India is set to swing from being a cautious spender in 2020 to opening the fiscal floodgates as Prime Minister Narendra Modi seeks to pull Asia’s third-biggest economy back from the worst of the pandemic.
Curbs imposed by the finance ministry on more than 80 government departments and ministries earlier in the year to preserve cash were relaxed this quarter. In addition, this year’s Budget will be increased from its current $407 billion when new spending plans are announced Feb. 1, according to people familiar with discussions, who asked not to be identified as the information isn’t public and subject to change.
The developments will give a boost to much-needed spending to help weather the hit from the coronavirus pandemic. Government expenditures have barely hit the half way mark seven months into the fiscal year, which started April.
Government spending is key to staving off a prolonged crisis in the nation that’s home to the world’s second-largest coronavirus outbreak. The economy entered an unprecedented recession last quarter after lockdowns brought economic activity to a near standstill in the April-June period.
In addition to budget spending, Modi’s government has announced measures that it said are worth an additional 30 trillion rupees, or 15% of gross domestic product, to rescue businesses and jobs.
That package, however, underwhelmed some economists who saw the actual fiscal cost of the steps, which were mostly loan guarantees, at less than 2% of gross domestic product. This compares to direct spending of roughly 3% of GDP on average in other emerging markets, according to S&P Global Ratings. On top of that, absence of private investment added to urgency for the government to ramp up spending, which was just 55% of the budgeted amount as of October.
The threat of a credit rating downgrade to junk discouraged officials from delivering a more immediate boost to the economy through direct cash handouts to citizens or tax cuts. India’s net government debt will rise to more than 90% of GDP this year from a little over 70% last year, according to S&P Global Ratings, and its combined fiscal deficit will be in double digits this year -- factors that have put the nation on the path for a rating cut.
Finance Minister Nirmala Sitharaman said in an interview this month that she wouldn’t let worries about a fiscal deficit stop her from spending more.
“There is a need, and a clear need, for me to spend the money,” Sitharaman said.
The finance ministry declined to comment this week on the possibility of up-sizing the current budget. The federal government’s budget gap will probably widen to 8% of GDP this year, according to a Bloomberg survey, as revenue collections are hurt by the economic contraction and the need for additional stimulus steps boost borrowing. That will be more than double the targeted 3.5%.
The government expanded its market borrowing plan this year to an unprecedented 13.1 trillion rupees from its planned 7.8 trillion rupees. The increase is needed to compensate states for the shortfall in the collection of goods and services tax.
High-frequency indicators show that a recovery is taking hold, with the central bank seeing the nation exiting a recession in the current quarter. The Reserve Bank of India also this month revised its full-year growth outlook to a milder 7.5% contraction, compared with its October estimate for a 9.5% decline.
“More evidence has been turned in to show that the Indian economy is pulling out of Covid-19’s deep abyss and is reflating at a pace that beats most predictions,” the RBI said in its December bulletin, after pledging to keep borrowing costs lower for the near future. “Although headwinds blow, steadfast efforts by all stakeholders could put India on a faster growth trajectory.”
Source: The Economic Times
India’s economy could prove to be the “most resilient” in the subregion of South and South-West Asia over the long term, according to a report by the UN, which says a positive but lower economic growth post COVID-19 pandemic and the country’s large market will continue to attract investments.
The report titled ‘Foreign Direct Investment Trends And Outlook In Asia And The Pacific 2020/2021’, and compiled by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), stated that inward FDI flows to South and South-West Asia slightly decreased by 2 per cent in 2019, from USD 67 billion in 2018 to USD 66 billion in 2019.
The growth, however, was mainly driven by India, which accounted for 77 per cent of the total inflows to the subregion and received USD 51 billion in 2019, up 20 per cent from the previous year.
The report, released last week, said the majority of these flows were destined for the Information and Communications Technology (ICT) and the construction of sub-sector.
Regarding the ICT sector, the report said the investment to India has evolved from information technology services for Multinational enterprises (MNEs) to the thriving local digital ecosystem where many domestic players, especially in e-commerce, have attracted considerable international investment.
The report added that FDI outflows from South and South-West Asia increased for the fourth consecutive year, modestly growing from USD 14.8 billion in 2018 to USD 15.1 billion in 2019.
The geographical spread of FDI outflows from the subregion remained uneven, with just two countries (India and Turkey) accounting for the vast majority of outflows in 2019, it said.
”As such, the slight increase in outward FDI was predominantly due to an increase in outflows from India, which accounted for 80 per cent of total outward investment from the subregion,” the report said, adding that in 2019, India invested USD 12.1 billion abroad, a 10 per cent increase compared with the previous year.
The report noted that in the short term, both inflows and outflows from and to the subregion are expected to decline. In the first three quarters of 2020, the value of greenfield FDI inflows declined by 43 per cent compared to the same period last year, signaling a reversal of the growth trend in the subregion.
Most of the greenfield flows (87 per cent) were destined for India, although the overall greenfield inflows to the country declined by 29 per cent. Equally, FDI from India is projected to decline in 2020, with the largest MNEs revising their earnings down by 25 per cent in early 2020 due to the impacts of the pandemic.
”However, India’s economy could prove the most resilient in the subregion over the long term. FDI inflows have been steadily increasing and positive, albeit lower, economic growth after the pandemic and India’s large market will continue to attract market-seeking investment,” the report said. India’s fast-growing telecom and digital space, in particular, could see a faster rebound as global venture capital firms and technology companies continue to show interest in the country’s market through acquisitions, it said. It noted that Facebook and Google’s investment in Jio Platforms in 2020 worth USD 5.7 billion and USD 4.5 billion respectively were testaments to this trend. ”Estimates suggest that by 2025, core digital sectors such as IT and business process management, digital communication services, and electronics manufacturing could double in size. ”In addition, the pandemic has only further increased the tendency of many sectors such as agriculture, education, energy, financial services, logistics to digitalise, as COVID-19 has pushed many individual and companies to adopt digital solutions and processes,” the report said.
India has implemented a number of noteworthy investment policies and measures since 2019. Some of them include the relaxation of limits to FDI in the insurance sector, liberalisation of FDI rules which ended equity caps in several sectors including coal and lignite mining, contract manufacturing and single brand retail trading and increase in ceiling for FDI into the defense sector to 74 per cent via automatic approval route, it said.
In addition to these measures, and in direct response to the COVID-19 pandemic, the government also introduced intensified FDI screening procedures from neighbouring countries, including Afghanistan, Bangladesh, China and Nepal, it said.
The report said that as in previous years, inflows of greenfield investments have been unevenly distributed across the Asia-Pacific region. In 2019, Vietnam received the second largest share of inward greenfield investment (11 per cent), followed by India (10 per cent), and Sri Lanka (8 per cent).
Looking ahead, in the short-term investment in pharmaceutical manufacturing is forecast to decrease as many European and United States pharmaceutical companies may switch partly to more localised sourcing owing to supply-chain disruptions in the pharmaceuticals sector during COVID-19 pandemic.
”This will be important for pharmaceutical manufacturing hubs in the region, particularly in India,” the report said. The report said that Asia-Pacific’s share in global FDI inflows dropped from 45 per cent in 2018 to 35 per cent in 2019, and its share in global FDI outflows decelerated from 52 per cent to 41 per cent.
Source: The Financial Express
The Finance Ministry has invited proposals from various Central government Ministries and Departments for additional expenditure through second and final Supplementary Demands for Grants (SDG).
The Second SDG will be presented during the Budget session of the Parliament likely to start from January 27.
In an Office Memorandum (OM), the Finance Ministry said: “All the Ministries/Departments have been requested to contain the expenditure within the approved Revised Estimate (RE) ceiling.” Though the exact details about the RE will be known in the Budget FY2021-22, it is expected that many Ministries and Departments will have to contain with lesser amount than what was allocated in Budget FY2020-21.
The OM has asked Central Ministries/Department to send proposals related to five types of cases. The first category belongs to advances from the Contingency Fund. The second category is about payment against court decrees which cannot be postponed. The third category is related to additional funds immediately required, which can be met by re-appropriation of savings in the grant but require prior approval of the Parliament. The fourth category includes cases where the Finance Ministry has specifically advised to propose Supplementary Demand in the Budget session. The fifth category refers to cases where additional expenditure has been allowed.
In the light of the observation of Public Accounts Committee, the Finance Ministry has reiterated “all the Ministries/Department may avoid pitfalls in expenditure, take all requisite measures, including use of electronic systems, to ensure proper planning and monitoring of expenditure vis-à-vis voted grants.”
Source: The Hindu Business Line
Amid slowing global demand and falling prices in the domestic markets, the Cotton Association of India (CAI) has sought export incentive for cotton fibre and yarn so as to prevent additional procurement burden on the government.
Speaking to BusinessLine, Atul Ganatra, President, CAI, informed that the exports have been badly hit due to economic slowdown in key markets such as Bangladesh and Indonesia. “Even though our cotton is the cheapest in the international market, exports are not taking off as expected. We believe the government should offer export incentive for cotton and yarn to encourage exports from India,” Ganatra said.
He further informed that in the current circumstances, India’s cotton exports are not likely to exceed 50 lakh bales, which is nearly same as last year.
The CAI held its 98th Annual General Meeting (AGM) through online mode, where trade members discussed the cotton scenario. At the AGM, Ganatra was re-elected as the President of CAI for the fourth time in a row.
Cheapest in the world
In his address to the members, Ganatra stated that the Minimum Support Price (MSP) is important to provide price support to farmers to prevent them from distress sales in the event of severely low prices. “However, the burden on the government exchequer can be minimised by incentivising exports of cotton from India, which will eventually enable farmers to realise competitive prices for their produce like their counterparts in other countries in the US, Australia, Brazil, etc.”
“Indian cotton is the cheapest cotton in the world and hence, there is a tremendous scope of improving export performance of the country,” he added.
Ganatra also underlined the Covid-19 impact on business which saw demand destruction due to lockdown and subsequent economic impact.
MSP & procurement
“Although production of cotton during the 2019-20 crop year was higher by over 15 per cent to 360 lakh bales from 312 lakh bales in the previous year, demand was drastically down by about 19.75 per cent to 250 lakh bales in 2019-20,” he said adding that the Cotton Corporation of India (CCI) will intervene with procurements through a massive support price operation. Ganatra also stated that the government has constantly increased the Minimum Support Price (MSP) for cotton over the past three years.
“During the last three years, the government has increased the MSP of GUJ ICS 105 29mm (Shanker-6 variety) by over 33 per cent cumulatively,” he added.
Last year, CCI had purchased 115 lakh bales, whereas this year Ganatra said the indications are that the Centre has set a target to procure about 125 lakh bales, of which about 60 per cent or 70 lakh bales is believed to have already been procured till December 27.
Ganatra added that the far-reaching impacts of novel coronavirus have severely impacted cotton business and has had a disastrous effect on every link in the cotton and textile value chain.
Source: The Hindu Business Line
Home appliances including TV, refrigerator, washing machines are likely to get expensive in the new year as appliances makers complain about high input prices. The coronavirus pandemic has led to supply chain disruptions across the world, which has made appliances’ input materials such as copper, aluminium and steel more expensive. Further, a rise in the ocean and air freight charges are also expected to weigh on the prices of home appliances in the new year. “We have already planned and announced a phased price hike across our product categories. This increase will be in the tune of 5 to 7 per cent, across categories,” a spokesperson from Voltas told Financial Express Online.
However, it is expected that the upcoming summer season, along with the changing lifestyle post-Covid, will continue to drive the demand for the lower penetrated product categories, in spite of these price hikes. “We are confident about further opening up of consumer sentiments in 2021, and we will be monitoring the trend very closely,” the Voltas spokesperson added.
Other major brands such as Godrej, LG, Panasonic, and Thomson are also set to raise the prices of appliances in the new year. “A rise in the commodity cost by 20 – 25 per cent, increase in ocean and air freights to the extent of 5-6 times due to shortage of containers, and the lag in the mining activity due to the pandemic is putting upward pressure on the overall input cost for appliances,” said Kamal Nandi, President, Consumer Electronics and Appliances Manufacturers Association.
As a result, brands are most likely to increase prices to the extent of 8-10 per cent in near future, which may hamper the overall demand in the next quarter, added Kamal Nandi, who is also the Business Head and Executive Vice President at Godrej Appliances. The industry hopes that it will be offset to some extent by pent up demand surfacing now, he further said.
It is not only that the global brands are queuing up to raise prices; Indian brands too are all set to go for a price hike. In fact, the price rise in the domestic brands is expected to be more than global brands.
“The industry is facing a severe challenge owing to the shortage and consequent increase of almost 150 per cent in the TV Open Cell prices, along with an increase in almost all other raw material such as plastic items etc,” Arjun Bajaaj, Director Videotex, told Financial Express Online. Also, the other factor leading to a sharp rise in the prices is the three-fold increase in import freight charges compared to October 2020, Arjun Bajaaj added. Consequently, the prices can rise to the tune of 20-30 per cent.
Source: The Financial Express
Though COVID-19 and the subsequent lockdown left a trail of economic devastation on most countries, India can potentially build upon three positive aspects- push in the rural economy, stronger federalism and a huge consumption base, former RBI Governor Duvvuri Subbarao Rao has said. In his foreword on a Telugu book titled "Maandhyam Mungita Desam" (Nation in Recession) authored by Tummala Kishore, he said the challenge for the government in the months and years ahead is clear: to put the economy back on a healthy growth trajectory and ensure that growth is inclusive, with lower income households too enjoying the benefits of rapid growth.
"The expanded MNREGA provided a lifeline when most needed, and the frontloaded transfer payments to women, pensioners and farmers have put money in the hands of households and have helped revive demand.
The brisk procurement by the FCI (Food Corporation of India) has buttressed farmers' incomes while it helped the government extend the food security programme until end November," he said. Subbarao said the second positive aspect he sees is India's federalism, which, "warts and all", has withstood the test of vigorous democracy though there were tensions between the Centre and the states on some issues such as GST compensation.
Notwithstanding all these tensions, it was vividly seen how the Centre and states coordinated in managing the pandemic, he said.
Subbarao said the third positivity is the countrys huge consumption base with 1.35 billion people and a per capita income of just over USD 2,000.
"In a setting like this, any increase in income of the bottom half will quickly turn into consumption, which in turn will spur production.
That consumption-production cycle can potentially put India on a virtuous cycle of growth and jobs," he said.
Stating that the Indian economy was already in a troubled shape even before the COVID-19 crisis, the former RBI Governor said a 'V' shaped recovery in the growth rate does not mean a 'V' shaped recovery in absolute output and the level of output in 2021-22 will be lower than what the country achieved in 2019-20.
Source: The Economic Times
Mukesh Ambani spent much of 2020 convincing Facebook Inc., Google and a clutch of Wall Street heavyweights to buy into his vision for one of the world’s most ambitious corporate transformations.
Now flush with $27 billion in fresh capital, Asia’s richest man is under pressure to deliver.
The 63-year-old Indian tycoon is focused on a handful of priorities as he tries to turn Reliance Industries Ltd. from an old-economy conglomerate into a technology and e-commerce titan, according to recent public statements and people familiar with the company’s plans.
These include developing products for the anticipated roll-out next year of a local 5G network; incorporating Facebook’s WhatsApp payments service into Reliance’s digital platform; and integrating the company’s e-commerce offerings with a network of physical mom-and-pop shops across the country. Ambani is also pushing forward with plans to sell a stake in Reliance’s oil and petrochemical units, a deal he had originally hoped would reduce debt and finance his high-tech pivot earlier this year.
Investors are watching Ambani’s every move as he overhauls his empire -- with a market value of $179 billion -- in the middle of a pandemic, wading into highly competitive industries and taking on rivals from Amazon.com Inc. to Walmart Inc. Reliance shares rose as much as 55% this year to an all-time high in September, but they’ve since pared gains as stakeholders look for more evidence that Ambani can execute.
“The jury is out,” said Nandan Nilekani, who co-founded Infosys Ltd. in 1981 and now serves as chairman of the Bangalore-based software services provider valued at about $72 billion. “There’s a lot of work to be done.”
While Ambani has publicly embraced his new partnerships with investors including Facebook (he and Mark Zuckerberg traded compliments during a livestreamed conversation on Dec. 15), the Indian tycoon’s fundraising spree was initially meant to be more of a Plan B. His original goal was to sell a 20% stake in Reliance’s oil and petrochemicals division to Saudi Arabian Oil Co., at an enterprise value of $75 billion, implying a $15 billion valuation for the stake.
The Aramco deal, first announced in August 2019, was supposed to help Ambani deliver on a pledge to get rid of his company’s $22 billion in net debt in 18 months. But as talks with the Saudis stalled, Reliance investors grew more anxious. The stock tumbled more than 40% in the three months through March 23.
Ambani, who had begun exploring stake sales in his digital services and retail units months earlier, decided to accelerate those talks after the Aramco deal hit a wall, people familiar with the matter said.
The response from investors exceeded the company’s expectations, one of the people said, with big-name backers including KKR & Co., Silver Lake and Mubadala Investment Co. committing more than $20 billion to the digital business and $6.4 billion to retail. Reliance declared itself free of net debt in June, nine months before its self-imposed deadline and Reliance’s shares surged.
At Reliance’s annual shareholder meeting in July, Ambani and his eldest children Isha and Akash sketched out the broad thrust of their high-tech ambitions. Among the new services they touted was a 5G wireless network as early as next year and a video-streaming platform that will bring Netflix, Disney+ Hotstar, Amazon Prime Video and dozens of TV channels under one umbrella.
Reliance’s digital unit, Jio Platforms Ltd., will also develop a portfolio of technology solutions and apps for India’s millions of micro, small and medium businesses, Ambani said, adding that he plans to eventually expand the platform overseas.
The company’s biggest priority for 2021 is 5G, people familiar with the matter said. While regulators have yet to auction rights to India’s next-generation airwaves, Ambani said this month that his company “will pioneer the 5G revolution in India in the second half of 2021.”
Advertisements for Jio Platforms Ltd., the mobile network of Reliance Industries Ltd., are displayed at Marine Drive in Mumbai, India, on Tuesday, July 14, 2020. Google is in advanced talks to buy a $4 billion stake in Jio, the digital arm of Indian billionaire Mukesh Ambani's conglomerate, people familiar with the matter said, seeking to join rival Facebook Inc. in chasing growth in a promising internet and e-commerce market.
Reliance is planning to showcase its lineup of 5G products at next year’s shareholder meeting, which typically takes place sometime between July and September, one of the people said. The company is also working with Google on an Android-based $54 smartphone, part of the strategy to get more Indians to use mobile data for services including streaming video, online games and shopping.
Reliance views the integration with WhatsApp’s recently approved payments system as a crucial step in the development of its online shopping services, the people said. The companies are working together as Reliance’s e-commerce platforms look to tap hundreds of millions of Facebook, WhatsApp and Instagram users.
Ambani’s biggest challenge now is to earn a return on these investments, said James Crabtree, author of “The Billionaire Raj: A Journey Through India’s New Gilded Age.”
The industries Ambani is targeting are constantly evolving, much more so than the refining and petrochemicals businesses that still comprise the bulk of Reliance’s revenue. “He’s got to get it right over and over again,” Crabtree said.
There’s also the challenge of “key man” risk. Ambani -- the face of Reliance -- isn’t getting any younger. While the company hasn’t publicly disclosed a succession plan, India’s Mint newspaper reported in August that Ambani, whose net worth is about $77 billion, is setting up a family council and aims to complete succession planning by the end of next year.
“Any large, single-pillar edifice has major inherent risks,” said Kavil Ramachandran, executive director of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business.
Ambani supporters point to his recent track record of disruption. He famously upended India’s telecommunications industry four years ago by offering free calls and cheap data, pushing some rivals into bankruptcy. His wireless carrier, Reliance Jio Infocomm Ltd., now has more than 400 million subscribers.
Sundar Pichai, chief executive officer of Alphabet Inc., gestures while speaking during a discussion on artificial intelligence at the Bruegel European economic think tank in Brussels, Belgium, on Monday, Jan. 20, 2020. Pichai urged the U.S. and European Union to coordinate regulatory approaches on artificial intelligence, calling their alignment “critical.”
“Mukesh has been a big part of this wave of innovation,” said Sundar Pichai, chief executive officer of Alphabet Inc., which owns Google. “His vision and focus of a future where every Indian can benefit from the opportunities technology creates is really exciting to us and we are glad to be a partner in that work.”
Ambani has also positioned his empire as a potential asset for an Indian government that’s keen for ways to counter the growing technological might of China, especially after deadly border clashes between the long-time rivals this year. Ambani has repeatedly highlighted how Reliance’s goals align with those of Prime Minister Narendra Modi’s government, which has called for homegrown solutions to bridge the country’s yawning digital divide.
While Infosys’s Nilekani cautions that it’s too early to declare Reliance’s transformation a success, he’s optimistic that Ambani will pull it off.
“He has a terrific eye for execution,” Nilekani said. “He looks at the big picture while at the same time getting into every minor detail, much like Jeff Bezos. They are both unique. Neither man is known to give up.”
Source: The Business Standard
The central bank has introduced various measures to support the banking sector including a relaxation in recognition and provisions for bad loans to protect lenders and creditors during the coronavirus pandemic.
The rollback of these measures could now hit the books of banks.
“The challenge is to rewind various relaxations in a timely manner, reining in loan impairment and adequate capital infusion
for a healthy banking sector,” the central bank said it in its annual report on Trends and Progress of Banking in India.
Non-banking financial companies (NBFCs) or shadow banks may see a hit on their profitability going forward due to asset quality concerns, lower credit demand and the tendency to preserve cash, the report said.
Toxic loans on the books of Indian banks have eased with gross bad loan ratios falling to 7.5% at the end of September 2020 from 9.1% in March, but it said that going forward such loans could rise again following relaxations being lifted.
The six-month loan moratorium on repayments provided by central banks and the supreme court judgment prohibiting recognition of bad loans since September may have also provided some respite to the banks on asset quality.
Concerns still remain on non-performing assets, particularly on credit card loans which does not augur well for the risk-profile of Indian banks.
“Given the uncertainty induced by COVID-19 and its real economic impact, the asset quality of the banking system
may deteriorate sharply going forward,” the RBI said.
The report also said Indian banks had written-off loans worth 2.38 trillion rupees ($32.46 billion) in the financial year 2020 that ended on March 31.
The overall outlook for the Indian economy in 2021 continues to remain uncertain, the report said.
“The high debt overhang of households, non-financial corporates and the (national and sub-national) governments remains a serious concern,” the central bank said.
Source: Reuters India
The apparel segment is still reeling under pressure with a decline of 12 per cent in November sales (year on year basis) against the pre-pandemic sales.
This is despite the festival season having helped the sales of apparels.
On the other hand, product categories like consumer durables and electronics, food and grocery continued to recover.
Retailers Association of India (RAI) has observed this in its 10th ‘Retail Business Survey’. The survey was conducted amongst 68 major retailers of various product categories during November.
It is pertinent to mention here that in October, apparel sales were down by 30 per cent year-on-year.
In November 2020, India Ratings and Research (Ind-Ra) had said in a research note that organised apparel retailers are expected to report a 40-45 per cent decline in revenue this fiscal.
Retailers are now looking forward to 2021 with cautious optimism, hoping to achieve around 85 per cent of pre-pandemic level in terms of business over the course of the next 6 months.
Source: Apparel Online
INTERNATIONAL
The Cotton Textiles Export Promotion Council (TEXPROCIL) has urged Government to take immediate steps in formulating a free trade agreement (FTA) with the UK.
Welcoming the exit of Britain from the EU on 1 January 2021 after a negotiated settlement, Manoj Patodia, Chairman, TEXPROCIL, said that the UK is one of India’s largest trading partners amongst the European countries in the Textile and Clothing (T&C) sector accounting for almost 24 per cent of the T&C products exported from India to the EU region.
Any further delay will only serve to hamper India’s T&C exports as the competing countries will surge ahead.
India’s exports to the EU have been stagnating over the last 6 years, while countries like Bangladesh, Vietnam and Pakistan have shown positive export growth to EU during the same period.
There are reports that UK has already signed trade agreements with 62 countries ahead of the end of the Brexit transition period on 1 January 2021, including countries like Turkey, Canada, Singapore, Mexico, etc.
It, therefore, becomes all the more imperative for India to commence the process of negotiations without any delay as India may lose the first mover advantage and consequent market share.
The Chairman also requested the Government to simultaneously revive and expedite the FTA negotiation with the EU, as it is one the leading markets for India’s exports of T&C products where competing countries like Bangladesh, Pakistan and Vietnam have an edge over India due to a zero tariff arrangement.
Source: Apparel Online
India may impose anti-dumping duty on the imports of Polyethylene Terephthalate (PET Resin) originating in or exported from China based on an application led by IVL Dhunseri Petrochem Industries Private Limited and Reliance Industries NSE -0.66 %. The Directorate General of Trade Remedies (DGTR) has recommended anti-dumping duty of $15.54-200.66 per MT of the imported product for five years.
PET resin is used in textiles, plastic bottles, tires, undersea cables and 3-D printing, among others.
“The Authority recommends imposition of anti-dumping duty equal to the lesser of margin of dumping and the margin of injury so as to remove the injury to the domestic industry,” DGTR said in a notification.
DGTR can only recommend the duty. The finance ministry takes a final call on imposing it.
As per the notification, the petitioners said that India is the single largest market for Chinese exporters and the share of exports to India in the total exports from China increased to 10% in April-June, 2019 from 5% in April-September, 2018.
“The exports from China to India are increasing at a much faster pace than those to third countries. The increasing importance of India as a market itself highlights threat of material injury,” they said, according to the notification.
While noting that the imports have increased at a “rapid rate” DGTR said that there are significant surplus capacities in China which are expected to increase further and that India, being the largest export market, is an important one for the exporters especially as other markets such as the US, Canada, Brazil and Argentina may be closed due to imposition of trade remedial measures.
The authority said that the imports entering the domestic market at such prices are likely to have a further suppressing or depressing effect as there is existence of a threat of further injury to the domestic industry.
Source: The Economic Times
European Union governments approved on Tuesday a trade deal regulating relations between the 27-nation bloc and Britain, paving the way for its provisional application from Jan 1, German Foreign Minister Heiko Maas said.
The deal, which preserves Britain’s zero-tariff and zero-quota access to the EU’s single market of 450 million consumers, was reached on Dec 24, 4-1/2 years after Britons voted by a slim margin in a referendum to leave the bloc.
“I am pleased that all EU 27 have given approval. By joining forces, we have succeeded in preventing a chaotic turn of the year,” Maas, whose country holds the rotating EU presidency, said on Twitter.
The approval is a formality after a deal between London and the EU last week. It is needed for the provisional application of the trade agreement from next year, before it is ratified by the European Parliament by the end of February.
The provisional trade deal is to be signed by EU Commission President Ursula von der Leyen and the chairman of EU leaders Charles Michel on Wednesday.
Source: Reuters India
After the success of the digital edition of the Kingpins Denim Fair in April, their most recent edition in Amsterdam also followed suit. One of the key highlights at KP24 Amsterdam emerged to be a presentation on the top denim trends for the Spring / Summer 2022 season, delivered by Amy Leverton of Denim Dudes.
From social influences and a focus on process over product to investment dressing and a new sense of responsibility, the Spring/Summer 2022 denim trends reflect and expand upon the current global social climate.
Work In Progress
Consumers of late have been quite keen on knowing the Behind-the-Scenes processes of the products they consume. The Work in Progress trend is about the idea and inspiration behind the product. According to Leverton, these two points increase the value that consumers place on the final product.
Ways to achieve this goal are many: the process of improving the idea and inspiration behind a product can be done through mixed media with digital and 3D design, and also through techniques such as upcycling or layering.
This trend places emphasis on both the creative production methods, and also on the story behind the product. This includes cultural references, political approaches, and at the same time, also the creative people who relay the story behind a design and especially come to the fore through collaboration.
The trend follows a wide colour palette featuring a variety of influences, and is communicated via strong and playful tones.
Lowkey
This trend delves into the details – it is all about an eye for detail and quality. Design aesthetics tend to be more minimalistic than flashy and busy: It is not the large labels and all-over prints that appeal to the consumer, but rather small details such as a special zipper or the buttons that would accentuate the product.
The quality aspect also relates directly to the production process- where does the material come from and how high is its quality? So manufacturers have to ensure that they are really safe and happy with the product and take time to get this done rather than rushing to get the product on the shelves as soon as possible.
In Leverton’s own words- “As the system of the global apparel industry is changing, we are less concerned with a time frame that puts quantity over quality. […] Responsibility must come first.”
In terms of style, the Lowkey trend revives the era of the ’80s and ’90s: ‘Smart casual’ with jeans and a blazer or a matching ‘two-piece’, but also oversized basics and a wide cut.
What also suits the reserved style is the colour palette, which tilts towards white, beige, brown, but can also show a bit of colour such as red, green and blue.
Devolution
Devolution (contraction of digitisation and evolution) essentially focuses on systematic change. Brands that follow this path, place social responsibility, structural equality, the environment and craftsmanship above consumption and the economic aspect.
The change of our society to a ‘better world’ places itself in the foreground. The health crisis created as a result of the ongoing COVID-19, has given us all, humans and nature, a positive, alternative lifestyle, Leverton stated.
Even in this trend, the background of the product plays an important role: where does the product come from and how is it produced? However, the focus goes beyond sustainable production and is about waste and how much residual production is left behind after producing a design.
All in all, this trend seems to take us back to basics and focus more on the craft art: from upcycling to homemade textures such as batiks, painting or traditional techniques – there are no limits.
Investment
This trend highlights the importance of investing more in a good product.
However, the focus on money should not take the lead. Rather, the aim is to invest in modern technology that makes denim production more circular and sustainable. A sound example of this is ‘Relz Black Denim’ – a sustainable black denim fabric developed by G-Star Raw along with Artistic Milliners and Archroma.
This also includes new possibilities for prints such as laser printing or the use of regenerative fibres.
But product development does not play an essential role in isolation- sales is also important. Options such as resale and rental of clothing become increasingly popular as consumers become more mindful of their purchases.
The colour palette for the Investment trend is very varied – from pastel shades to washed-out colours created by recycling, the trend offers great opportunities for creativity to bloom.
Source: Apparel Online
