Index of Eight Core Industries: combined growth slowed to 2.6% in December 2012, with key sectors showing mixed performance.
The Index of Eight Core Industries (weight 37.90% in IIP) recorded 154.6 in December 2012 with 2.6% growth, driven down by negative production in Coal, Natural Gas and Fertilizers; cumulative April-December 2012-13 growth was 3.3% (provisional). Sectoral figures: Coal -0.2% (Dec), Crude Oil 1.0% (Dec) with cumulative -0.4%, Natural Gas -14.9% (Dec) and -13.3% cumulative; Refinery +5.0% (Dec) and +6.9% cumulative; Fertilizers -3.8% (Dec) and -3.4% cumulative; Steel, Cement and Electricity showed positive monthly and mixed cumulative growth.

Export of edible oils: limited branded exports allowed with minimum price requirement to protect domestic supply.
Exports of edible oil are conditionally permitted from the Domestic Tariff Area to SEZs for use in processed food manufacture; coconut oil exports are allowed from all EDI ports and notified Land Customs Stations; branded consumer packs up to 5 kg may be exported without quantity limits only if they meet a Minimum Export Price; an Inter ministerial Committee chaired by the Commerce Secretary will periodically calibrate the MEP and oversee related notifications.

Monetary policy: repo rate cut 25bp and CRR reduced to inject liquidity and support growth.
The Reserve Bank reorients policy to support growth while containing inflation: GDP 2012-13 projection revised to 5.5 per cent, WPI projection for March 2013 to 6.8 per cent, M3 to 13.0 per cent and non-food credit to 16.0 per cent. Key risks include a large current account deficit, supply constraints, weak investment demand and banking asset quality. Monetary measures: repo rate cut of 25 basis points to 7.75 per cent, reverse repo 6.75 per cent, MSF and Bank Rate 8.75 per cent, and CRR reduced by 25 basis points to 4.0 per cent, injecting about `180 billion.

Financial inclusion: bank led, technology enabled solutions to link urban poor with tailored savings, credit, remittance and insurance services.
The Reserve Bank advocates a bank-led approach to financial inclusion of the urban poor, leveraging technology, Business Correspondents and NGO partnerships to provide appropriate savings, credit, remittance and insurance products. Key barriers-irregular incomes, migratory status, inadequate KYC, financial illiteracy and preference for flexible informal credit-require cluster based product design, JLGs, Aadhaar enabled KYC and coordinated account opening and literacy campaigns. Bundled interventions like the Rickshaw Sangh programme-combining asset finance, NGO guarantees, permits, insurance and post loan handholding-are cited as replicable models to enhance creditworthiness and livelihood sustainability.

International MSME cooperation expands via MoU-driven trade and investment pathways for small enterprises to access European markets.
Bilateral engagement to enhance International MSME Cooperation focused on expanding market access, trade promotion and investment facilitation between India and Slovenia, recommending that counterpart organisations such as the National Small Industries Corporation facilitate joint participation of MSMEs in trade fairs and exhibitions to improve export opportunities; and proposing a Memorandum of Understanding to institutionalise continuous dialogue and practical collaboration, with priority sectors including energy, energy-efficient housing, automotive, IT solutions, mechanical engineering and tourism and Slovenia positioned as a gateway to European markets.

Comprehensive Economic Cooperation Agreement talks to deepen trade and investment, remove barriers and facilitate sectoral investment.
India and Australia committed to strengthening institutional frameworks to deepen trade and investment, prioritising conclusion of a Comprehensive Economic Cooperation Agreement with progress on goods offers and anticipated services offers to broaden merchandise trade, remove non-tariff barriers to services, and facilitate investment in priority sectors including mining, manufacturing, infrastructure, clean technology and tourism.

Nutrient Based Subsidy policy allows companies to fix MRP while government sets fixed subsidy and monitors transparency.
Under the Nutrient Based Subsidy policy the Government sets an annual fixed subsidy per fertilizer while companies are free to fix MRP; subsidy fixation accounts for international prices, exchange rates and company costs and is asserted to be transparent, and audited company balance sheets show no evidence of undue profiteering. Movement of P&K fertilizers in Rabi 2011-12 reflected pre positioning, long term contracting, port storage limits, rail rake constraints and short seasonal consumption windows rather than excess dispatch. NBS does not regulate MRP and P&K fertilizers are importable under Open General Licence.

Interest subvention for rupee export credit widened to include engineering items and extended for specified exporter sectors.
The Reserve Bank directs scheduled primary urban co operative banks holding AD Category I licence to provide interest subvention on pre and post shipment rupee export credit to specified sectors, including newly added engineering tariff lines, with subvention calculated on outstanding export credit from disbursement to repayment or until overdue; banks must submit quarterly reimbursement claims in the prescribed format accompanied by an External Auditor's Certificate for settlement.

Interest subvention on rupee export credit extended, requiring urban co op banks to apply lower rates and seek quarterly reimbursement.
Scheduled primary urban co operative banks holding AD Category I licences must charge discounted interest on pre and post shipment rupee export credit for specified sectors from April 1, 2012 to March 31, 2013, at two percentage points below rates for other exporter categories on outstanding amounts from disbursement until repayment or until overdue; banks shall file quarterly reimbursement claims to the Reserve Bank's Urban Banks Department in the prescribed format with an external auditor's certificate.

Electronics system design and manufacturing policy framework expands sector support, incentives and project approval timelines.
The Government has created a new policy framework for Electronics System Design and Manufacturing covering avionics, automotive electronics, medical electronics and LEDs, supported by the MSIPS project-incentive mechanism with defined project approval timelines and measures to improve ease of doing business. The policy includes extended export incentives, plans to increase electronics PhDs, legal amendments to establish medical device standards, encouragement of public-private partnerships for device development, and sector-specific aims such as automotive electronics localisation, avionics maintenance hubs, and domestic LED fabrication.

Import duty on crude edible oil increased to support domestic farm prices; refined oil duty unchanged, limited consumer impact.
The CCEA approved an import duty on crude edible oil while retaining the duty on refined edible oil, aiming to raise the procurement price for oil palm Fresh Fruit Bunches by increasing the landed price of Crude Palm Oil; consumer price effects are described as negligible and may be moderated by large exporter stocks and potential export duty adjustments abroad.

Agrotextiles scheme for North East launched to boost technical textiles and enable fiscal flexibility for regional promotion.
A five year agrotextiles scheme for the North East is announced with a Rs. 55 crores budget alongside an enlarged 12th Plan outlay for technical textiles (over five times the prior allocation). The Ministry introduces a special North East scheme granting fiscal flexibility through relaxed parameters, promotes inter ministerial coordination with States and industry, and offers incentives for Technical Textile Parks-up to Rs. 40 crores of project cost-naming five parks expected to become industrial hubs.

Export allowance for processed agricultural products permitted despite bans on basic produce, to protect value chains and reduce waste.
The Cabinet Committee on Economic Affairs approved permitting export of processed and value added agricultural products even when basic farm produce exports are restricted or banned, listing eligible items such as various cereal flours and products, milk derivatives including casein, butter and cheese, value added onion products, and peanut butter. The justification is that processed exports constitute a very small portion of overall exports and thus will not affect domestic availability; permitting them aims to reduce perishability losses, support processing capacity, and encourage value addition while creating an exception to blanket export restrictions.

Tariff value alignment: notified edible oil tariff values to be defrozen and linked to international prices.
Approval was given to defreeze and re notify tariff values for specified palm and soybean edible oils so that notified values are aligned with prevailing international prices. Tariff values are fixed under Section 14(2) of the Customs Act, 1962 and notified fortnightly. The previous freeze since 2006 caused divergence from internationally computed landed prices, adversely affecting import duty revenue and the competitiveness of the domestic refining industry; aligning values with international prices is intended to redress those effects.

Fuel efficiency rating proposed to inform consumers and promote conservation through annual public energy audit reporting.
The Minister directed PCRA to implement a precise Energy Audit process with annual public Energy Audit Reports, require energy budgeting by all users, and develop a mechanism for an automobile fuel efficiency rating, alongside intensified household fuel conservation awareness campaigns in local languages.

Coal sector reforms: propose MDO development and competitive bidding to boost domestic production and supply reliability.
Government proposes developing selected Coal India Limited blocks through mine developer and operator (MDO) arrangements alongside amended MMDR rules instituting competitive bidding; complementary measures include CIL modernization, GCV-based grading and pricing, accelerated rail evacuation and state facilitation of land, R&R and clearances, while imports and overseas equity are contemplated as supplementary supply options.

Technology Innovation Centre to demonstrate advanced apparel production technologies and applied research boosting SME productivity and competitiveness.
The ATDC-JUKI Technology Innovation Research Centre at ATDC Gurgaon will demonstrate advanced apparel production technologies, conduct applied research, and foster industry-academia collaboration to combine research with technology training aimed at increasing productivity, efficiency and quality in apparel manufacturing, especially supporting SMEs to enhance competitiveness.

Preferential Trade Agreement negotiations advance as India and SACU press for early finalisation and tariff margin responses.
Early finalisation of the Preferential Trade Agreement (PTA) with SACU is urged, with requests for SACU to respond to India's proposal on an average Margin of Preference (MOP) so officials can exchange tariff request lists and resolve differences; officials will meet to pursue negotiations and coordinate WTO stances. India also raised concerns about the temporary suspension of frozen boneless buffalo meat imports, noting prior market access and requesting review of the suspension.

Nutrient Based Subsidy policy strengthens fertilizer subsidy targeting and market pricing, paired with investment and direct transfer reforms.
The Department adopted a New Investment Policy-2012 to expand urea capacity and implemented the Nutrient Based Subsidy (NBS) for P&K fertilizers providing fixed per kg subsidies by grade with additional support for micronutrient fortification; revival of closed HFCL/FCIL units is pursued subject to BIFR procedures and Cabinet review, while transparency and subsidy targeting are being advanced through e Office measures and a piloted Direct Transfer of subsidy system linking retailer sales and Aadhaar enabled bank accounts.

Safeguard duty removal after bilateral memorandum restores prior trade conditions for cotton yarn imports.
A foreign administrative review had recommended continuation and retroactive application of a safeguard duty on cotton yarn imports; bilateral consultations identified procedural inconsistencies in extending measures by provisional duty. A Memorandum of Understanding was concluded under which the foreign government agreed to rescind the definitive measure, and it subsequently withdrew the safeguard duty by an executive gazette resolution.