Business News at 05:30 pm on 31st March 2023

The Modi govt on Friday unveiled India’s new foreign trade policy, which will be adopted from April 1. This will take steps to support international trade using the rupee currency, the government said, as it looks to boost exports amid slowing global trade. The South Asian nation is prepared to trade in rupees with nations facing a shortage of dollars so as to “disaster-proof” them and effectively boost its exports, Commerce Secretary Sunil Barthwal told a news conference in the capital, New Delhi. The measures include industry-specific targets to reach a goal of $2 trillion in exports of merchandise and services by 2030, said Santosh Kumar Sarangi, head of the directorate-general of foreign trade. That represents a nearly three-fold jump from expected exports of $770 billion in financial year 2022/23, he added, despite global uncertainties that make the export scenario slightly challenging. India is also launching a new amnesty scheme for one-time settlement of defaults on export obligations, Sarangi said. The scheme, which aims for faster resolution of trade disputes, will run until September 2023, but will not apply to cases involving fraud investigations.

Moving on. Global mergers and acquisitions activity shrank to its lowest level in more than a decade in the first quarter of 2023, as rising interest rates, high inflation and fears of a recession soured the appetite of companies for dealmaking. M&A volumes during the first quarter slumped 48% to $575.1 billion as of March 30, compared to $1.1 trillion during the same period last year, according to data from Dealogic. A banking crisis that started in the United States this month with Silicon Valley Bank and spread to Europe with the Swiss government-orchestrated sale of Credit Suisse Group AG to UBS Group AG roiled markets and stopped many deals in their tracks, investment bankers and lawyers said. M&A volumes dropped 44% to $282.7 billion in the U.S. and 70% to $81.87 billion in Europe. Deal volumes in Asia Pacific fell 29% to $176.1 billion. The total number of deals worth over $10 billion fell by a big margin from last year, as the appetite for large strategic tie-ups evaporated amid a tougher antitrust environment and macroeconomic uncertainty.

In other news, Pakistan’s finance minister, Ishaq Dar, said on Friday that China had rolled over a $2 billion loan that matured last week, providing relief during the South Asian nation’s acute balance of payment crisis. Locking in a rollover had been critical for Pakistan, where reserves have dipped to just four weeks’ worth of imports and talks over an IMF bailout tranche of $1.1 billion have hit a stalemate. “I am happy to confirm that this had been rolled over on March 23,” Dar told parliament, referring to the maturity date. He said all concerned documentation had been completed. Neither the government in Beijing nor the Chinese central bank responded to requests for comment on the rollover. Dar’s comments were the first official announcement of the rollover after the loan matured. Dar did not give the new maturity date or other terms of the arrangement. A top finance ministry official told Reuters on Wednesday that a formal confirmation of the refinancing would be made after the process was completed.

In another economic development, Japan will host a Group of Seven trade ministers’ teleconference on April 4, where the World Trade Organization reform will be discussed with its director-general Ngozi Okonjo-Iweala, the trade ministry said on Friday. Under the moderation of Japanese trade and foreign ministers, the talks will also address strengthening free and fair trade orders, supply chains and economic security, the ministry said in a statement.

Now some updates from corporate world. Zee Entertainment Enterprises Ltd has entered into a one-time settlement agreement with Standard Chartered Bank for the loan taken by Siti Networks, a part of the Essel Group. Standard Chartered Bank had sanctioned certain credit facilities to Siti Networks, which was inter-alia secured by DSRA (Debt Service Reserve Account) support and undertaking from ZEEL. “Since the Borrower has defaulted in its debt repayment obligations to the Bank, the Company has entered into a one-time settlement agreement with the Bank in respect of DSRA Claims/Undertaking in the interest of amicably resolving the issues between the parties,” said ZEEL in a regulatory filing on Thursday. Though the company, which is merging with rival Culver Max Entertainment Pvt Ltd, formerly known as Sony Pictures Networks India, has not mentioned the amount. Siti Networks, formerly known as Wire and Wireless Ltd, is a multisystem operator promoted by media baron Subhash Chandra-led Essel Group. Earlier this week, ZEEL announced settling its dispute and claims with IndusInd Bank.