April 26th is celebrated as World Intellectual Property (IP) Day every year since 2000, when the member states of the World Intellectual Property Organisation (WIPO) decided to celebrate this day in recognition of coming into force of the WIPO Convention on this date in the year 1970. India joined WIPO in the year 1975. In its statement at WIPO’s general Assembly, India reiterated its commitment to a strong IP regime. To quote from the statement given on 21st Sept, 2020, “India has taken significant steps towards promotion of innovation and creation of a dynamic, vibrant and balanced intellectual property system with particular focus on encouraging startups. We have also been actively involved in global effort to produce an effective and safe vaccine against Covid-19 as part of our contribution to this important global public good.”
Every year to celebrate this day, a special theme having interface with IPR is chosen. A review of these themes over the last 21 years makes it an interesting compilation of areas in IPR requiring attention of the world.
2001 – Creating the Future Today
2002 – Encouraging Creativity
2003 – Making IP your Business
2004 – The Importance of IP for Economic, Social and Cultural Development
2005 – Think, imagine, create
2006 – IP – It Starts with an Idea
2007 – The Link between IP and Creativity
2008 – Celebrating Innovation and Respecting IP
2009 – Promoting Green Innovation as the key to a Secure Future
2010 – Innovation – Linking the World
2011 – Designing the Future
2012 – Visionary Innovators
2013 – Creativity – The Next Generation
2014 – Movies – A Global Passion
2015 – Get up, stand up. For music
2016 – Digital Creativity: Culture Reimagined
2017 – Innovation- Improving Lives
2018 – Powering change: Women in innovation and creativity
2019 – Reach for Gold: IP and Sports
2020 – Innovate for a Green Future
An analysis of these themes highlights the need to focus on creativity and innovation for future of humanity. One of the striking themes have been for the year 2018 which focused upon ‘women in innovation and creativity’. Theme for the World IP Day 2021 is ‘IP&SME – Taking your ideas to market’. Focus on Small and Medium Enterprises (SMEs) is very important, especially for countries like India which has a large population requiring employment and livelihood. Leveraging IPR can provide these SMEs with a wherewithal to build resilient businesses and become more competitive. A suitable IPR may help the SME to protect their innovation in technology or otherwise (patents), build their brand (trademarks), secure their designs and creative works (copyright and design laws). Not only this, local producers may also get geographical indications (GI) and agricultural producers may benefit from plant variety protection. Cultural and Traditional Knowledge of indigenous SMEs may also be protected and prospered.
SMEs in India: The small scale sector has played a very important role in the socio-economic development of India. The Small Scale Industries plays a vital role in meeting the constitutional goal, as it aims at removing regional disparities, facilitate the equitable distribution of national income and wealth, and earn return on investment in shorter period (Naik SD, 2002). In India the concept of MSME has originated from the concept of Small Sector Industries (SSI) in India. The conceptual and legal framework for small scale and ancillary industrial undertakings is derived from the Industries (Development and Regulation) Act, 1951 (IDRA). In 2007, Ministry of Agro and Rural Industries (Krishi Evam Gramin Udyog Mantralaya) and Ministry of Small Scale Industries (Laghu Udyog Mantralaya) have been merged into a single Ministry, namely, “Ministry Of Micro, Small and Medium Enterprises (Sukshma Laghu Aur Madhyam Udyam Mantralaya).
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 seeks to facilitate the development of MSMEs as also enhance their competitiveness. MSME in India are classified in two Classes: (a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods and (b) Service Enterprises: The enterprises engaged in providing or rendering of services. MSME is classified as per their investment thresholds, which used to be different for manufacturing sector (on the basis of investment in plant and machinery) and Services sector (on the basis of investment in equipment). Now, it is only on the basis of investment and annual turnover. The distinction between manufacturing and services enterprises have been done away with.
• A micro enterprise is defined as a unit where the annual turnover does not exceed five crore rupees;
• A small enterprise will be defined as a unit where the annual turnover is more than five crore rupees but does not exceed Rs 75 crore;
• A medium enterprise will be defined as a unit where the annual turnover is more than seventy five crore rupees but does not exceed Rs 250 crore.
STARTUPS – Government of India (GOI) launched the Startup India initiative in January 2016 which was intended to provide an impetus to the entrepreneurship culture in India. Intention is to promote a startup culture and allow younger population to take risk with their ideas and become ‘job-creators’ rather than slog as ‘job seekers’. India’s demographic dividend required a suitable channelization of human resource. The Startup Action Plan of 2016 (SAP) addressed three key areas for empowering potential startups, i.e. (i) handholding and simplification (ii) funding support, incentives and (iii) incubation and industry-academia partnership (VK Singh, ADBI – WP 1146, 2020).
Startups and IPR: Among other benefits, Startup action plan provided with legal support and IPR facilitation benefits by fast-tracking of startup patent applications so that they can realise the value of their IPRs at the earliest, provided panel of facilitators to assist in filing of IP applications and legal support and fast-tracking patent examination free of charges. The startups have to only bear the cost of statutory fees payable. As a result of these initiatives, it is reported (Evolution of Startup India – Capturing the 5 year Story) that as of November 2020, 5,020 Patent applications have been filed, 1,170 patent applications filed for expedited examination by Startups; of these 884 applications have been examined and 459 Patents have been granted, 12,264 Trademark applications have been filed. 510 patents and designs facilitators and 392 trademark facilitators are empaneled under the scheme.
Achieving SDGs through IPR: Francis Gurry director of WIPO had rightly said that “Intellectual property as a policy exists to create an enabling environment for – and to stimulate investment in – innovation; to create a framework in which new technologies can be traded around the world and shared. The economic imperative at the heart of innovation is fundamental to the process of societal transformation that the Sustainable Development Goals aim to achieve.” The 17 SDGs are aimed towards ending poverty, protect the planet and ensure that everyone lives in peace and prosperity. Promoting creativity and innovation is much required to have out-of-the box solutions for achieving the SDGs by 2030.
SDG 9 deals with building resilient infrastructure, promoting sustainable industrialization and fostering innovation. One of the indicators of this SDG 9 has a goal to “Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to value chains and markets.” Innovation is further essential also to achieve SDGs 2 (zero hunger), 3 (good health and wellbeing), 5 (gender equality), 7 (affordable and clean energy), 8 (decent work and economic growth), 11 (sustainable cities and communities) and 13 (climate action). Each of these SDG goals opens up several opportunities for the SMEs to innovate at the local level. COVID-19 has shown us the importance of producing locally, be it the sanitizers, the masks, the vaccines and the recent one being the ‘oxygen’.
Creating an IP ecosystem with rule of law is very important. In India, while we have all laws for protecting IPR, and our Global Innovation Index has also progressed, still enforcement of IPR has always been a concern. It is about building a culture of compliance to IP Laws. We will not be able to help our own SMEs with IP protection, unless we have a strategy which encourages and facilitates creation, development, management and protection of IPR. National IPR Policy 2016 gives the clarion call of “Creative India; Innovative India” (Rachnatmak Bharat, Abhinav Bharat).
One of its 7 objectives focuses upon the commercialization of IPR which essentially pushes us towards getting the financial value of IPRs created. This is specifically important for the SMEs. “There is a need to create a public platform to connect creators and innovators to potential users, buyers and funding institutions”. Startup India and Make in India schemes of the government are somewhat trying to move in this direction. IPR policy recognizes the need for creating materials for MSMEs highlighting special support mechanisms for them to develop and protect IP, and also providing financial support to the less empowered groups of IP owners or creators like farmers, weavers, artisans, craftsmen, artists etc. through financial institutions like rural banks or cooperative banks offering IP friendly loans.
MSMEs are being supported through reduction in fees for filing of IPRs. These reduction range from 50-60% for trademark and design filing. A new Scheme enables MSMEs for a financial assistance for filing applications for IPR protection amounting to up to Rs 1 lakh for patents (domestic), up to Rs 5 lakh for patents (international), up to Rs 10,000 for trademark and up to Rs 2 lakh for GI registration (PIB, 16th September 2019).
Protecting Competition: One of the challenges for the SMEs could be aggressive competitors who do not want to play fair and utilize IP litigation for the purposes of threatening small players with consequences. This is referred to as ‘Sham litigation’ or ‘Bad-faith litigation’. A Case in point could be the JCB Case (Case 105 of 2013), wherein CCI in its prima facie order directing investigation by DG was of the opinion that JCB may have abused its dominant position by filing a bad-faith litigation before Delhi High Court alleging infringement of its Design rights. The matter involved the product “Bull Smart” (low cost backhoe loaders, a light construction equipment) to be launched by Bull Machines Pvt. Ltd. which JCB alleged to be a breach of their design rights before the High Court.
It is interesting to note that this was the first ever case in which ‘dawn raid’ was conducted by the Director General (DG) of Competition Commission of India, however, Delhi High Court stayed investigation in this matter. CCI approached Supreme Court and it was only in 2019 that Supreme Court allowed the usage of evidence gathered during the ‘dawn raid’. Long duration taken for deciding such matters also dampens the spirit of law to protect and promote competition. Irrespective of the outcomes, a swift decision on jurisprudential issues would go a long way in helping meet the objectives of the legislation, especially when the matter in question is about ‘bad-faith’ litigation. The final outcome of this case is still awaited. This case illustrates the need for adequate protection of SMEs from bad-faith litigation.
Women in SMEs and IPR – It is disheartening to know that there is only 13% women running small businesses. While low financial inclusion of women entrepreneur is dubbed to be the main reason for this problem, there are several other social factors which contributes to this problem. Demonstrating creativity and innovation by women in SMEs may help bridge this gap. As owners of IPR, women innovators may shine as small entrepreneurs to begin with. A study by WIPO shows that India ranks 7th in percentage of women who are active as inventors in different countries, however still this number doesn’t match with the percentage of women running small businesses. Patent Rules provide for an expedited examination of international patent application if the applicant or one of the applicant is a female (natural person category).
IPR Rankings – India has witnessed a substantial jump of 33 places in Global Innovation Index rankings since 2015. India ranks 48th among the 131 economies featured in the GII 2020 released by WIPO along with Cornell University and INSEAD Business School. However, in a report (International Intellectual Property Index) released by US Chamber of Commerce Global Innovation Policy Center (GIPC), India ranks 40th out of 53 global economies. Amidst the rising pressure on invoking compulsory licensing provisions in relation to the COVID vaccines, India continues to remain on the US ‘Priority Watch List’ for alleged violations of IPR, be it patent, copyright or trade secrets. This is indeed a ‘catch 22’ situation for the Government which has to balance the rights of the IP owners and the socialistic objectives of the constitution. Supreme Court has recently remarked that Central Government cannot leave it to the market forces. This is a debate in which the common man of India has to engage and weigh the options, for which awareness about IP rights is essential.
Awareness is still lacking: The 2012 National Study on Intellectual Property and Small and Medium Sized Enterprises – India, under the WIPO Development Agenda highlighted “Contrary to the common belief that awareness about IPR among MSMEs is completely missing, some MSMEs appear to be aware of IPRs and comprehend the need for protecting IPR. The awareness seems to be more about trademark and designs as compared to patents. However, the number of MSME engaged in IPR activities is still very small considering the large size of the MSME sector in India”. In the last 10 years things have changed a lot, however, still IPR is yet to get its due focus. IPR as a mode of investment and its treatment at par with the tangible assets like land, machinery, equipment is yet to happen in India. IPR and its commercialization has to become the mantra of success for the SMEs.
When India has resolved to be Aatmanirbhar, it would be crucial for the SMEs to bring their ideas to the market. ‘Vocal for local’ would not be successful unless the local producers realize the potential of getting IP rights legally so that the fruits of their innovation are not lost in transition. While discussing startups, one should not forget the rural artisans who have been self-entrepreneurs like potters, blacksmiths, weavers, cobblers, stone workers, carpenters, engravers etc. However, they have been generally left out from policy making, because of being clubbed with non-farm workers (Solanki 2018). Schemes like ‘One District One Product’ (ODOP) may become more successful when the indigenous and specialized products get their GI protection, whether it is ‘Nagpur Orange’ of Maharashtra or ‘Kutchi shawl’ of Gujarat, Odisha’s Rasgulla or Mizo Chilli of Mizoram.
Dr. Vijay Kumar Singh is Dean, School of Law at UPES Dehradun. Views are personal.
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‘What are the key learnings that hospitality industry can take from current conditions?’
The world is currently battling with the unprecedented effects of the COVID-19. With the UN claiming it to be a crisis on humanity like never before, it has put our social fabric and cohesion under tremendous stress. In the face of this fatal virus, the economies worldwide have come to a standstill, making the travel restrictions and social distancing policies the new normal.
Impact of the Outbreak: The hospitality industry has taken a massive hit around the globe with occupancy rates dropping by 59% in US hotels alone. Significant declines are also forecasted in average daily rate (ADR), occupancy, demand, and revenue per available room (RevPAR) for 2020.
Current forecasts predict a deep economic contraction in the first half of the year, followed by a bounce-back in the latter half. However, there could also be a prolonged economic uncertainty that would resist a sharp bounce-back. As hotels counter this economic crisis, there will be a dire need to assess the business continuity and operational challenges, both for the short and long term, and understand the impact on Cash, Working Capital, and Profitability.
The severe situation had stalled travel plans for the majority of the people around the world but it is expected that hotel bookings will see a recovery after September 2020. However, it is also predicted that people will be more inclined towards traveling domestic rather than international. Thus, it is imperative for the hotels to be prepared before the business starts to ramp up and use this interim period as an opportunity to overhaul their legacy systems.
THE NEED OF THE HOUR
Regain Guest Confidence: The core of the relationship between any brand and its consumers is “the trust”, and thus recapturing guest confidence should be the primary step for any brand amidst this pandemic situation. At a time when consumer confidence is at an all-time low, communication will play the lead role in re-assuring the guests of the safe environments at different hotels. Also, within the hotel premises, the way hotels empower their guests with increasingly relevant and timely information, will also hold the key to future.
Revisit Hospitality Offerings:Hotels will need to review their existing service offerings to adapt to the “new normal” and provide a touch-free experience to their guests when they arrive at the property. To achieve this, Hotels will need a transformation in their daily operations to provide an experience that would ensure that both the guests and the hotel staff are in safe hands.
Employee Well Being: A turnaround is also expected in the hospitality industry at the employer level. The current working models need to be re-evaluated for efficiency with ‘employee wellbeing’ positioned higher than ever in the hotel’s priority list. Providing them with safety kits and eliminating the different touchpoints while serving the guests are the major needs of the hour.
Regulatory Compliances Liabilities: In this new environment, hotels need to adopt new practices to regulate the environment in which the business happens. Once the operations begin, stern measures on sanitation and hygiene will be very important and hotel properties will have to not just be aesthetically clean but also clinically clean. It will also be important to ensure that the mandatory regulatory guidelines such as social distancing are being followed at their properties
OPPORTUNITIES TO UPGRADE THE SKILL SET
Up-skill: Creating opportunities for hotel employees to add value to their skill-sets could build confidence in hotel companies, as layoffs can be expected by all major and minor hotel companies. Hyper-local hotels may see the largest number of layoffs due to the popular asset-light model, where large number of operating units, scattered across countries, could be written off all at once. This will bleed out a vast number of hospitality employees into an already difficult market. Individuals who can upgrade their skill sets by way of enrolling in speciality-specific courses could benefit greatly.
Re-skill:Offering routes such as ‘Recognition of Prior Learning’ opportunities to qualified hospitality front-line professionals could accelerate the process in re-skilling individuals, hence preparing them for roles in hotels and other hospitality-related operations in an environment where lean, yet skilled operations will be required.
Hygiene and sanitation remained a recurrent sub-theme throughout the responses, be it about foreseeable consumer behaviour or learnings for the industry and educators or trainers. The issue of hygiene has been well documented in tourism and hospitality literature. However, for a developing country like India that deals with issues like over-crowdedness and congestion, it is too serious a concern to be overlooked. where the researchers have speculated presence of SARS-COV-2 in human waste water becomes more consequential if not managed effectively. The seriousness of this issue can’t be emphasised enough and regardless of the type and size of the establishment, next crucial aspect that is likely to govern the survival would be the presence of standards of waste management and effective sanitation practices visible in all forms of hospitality operations.
Hospitality management must consider wearing masks mandatory until a sustained solution, for instance the most contemplated solution+COVID-19 vaccine, is achieved. Irrespective of type of operations, managers must consider creating dedicated task forces among employees to address hygiene issues and related training and awareness creation. Basing on the responses received it seems clear now that there is stark need of formulating national standards for tourism and hospitality enterprises, and their implementation and monitoring should be effectively carried out, failing that should invite relative penalties. The need of national standards also resonate with the recommendations made by authorities/researchers. One such standard practice could be mandatory temperature checking and its record keeping at the entry and exit points of work places and institutions.
The notion of retaining optimism and hopes of revival remained high. This was particularly visible with the responses pertaining to the manpower development. This viewpoint of the experts in tourism and hospitality may be attributable to their rich experiences, where they must have observed highs and lows in the industry. Although COVID-19 presents an unprecedented case before all the sectors, in that the reduced demand and revenues are obvious consequences, which can resonate with the previous crises that also had detrimental effects. However, in previous health (e.g. SARS, Swine Flu, MERS, and Ebola) or other sorts of crises (acts of terrorism, natural calamities) travellers mostly had alternatives at their disposal. This time the entire planet has been held hostage to this severe pandemic, which has brought an absolute halt on various activities, leisure sector being the prominent casualty. From the responses it is evident that alike educators, industry managers too didn’t shy away from highlighting the human resilience and seemed hopeful towards the eventual recovery, meanwhile reassuring individuals who have or intend to pursue careers in the industry.
Budgets and Capital Expenditure:Hotel owners should consider whether the existing rights of the owner in relation to the setting, approval and variation of budgets and decisions relating to capital expenditures are adequate or should be enhanced in order to give the owner greater say on decisions relating to expenditure that is considered necessary or desirable in light of Covid-19, for instance investments towards improving the health and safety components of the hotel.
This is extremely important from a hotel owner’s perspective because: (a) they have the obligation to fund the hotel’s working capital and capital expenditure requirements; and (b) the owner’s performance termination rights will typically be linked to the level of operating profit generated by the hotel operator relative to the budgeted operating profit. If the owner does not have adequate rights in respect to the setting of the budget and approval of variations from the budget and sufficient control over the budget process, then the operator could provide for a lower operating profit in the budget and thereby ensure that it does not fail the operating profit test (this is over and above a general exclusion which an operator may include for force majeure events).
Additionally, it would also be worthwhile to consider including a mechanism thereby the owner and operator have to mutually agree to adjust the budgets and capital expenditure for a specific period in the event of a force majeure event occurring and the operator should not have a unilateral right to make any such adjustments.
Compulsory Acquisition:During recent times, there have been instances where government authorities in certain countries have taken over hotels to use them as quarantine facilities for Covid-19 patients. While these instances may not be common, it gives rise to another scenario which may need to be covered in the condemnation provisions of hotel operating contracts. Further, as the hotel owner is unlikely to receive any substantial compensation from the government, the rights of an operator to receive any portion of the compensation received from the government should also be considered and re-examined and specific carve-outs may need to be agreed. Consideration should also be given to the hotel’s insurance policies and whether any conversion of use of the hotel into a quarantine or other medical facility may vitiate these insurance policies.
Public Health Emergency Obligations:Hotel operating contracts do not, usually, contain any provisions on: (a) the procedures to be followed by the parties; and (b) the rights and obligations of each party, in the event of a public health emergency occurring in the hotel (for example, a guest or staff testing positive for Covid-19). It is important that these gaps are filled to ensure that there is no ambiguity on the roles and responsibilities of the parties and thereby avoiding the blame-game.
HOTEL MANAGEMENT REQUIRES LIFELONG LEARNING
Albert Einstein said, “Once you stop learning, you start dying”, and the saying has never been truer than in the current context. Even if you were a seasoned hotel manager, the COVID-19 crisis has likely challenged all of your past experience and knowledge about the profession. In the face of uncertainty, hoteliers have had to relearn some of the key cornerstones of the industry, such as staffing and revenue management, both of which underwent major transformations because of COVID.
As a result, web traffic on hospitality-related educational platforms nearly doubled in the past few months. Instead of wallowing in self-pity, hoteliers understood that they needed to take action in order to adapt and save their business. In a great showing of courage and resilience, most of them took the matter into their own hands and kept looking for ways to survive amidst the plethora of constraining safety measures and lockdowns. This gave birth to new innovative strategies for hotels to generate revenue.
HOPING FOR A BEGINNING OF AN END
We can say that,
Post Covid19, organisations will surely redesign/reorganise their business models based on the loss handled and market conditions for the future. Workforce reduction is a possibility however smarter organisations may look at utilising the available workforce in newer roles as per the need of the business. Its (sic) important to understand that hospitality is all about human connections and people will be at the heart of everything we strategize.
COVID-19 is pushing the industry to manage, adapt, and respond to the uncertainty and risk associated with this global health incident. Managing the guests’ & employees’ safety and delivering as per guests’ expectations will not be considered a competitive advantage, but rather an industry imperative. Enterprises in the hospitality industry should partner with the right technology solutions providers to ensure a foolproof digital transformational strategy for the future.
RELAXATIONS PROVIDED UNDER GAS CYLINDERS RULES, 2016 TO FAST-TRACK IMPORTS
The relaxations in rules will fast-track approvals for imported cylinders and pressure vessels for storage and transportation of medical oxygen.
Government of India has reviewed the existing procedure for approval of global manufacturers for importing oxygen cylinders by Petroleum and Explosive Safety Organization (PESO). In view of the COVID pandemic, PESO shall not carry out physical inspection of global manufacturers’ production facilities before grant of such approval. Now, such approvals shall be granted online without any delay on submission of manufacturer’s particulars; ISO certificate of manufacturer; List of Cylinders their specifications, drawings & batch number; Hydro test certificate and Third-Party inspection Certificate. Every foreign manufacturer/ importer who wants to import oxygen cylinders is required to apply for import permission through PESO online system.
In view of emergent situation, procedures are relaxed and the following process is to be followed wherever due to unavoidable circumstances or urgencies, consignment of oxygen cylinders, ISO containers or PSA plants or its related equipment have already arrived in India, without taking import permission from PESO. The filling permission for these cylinders will be issued based on the following relaxation in the rules. Same procedure will apply for import of further such equipment in case the online approvals have not been taken.
As such, Certification of PESO will not be mandatory pre-shipment. However, the certification of PESO will be required before use of the oxygen cylinders which entails weight and hydro testing. The Indian Missions should however ensure that the oxygen cylinders should comply with India or International standards before shipment. In case of filled cylinders, the agency exporting to India shall certify that the oxygen filled in the cylinder is of such purity and concentration that is fit for medical use. The certification shall be attested by the Indian Mission in the exporting country. Further, soon upon receipt in India, such filled cylinders shall be inspected on sample basis by an empanelled agency of PESO and certified as fit for medical use.
All the filled cylinders must be verified for quality of gas filled therein under the supervision of medical/ Food and Drugs Controllers and if quality of gas conforms to their requirement of medical oxygen, cylinder may be sent directly to hospitals for use. On emptying out the oxygen, cylinder shall be sent to filler and the process as given above shall be followed.
Guidelines for PSA installations at hospitals with filling facility or at COVID centers:
A. PSA plants where generated oxygen is directly supplied to hospital/ no filling of cylinder is taking place; does not need any permission or license under rules administered by PESO and can be allowed.
B. If PSA is attached with a compressor and filling of oxygen cylinder is to take place, hospital must notify it to PESO with following information:
a. Number of filling points.
b. Number of cylinders to be stored at site
c. An SRV shall be mandatorily installed in the pipeline outlet to compressor.
d. Well ventilated location with adequate illumination.
e. Before filling the cylinder, shall be examined/ cleaned for absence of any Carbonaceous grease and valid hydro test certificate (tested cylinder at 225 Kg/Cm2 hydrostatically)
f. Filling operation shall be carried out under supervision of a competent & experienced person.
g. The space for filling of cylinders to be isolated and maintain clearance of 1m from filling point on all the sides.
C. Any COVID centre may utilize liquid cylinders on board with vaporizer for supplying of gaseous medical oxygen through pipeline or for filling cylinders in open places are permitted subject to conditions stipulated under Sr No. (B) above for PSA and information be submitted to PESO.
These relaxations shall be valid for a period of 6 months or till further orders of Department for Promotion of Industry and Internal Trade, whichever is earlier
RESOLUTION OF PENDING ISSUES OF EXPORTERS WOULD GIVE IMPETUS TO TRADE, SAYS EEPC INDIA CHAIRMAN
The value of engineering goods shipments registered a year-on-year growth of 238.27% during April, 2021 owing primarily to lower base effect and strong demand from traditional markets. This shows recovery in external trade is very much on track and improved trade outlook, said EEPC India Chairman Mahesh Desai.
“As vaccine coverage rises in Europe and North America we see further increase in demand. Shipments to China have already been quite healthy and we expect the trend to continue,” he noted.
As per data released by the government, India’s overall merchandise exports in April 2021 was US$ 30.63 billion, a jump of 195.72% over US$10.36 billion in April 2020. As compared to April 2019, exports in April 2021 exhibited a positive growth of 17.62%.
Mr Desai said that the recent surge in Covid cases has some downside risks to the growth as various state governments have imposed lockdowns and curfews to contain the spread of the virus.
“This has caused a slowdown in inter-state movement of goods and shortage of manpower. In order to address this, we urge the government to classify the export sector as the essential services,” he said.
The EEPC Chairman noted that the government has largely taken a very balanced approach to deal with the health crisis focussing both on saving lives and protecting livelihood.
In a very encouraging development, Department of Commerce has taken up various issues of exporters with the Finance Ministry for their early resolution. Some of the pending issues pertain to Remission of Duties and Taxes on Export Products (RoDTEP), Merchandise Exports from India Scheme (MEIS) and Inverted duty structure.
“Once resolved, it will further provide impetus to the export sector,” said Mr Desai.
Given the growth trends in previous fiscal and April this year, it is hoped that merchandise exports could touch $400 billion in FY22. The value of exports in the first week of May was up by almost 9% (over the same period last year) pointing to a positive trend, the EEPC Chairman concluded.
RBI SUPPORTS MEASURES TO HELP SMALL BUSINESSES HIT BY SECOND PANDEMIC WAVE
Besides providing liquidity support to small borrowers, the measures announced by RBI would boost confidence of the trade and business, said Desai.
“Over the last few months, India’s merchandise exports have shown an upward trend but the surge in new Covid cases has posed some downside risks. The relief measures announced by RBI for MSMEs should mitigate those risks,“ he added.
One of the key focus areas of the central bank was facilitating easy credit for entities in the health sector including vaccine manufacturers and suppliers of oxygen and ventilators. For this, an on-tap liquidity window of Rs 50,000 crore has been announced. This will help strengthen Covid infrastructure in the country and ensure that the impact of the second wave of the infection on the economy is minimal.
Another key support measure announced by the RBI was Resolution Framework 2.0 for Covid related stressed assets of individuals, small businesses and MSMEs. This is a major relief for small and medium players, noted Desai.
Among other things, the Production Linked Incentive (PLI) worth Rs 6,238 crore for air conditioners and LED lights would certainly give a big boost to local manufacturing. The various PLI schemes are being seen as the mega policy plan of the government to make India a global manufacturing hub, said Desai.
He noted that the PLI schemes were also being considered one of the major pull factors for MNCs looking to diversify their supply chains “This will not only bring fresh investments into the country but also offer opportunities for local firms to enter into technical tie-up and form joint ventures,” he said.
The government has so far cleared nine PLI schemes for different sectors. Both local and foreign players have shown keen interest in the scheme. Overall, an outlay of Rs 1.97 lakh crore has been lined up for 13 key sectors. All the schemes together are projected to boost India’s output by over US$ 500 billion in the next five years.
The additional manufacturing capacity coming under the PLI scheme would have a huge multiplier effect and help build a robust supply chain network linked with global giants. It will positively impact the SME sector and spur growth and employment, said Mr Desai applauding the policy action.
INDIA’S TRADE PRFORMANCE CONTINUES TO BE IMPRESSIVE IN APRIL 2021
Merchandise exports accelerate by an impressive 195.72 per cent over April 2020 levels and 17.62 per cent over the April 2019 levels.
India’s export performance continues to be impressive in April 2021 with merchandise exports accelerating by an impressive 195.72 per cent over April 2020 levels and 17.62 per cent over the April 2019 levels.
Merchandise export, excluding POL and Gems & Jewellery, have increased by 160.24% in April 2021 over the same period of 2020-21 and by 20.47% over same period of 2019-20.
The Economic recovery is also visible in the rising import growth of 167.05 per cent and 7.87 per cent during April 2021 over same period of 2020-21 and 2019-20 respectively.
Service exports estimated for April 2021* are USD 21.17 Billion, registering a positive growth of 28.68 percent vis-à-vis April 2020. The estimated value of services import for April 2021* is USD 13.00 Billion, registering a positive growth of 39.75 percent vis-à-vis April 2020. The estimated value of Net of services export for April 2021* is USD 8.17 Billion registering a positive growth of 14.28 percent vis-à-vis April 2020.
COMMODITY-WISE GROWTH TRENDS
The commodities/commodity groups which have recorded positive growth during April 2021 vis-à-vis April 2020 are Gems & jewellery (9271.21%), Jute mfg. including floor covering (1684.62%), Carpet (1352.68%), Handicrafts excl. handmade carpet (1275.46%), Leather & leather products (1201.44%), RMG of all textiles (927.08%), Cotton yarn/fabs./made-ups, handloom products etc. (618.26%), Man-made yarn/fabs./made-ups etc. (587.01%), Other cereals (451.39%), Ceramic products & glassware (444.45%), Electronic goods (372.62%), Oil meals (279.49%), Cashew (260.48%), Mica, Coal & other ores, minerals including processed minerals (241.21%), Engineering goods (238.27%), Petroleum products (191.53%), Tobacco (187.4%), Cereal preparations & miscellaneous processed items (174.61%), Iron ore (172.16%), Oil seeds (169.04%), Meat, dairy & poultry products (148.81%), Tea (146.31%), Marine products (107.94%), Spices (97.56%), Coffee (75.02%), Organic & inorganic chemicals (68.54%), Rice (61.64%), Plastic & Linoleum (51.89%), Fruits & vegetables (25.4%) and Drugs & pharmaceuticals (23.43%).
Iron Ore and Drugs & Pharmaceuticals exports have been consistently growing throughout 2020-2021 and April 2021. Rice export has been consistently growing during 2020-2021 and April 2021 except for the month of April 2020. Cereal preparations & miscellaneous processed items, Other Cereals and Oil Meals exports have been consistently growing since June 2020. Jute Mfg. including Floor Covering and Carpet exports have been consistently growing since July 2020. Handicrafts, excl. handmade carpet, Cotton Yarn/Fabs./made-ups, Handloom Products etc., Ceramic products & glassware, spices and ‘others’ categories exports are growing consistently since September 2020. Mica, Coal & Other Ores, Minerals including processed minerals export is consistently growing since October 2020.
Sectors such as Leather & leather products, Man-made Yarn/Fabs./made-ups etc., and Marine products which had been exhibiting negative growth during the pandemic (2020-2021) have picked up from March 2021 onwards.
*Note: The latest data for services sector released by RBI is for March 2021. The data for April 2021 is estimates, which may undergo revision with subsequent releases of RBI.
Commerce Minister Piyush Goyal had a virtual meeting with Ambassador Kathleen Tai, US Trade Representative on 14th May 2021. The meeting focused on increasing vaccine availability in an inclusive and equitable manner to combat the global pandemic caused by Covid-19. The proposal of India on waiver of certain TRIPS provisions to increase global vaccine production in order to take on the challenge of vaccinating the poorest of the poor and save lives was also discussed. The Minister thanked the USTR for the US announcing its support for India’s proposal. The Minister mentioned the supply chains for the vaccine manufacturers must be kept open and unbridled as the entire world is in dire need of vaccines. Both sides agreed to work towards the common resolve of increasing vaccine availability and saving lives.
GOYAL LAUNCHES ‘DGFT TRADE FACILITATION APP’ FOR PROVIDING INSTANT ACCESS TO EXPORTERS/IMPORTERS ANYTIME, ANYWHERE
Commerce & Industry Minister Piyush Goyal says that the trade facilitation app is ready for Industry 4.0.
Commerce & Industry Minister Piyush Goyal recently launched DGFT ‘Trade Facilitation’ Mobile Application, for promoting ease of doing business and providing quick access to information to importers/exporters.
Speaking about the app, Goyal said that in the post-covid world, tech-enabled governance will play a key role in determining India’s growth and competitiveness. He said that a Single-window approach has enabled tech transformation of service delivery in India. It has liberated last-mile beneficiary from location based constraints, and enhanced ease of doing business. He said that Progress in technology helps develop the economy and strengthen Indian firms in the competitive global market. “We desire to move towards paperless, automated processing systems, simple procedures for trade players, online data exchange between departments & digital payments & acknowledgements.”, he added
Lauding the initiative of DGFT, Goyal said that the new Trade Facilitation App is a step in the right direction as it provides easy, omni-channel access to various trade related processes and enquiries at the touch of button. He said that truly imbibing Prime Minister’s vision of Minimum Government, Maximum Governance, DGFT is standing up for businesses as a true leader with e-issuance of certificates, QR scan process to validate documents. It will reduce transaction cost and time for imports and exports related processes, and usher in transparency. He said that ‘Trade Facilitation Mobile App’ is a symbol of India’s Idea of Aatmanirbharta – Making governance easy, economical & accessible, as it symbolises shift in traditional thinking.
Shri Goyal said that Trade facilitation App is READY for Industry 4.0, as it provides
• Real-time trade policy updates, notifications, application status alert, tracking help requests
• Explore item-wise Export-Import policy & statistics, Track IEC Portfolio
• AI-based 24*7 assistance for trade queries
• DGFT services made accessible to all
• Your Trade Dashboard accessible anytime & anywhere
The Minister said that ‘Mobile’ India creates an international trade opportunities for MSMEs and Foreign players. It will enable creation of a quality conscious and cost-competitive domestic industry. Further, it will significantly contribute to export target of $1 Trillion by 2025 and GDP target of $5 Trillion. He said that for advanced App development, more inputs & ideas of all stakeholders should be invited for further refinement which will help in expediting our technological transformation. Shri Goyal also called for engagement with technology and language specialists to develop Governance Apps in various regional languages, which will support the spirit of oneness amongst our citizens.
The new Mobile App of DGFT provides the following features for ease of the exporters and importers –
• Real-time Trade Policy Updates and Event Notifications
• Your Trade Dashboard Anytime Anywhere
• Access all services offered by DGFT in App
• Explore Item-wise Export-Import Policy and Statistics
• 24×7 Virtual Assistance for Trade Related Queries
• Track your IEC Portfolio – IEC, Applications, Authorizations
• Real-time Alerts on status of applications
• Raise and track help requests in real-time
• Share Trade Notices, Public Notices easily
The App will be available on Android and iOS platforms. The App can also be downloaded from the DGFT Website (https://dgft.gov.in). It has been developed by the Tata Consultancy Services (TCS), as per the directions of the Directorate General of Foreign Trade (DGFT).
THE ROAD NOT TAKEN: CROSS-BORDER INSOLVENCY REGIME IN INDIA
OVERVIEW: CONCEPT OF CROSS-BOUNDARY INSOLVENCY
The recent judgment on Jet Airways v SBI & Ors is a strike on the previously closed doors of the Cross Border Insolvency regime in India under the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as ‘IBC’). The Indian jurisdiction has time and again questioned with respect to it’s competence in handing cross border insolvency proceedings. The advent case of Jet Airways has given Indian an eccentric window to exhibit its potential and capabilities for handling the cross border insolvency disputes. The Hon’ble National Company Law Tribunal (hereinafter referred as ‘NCLT’) has set aside a non-arbitrary order towards the disputed position of Jet Airways and recognized that the resolution of the party which has the operations and stakeholders across the globe shall have implications if parties are spread across jurisdiction. The Appellate Tribunal has also set aside the order upholding the recent cross-border protocol agreed between NCLT appointed Resolution Professional (hereinafter referred as RP) and the Dutch insolvency trustee and deciding that the Dutch trustee is equivalent and analogous to the RP. Thus, clearly stating that the trustee has a right to attend the meeting of the committee of creditors as per the provisions of the insolvency law. However, it is pertinent to highlight that the NCLT specifically pointed out a quintessential cross-swording between two emblematic concepts of universalism and territorialism. These two conceptual terms are intertwined with each other in their basic sense.
The basic idea behind adverting these two concepts was due to the undemonstrated provisions in the cross border insolvency regime in IBC and clueless reasoning and deliberate abandonment of a United Nation Commission on International Trade model law on Cross Border insolvency (‘Model Law’) by the Indian jurisdiction. The notion of cross border insolvency comes into delineation when the insolvent debtor has assets located in more than one jurisdiction or in a circumstances where some of the creditors of such debtor are not located in a jurisdiction where the insolvency proceedings has been commenced.
CROSS-BORDER REGIME: INDIAN JURISDICTION
In 2000 the aforementioned difficulty was acknowledged by the Justice V. Balakrishna Eradi Committee which called for urgency in adoption of the Model Law, partly or in whole for an effective cross border regime. Subsequently, N.L Mitra Committee report reiterated the need for adoption of the Model Law. Earlier in India, as regards to Cross Border Insolvency under the Companies Act, 1956 and the Companies Act, 2013, a court could order winding up of a foreign company limited to the extent of its assets in India. However, there were no specific statutory provisions in case an Indian company having is assets abroad was sought to be wound up. Therefore, it was done through a mutual recognition of foreign decrees as provided under the Code of Civil Procedure, 1908. In the absence of such recognition it was a tricky situation for the liquidator in gathering information with regards to foreign assets and disposing them under the liquidation.
Presently, Section 234 and 235 of the IBC provides the legal framework under the IBC with respect to Cross Border Insolvency and envisage entering into bilateral agreements Finalizing such bilateral treaties require time consuming negotiations and every treaty made would be distinct which will create ambiguity for foreign investors. However, the provided legal framework has not been notified yet and therefore is not into effect and any orders passed in India with respect to Cross Border Insolvency will not have any effect in a foreign country. IBC is silent on the position of a foreign creditors’ right to approach NCLT to initiate corporate insolvency proceedings. However, in the matter of Macquarie Bank Limited v. Shilpi Cable Technologies Ltd, the Hon’ble Supreme Court gave a clarity that rights of the foreign creditors are similar to the rights of the domestic creditors with respect to initiating and participating in Corporate Insolvency Resolution Process under IBC.
MODEL LAW & INDIA’S RECOMMENDATION FOR ITS ADOPTION
Model Law was recognized as a framework which was globally accepted. The Model Law got its consensus by UNCITRAL in 1997 and since then it has become as the most widely accepted framework which deals with the Cross Border Insolvency issues and therefore, around 44 countries and in total 46 jurisdictions have adopted the legislation based on the Model Law. Under the Model Law, recognition is given to both the proceedings i.e. remedies provided under the foreign proceedings as well as the remedies provided under the Domestic proceedings. Relief can be provided if the foreign proceeding is either a main or non-main proceedings. It provides coordination between the foreign and domestic insolvency proceedings by encouraging cooperation between the courts. It allows the foreign insolvency professionals and foreign creditors to participate in the domestic insolvency proceedings against the debtor. Presently, on perusal of Section 234 of IBC it is clear that there is direct access with regards to the foreign creditors has been provided under the IBC. However, with respect to the foreign insolvency professionals no such provisions have been envisaged under the IBC.
The Model Law endows basic legal framework for cooperation between the domestic and foreign courts/ insolvency professionals. In India Insolvency Law Committee in its report recommended adoption of Model Law, as it provides for a wide-ranging framework to deal with Cross Border Insolvency issues. However, few carve out were suggested by the Insolvency Law Committee in order to ensure that there is no contradiction between the current domestic insolvency framework and Model Law framework.
Further, Countries which enact the Model Law are allowed to exempt certain entities from the application of the Model Law therefore; the Committee recommended to exclude the banks and insurance company from the scope of Model Law. The rationale provided behind this exclusion was that the insolvency of those entities requires particularly prompt and circumspect action and may be subject to a special insolvency regime. Further, the Committee was of the view that Section 234 and 235 of IBC should be amended so that it is applied only to individuals and partnership firms since the content relevant to the Corporate Debtor has already been captured under the Proposed Model Law. With respect to dual regime, the Committee noted that at present the Companies Act, 2013 already contain provisions related to insolvency of foreign companies.
In the Model Law, reciprocity indicates that a domestic court will recognize and enforce a foreign court’s judgment only in the case if the foreign country has adopted an akin legislation to the domestic country. Thus on Reciprocity, the committee recommended that the Model Law may be adopted initially on a reciprocity basis which may be diluted upon reconsideration. Foreign proceedings and its relief are duly recognized under the Model Law. Relief will be provided irrespective of the fact that the proceeding is a main proceedings or non-main proceeding. Therefore, if the domestic court determines that the debtor has its centre of main interest in a foreign country; such foreign proceedings will be recognized as the main proceedings. This recognition will allow foreign representative greater powers in handling the debtor’s estate.
CONCLUSION: TWO-STEP FORWARD APPROACH
Cross Border Insolvency regime is a road talked boastfully about, but is a road not taken yet. Cross Border Insolvency, the less travelled road would make all the difference in India. It encircles three major circumstances: firstly, the debtor’s assets that are located in diverse jurisdictions and the creditors want to cover those assets for the purpose of insolvency proceedings, secondly, in safeguarding the creditors’ rights who have interest in the assets of the debtor located in the different jurisdiction, and thirdly, in cases when the insolvency proceedings have been initiated in more than one jurisdiction on the same Corporate Debtor. It is pertinent to mention that the majority of countries are yet to agree upon an amicable and a singular code or a treaty which is pivotal for bestowing and uncovering the blanket on such cases without inviting any difference of opinion or interest of the related parties.
In the era of neoliberalism, the proposed draft by the Insolvency Law Committee will empower Indian jurisdiction to deal with the matters pertaining to Indian companies having their assets overseas and vice versa. The balance in inclusion and exclusion will be a major game changer for the Indian jurisdiction. The chapter of Cross Border Insolvency under IBC is much awaited and would enable the legal framework to have effective assistance in situations of concurrent proceedings. Therefore, it is paramount for us to clean our lenses and take the road less travelled, the road which would yield our nation the benefit of lost battles in past and untimely progress in future.
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