Economic growth slowdown driven by weak external demand and investment, with implications for savings, banking and trade balances.
The Bulletin presents five reports: national income aggregates showing slowed real GDP growth due to weaker external demand and investment with lower savings and investment rates; a deficient North-East monsoon that is unlikely to severely affect aggregate agricultural output given irrigation, record foodgrain levels and adequate reservoir storage; international banking statistics indicating year-on-year growth in banks' international liabilities and assets with high US dollar denomination and short-term consolidated claims; banks' investment portfolios showing moderated growth and medium-term government security concentration; and foreign trade data revealing strong import and export growth alongside a widening trade deficit.

Foreign investment liberalization invites overseas partners to invest in food chain infrastructure to reduce post-harvest losses.
The government is incrementally liberalising foreign investment in food-sector infrastructure, allowing 100% foreign participation in backward logistics up to the cash-and-carry level and announcing calibrated liberalisation of the FDI Policy in Multi Brand Retail; these measures aim to attract private and foreign partners to invest in cold chains, storage, transportation and food-processing technologies to reduce high post-harvest losses and strengthen the food value chain.

Trade target acceleration: India and Indonesia pursue services liberalisation, mode IV mobility and review of mining export pricing rules.
Acceleration toward the bilateral trade target has led India and Indonesia to speed up CECA negotiations and deepen India ASEAN FTA implementation, focusing on services liberalisation and facilitating temporary movement of professionals under mode IV, with Indonesia asked to address sectoral exclusions in health and banking. Both sides flagged non tariff barriers affecting pharmaceuticals and bovine meat. India also sought review of Indonesian mining regulations requiring coal exports at monthly benchmarked prices, which have disrupted pricing assumptions of Indian IPPs. To address these issues, five sectoral working groups were established covering health care and pharmaceuticals, mining, agro processing and food processing, research and technology, and skill training.

Import of sensitive items rose 44.7% to Rs.75,948 crore; edible oils and automobiles drove the increase.
Imports of sensitive items increased from Rs.52,492 crore to Rs.75,948 crore (44.7%) in April-December 2011, comprising 4.6% of gross imports versus 4.3% previously. Milk & milk products and food grains declined, while edible oils (notably crude palm oil), automobiles and parts, fruits & vegetables, pulses, rubber, small-scale industry products, cotton & silk, spices, alcoholic beverages, marble & granite, and tea & coffee showed growth. Crude and refined edible oil imports rose by 68.1% and 64.4% respectively. Imports rose from many supplying countries while falling from Brazil and Australia.

Core industries index shows subdued growth with mixed sectoral performance and slower cumulative expansion trend
The Index of Eight Core Industries (weight 37.90% of IIP) recorded a combined index of 149.1 in January 2012 with 0.5% growth. The release provides monthly and cumulative April-January growth rates for Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement, and Electricity, evidencing mixed sectoral performance and noting provisional data and a specific refinery throughput treatment.

Direct import of Aviation Turbine Fuel permitted for Indian carriers as actual users subject to authorisation and actual-use conditions.
Indian carriers may be authorised to import Aviation Turbine Fuel directly as actual users and on an actual use basis, deviating from the State Trading Enterprise regime; such authorisation is available under the enabling provision of the Foreign Trade Policy and must be obtained by applying in the prescribed format ANF 2 B on the trade authority's website.

Marine product export growth improves value realization and shifts market share toward South East Asia, driving promotional action.
Marine product exports during April-December 2011-12 rose in both quantity and value with improved unit value realization; frozen shrimp and fish led growth, Vannamei shrimp expanded sharply, while dried, chilled and live items declined. South East Asia became the largest market after significant increases in shipments and receipts, with EU, USA and Japan showing mixed growth and China declining. Trade pacts, regional raw material shortages and currency depreciation contributed to better rupee value realization. MPEDA and industry organisers scheduled the 18th India International Seafood Show to promote exports and market development.

Export promotion: measures to improve market access for Indian handmade carpets through duty relief, bonded warehouses and joint study.
India proposes trade facilitation measures to expand handmade carpet exports to China, including duty free entry for Indian exhibitors up to a restricted value, lower import duties on Indian handmade carpets, and establishment of a bonded warehouse facility in Xining to aid importers' distribution; a study group or joint working group on carpets is also proposed to advise both governments.

Import of sensitive items shows marked year on year increase driven by edible oil and broad commodity growth.
Import of sensitive items rose 42.3% in April-November 2011 to Rs.67263.75 crore, increasing their share of total imports from 4.4% to 4.7%. Growth was concentrated in edible oils (both crude and refined, driven by crude palm oil), fruits & vegetables, pulses, automobiles, rubber, SSI products, cotton & silk, spices, alcoholic beverages, marble & granite, and tea & coffee, while milk & milk products and food grains declined. The release provides provisional tariff-line level estimates showing commodity-specific contributions and country-source variations.

Trade growth shows sustained export expansion and wider import-driven deficit, highlighting sectoral shifts and provisional estimates.
India's exports rose in January 2012 and grew cumulatively April 2011-January 2012, but import growth outpaced exports over the same cumulative period, producing a larger trade deficit; sectoral detail highlights major export contributors (engineering, petroleum products, gems and jewellery, pharmaceuticals, leather, textiles, electronics, garments) and major import growth in petroleum, precious metals, machinery, electronics, chemicals and coal. The Commerce Secretary stated these are provisional estimates subject to change.

Trade agreement negotiations: BTIA talks aim to expand and diversify bilateral trade, fostering greater investment and cooperation.
India and the European Union advanced bilateral trade and investment discussions focused on progressing the proposed BTIA to expand and diversify trade, with leaders and delegations working to converge positions and resolve differences on trade-related issues to strengthen negotiation momentum and deepen economic cooperation.

Bilateral trade ties strengthened as India and Mauritius commit to expanding sectoral cooperation and FDI facilitation.
India and Mauritius reported expanding economic and commercial relations, with Mauritius a principal source of foreign direct investment into India and rising Indian investments in Mauritius. Both governments identified priority sectors for enhanced cooperation, including agro processing, manufacturing, pharmaceuticals, medical equipment, seafood, automobile parts, tourism, IT and Ayurveda. India agreed to provide special dispensation to Mauritius regarding export restrictions after lifting the non basmati rice ban, and Mauritius sought Indian support for skills development in gems and jewellery and capacity building in consumer protection and metallurgy.

Exemption from export bans allows essential commodities to cross borders under annual limits following official notification and exchange.
An official notification exempts specified essential commodities from export bans subject to annual quantity limits agreed by the importing party, while a Letter of Exchange and an amendment to the Letter of Guarantee implement designated exit/entry points and transit arrangements under the bilateral Trade, Commerce and Transit framework.

Bilateral economic cooperation expands into targeted investment and joint ventures, securing long-term fertilizer supply and pharmaceutical production partnerships.
India seeks investment-led expansion of bilateral economic cooperation with Belarus through Indian joint ventures in pharmaceutical production to localise up to half of Belarus' drug needs, and a long-term arrangement and joint venture proposals to secure potash fertilizer supplies; both countries agreed to form a Joint Working Group on Trade and Investment and to pursue trade promotion and expedited finalisation of outstanding bilateral agreements.

Cost of credit must be reduced to support regional trade through new credit mechanisms and improved customs infrastructure.
Cost of credit for industry and exporters must be lowered and new credit mechanisms developed to support commercially viable regional projects; the Government will consider measures for exporters and investors. Complementary trade facilitation requires improved customs infrastructure, integrated check posts and faster border processing. India has reduced its sensitive list for SAARC LDCs and extended near-universal zero-duty access for LDC-relevant tariff lines, while calls were made to reduce non tariff barriers, build regional production chains and strengthen institutional linkages to foster regional cooperation.

Comprehensive debt relief for small coffee growers strengthens government support to stabilise production and develop domestic coffee markets.
The Government announced a Comprehensive Debt Relief Package for small coffee growers, coupled with financial restructuring, technology support for cultivation, development assistance to improve production and quality, capacity building, packaging and marketing linkage development, and encouragement of increased domestic roasting capacity and private investment to reduce exposure to global price volatility.

Sovereign investment interest spurs Joint Working Group to pursue de risked infrastructure and sector diversification opportunities.
ADIA signalled interest in Indian infrastructure and related sectors and the parties agreed to form a Joint Working Group to identify and finalise projects; de risked infrastructure and PPP projects, including the Delhi-Mumbai Industrial Corridor, were highlighted as likely targets, and discussions also covered diversification into pharma, services, engineering and agro processing and coordination on a proposed Free Trade Agreement with Gulf partners.

Export growth highlights widening trade deficit as imports increase faster than exports, based on preliminary trade estimates.
India's exports for April-December 2011 rose 25.8% to US$ 217.6 billion while imports grew 30.4% to US$ 350.9 billion, producing a negative balance of trade of US$ 133.3 billion; December 2011 monthly figures showed a similar deficit pattern and the Commerce Secretary noted the figures are preliminary estimates.

Preferential trade agreement momentum to be pursued, with intensified efforts on the PTA and investment protection agreement.
The Commerce Minister and his counterpart reviewed bilateral commercial relations, noted continued growth in trade and investment, and agreed to maintain momentum through commercial delegations and facilitative measures while intensifying efforts to conclude a Preferential Trade Agreement with SACU and finalise a Bilateral Investment Promotion and Protection Agreement to deepen market access and secure investment flows.

Sensitive item imports rose, shifting commodity and supplier composition and increasing their share of total imports.
Import of designated sensitive items increased during April-October 2011 versus the prior year, raising their share of total imports. Milk and milk products and food grains fell while edible oil, automobiles, fruits and vegetables, pulses, rubber, textiles, small-scale industry products, spices, stone products, alcoholic beverages and tea and coffee rose. Edible oil increases were driven by crude palm oil and its fractions, with both crude and refined edible oil imports up. Supplier composition shifted with rises from several countries and declines from others.