introducing continuous descent approach which is a method by which aircraft approach airports before landing to reduce fuel consumption and noise and it also involves maintaining a constant three-degree descent angle during landing until meeting the instrument landing system at the IGI airport as an immediate measure to reduce noise pollution. Recently in 2009, the Government of India has raised the National Ambient air quality standards that are equivalent to the European level as well. 

LAWS FOR CONTROLLING AVIATION POLLUTION

 Earlier only common law remedy was only available for excessive noise and other pollutions. With the Declaration of the United Nations Conference on the Human Environment which was made at Stockholm on 16th June 1972, Modern environment law started. In 1982, a charter was made for nature by United Nations and in the 1989 Hague declaration, a charter was made on Environment basically to protect the Ozone layer globally and to prevent global warming of the atmosphere. In India, there is no specific provision related to aviation pollution, but our Indian Constitution states that protection and improvement of the environment, forests, and wildlife of the country is State’s duty. 

An act was passed by the American congress in 1990, which states that by the year 2000 all aircrafts in commercial fleets weighing more than 75000 pounds must be at either stage three aircraft at stage 2. According to the bill of United States senate bill, the Quiet communities act of 1947; it would re establish the office of noise abetment and control in the environment protection authority and would also challenge the US federal aviation administration to listen carefully and also to look after the aviation noise. In India there is no specific provisions regarding aviation pollution however our Indian Constitution states that it is the duty of the state to protect the environment and to work for improvement as well along with wild life and forests. Both fundamental rights and dpsp talks about environment Our constitutional provisions are backed by a number of laws, it is considered as the father of other laws. 

Under art.253 of constitution the epa 1986 was enacted and came into force after bhopal gas tradegy. Similarly A large number of laws such as water act and air came into existence when there is disputes The scope of the environment protection act is broad in the sense with the environment which includes water, air, land, and the interrelationships among them and human beings and other living organisms. Environmental Pollution is defined in Environment Protection act, as the presence of pollutants in the environment, and environment pollutants can be defined as the solid, liquid, and gaseous substance present in such concentration as may be and which are injurious to the environment. 

According to sec 15 of the Environment Protection Act, whoever fails to comply with or contravenes any of the provisions of the Act or any rules made thereunder shall be punishable with imprisonment for a term which may extend to five years with a fine which extends to one lakh rupees or with both. Under sec 17 of this act, where an offense under this act has been committed by and head of the department shall be guilty of the offense and will be liable and punished accordingly.

 CONCLUSION AND SUGGESTIONS

 We can say that no doubt that in our changing scenario aviation is something very important and becoming an essential infrastructure and on the other hand, airports and aviation industries are causing pollution to a reasonable extent. There are three actions which have been recommended to achieve the National Vision for Aviation and the Environment, the first one is to basically promote coordination and communication among the stakeholders, the second deals with the development of more effective tools and metrics for the guidance of policy decisions and research planning investments, the last one is related with technological and policy options to achieve a balanced approach to a long term environmental improvements, all of them are interrelated and can only be achieved if all of them are implemented correctly. 

Apart from the recommendations, there are some suggestive ways by which we can help in reducing environmental pollution like using biofuels which are present partially currently, by addressing new and independent challenges, regular check on air traffic controllers, curbing air transportation. As Mahatma Gandhi said that “ Earth provides enough to satisfy our needs but not to satisfy our greed.” And hence it is our responsibility to protect our environment.

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Policy & Politics

The Unique Indian Market: Doing Business in India

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The complex and challenging diversity of India has confused many – Indians as well as foreigners have tried and are still trying to understand the market for taking right decisions. But often they have failed. Some learnt their lessons and survived whereas others quit. But no one could sum up common problems or common prospects with sure shot definition of the Indian market and its attributes like most global peers (by definition of a country). Now, here is a book which has tied all aspects about the country together in one thread and very brilliantly put them in mere 200 odd pages. This quick read summarizes the History, Geography, Democratic Politics and Economics of modern Free India along with undivided India/ colonial India(before independence), without compromising on data and the key facts.

The initial chapters in the book focus on an overall status of Indian market – a brief history, success, and failures of foreign companies in India. This is followed by describing the diversity across all possible parameters viz. ethnic, linguistic, regional, religious, cultural, food habits, lifestyle etc. The next few chapters brilliantly summarize the history of foreign attacks and rulers from Gupta Dynasty in 4th Century to the British rule till 1947 (middle of 20th Century) along with foreign business in India since 1292AD. All the East India Companies of different countries for different goods in different Indian territories, debate on acknowledgement of “India” and failure of an American East India Company (yet a successful ice-export to America by ship in 1883) is covered here.

Stating credible and authentic sources, the author boasts of the 35% contribution made by India to the world GDP before the foreign attacks and compares it to the ‘less than 1%’ a decade before the start of the 21st Century. The book compares the golden history with current concerns and struggles for the SMEs in the country providing valid reasons for the change over centuries and suggestions for making a mark again. It talks about how the country directly jumped from being an agrarian economy to the service one, grossly skipping the important manufacturing lessons. The seeds sown by the invaders that made India a supplier of raw materials and importer of finished goods, are still reaping their bitter fruits which has made Indians totally dependent on other countries or their MNCs/companies in India for the manufacturing part. Every eye is now on the results of ‘Make-In-India’ and ‘Atma-Nirbhar-Bharat’. How India makes up for the losses it faced for centuries and gets back its prosperity, which it lost to the greed of others, and self-created mistakes!

The next few chapters provide the reader an exhaustive overview of governance and administration system in India with around 1000 political parties at country level, and the love-hate relationship between the union and state governments, and its implications on businesses. Following these are topics on classification of the country based on wealth inequality, religion, reservations, working, education, native status, region, languages, surnames etc.

An exceptional set of chapters on Social Capital of India and Indian Education System follow next. The author highlights how successful SME with international trade existed even in ancient history. Pluralism based rich heritage was present without existence of slaves or concept of castes. Qualities and actions were given more importance in ancient India, not the family of birth – all these were changed by the British for their selfish motives and ‘divide and rule’ policies; castes were assigned at birth and first caste-based census was reported in 1987. Castes were brought by the Portuguese and the British. Jati

Book Review

(based on knowledge) or Varna (community) is not same as Caste. Caste and Reservations based systems were the main cause for lack of development , disharmony, and social problems like untouchability. The Indian Education System today faces issue of ample knowledge but lacks in skills and trainings, because it has shifted from the Gurukul system and well-developed universities to current faulty Pro-Degree one. This was surely another downgrade by foreign invaders who wanted India to remain a raw-material exporter. Practice based education system was converted to theory based, same education system for all, high tenure in education system of 10+2+3/4 years. The upcoming New Education Policy gets a ray of hope to cater to these drawbacks and revive the ancient Indian entrepreneurial system with new nomenclature.

India’s orientation towards service sector and the problems of agriculture and industries is covered in detail in the following chapters. How ‘thriving SMEs were uprooted and License-Quota-Permit-Raj was imposed’ is discussed. Even after 75 years of independence and multiple changes in industrial policy, manufacturing industry is still not even close to the ancient SMEs. Due to the strong Government control, even now around 2,000 different approvals and permissions are required to start and run a manufacturing business, which need to regularly undergo lot of inspections and regulations.

Business culture, business systems and impact of family system on business is well defined and exhaustively discussed by Dr. Jain. India vs. Bharat debate and India’s Diaspora with Indians who have settled abroad are a decent read. The author does not forget to cover the regular and massive festivals and celebrations and their role in business.Interestingly chapters that follow next highlight on media –(advertising and PR), Jugaad Technology, existence of parallel systems and paradoxes seen in the country which create a base for how things are not as they appear.

The last few chapters talk in detail about India being in transition, the taxation & legal system in India and strategies and tips for a successful India entry. Throughout the book, the author continues to assess the performance and what lacks in the SMEs ,he provides apt suggestions to cater to the later.

A well-researched, well-structured, and well-expressed book of 30 chapters, “The Unique Indian Market: Doing Business in India” is a masterpiece for existing and prospective entrepreneurs and for everyone who intends to understand the country (in fact, the Sub-continent – considering the diversity as the author Dr. Prateek Jain puts it). Dr. Jain has used a varied range of writing flavors – seriousness of facts, jokes with good sense of humor, using anecdotes or simple essaying – keeping the essence intact and effective. Each chapter is complete in itself, yet well connected with the other.

In a nutshell, after the detailed and fact-based analysis, the author convinces the reader how 2020s is the best time to do business in India. Success is guaranteed if the uniqueness of the market is accepted and appreciated, and case specific related action taken. Though targeted with a business in India focus, this book is a must-read book for a traveler, a student or a homemaker!

Hemant G. Golechha is PhD Research Scholar, Dr. Vishwanath Karad’s MIT World Peace University.

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Policy & Politics

INDIA’S MERCHANDISE EXPORT IN APRIL 2021 WAS US$30.21 BILLION

Tarun Nangia

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India’s merchandise exports in April 2021 was USD 30.21 billion, an increase of 197.03% over USD 10.17 billion in April 2020 and an increase of 16.03% over USD 26.04 billion in April 2019.

India’s merchandise imports in April 2021 was USD 45.45 billion, with an increase of 165.99% over USD 17.09 billion in April 2020 and an increase of 7.22% over USD 42.39 billion in April 2019.

India is thus a net importer in April 2021 with a trade deficit of USD 15.24 billion, which increased by 120.34% over trade deficit of USD 6.92 billion in April 2020 and declined by 6.81% over trade deficit of USD 16.35 billion in April 2019.

In April 2021, the value of non-petroleum exports was USD 26.85 billion, registering a positive growth of 200.62% over USD 8.93 billion in April 2020 and a positive growth of 19.44% over USD 22.48 billion in April 2019. The value of non-petroleum and non-gems and jewellery exports in April 2021 was USD 23.51 billion, registering a positive growth of 164.28% over USD 8.90 billion in April 2020 and a positive growth of 19.89% over USD 19.61 billion in April 2019.

In April 2021, Oil imports was USD 10.8 billion, a positive growth of 132.26% compared to USD 4.65 billion in April 2020 and a negative growth of 6.62 compared to USD 11.56 billion in April 2019.

Non-oil imports in April 2021 was estimated at USD 34.65 billion, showing an increase of 178.6% compared to USD 12.44 billion in April 2020 and an increase of 12.42% compared to USD 30.82 billion in April 2019.

Non-oil, non-GJ (gold, silver &Precious metals) imports was USD 26.05 billion in April 2021, recording a positive growth of 111.3%, as compared to non-oil and non-GJ imports of USD 12.33 billion in April 2020 and a positive growth of 6.48% over USD 24.46 billion in April 2019.

All Major commodities have recorded positive growth in export during April 2021 vis-à-vis April 2020 namely, Gems and Jewellery (9158.63%), Jute mfg. Including floor covering (1556.39%), Carpet (1351.48%), Handicrafts excl. Hand-made carpet (1207.98%), Leather and leather manufactures (1168.96%), RMG of All Textiles (920.52%), Cotton yarn/fabrics/made-ups, handloom products etc. (616.6%), Man-made yarn/fabrics/made-ups etc. (583.53%), Ceramic products and glassware (441.57%), Other cereals (441.46%), Electronic Goods (362.86%), Oil meals (275.91%), Cashew (252.46%), Mica, coal and other ores, minerals including process (234.63%), Engineering goods (234.63%), Tobacco (183.86%), Iron ore (175.15%), Petroleum products (171.11%), Cereal preparations and miscellaneous processed item (170.86%), Oil Seeds (166.24%), Meat, dairy and poultry products (148.6%), Tea (143.04%), Marine products (107.59%), Spices (102.32%), Coffee (73.83%), Organic and Inorganic Chemicals (69.39%), Rice (60.29%), Plastic and linoleum (47.49%), Fruits and vegetables (21.82%), and Drugs and pharmaceuticals (20.68%).

Major commodity groups of export showing positive growth in April 2021 over April 2019 are: Iron ore (219.55%), Other cereals (206.43%), Oil meals (86.59%), Jute mfg. Including floor covering (66.19%), Rice (49.45%), Cereal preparations and miscellaneous processed item (40.34%), Electronic Goods (35.81%), Mica, coal and other ores, minerals including process (33.17%), Spices (32.72%), Cotton yarn/fabrics/made-ups, handloom products etc. (25.27%), Ceramic products and glassware (22.57%), Drugs and pharmaceuticals (22.55%), Carpet (22.38%), Engineering goods (18.61%), Cashew (16.57%), Gems and Jewellery (16.38%), Marine products (16.34%), Handicrafts excl. Hand-made carpet (14.33%), Plastic and linoleum (13.31%), Fruits and vegetables (11.66%), Man-made yarn/fabrics/made-ups etc. (8.35%), and Oil Seeds (1.30%).

Major commodity groups of export showing negative growth in April 2021 over April 2019 are: Tea (-23.66%%), Leather and leather manufactures (-13.27%), Tobacco (-9.86%), RMG of All Textiles (-8.01%), Petroleum products (-5.5%), Coffee (-2.56%), Organic and Inorganic Chemicals (-2.21%), and Meat, dairy and poultry products (-1.38%).

Major commodity groups of import showing positive growth in April 2021 over the corresponding month of last year are: Gold (215906.91%), Pearls, precious & Semi-precious stones (119500.48%), Sulphur & Unroasted Iron Pyrites (1525.05%), Electronic goods (213.59%), Non-ferrous metals (193.89%), Transport equipment (170.95%), Professional instrument, Optical goods, etc. (163.13%), Artificial resins, plastic materials, etc. (138.18%), Metaliferrous ores & other minerals (133.77%), Petroleum, Crude & products (132.26%), Machinery, electrical & non-electrical (113.73%), Textile yarn Fabric, made-up articles (111.7%), Wood & Wood products (101.01%), Machine tools (100.93%), Vegetable Oil (97.57%), Project Goods (91.79%), Leather & leather products (91.59%), Dyeing/tanning/colouring materials (88.10%), Chemical material & products (84.57%), Iron & Steel (73.19%), Organic & Inorganic Chemicals (72.73%), Fruits & vegetables (70.0%), Coal, Coke & Briquettes, etc. (65.98%), Medcnl. & Pharmaceutical products (56.92%), Pulp and Waste paper (46.35%), Cotton Raw & Waste (11.68%) and Fertilisers, Crude & manufactured (7.75%).

Major commodity groups of import showing negative growth in April 2021 over the corresponding month of last year are: Silver (-88.55%), Newsprint (-46.07%), and Pulses (-42.46%).

Major commodity groups of import showing positive growth in April 2021 over April 2019 are: Vegetable Oil (75.85%), Gold (54.17%), Chemical material & products (41.68%), Artificial resins, plastic materials, etc. (36.69%), Metaliferrous ores & other minerals (29.60%), Sulphur & Unroasted Iron Pyrites (25.23%), Medcnl. & Pharmaceutical products (22.23%), Fruits & vegetables (18.95%), Electronic goods (17.01%), Pearls, precious & Semi-precious stones (15.39%), Non-ferrous metals (13.51%), Organic & Inorganic Chemicals (12.46%), Professional instrument, Optical goods, etc. (6.78%), Dyeing/tanning/colouring materials (5.54%), and Wood & Wood products (2.63%).

Major commodity groups of import showing negative growth in April 2021 over April 2019 are: Silver (-95.25%), Newsprint (-59.63%), Cotton Raw & Waste (-50.42%), Pulses (-46.98%), Project Goods (-37.47%), Leather & leather products (-33.10%), Transport equipment (-24.49%), Machine tools (-23.40%), Pulp and Waste paper (-18.09%), Iron & Steel (-17.93%), Coal, Coke & Briquettes, etc. (-14.84%), Fertilisers, Crude & manufactured (-11.44%), Petroleum, Crude & products (-6.62%), Machinery, electrical & non-electrical (-1.55%), and Textile yarn Fabric, made-up articles (-0.37%).

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Policy & Politics

Badrinath to be developed as spiritual and smart hill town by oil and gas PSUs

Chief Minister of Uttarakhand and Minister for Petroleum and Natural Gas & Steel jointly witness the signing.

Tarun Nangia

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Memoranda of Understanding (MOUs) were signed today between the Oil and Gas PSUs-IndianOil, BPCL, HPCL, ONGC and GAIL, and Shri BadrinathUtthan Charitable Trust for Construction and Redevelopment of Badrinath Dham as a Spiritual Smart hill Town. The MoUs were signed in the august presence of the Chief Minister of Uttarakhand Tirath Singh Rawat, Union Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan, Tourism Minister of Uttarakhand Satpal Maharaj, Secretary, MoPNG Tarun Kapoor, Chief Secretary of Uttarakhand Shri Om Prakash, and senior officers of the MoPNG, Uttarakhand Government and Oil & Gas PSUs.

As per the MoUs, the Oil & Gas PSUs will be contributing Rs. 99.60 crore in the first phase of the developmental activities, including river embankment work, building all-terrain vehicular path, building bridges, beautifying existing bridges, establishing gurukul facilities with accommodation, creating toilet and drinking water facilities, installing streetlights, mural paintings etc.

Speaking on the occasion, Pradhan said that Char Dham is close to millions of Indians, due to spiritual, religious and cultural reasons. The Oil and Gas PSUs will not only contribute to the development work of the Badrinath but are also part of the development of Kedarnath, Uttarkashi, Yamunotri and Gangotri. He said “Today’s event is a significant milestone in the direction of Prime Minister Narendra Modi’s vision of developing Badrinath shrine as a mini smart and spiritual city, without compromising on the religious sanctity and mythological importance of the region.”

Lauding the efforts of Oil & Gas PSUs in developing the facilities, Pradhan said, “I am glad that Oil and Gas PSUs of this nation have come forward to realise the vision of developing BadrinathDham into a Smart Spiritual Town. Tourism is one of the key industries, which is playing a critical role in the development of the state. Development of the sites like Badrinath would also help in attracting more tourists, which in turn would strengthen the economy of the state.”

Addressing the occasion, Tirath Singh Rawat said, “I congratulate Union Minister Dharmendra Pradhan and Oil & Gas PSUs for extending their supports for this noble initiative. Shri Badrinath Dham has a special place in the hearts of the people of this country. It is considered to be one of the most sacred places in our country, and developmental activities are much needed to provide the best of facilities to the pilgrims from across the country. With the concerted efforts of both Uttarakhand Govt. and Oil & Gas PSUs, we are hopeful that the rejuvenation work of Shri Badrinath Dham will be completed within a span of three-year time.”

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SIGNIFICANT ECONOMIC PRESENCE: ADDING ANOTHER STRING TO THE BOW

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Over the years, digitalisation and technology have revolutionised our world and daily lives. Emerging technologies such as internet of things, quantum computing, augmented reality, artificial intelligence, big data, machine learning, blockchain etc have a marked influence on our economic as well as social activities and are changing the way people connect, entertain, socialise, create, sell, shop and work. With technological advancement, the pace at which businesses have proliferated their extraterritorial presence without having any tangible footprint, is astonishing. India is among the top three global economies in terms of digital consumer base, with 624 million active internet users. Taxation systems in major developing economies, including India, were drafted taking into consideration, the traditional way of doing business, ie a brick-and-mortar model. The conventional residence-based and source-based concepts of taxation have become outmoded over time and incapable of effectively taxing the digital economy largely due to its distinctive amorphous nature. This has resulted in either double taxation or non-taxation of revenues and has become a key base erosion and profit shifting concern across the globe. The OECD and G-20 countries have been working determinedly under the inclusive framework on BEPS to address the need for tax reforms. The OECD is spearheading a project to develop a consensus-based solution to address this crisis through revised profit allocation and nexus rules. India has been at the fore of adopting changes in international tax systems to keep pace with progression in the digital world. India was among the first to implement Equalisation Levy in 2016 on online advertisements related services and to substantially expanded the scope of this levy in 2020 to cover e-commerce supply and services. Equalisation Levy is designed to operate outside the framework of the existing system of tax treaties and transactions covered thereunder are not subject to income tax.

In the year 2018, the domestic tax laws in India were amended to widen the scope of ‘business connection’ with the introduction of Significant Economic Presence (SEP). The resulting income of a non-resident attributable to SEP in India were to be considered taxable. However, owing to delay in accomplishing a global consensus, SEP provisions were deferred till April 1, 2021 and the enacting thresholds were not prescribed. Pursuant to the amendments in Finance Act 2020 and the recent notification prescribing these thresholds, SEP is now defined to mean any transaction in respect of any goods, services or property carried out by a non-resident with any person in India, including the provision of download of data or software in India, subject to payments threshold of INR 20 million or systematic and continuous soliciting of business activities or engaging in interaction with 0.3 million or more number of users in India. Moreover, transactions and activities may constitute SEP in India, regardless of whether a non-resident has a residence or place of business in India, or renders services in India, or agreement for such transactions or activities is entered in India. This all-embracing definition is not restricted to digital transactions and could also impact typical buy-sell or service transactions between non-resident and an Indian resident. Far from the original intent, SEP provisions may also embrace offshore sale of goods and provisions of services outside India, unless clarified otherwise. Necessary clarifications regarding definition of key terms such as goods, property, systematic and continuous soliciting etc are awaited too from the Regulators.

Although SEP related provisions are applicable from April 1, 2021, it may only be a ‘paper tiger’ as non-residents from tax treaty network countries are shielded under the narrower definition of Permanent Establishment (PE) in respective tax treaties. India has an operational tax treaty alliance with majority of countries housing businesses that derive income from India. Unless these tax treaties are renegotiated through bilateral or multilateral instrument and corresponding modifications are made to include provisions similar to SEP in those tax treaties, SEP provisions under domestic tax laws seem innocuous. Irrespective of this armour, test of beneficial ownership could still be a relevant aspect to evaluate, especially in cases of multi-tier structures, where a non-resident could invoke tax treaty protection to duck SEP test. On other side of the fence, SEP provisions would set in motion for all businesses coming from countries such as the Bahamas, Bermuda, Cayman Islands, etc, with whom India does not have a tax treaty yet.

A conjoint assessment of net basis taxation under SEP and gross basis taxation under Equalisation Levy would become critical for digital businesses. Equalisation Levy would become an elective regime once a non-resident e-commerce operator accedes to an Indian PE, in the form of SEP. In a scenario where a non-resident constitutes SEP in India, only income attributable to such transaction or activities would be taxable in India. While a public consultation document on profit attribution for SEP was issued by the Central Board of Direct Taxes, no rules have been notified so far. It, therefore, becomes apposite to assess the applicability of Rule 10 in such a scenario. Constitution of SEP would unfold various compliance obligations for both, payers and non-residents. Payers would be required to review withholding tax position as any shortfall could trigger expense disallowance, interest, and penal consequences. Non-residents, on the other hand, could be required to file income tax return, tax audit and transfer pricing reports in India, wherever applicable. Notably, non-compliance related to transactions carried out between April 1 and May 2 of 2021 (ie before threshold notification date) may possibly be defended by payers on the tenet of impossibility of performance.

Though the payment threshold for Equalisation Levy and SEP are calibrated at same level, it is quite low given the size of Indian economy and growing consumer base. Even after the Apex Court settled the highly debated issue of taxation of software, taxpayers cannot breathe a sigh of relief as the ruling was based entirely on the premise of no PE in India and software sale as well as services transactions could now well be covered under the new SEP regime. The evolving ecosystem of taxation in India would require non-residents to tread a tightrope as dynamic provisions such as SEP are plugging-in loopholes that may have existed under domestic tax laws for a while. What lies ahead is the hope of reaching a quick global consensus that could provide a fair and just system of taxation, followed by modification of tax treaties to incorporate the suggested amendments.

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Policy & Politics

Pradhan flags off used cooking oil-based biodiesel from Indian Oil’s Tikrikalan terminal

Tarun Nangia

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Minister of Petroleum & Natural Gas and Steel, Dharmendra Pradhan, remotely flagged off the first supply of UCO (Used Cooking Oil) based Biodiesel blended Diesel under the EOI Scheme from IndianOil’s Tikrikalan Terminal. Secretary, Ministry of Petroleum & Natural Gas Tarun Kapoor and Chairman, IndianOil S M Vaidya, were also present on the occasion.

To create an eco-system for collection and conversion of UCO into Biodiesel and developing entrepreneurship opportunities, Hon’ble Minister of Petroleum and Natural Gas & Steel, along with Hon’ble Minister of Health & Family Welfare, Science & Technology and Earth Sciences, had initiated Expressions of Interest (EoIs) for “Procurement of Bio-diesel produced from Used Cooking Oil (UCO)” on the occasion of World Biofuel Day on 10th August 2019. And such “Expression of Interest” is being periodically released by Oil Marketing Companies (OMCs). In the first phase, 11 EoIs were floated between 10.08.2019 to 09.11.2020 for 200 locations. Publication of EoIs has been extended for one more year up to 31.12.2021, for 300 locations across the country.

Under this initiative, OMCs offer periodically incremental price guarantees for five years and extend off-take guarantees for ten years to prospective entrepreneurs. So far, IndianOil has also issued 23 LOIs for Biodiesel plants with a total capacity of 22.95 Cr Litres (557.57 TPD). Under this initiative, IndianOil has received 51KL of UCO-Biodiesel at its Tikrikalan terminal in Delhi as of 31.3.2021.

Speaking on the occasion, Dharmendra Pradhan complimented the Oil industry on the stellar role they have played to keep the fuel lines running despite the stiff challenges of the pandemic. He also lauded the OMCs for going beyond the usual business imperatives by extending support for medical oxygen supply to the nation in this crisis. Mr Pradhan also appreciated IndianOil’s leadership role in smoothening the Liquid oxygen logistics in the country through various initiatives.

Referring to the flag-off of the first supply of UCO-based Biodiesel from IndianOil’s Tikrikalan Terminal, Mr Pradhan said, “This is a landmark in India’s pursuance of Biofuels and will have a positive impact on the environment. This initiative will garner substantial economic benefits for the nation by shoring up indigenous Biodiesel supply, reducing import dependence, and generating rural employment”. He appreciated the proactive role played by OMCs in this direction and shared that 30 LOIs have already been issued.

Secretary, Ministry of Petroleum & Natural Gas, Tarun Kapoor, while delivering his address, said, “With this flag off, a new era of Bioenergy has been ushered in that will revolutionize the Indian petroleum sector. Feedstock availability in Biodiesel is a challenge, and leveraging UCO can be a major breakthrough that will enable us to reach the target of 5% Biodiesel blending. It will also help divert the unhealthy used oil from the food chain to a more productive purpose”. Mr Kapoor also complimented IndianOil for their focused drive on UCO based Biodiesel and for the concerted efforts undertaken to promote the benefits of Biodiesel.

Earlier, Chairman IndianOil S M Vaidya, while welcoming the gathering, said, “IndianOil is committed to contributing to this remarkable drive to retrieve the unhealthy Used Cooking Oil and usher in a revolution through “Randhan se Indhan”. We aspire to trace even the last drop of UCO and ensure its conversion to Biodiesel, thereby contributing to a more energy secure, greener and healthier India. This event is yet another significant step towards a Swachh and Aatmanirbhar Bharat”. He also shared that IndianOil has started constructing eight Biodiesels plants across Uttar Pradesh, Gujarat, and Madhya Pradesh.

Biodiesel is an alternative fuel similar to conventional or ‘fossil’ diesel. It can be produced from vegetable oil, animal fats, tallow and waste cooking oil. A significant advantage of Biodiesel is its carbon-neutrality, i.e. the oilseed absorbs the same amount of CO2 as is released when the fuel is combusted in a vehicle. Also, Biodiesel is rapidly biodegradable and completely non-toxic.

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INDIA BEGINS EXPORT OF ORGANIC MILLETS GROWN IN HIMALAYAS TO DENMARK

Tarun Nangia

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In a major boost to organic products exports from the country, first consignment of millets grown in Himalayas from snow-melt water of Ganges in Dev Bhoomi (Land of the God), Uttarakhand would be exported to Denmark.

APEDA, in collaboration with Uttarakhand Agriculture Produce Marketing Board (UKAPMB) & Just Organik, an exporter, has sourced & processed ragi (finger millet), and jhingora(barnyard millet) from farmers in Uttarakhand for exports, which meets the organic certification standards of the European Union.

UKAPMB procured millets directly from these farmers which have been processed in the state-of-art processing unit built by mandi board and operated by Just Organik.

“Millets are unique agricultural products from India which have significant demand in the global market. We will continue to carry out export promotion for the millets with a special focus on products sourced from Himalayas,” said by Dr M Angamuthu, Chairman, APEDA. He stated that Indian organic products, nutraceuticals and health food are gaining more demand in overseas market

In Uttarakhand, many of the common varieties of millets are the staple foods in the hills. The Uttarakhand government has been supporting organic farming. UKAPMB, through a unique initiative has been supporting thousands of farmers for organic certification. These farmers produce mainly millets such as ragi, barnyard millet, amaranthus etc.

The exports of millets to Denmark would expand exports opportunities in European countries. The exports would also support thousands of farmers that are getting into organic farming. Millets are gaining a lot of popularity globally because of high nutritive values and being gluten free also.

Meanwhile, India’s export of organic food products rose by more than 51% to Rs 7078 crore ($ 1040 million) during April-February (2020-21) compared to the same period in the previous fiscal (2019-20).

In terms of quantity, the exports of organic food products grew by 39% to 888,179 metric tonne (MT) during April-February (2020-21) compared to 638,998 MT shipped in April- February (2020-21). The growth in organic products have been achieved despite logistical and operational challenges posed by the COVID19 pandemic.

Oil cake meal is a major commodity of the organic product exports from the country followed by oil seeds, fruit pulps and purees, cereals & millets, spices, tea, medicinal plant products, dry fruits, sugar, pulses, coffee, essential oil etc. India’s organic products have been exported to 58 countries including USA, European Union, Canada, Great Britain, Australia, Switzerland, Israel and South Korea.

At present, organic products are exported provided they are produced, processed, packed and labelled as per the requirements of the National Programme for Organic Production (NPOP). The NPOP has been implemented by APEDA since its inception in 2001 as notified under the Foreign Trade (Development and Regulations) Act, 1992.

The NPOP certification has been recognized by the European Union and Switzerland which enables India to export unprocessed plant products to these countries without the requirement of additional certification. NPOP also facilitates export of Indian organic products to the United Kingdom even in the post Brexit phase.

In order to facilitate the trade between major importing countries, negotiations are underway with Taiwan, Korea, Japan, Australia, UAE, New Zealand for achieving Mutual Recognition Agreements for exports of organic products from India.

NPOP has also been recognized by the Food Safety Standard Authority of India (FSSAI) for trade of organic products in the domestic market. Organic products covered under the bilateral agreement with NPOP need not to be recertified for import in India.

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