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US becomes India’s 2nd biggest crude supplier

New Delhi: The US has become the biggest gainer of its decision to impose sanctions on oil producing countries Iran and Venezuela.

America has steadily improved its exports post sanctions and has now become the second biggest oil supplier to India, the world’s third largest oil consumer.

As per trade data, the US supplied almost 2.2 million tons (mt) of oil to India in February, higher than even Saudi Arabia, which had traditionally been among the biggest exporters of oil to India. This is 48 per cent growth in US oil exports to India and is accounting for almost 14 per cent of India’s total oil imports in February.

Surprisingly, the Saudis supplied about 1.8 mt of oil to India in February, a fall of over 40 per cent, that pushed it to number four position among countries meeting energy demand of the world’s third largest oil importer.

Sources said US sanctions have lifted oil trade with the US as it is quickly occupying the space vacated by Iran that has been among India’s top three oil suppliers in the past.

Before sanctions reduced Iranian oil supplies to almost zero level in FY21, the Islamic nation used to export over 20 mt of oil to India, accounting for over 10 per cent of the country’s total oil imports.

This year (FY21) up to February, imports from the US has already increased to its highest ever level of about 13 mt and May end the year with 15 mt of oil imports. India imports over 200 mt of oil per year and meets 85 per cent of domestic oil needs through shipping channels.

In 2020-21 April-December, US was the fourth largest supplier ($4.9 billion) after Iraq ($9.4 billion), Saudi Arabia ($8.9 billion) and UAE ($7.4 billion)

India began imports of oil from the US in 2017.

For the US, the trade dispute with China has meant exploring a nearer market for its surplus oil which this year has become very distinct with lower demand in the domestic market. India has provided the right market in this environment to push oil sales.

“Indian refineries are preferring to go for cheaper US crude purchases as it helps them offset supply cuts announced by OPEC + and unilateral 1 million barrel per day production cuts by Saudi Arabia. India has been pushing OPEC to increase production and help tame rising crude prices that goes against the interest of prime oil.

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Business Latest News

Biden eyes first major tax hike since 1993

Washington: US President Joe Biden is planning the first major federal tax hike since 1993 to help pay for the long-term economic program designed as a follow-up to his pandemic-relief bill, Bloomberg reported this week, citing people familiar with the matter.

Unlike the $1.9 trillion Covid-19 stimulus act, the next initiative, which is expected to be even bigger, won’t rely just on government debt as a funding source. While it’s been increasingly clear that tax hikes will be a component — Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates — key advisers are now making preparations for a package of measures that could include an increase in both the corporate tax rate and the individual rate for high earners.

With each tax break and credit having its own lobbying constituency to back it, tinkering with rates is fraught with political risk. That helps explain why the tax hikes in Bill Clinton’s signature 1993 overhaul stand out from the modest modifications done since.

For the Biden administration, the planned changes are an opportunity not just to fund key initiatives like infrastructure, climate and expanded help for poorer Americans, but also to address what Democrats argue are inequities in the tax system itself. The plan will test both Biden’s capacity to woo Republicans and Democrats’ ability to remain unified.

While the White House has rejected an outright wealth tax, as proposed by progressive Democratic Senator Elizabeth Warren, the administration’s current thinking does target the wealthy.

The White House is expected to propose a suite of tax increases, mostly mirroring Biden’s 2020 campaign proposals, according to four people familiar with the discussions.

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e-paper-stories Latest News

Proposed US capital gains tax could drive up FII investments in India

Mumbai: The proposed US capital gains tax will drive in more FII inflows into India as well as other emerging markets, analysts predicted on Wednesday.

Notably, the speculation over a rise in FII inflows into India gained traction after US Treasury Secretary Janet Yellen proposed capital gains tax, reported IANS.

This tax, if implemented, will leave very little incentive for massive US funds to stay invested in the American markets, thereby, triggering an inflow into emerging economies such as India.

Lately, high return from domestic stocks on the back of faster than anticipated economic recovery has driven in over $22 billion into the local markets. This trend will get supplemented by the proposed US tax.

“The proposed changes to US capital gains tax once implemented could move some funds out of the US and into other emerging markets, including India. Such an inflow could get invested across a host of sectors including financials,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

According to Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services: “The market outlook has drastically improved. This sentiment has been supported by the proposal for capital gains tax in the US.”

Vinod Nair, Head of Research at Geojit Financial Services, said: “This is a bit early to comment since the proposal are not concrete as of now. Though it will be positive for India.”

Besides, a faster-than-anticipated macro recovery, expectations of healthy Q4 results and an expedited vaccine roll-out program are likely to accelerate investments into the market.

In the calendar year 2020, India had received $22.5 billion or Rs 1.7 lakh crore worth of FII money for equities.

Earlier, the lockdown induced market crash led to cheaper valuations which attracted foreign investors.

Furthermore, a global flood of liquidity and near zero interest rates in foreign markets accelerated these inflows.

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e-paper-stories Latest News

How Biden and Treasury pick plan to revive economy

Washington:  “Help is on the way,” President-elect Joe Biden said while announcing Tuesday his advisers who he hopes can guide the United States back to solid economic footing.

The six-person economic team Biden has tapped includes veterans from Democratic administrations. The most important of them being Janet Yellen, who was Fed Reserve chair in the Obama administration, as Treasury Secretary.

He pointed to what has been a two-track economic recovery amid the pandemic, in which working people continue to struggle while the wealthy get further ahead.

Biden said Congress should come together to pass a “robust” aid package, but he also repeated his call for “immediate relief” in the lame duck period before he takes office. Indeed, he has joined other top Democrats to back the $908 billion bipartisan relief effort announced this week. It includes $288 billion for small businesses, including for the Paycheck Protection Program; $180 billion for additional Unemployment Insurance and $160 billion for state and local governments. But the plan doesn’t include the second round of stimulus checks.

The President-elect’s tasks include keeping businesses and schools open safely, delivering economic relief for those who have lost jobs or had hours cut, stabilizing the nation’s health care system and addressing racial inequities the virus has laid bare.

“Our message to everyone struggling right now is this: Help is on the way,” Biden said.

Yellen also highlighted many of the economic challenges facing the Biden administration and vowed to champion policy changes to deal with issues such as gender discrimination and small business lending that blocks wealth-building opportunities for communities of color.

“It’s a convergence of tragedies that is not only economically unstable, but one that betrays our commitment to giving every American an equal chance to get ahead,” Yellen said.

Meanwhile on Tuesday, President Donald Trump hinted at a White House Christmas party that he is looking to wage a 2024 comeback campaign.

“It’s been an amazing four years. We are trying to do another four years. Otherwise, I’ll see you in four years,” Trump told a crowd of mostly RNC  members.  But he is not ready to concede as he released a video diatribe Wednesday against the rigged 2020 election.

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Latest News USA

‘Help is on the way’

Wilmington, Del: With coronavirus cases and hospitalizations surging in the country and the job market struggling to pull itself out of the abyss caused by the pandemic, President-elect Joe Biden on Tuesday formally announced the advisers who he hopes can guide the United States back to solid economic footing.

The six-person economic team Biden has tapped comprises veterans from previous Democratic administrations and, if confirmed, includes a number of historic firsts.

Speaking from Wilmington, Del., the President-elect referred to the group as “first rate” and well-equipped to meet the dual challenges the pandemic and the sputtering economy present.

“A team that’s tested and experienced, it includes groundbreaking Americans who come from different backgrounds but who share my core vision for economic relief here in the United States of America,” Biden said.

Biden said Congress should come together to pass a “robust” aid package, but he also repeated his call for “immediate relief” in the lame duck period before he takes office. The rollout of Biden’s team comes as lawmakers have offered new aid proposals.

Biden also laid out a laundry list of economic goals that must be addressed early on in his administration. These include keeping businesses and schools open safely, delivering economic relief for those who have lost jobs or had hours cut, stabilizing the nation’s health care system and addressing racial inequities the virus has laid bare.

“Our message to everyone struggling right now is this: Help is on the way,” Biden said.

The incoming administration’s economic team is set to be led by Janet Yellen, a former Federal Reserve chair whom Biden nominated for treasury secretary. Yellen would become the first woman to lead the department in its 231 years of existence.

Yellen also highlighted many of the economic challenges facing the Biden administration and vowed to champion policy changes to deal with issues such as gender discrimination and small business lending that blocks wealth-building opportunities for communities of color.

“It’s a convergence of tragedies that is not only economically unstable, but one that betrays our commitment to giving every American an equal chance to get ahead,” Yellen said.

Neera Tanden is to serve as director of the Office of Management and Budget. If confirmed, Tanden would be the first woman of color to lead the OMB.

“We face great challenges as a country right now. To recover, we must restore the American dream — a society where each person can rise to their potential and dream even bigger for their children,” she wrote. “As Treasury Secretary, I will work every day towards rebuilding that dream for all.”

Cecilia Rouse, one of the nation’s top labor economists, is to serve as chair of the Council of Economic Advisers. If confirmed, the Princeton dean will become the first African American and the fourth woman to lead the CEA in its 74 years of its existence.

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