IMEC momentum to boost Karnataka exports amid global trade disruptions
Bengaluru (PTI): Karnataka’s exporters are set to benefit as the India-Middle East-Europe Economic Corridor (IMEC) gathers momentum as an alternative to traditional maritime choke points, a senior tax official said, pointing to shifting global trade routes amid ongoing geopolitical tensions.
Addressing a seminar on “Navigating Geo-Political Challenges: Policy Measures and Preparedness to Build Resilience,” Kotraswamy M, Commissioner of Central Tax, Bengaluru North, said disruptions around key routes such as the Strait of Hormuz and the Suez Canal had underscored the need for more reliable corridors.
The event was organised by the Bangalore Chamber of Industry and Commerce (BCIC) in association with the Indian Institute of Materials Management.
"Owing to geopolitical tensions in West Asia, connectivity was hindered with Strait of Hormuz and Suez Canal as the choke points. Now with India-Middle East-Europe Economic Corridor (IMEC) gaining momentum as alternatives to the choke points, exporters from Karnataka and other states in India stand to gain in the global trade market," Kotraswamy said.
With this development, several critical choke points, especially fuel-related disruptions are expected to increase, he said adding IMEC is now gaining momentum as a more efficient and more reliable pathway, instead of depending on routes like the Suez Canal, the Strait of Hormuz, or even the Cape route, which are costly in terms of freight and sailing time, Kotraswamy said.
He added that exporters were also seeing gains from policy measures under the Goods and Services Tax (GST) regime.
“As exports are treated as zero-rated supplies under GST, the effective tax incidence on exports is zero per cent, allowing businesses to claim refunds on input taxes paid,” he said.
Kotraswamy noted that over 90 per cent of refund claims were now processed within seven days, compared to 15 to 30 days earlier.
He further said recent recommendations had enabled automatic refund processing and reduced documentation, cutting compliance costs by 20 to 25 per cent and easing working capital pressures.
Highlighting the state’s export performance, Prince Mehra of EXIM Bank said Karnataka is the fourth-largest exporter in India, contributing around seven per cent to the country’s merchandise exports and recording a compound annual growth rate of 7.8 per cent from FY19 to FY25.
“In FY25, Karnataka’s exports stood at USD 30.5 billion, driven by telecom instruments (17.3 per cent) and petroleum (14 per cent), followed by electrical equipment (five per cent), RMG/apparel (4.7 per cent), electronics (4.2 per cent), coffee (4.1 per cent) and pharmaceuticals (3.8 per cent),” Mehra said.
He added that the state ranked sixth in NITI Aayog’s Export Preparedness Index 2024 with an untapped export potential of USD 24.4 billion.
Emphasising the need for adaptability, K Ravi, senior vice president of BCIC, said in today’s volatile global landscape, resilience is no longer optional as it is a strategic imperative. Geopolitical challenges are reshaping trade dynamics and compelling businesses to rethink risk, cost, and continuity.
Sivasankari Murugan of ECGC highlighted support mechanisms available to exporters, including insurance products and policy interventions such as the RELIEF Scheme and the Export Promotion Mission.
She said such measures reflected a strong commitment to safeguarding industry competitiveness, and added that platforms like the seminar help stakeholders build the collaborative mindset required to navigate uncertainty.
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First direct US-Venezuela commercial flight in 7 years to land in Caracas
Caracas (Venezuela) (AP): The first direct commercial flight between the United States and Venezuela is scheduled to land on Thursday in the Venezuelan capital, Caracas, seven years after the US Department of Homeland Security ordered an indefinite suspension, citing security concerns.
The resumption of a commercial flight between the two countries comes in the wake of the US capture of Nicolás Maduro in a stunning nighttime raid on his residence in Caracas, Venezuela's capital, in early January.
It also comes a month after the US formally reopened its embassy in Caracas following the restoration of full diplomatic relations with the South American country.
Flight AA3599 operated by Envoy Air, a subsidiary of American Airlines, was scheduled to depart from Miami at 10:16 a.m. local time and arrive three hours later in the Venezuelan capital, returning to Florida later in the afternoon.
Earlier, the airline said a second daily flight between Miami and Caracas will start on May 21.
In late January, US President Donald Trump said he informed Venezuela's acting President Delcy Rodríguez that he would open up all commercial airspace over Venezuela, allowing Americans to visit.
“American citizens will be very shortly able to go to Venezuela, and they'll be safe there,” Trump said at the time.
The flights mark the resumption of nonstop travel between the US and Venezuela for the first time since diplomatic ties were severed in 2019. For the past seven years, passengers have relied on international airlines and indirect routes through neighbouring Latin American countries.
In January, when the airline announced the resumption of flights it said it would give customers the opportunity to reunite with families and pursue new business opportunities.
American Airlines was the last US airline flying to Venezuela. It suspended flights in 2019 between Miami and Caracas, as well as flights to the oil hub city of Maracaibo. Delta and United Airlines pulled out in 2017 amid a political crisis that forced millions to flee the country.
