Thursday, September 15, 2022
This hand or that?
"Foxconn and Vedanta have announced $19.5 billion to build one of the first chipmaking factories in India." BBC. "The facility, which will be built in Mr Modi's home state of Gujarat, has been promised incentives." "The project is expected to create 100,000 jobs in the state, which is headed for elections in December, where the BJP is facing stiff competition from opposition parties." This should be a balm for Finance Minister Nirmala Sitharaman "who sought to know from India Inc what is stopping them from getting into manufacturing when countries abroad are showing their belief in India." ET. Foxconn is a Taiwanese multinational company with its headquarters in Tucheng, New Taipei City, Taiwan. wikipedia. "After a decade of scepticism over free trade deals, India has been signing a bevy of new agreements with a number of countries to reduce trade barriers, eliminate tariffs and gain preferential access to global markets." BBC. "These deals are expected to cover a range of products and services from textiles to alcohol, automobiles, pharmaceuticals as well as subjects like labor movement, intellectual property enforcement and data protection." At the same time Prime Minister Narendra Modi has been pushing for 'Atmanirbhar Bharat', which can be translated to 'self-reliant or self-sufficient India'. wikipedia. In line with that, "The government ...warned multinational and local auto companies of serious action if they force Indian component makers to compulsorily source from overseas suppliers and not localise within the country. The warning comes amid a strong push by the government to Make in India initiative through programs such as Armanirbhar Bharat scheme and production-linked (PLI) schemes." TOI. "India's trade policy is not just incoherent across time but contradictory at any particular moment in time. For example, steel producers justifiably complain that the new export taxes mean that they will fail to meet government-set targets for exports under an incentive subsidy regime begun as recently as last year," wrote Mihir Sharma. "Last year, he (Modi) promised India would vaccinate the world - only to end vaccine exports after the Delta variant hit. In April, he promised to 'feed the world' and to 'send relief from tomorrow itself'; within weeks, his government shut down the wheat trade." Then, there is the government hunger for taxes. India's goods and services tax (GST) is the most complex and, at 28%, it is the second highest rate in the world. BS. India's horticulture production was 334.6 million tonnes in 2020-21, of which fruit production was 102.5 million tonnes, and yet we are 19th in revenue in the beverage sector, wrote Arpita Mukherjee & Eshana Mukherjee. Because "In India, zero-sugar carbonated drinks and carbonated fruit-based drinks attract 40% tax (20% GST+12% compensation cess)." Regarding the Foxconn/Vedanta deal, "If voters and taxpayers in Gujarat are excited about this 'landmark investment' they ought to read up on recent Wisconsin history," wrote Tim Culpan. "Wisconsin never hit its target. And neither will Gujarat." The right hand seems ignorant of the left hand.
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