The textile industry has appealed to the Prime Minister to come out with policy measures that will enable the sector achieve its potential growth rate and have a major share in the global textile industry. Representatives of 20 textile industry associations participated in a meeting organised by Southern India Mills’ Association here on Monday with S. Gurumurthy, economist and corporate advisor. The participants submitted their suggestions that will help the textile and clothing sector achieve higher growth and also the support measures required from the government. According to a press release from the association, cotton textiles, textile and clothing and garment exports have declined in September too. The global trade is going through structural changes and this is having an impact on Indian exports. From fibre (cotton and manmade) to support for technology adoption, exports and interest rate reduction, the industry needed support in several areas. Mr. Gurumurthy urged the industry to be proactive and innovative. He said the industry should come out with proposals that will benefit the country, the society and the manufacturers. India’s co-operation with Bangladesh and Vietnam will benefit the textile sector, he said.
SOURCE: The Hindu
The last nine months have seen India’s merchandise shipments contract by 5 per cent, 12 per cent, 14 per cent, 21 per cent, 15 per cent, 20 per cent, 16 per cent, 10.3 per cent and 20.7 per cent, consecutively. Most analysts give three explanations for this: the adverse effect of a fall in crude prices, the competitive devaluation of competing economies’ currencies against the dollar and the slower growth of world trade. The fall in crude prices have affected the dollar earnings from export of refined petroleum products such as diesel and petrol. The slower growth of world trade is an irrefutable reality that is bound to affect India’s exports.
Manufacturing concerns
However, India’s merchandise exports have been hovering around $300 billion for over four years now. That is not fully explained by low crude prices, which became a feature only after mid-2014. Nor does slowing global trade fully account for this slide, given India’s modest export share at 1.7 per cent. Similarly, India’s top competitor in its key exports such as steel, chemicals and textiles is China, and the yuan has fallen just 3 per cent against the dollar (compared to the rupee by 10 per cent) since July 1, 2014. The roots of India’s declining exports are deeper. There are no short term fixes, such as letting the rupee depreciate against the dollar, simply because India’s export basket is no longer as price elastic as it used to be. Hence, much greater currency depreciation would be needed to give any real push to India’s exports. Yet it may not work as each country is trying currency devaluation to capture an increasing share of sluggish global demand. One can’t do much about subdued crude prices, which are likely to continue in the near future. Then, what’s holding up India’s exports?
Despite all attempts at diversification, India’s merchandise export has a narrow base with the top 20 categories accounting for 78 per cent of the total. Even under top export categories, such as textile, India is exporting low value commodities such as cotton yarn or apparel rather than technical textiles. India’s manufacturing exports are fast losing price competiveness primarily because of poor logistics infrastructure compounded by a poorer trade facilitation regime. India’s over-dependence on road freight means that logistics cost as a percentage of GDP remains as high as 13-14 per cent compared to 7-8 per cent in developed countries. Most of India’s preferential trade agreements (PTAs) are shallow in terms of product coverage. For example, India-Mercosur PTA doesn’t include textile and apparel items that face prohibitive import duties, going up to 35 per cent.
Poorly conceived FTAs
India’s pharmaceutical exports have not benefited from tariff reduction under India-Japan CEPA mainly because it’s too cumbersome to deal with the Japanese drug regulator. Japan allows duty free import of apparels from India only if all the raw materials used are of either Indian or Japanese origin with an exception of 7 per cent content by weight that can be sourced from third countries. No surprise then, that the utilisation of India’s PTAs for export promotion remains very low. Strangely, India itself has not imposed any sourcing restrictions even for sensitive items like textiles while granting unilateral duty free market access to countries like Bangladesh. India’s ill-conceived trade pacts have also resulted in inverted duty structure that discourage production and export of value added items. Fixing its trade regime should be the top priority for the government. India is also going slow on trade pacts that could be immensely beneficial.
Vietnam has concluded an FTA with the largely untapped Eurasian Customs Union comprising Russia, Belarus and Kazakhstan while India’s negotiation is moving at its own pace. Worse, India recently called off the trade talks with EU. The recently concluded, Transpacific Partnership (TPP) which India did not really try to join could be damaging for its exports. A tighter IPR regime may adversely affect India’s export of generic medicines to the TPP countries, the US in particular. TPP will create direct tariff disadvantage for India’s apparel exporters (vis-à-vis Vietnam) who operate on as low as a 6 per cent margin. TPP may lead to investment moving out of India to TPP countries, and hurt India’s future exports. Reviving India’s exports call for a well thought out trade strategy.
SOURCE: The Hindu Business Line
The Centre will not discontinue the Technology Upgradation Fund Scheme (TUFS) and rather restructure it keeping in view the complaints of the textile industry, Union Minister Santosh Gangwar said. TUFS was introduced in 1999 to catalyse investments in all the sub-sectors of textiles and jute industry by way of 5 per cent interest reimbursement. The Textile Minister said his ministry has requested the Finance ministry to make the desired changes, and the "scheme will not be discontinued" but will only be tweaked to remove the "complaints" by the industry. However, representatives of the textile industry are of the view that they should be consulted before the requisite changes are made, pointing out that the sector is in a "bad shape" and the government has not disbursed subsidy amount under the scheme for the period after September 2014. "TUFS will remain. However, we are making some changes (in the scheme). We have suggested to the Finance Ministry that the scheme should not be discontinued as it is in force since 1998-99 and has benefited the sector immensely. There was a blackout and leftout period in between which was wrong," Gangwar told PTI on the sidelines of an Assocham event here. Asked by when the changes in the new scheme will be notified, he said "it will be known in hardly 15 days".
Gangwar added that Prime Minister Narendra Modi wants the scheme to "reach a logical end". However, he added the government will not discontinue the scheme but will restructure it in such a manner that there are no "complaints". As of now, the scheme is to continue till March 2017, the end of 12th plan period. Confederation of Indian Textile Industry (CITI) Secretary General Binoy Job said: "For more than a year, the money has not been disbursed. This year the subsidy amount was released in September, but that was for until September 2014. "As a result, we are badly stuck as textile industry runs on bare minimum margin of 2-5 per cent. The industry is already in a bad shape because of global market conditions like China slowdown, and is thus, heavily dependent on the subsidies. "If the government does not disburse committed support under TUFS, we will be in a soup. Before restructuring, the government should consult the textile industry," he added. Job further said that the Rs 1,520 crore allocated for TUFS in the 2015 budget is "quite less" since as per the scheme, at least Rs 3,000 crore should have been provided.
Besides, the Textile Minister expects the new policy to be finalised before the Winter Session of Parliament. "We have circulated the draft policy for inputs among various ministries. I expect the new policy to be finalised before the Winter session of Parliament," Gangwar said. The new Textiles Policy, which is being finalised by the government, aims to increase the exports to USD 300 billion by 2024-25 and envisages creation of additional 35 million jobs. However, while luxury goods have consistently gained both market share and mind share in India, several key challenges such as lack of quality luxury space and infrastructure, a highly fragmented consumer base, significant import duties, among others are impediments to its growth, Assocham President Rana Kapoor said. "It is, therefore, critical for the government to take significant steps towards establishing a more liberal trade policy and a robust regulatory framework, which will be crucial for attracting investments into the sector," he said. The government is working on providing market linkages - both national and international - providing access to credit and information and encouraging skills upgradation and value addition through avenues like branding, packaging and technology, said Heptulla. "We are also working on enhancement of business opportunities for artisans," she added. She further said that her Ministry has recently identified 18 crafts and has come out with a coffee table book titled as "creative continuum" featuring them. This is an attempt to systematically document the traditional crafts in which predominately minority communities are engaged.
SOURCE: The Economic Times
The Government of India on the recommendation of the Directorate General of Anti-dumping and Allied Duties have imposed anti-dumping duty on import of various polyester yarns from China and Thailand for a period of five years, effective from 21 October has evoked mixed response from the industry. Government has imposed anti-dumping duty of $547 on every metric tonne of all fully-drawn or fully-oriented yarn, spin draw yarn and flat yarn of polyester. The ant-dumping duty applicable on imports from Jiangsu Hengli Chemical Fibre Co. Ltd. would be $256 per ton, while it would be $547 per ton for the specified yarn imported from any other Chinese company. Likewise, the duty on imports from Indorama Polyester Industries Public Company Limited (formerly Indo Poly (Thailand) Ltd.) would be $57.78 per ton, while it would be $248.63 for import of specified yarn from all other Thai companies.
According to Chairman Vardhaman group, S P Oswal, the step would not be beneficial for garment manufacturers as they have to compete with manufacturers from Pakistan, Bangladesh, Sri Lanka and many other such countries that are getting yarn at cheaper price from China and some other countries. This would ultimately hurt the international market of garment manufacturers in the country and thus impact their exports. However, chairman Ludhiana Knitwear Club Vinod Thapar said that though there is some bit of truth in the fact that garment manufacturers, especially those into t-shirts and shirts, will not be able to get cheaper yarn from China, the step would, at the same time, help manufacturers of yarn in India. He is of the view that that this is a good step and now government need to also concentrate on providing more support to the industry at other levels so that yarn manufacturers are able to compete with China.
As per Rajiv Garg, owner of Garg Acrylics, this would help filament yarn manufacturers; filament yarn is used in t-shirts and sports wear and would thus definitely have an impact on manufacturers as well. But to make things really beneficial, government should be imposing anti-dumping duty on fabric imported in large quantity from China. According to Kuntal Jain, Director of Duke group, the government has taken steps to help local industry and manufacturers. But it need to take more steps towards balancing the situation and providing a level playing field to all the sectors like providing some incentives for the manufacturers, especially to help them in cost cutting and enable to fight cheap goods from China. On the other hand, President of Punjab Spinners Association, Madan Mohan Vyas offering a neutral view said that the anti-dumping duty was not going to show much impact straight away as this yarn is used more in mink blankets and sportswear. At the same time, he did not deny that this would have an impact on garment manufacturers. He said that things would change if the government gives more support to manufacturers in addition to levying of anti-dumping duty to strengthen its vision of 'Make in India'. He added saying that he was quite sure that the government would take some more steps and measures to help manufacturers take on international competitors.
SOURCE: Yarns&Fibers
The Indian textile and garment companies facing duty disadvantage at home, some have already prompted to expand outside India in recent years. Moreover, with the recently negotiated Trans-Pacific Partnership (TPP), some more the Indian companies may shift their base to Vietnam to grab the advantage of duty-free access to the US and other TPP markets, like they did some years ago to Bangladesh to take the benefit of duty in exports as well as low labour costs, according to analysts. But there are some other players, while recognizing potential threat from Vietnam chose to await the full text of the TPP, expected to be released next month.
Vietnam has already beaten India as the world’s third-largest garment exporter and the threat from the nation appears more real given the fact that the US accounted for 22-30% of India’s garment exports in recent years and Indian exporters have to pay duty in the range of 14-32% for the shipment of textiles and garments there. The TPP between the US and 11 other Asia-Pacific nations, including Vietnam, represents roughly 40% of global gross domestic product and a third of world trade.
Shailesh Pathak, executive director with Bhartiya Group, at FE’s Digital India programme said that they employ 6,000 people in their fashion business in Chennai and Bengaluru. There is a high probability that 4,000 of those jobs will move to Vietnam in 12 months. Naishadh Parikh, director at Arvind Mills and the newly-appointed chairman of the Confederation of Indian Textile Industry, said that the pact suggests there is a potential risk of investment and employment moving to select TPP countries, especially Vietnam. But until the full text is made public, it’s too early to say if Indian companies would shift base soon, as any such move depends on several other factors as well, including familiarity of the market.
As per information available, the TPP nations have to conform to the standards prescribed by the International Labour Organisation (ILO), which means labour costs may also go up in a TPP country for some investors if they are not following such norms already. And the concerns aren’t restricted to Vietnam enjoying the duty advantage in garments, but much more. The US government’s yarn-forward rule, which requires the yarn and the fabric used in the final product to be made in one of the free trade partners to qualify for duty-free access under the trade pact, will be applicable to all the TPP nations. According to SP Oswal, chairman of the Vardhman Group, such a rule will mean Vietnam will have to either scale up capacities to m anufacture yarn and other stuff to make garments for exports to the US or buy such items from another TPP country. This will hurt India’s exports of such textile items to Vietnam. While Vietnam’s garment exports were to the tune of $21 billion in 2014, just behind China and Bangladesh, its textile exports stood at just $3 billion last year. In fact, Vietnam relies on other nations, including India, for sourcing textile items for making garments. In contrast, India exported garments worth $16.85 billion in 2014-15, while its textile exports stood at $20.81 billion.
Oswal added that Chinese companies will take advantage of this situation and invest more in Vietnam to benefit from the duty-free access to the US. As Chinese companies seek to shift investments to other nations to beat rising wage costs at home, the TPP would prompt them to invest in Vietnam, also because of its proximity with China. According to a CII-Wazir report, China’s costs have raised three fold over the past seven years. Already, India’s share in the US textile and apparel imports remained rather stagnant (6.3% in 2014 from 5.2% in 2005), thanks to a rising Vietnam, which managed to corner 9.3% of the US market in these segments in 2014 from as low as 3.2% in 2005, according to the US government data. And with the TPP, the situation could be even more daunting for India. As such, India has a disadvantage with competitors such as Bangladesh and Pakistan, which enjoy duty-free access to the EU, the biggest garment market for India.
Considering Vietnam doesn’t grow cotton and needs textile items for making garments, an opportunity has come to shift investments to Vietnam, not just for garment but event for textile companies but not many Indian firms will be able to seize it at the moment, said a senior executive with a Gurgaon-based large garment company that exports to the US in huge volumes. To set up a decent-sized textile or garment unit in Vietnam to gain from the duty advantage there, an investment of at least Rs1,000 cores is required. In an atmosphere of a global slowdown, a massive liquidity crunch and stressed balance sheets, it’s not possible for many Indian companies to move out immediately and invest. Moreover, by the time Indian companies are ready, Chinese companies would, by then, have further entrenched their position there.
Raymond is investing $100 million in Ethiopia to set up a factory, while many others have shifted to Bangladesh. Arvind Mills has been expanding its denim manufacturing in Bangladesh in a joint venture with Nitol group. Some mills are looking at acquisitions in Uzbekistan and Kazakhstan too. However, India also is negotiating a similar regional free-trade agreement called the Regional Comprehensive Economic Partnership (RCEP) with 15 other countries and has seven countries in common with TPP (Japan, Australia, New Zealand, Vietnam, Malaysia, Singapore and Brunei). It also hopes to bank on a proposed $300 million line of credit it extended last year to promote Indo-Vietnamese cooperation in the textile and garment sector, according to commerce ministry officials. The credit, to be disbursed through the Vietnam Exim Bank, is to be used mainly to set up a textile and garment industrial park close to the Ho Chi Minh city as well as to help Indian and Vietnamese companies to forge joint ventures. However, the package of $300 million provided by the Indian government for setting up units in Vietnam is too small to make a meaningful impact. Although the TPP has other nations with interest in textiles, including Mexico, Vietnam is expected to hurt India the most.
SOURCE: Yarns&Fibers
Nearly two decades after exiting the textiles business, Kanoria Chemicals & Industries Ltd has made a re-entry. It is in talks with H&M, Peter Van Heusen, Velocity, Raymonds and Arvind to sell denim from its plant in Ethiopia. The company has made an investment of about $50 million in the African country to take advantage from duty-free exports to the US and the European Union. The plant is the first denim manufacturing unit in the eastern Africa. Chairman and Managing Director Rajya Vardhan Kanoria told Business Standard, “The company is also in talks with the Ethopian government for supporting cooperative contract farming of cotton.” The plant has an annual capacity of 12 million metres. The company requires 5,000-7,500 tonnes of cotton yearly. Currently, it is importing cotton from the US, India, Pakistan and Sudan. Under trade agreements with African countries, garment exports to the US and the EU do not attract import duty, which is 14 per cent.
Kanoria said their Ethiopian venture had 20 per cent equity participation from private equity player Fung Capital. Indian Export-Import bank has provided a $21-million loan for the plant. The denim plant is located in Bishoftu town of Oromia region. It would make fine-quality denim fabric and create direct employment opportunities for about 500 people, and an expected indirect employment to around 20,000, primarily in the garment sector, said Kanoria. The company acquired 15 hectares there. The Kanoria group is diversified and has a presence in manufacturing organic chemicals in India, electronic auto components in Europe and renewable power in India. The group is also among the largest chemical marketing and distribution companies in the world. The company expects to generate annual foreign exchange earnings of $25 million from the unit. Kanoria said it had created a presence in Africa by promoting Kanoria Africa Textiles. “We see a huge market in Africa. The idea behind setting up the unit is not just getting into textile but into Africa.” He said cheap hydropower is one of the advantages that Ethopia had over India. The company has invested in its own 132-kilovolt substation and seven km-long power transmission line to the plant.
SOURCE: The Business Standard
Kumar Mangalam Birla's stake in Century Textiles and Industries could rise by almost 5% in the next few weeks as he plans to convert warrants help by his entities into equity before the deadline of December 18 — when the instruments lapse. Century Textiles, founded by his grandfather Basant Kumar Birla, had issued 1.86 crore warrants to private companies owned by the Aditya Birla Group chairman last year. Of this, 84.7 lakh warrants were converted into equity shares in March this year, taking the promoter stake in the company to over 45% from 40% in December 2014. Kumar Mangalam Birla now intends to convert the rest of the warrants into equity. After this, promoter group stake in Century will rise to 50.21% from 45.22% currently. An email sent to Aditya Birla Group and Century Textiles went unanswered till the time of going to print. Analysts say that the promoter of Century Textiles had refrained from converting their entire warrants to equity in one go as it would have triggered an open offer. Sebi rules allow for creeping acquisition or buying shares from the secondary market only up to 5% in a fiscal. The warrants were issued at Rs 355 each in 2014. Century Textiles shares gained 2.76% to close at Rs 545 on Tuesday.
SOURCE: The Economic Times
The Australian Minister discussed the road-map for finalisation of the free trade pact with his Indian counterpart, Nirmala Sitharaman. “My negotiating team has set a time-line for concluding various parts of the negotiations, which I have discussed with my counterpart,” he said. The India-Australia CECA is expected to result in lower import duties on industrial and farm goods, greater access to the services market and easier investment norms in both countries. Australia is trying to push India to include services such as insurance and retail in the deal and also agree to a provision that would lead to the addition of other sectors such as legal and education in the pact once they are opened up. On the proposed civil nuclear pact with India, Robb said that the deal, for shipment of uranium to India, had received all administrative clearances in Australia, but was yet to be ratified.The services sector in Australia accounts for 85 per cent of the country’s GDP and nine out of 10 jobs. “It is an important sector for us. India’s Prime Minister Narendra Modi has also said that he wants to get access to Australia’s expertise in services,” Robb said, adding that it could be in diverse sectors such as health, accountancy, project management and construction.
SOURCE: The Hindu Business Line
Exim Bank today said it will set up in Africa a development firm KPDC, in partnership with others, to facilitate Indian participation in infrastructure projects across the continent. Other shareholders in the company are IL&FS Group, African Development Bank and State Bank of India. Exim Bank's proposal comes on the occasion of third India- Africa Summit which began here yesterday. "Deputy Managing Director of Exim Bank of India David Rasquinha, announced setting up the Kukuza Project Development Company (KPDC) in Africa to facilitate Indian participation in infrastructure projects in Africa on October 26," Exim Bank said in a release. KPDC will synergise the strengths of every partner, who will complement each other in building Indian project exports while simultaneously aiding the furtherance of economic and political ties between India and Africa, Rasquinha said. The investment is in keeping with the developmental role envisaged to be played by the bank, said the release. KPDC is expected to provide specialist project development expertise to take the infrastructure project from the concept stage to the commissioning stage in the African continent. It will provide the entire gamut of expertise -- project identification, pre-feasibility/feasibility studies, preparation of detailed project reports, environmental and social impact assessment. The company will be operational from first quarter of the 2016, said the Bank.
SOURCE: The Economic Times
Zimbabwe has sought Indian “participation, investment or assistance” in the development of the mining sector, particularly the mining of precious stones. The invitation was extended at a bilateral meeting that the Foreign Minister of Zimbabwe, Simbarashe S. Mumbengegwi, had with Sushma Swaraj, External Affairs Minister, on the sidelines of the 3rd India-Africa Forum Summit meeting here on Tuesday. “India has assured all possible help,” a senior official of the Ministry of External Affairs told newspersons after the meeting. Meanwhile, Tunisia has suggested that India could consider setting up another phosphate plant in that country. The suggestion was made at a meeting between Taieb Baccouche, the Tunisian Foreign Minister, and Swaraj. India already has a phosphate plant in Tunisia that is 70 per cent owned by the Tunisian Government, with Indians owning the balance stake. Cameroon’s Foreign Minister Lejeune Mbella Mbella sought India’s assistance in fighting the Boko Haram militant Islamic group.
SOURCE: The Hindu Business Line
A Dubai-based business council has signed a MoU with the Annual Investment Meeting (AIM) for its participation as an official supporting partner for a three-day event here to attract FDI. The AIM is a Foreign Direct Investment-focused event which is to be held here from April 11-13 next year and is the first collaboration between the Indian Business and Professional Council (IBPC) and AIM. The memorandum of understanding (MoU) was signed by Kulwant Singh, President of IBPC and Dawood Al Shezawi, CEO of AIM. This MoU reinforces the goal of providing an effective platform to Indian businessmen and professionals to network and exchange information related to business opportunities in India and UAE. It affirms the commitment of both parties to work together in promoting an environment conducive for businesses to flourish and fostering harmonious relations that will induce further investments. The event will include a thought leadership conference, an exhibition, a ministerial roundtable, global leaders' debate, country presentations, capacity building workshops, and bilateral G2G, G2B and B2B meetings. Every year, the event draws in the participation of over 120 countries, over 100 heads of states and governments, 15,000 businessmen and investors, and announcements of multiple projects worth billions of dollars. 'The New World of FDI, Key Features and Best Practices' is the theme for AIM 2016.
This upcoming 6th edition will be the largest and most diverse to date where high-profile government and private sector representatives will convene and address several investment-related issues and activities. "Optimistic about the prospects of fostering a better relationship between the government and private sector pertaining to establishing and maintaining businesses in the UAE, IBPC President, Kulwant Singh said."We feel that if challenges are addressed, more investors from India will be encouraged to come into the country," he said. "AIM will tackle the importance of new sources of FDI, even those coming not only to but from emerging economies, India being one of the fastest growing economies in the world. It is thus timely to discuss the policies and best practices that will promote and encourage such investments," Dawood Al Shezawi, CEO of AIM said.
SOURCE: The Economic Times
India on Tuesday made a strong pitch for a permanent seat for Africa at the United Nations Security Council (UNSC) stressing on the fact that both India and Africa can no longer remain excluded from global governance institutions. “Although Indians and Africans comprise 2.5 billion people, our nations continue to be excluded from appropriate representation in the institutions of global governance. India and Africa can no longer be excluded from their rightful place of the permanent membership of the UN Security Council,” said External Affairs Minister Sushma Swaraj at the ministerial meeting of the third India-Africa Forum Summit here on Tuesday. Questioning the legitimacy of UNSC’s governance structure, Swaraj said the African continent represents one-sixth of humanity, hence, it cannot be excluded. “Unless we put in place more democratic global governance structures, the more equitable and just international security and development frameworks that are essential for the collective peace and prosperity of this planet, will continue to elude us. There can no longer be pockets of prosperity in vast areas of under-development and insecurity,” she said.
Highlighting India’s contribution to the development of Africa, Swaraj said in the past 10 years, a total of $9 billion in concessional credit has been approved for nearly 140 projects in 40 African countries; out of this, 60 projects have been completed. She added India has granted duty-free market access for 98 per cent tariff lines for the least developed countries of Africa. Two-way trade between India and Africa reached $72 billion in 2014-15, from $8.2 billion in 2004-05. Meanwhile, Finance Minister Arun Jaitley released a report titled Enhancing India’s Trade Relations with Africa: A Brief Analysis by Exim Bank. “India and Africa are rapidly growing developing economies in the world. While Africa is the continent of the future, India is an emerging economy. As the global economy continues to recover slowly from the global financial and economic crises, India and Africa together can become the engines of growth for the entire world,” Jaitley stated. According to the EXIM Bank report, due to large-scale imports from the region, India's trade deficit with Africa also increased to $5.7 billion in 2014 from $1.4 billion in 2004. Amongst the major trade partners with which India's maintains a trade deficit, the largest countries are Nigeria, Angola, Botswana, Gabon, Equatorial Guinea, Morocco, Cameroon, Guinea, South Africa and Côte d'Ivoire.
SOURCE: The Business Standard
India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year, according to a World Bank report. “A forward movement of 12 spots in the ease of doing business by an economy of the size of India is a ‘remarkable achievement,” World Bank’s Chief Economist and Senior Vice President Kaushik Basu said. “For any big economy, a rank improvement of 12 is a remarkable achievement. Going from 142 in the world to 130, as India has done, is very good sign. It gives a good signal about the way things are moving in India,” Basu told PTI in an interview as World Bank released its annual report ‘Doing Business 2016’ which is topped by Singapore, followed by New Zealand, Denmark, South Korea, Hong Kong, Britain and the US.
China is ranked 84 and Pakistan is at 138th place. Pakistan in fact has slipped 10 spots from 128 last year while China has moved six spots in a year from 90 since the last report. The World Bank said India, which has a global ranking of 130, implemented two reforms during the past year. For example, in starting a business, India eliminated the requirements for a paid-in minimum capital and a certificate to commence business operations, significantly streamlining the process for starting a business. “What is significant about India is that they are in the middle of what appears to be a very, very ambitious process of reforms affecting a broad range of areas captured by the Doing Business indicators,” Lopez Claros, Director of the Global Indicators Group World Bank, said during a conference call. “My expectation, therefore, is that if this process continues, if it is sustained, and the authorities show the degree of determination which has been in evidence in the last year, then we could see substantial improvements in coming year,” he said.
Observing that the potential to see kind of a rapid economic growth in India is very high, Claros said it has very favourable demographics, and to the extent that some of the bottlenecks that the Doing Business data identified in India are removed, the potential benefits could be quite large. “And India being India, that is a large economy. This could have also international repercussions in terms of the impact on the global economy,” he said. Claros said there is a great deal of work underway in India to design a policy that will be modest and friendly. “And the improvement that you have seen in India’s Doing Business ranking this year is kind of an early recognition of these efforts, but more is coming,” he added. India stands for having made big strides toward better and more efficient business regulation. In 2004 it took 127 days to start a business in India. In 2005 this has been reduced to 29 days, the report said.
In India the establishment of debt recovery tribunals reduced nonperforming loans by 28 per cent and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit. Research also shows that a badly designed tax system can be a big deterrent for businesses, it said. In 2010, India established an online system for value added tax registration and replaced the physical stamp previously required with an online version. “In the past year India eliminated the paid-in minimum capital requirement and streamlined the process for starting a business. More reforms are ongoing — in starting a business and other areas measured by Doing Business — though the full effects have yet to be felt,” it said. India made starting a business easier by eliminating the minimum capital requirement and the need to obtain a certificate to commence business operations. This reform applies to both Delhi and Mumbai, it said. The utility in Delhi made the process for getting an electricity connection simpler and faster by eliminating the internal wiring inspection by the Electrical Inspectorate. The utility in Mumbai reduced the procedures and time required to connect to electricity by improving internal work processes and coordination, it said. The report said in dealing with construction permits, India ranks 183 and in registering property it ranks 138. But in getting electricity India is now ranked at the 70th spot. In protecting minority investors, India now ranks eight and in getting credit it is now placed at the 42nd spot. In paying taxes and enforcing contracts India is now ranked at 157th and 178th spots respectively.
In trading across borders, India ranks 133rd and in resolving insolvency, it ranks 136th, the report said. The Doing Business report records 22 economies worldwide with resolution times above 1,000 days and four of them are in the South Asia region, namely Afghanistan, Bangladesh, India, and Sri Lanka. Furthermore, it takes entrepreneurs in the region an average 98 days to register property, which is more than twice the global average. Last year, Pakistan was ranked 128 and Bhutan was 125. India was ranked 142, Afghanistan 183, Bangladesh 173. Last year, India was ranked 158 in starting a business, dealing with construction permits (158), Getting electricity (137), Registering property (121), Getting Credit (36) Protecting minority investors (seven), paying taxes(156), trading across borders (126), enforcing contracts (186), and Resolving insolvency (137).
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.94 per barrel (bbl) on 27.10.2015. This was lower than the price of US$ 44.71 per bbl on previous publishing day of 26.10.2015.
In rupee terms, the price of Indian Basket decreased to Rs 2854.05 per bbl on 27.10.2015 as compared to Rs 2904.42 per bbl on 26.10.2015. Rupee-dollar exchange rate remained unchanged at Rs 64.96 per US$ on 27.10.2015 as compared to 26.10.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on October 27, 2015 (Previous trading day i.e. 26.10.2015) |
Pricing Fortnight for 16.10.2015 (Sep 29 to Oct 13, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
43.94 (44.71) |
47.70 |
|
(Rs/bbl |
2854.05 (2904.42) |
3115.29 |
|
|
Exchange Rate |
(Rs/$) |
64.96 (64.96) |
65.31 |
SOURCE: PIB
Implementation of the Trade Facilitation Agreement (TFA) has the potential to increase global merchandise exports by up to $1 trillion per annum, with developing countries expected to capture more than half of these gains, World Trade Organization said. "Global merchandise exports estimated to increase by between $750 billion and $1 trillion per annum...developing countries' exports estimated to increase by between $170 billion and $730 billion per annum," the WTO said in its flagship World Trade Report, which has been released ahead of the crucial talks in December. "You could say that it is global trade's equivalent of the shift from dial-up internet access to broadband," World Trade Organization director general Roberto Azevedo said at the launch of the report on Tuesday. The report pegs the overall boost to global GDP growth at 0.5% per annum as the agreement aims to standardise, streamline and speed up customs processes around the world, helping to expedite the movement, release and clearance of goods. Interestingly, based on a previously used separate economic modelling approach, the organisation said the TFA would boost global merchandise exports by $1.8-3.6 trillion and help exports from least developed countries 13-36%, much more than either developed or developing economies. Fifty of the WTO's 161 members have ratified the Trade Facilitation Agreement, which was concluded at the WTO's ninth ministerial Conference in Bali in December 2013. India is yet to ratify the agreement. "This is very positive - we are almost halfway to the target number, at which the agreement comes into force," Azevedo said and urged for pace of ratifications to increase even as he cited strong political will at the highest levels as a key factor for the success of the agreement. The report noted that full implementation of the TFA could reduce trade costs of members by 14.5% on average and help developing countries enter 30% more foreign markets. The WTO expects 20 million jobs to be created by TFA implementation, with an increase to 30 million, depending on the sectors involved and how labour-intensive they are. As per the report, besides reducing costs of trade, trade facilitation can help countries attract foreign direct investment.
SOURCE: The Economic Times
China has taken unprecedented steps to stabilise its stock markets after a rout in June and has also intervened to support the yuan in the face of bearish pressure.
Following is the timeline of Beijing’s market-stabilising and economy-boosting measures, reforms and statements.
** Oct 23 – The People’s Bank of China (PBOC) cut interest rates and banks’ reserve requirement ratios (RRR), after the country posted its slowest quarterly economic growth since the global financial crisis.
** Oct 22 – Wang Xiaoyi, the deputy head of the State Administration of Foreign Exchange (SAFE), said the yuan devaluation in August was not a large-scale government intervention and no direct connection can be seen between the currency reform and capital outflows.
** Oct 12 – Yi Gang, deputy governor of PBOC, said China’s stock market correction is “almost over” and Beijing has taken a series of measures to avoid systemic risks, the official China Securities Journal quoted Yi as saying.
** Oct 10 – China subscribed to the International Monetary Fund’s Special Data Dissemination Standard (SDDS), marking a major step forward for official statistics in the country.
** Sept 17 – The State Administration of Foreign Exchange says it will conduct checks on firms’ forex buying to prevent speculation on yuan depreciation and step up a crackdown on illegal cross-border money transactions.
** Sept 16 – The assistant chairman of China’s securities regulator is under investigation for suspected “serious violation of discipline” as authorities work to restore confidence in the stock market.
** Sept 15 – Chinese police are investigating senior managers at CITIC Securities, as Beijing intensifies its scrutiny of irregular stock market activity.
** Sept 11 – China’s securities regulator says that it will punish four brokerages for their lack of due diligence when connecting to external trading systems, in its latest effort to crack down on grey-market margin financing.
** Sept 11 – The PBOC has asked banks to strengthen supervision of forex purchases by foreign-held non-resident accounts (NRA) to tighten loopholes in its managed capital account, sources told Reuters.
** Sept 10 – Offshore yuan in Hong Kong shoots up on suspected, rare intervention by Chinese state banks on behalf of the central bank, a bold gesture to shake out speculators betting on further yuan losses.
** Sept 7 – Chinese exchanges say mulling “circuit breaker” to CSI300 index that would briefly suspend market trade if the index rises or falls 5 percent, suspending trade for a day if it rises or falls 7 percent.
** Sept 1 – The PBOC plans to tighten rules on trading of currency derivatives from October in a move to curb speculation and volatility.
** Aug 27 – In a rare move, the PBOC intervenes in yuan derivatives markets to push down the implied discount of the yuan’s value in the future against its current value to reduce market expectations of further depreciation.
** Aug 24 – Share indexes slump more than 8 percent as the “national team” of investor stays on the bench.
** The PBOC cuts interest rates and RRR for the second time in two months.
** Aug 23 – China allowed pension funds managed by local governments to invest in the stock market for the first time, potentially channelling hundreds of billions of yuan into the country’s equity market after shares slumped nearly 12 percent the week before.
** Aug 14 – The CSRC surprises the market by announcing that Beijing will allow market forces to play a bigger role in determining stock prices, the first official signal that Beijing is moderating its efforts to prop up stocks.
** Aug 11 – The central bank devalues the yuan by nearly 2 percent, a move that was followed by further weakening of the currency in following trades. Policymakers describe the move as part of ongoing reforms but markets suspect political pressure on weakening the yuan to boost ailing exports.
** Aug 10 – Reuters exclusively reports that the ruling Communist Party of China has begun looking for an eventual replacement for the top securities regulator, who faces internal criticism over his handling of this year’s boom and bust in Chinese stock prices.
** July 27 – Share indexes slump again, sparked by talk of a government withdrawal from market-rescue steps and worries over the health of the economy.
The CSRC vows further market support.
** July 8 – Chinese regulators raised margin requirements for short positions taken against the small-cap CSI500 Index, and making it easier for insurers to buy blue chips. The CSRC warns of “panic” and “irrational selling” in the market.
** July 5 – China state-owned investment company Central Huijin Investment Ltd says it buys exchange-traded funds (ETFs) to support the market and will continue to do so.
The growing number of state agents and brokerages and other entities enlisted into the market rescue effort are soon dubbed “the national team”.
The CSRC announces that PBOC will inject liquidity directly to the state-backed margin finance company to stabilise the tumbling stock market.
** July 4 – China’s top 21 securities brokerages pledge to invest at least 120 billion yuan ($19 billion) collectively to help stabilise the market.
** July 3 – China Financial Futures Exchange (CFFEX) suspends 19 accounts from short-selling for one month.
** July 2 – The CSRC lowers threshold for individual investors to trade on margins and expanding brokerages’ funding channels.
** June 29 – The state-backed provider of margin financing, China Securities Finance Corp, publicly says that the risk of margin trading is controllable and margin calls are relatively small.
** June 27 – The PBOC cuts interest rates and trims banks’ RRR in a move widely interpreted as mainly a step to support the slumping stock market.
** June 12 – The stock market peaks. China market regulator seeks to cap margin trading, short selling.
SOURCE: The Financial Express
Zambia has the potential of producing internationally recognised designers as it has a lot of good and talented designers but local fashion designers lack good and indigenous materials for the couture industry hence are forced to import from other African countries, said Zambian fashion designer Charity Nyirongo. Nyirongo has called on the government to invest in fashion designing training institutions as the move has the potential to revive the collapsed textile industry. At the fourth edition of Hub of Africa Fashion Week held in Addis Ababa, Ethiopia, the proprietor of Mo Creations and Couture brand speacking on the occasion said that the move would help revamp the local textile industry and enable local designers compete favorably at international level.
Zambian Embassy counsellor for economics Linda Mbangweta, who was in attendance to support the local designer, said that the event was a good platform to market Zambia and encourage local designers. This is a positive stride for the local designers as they exhibit traditional outfits on the runway and they exchange ideas and training skills with international designers. Hub of Africa continues to push the continent as a competitive destination for business of the textiles and fashion industry and creating a platform for African designers to market themselves on the international market.
SOURCE: Yarns&Fibers
The Central Bank of Nigeria (CBN) has proposed to provide financial assistance to textile industries in order to boost the economy of the country, according to Nigerian media reports. CBN governor Godwin Emefiele recently held a meeting with garment and textile manufacturers in Abuja and offered to assist them in order to solve issues hampering production. He stressed that garment and textile manufacturing industries generate employment and contribute to the country's economy and hence must be given assistance to function optimally. Emefiele especially stressed on helping small and medium scale manufacturers with accessing loans from banks to resume full production without having to worry about short tenure and suspension. Alhaji Ismaila Isa Funtua, representative of the United Nigeria Textile Limited (UNTL) discussed about restructuring the loan from Bank of Industry and making cotton, the basic raw material for the textile and garment industry, easily available to manufacturers.
SOURCE: Fibre2fashion
The recently concluded 15th Vietnam International Textile and Garment Industry Exhibition that ended on October 24 in Ho Chi Minh City saw participation of approximately 125 exhibitors covering 300 booths, as per Vietnamese media reports. Companies from India, Japan, China, Germany, Taiwan, Turkey, and Korea showcased sewing, spinning, knitting, printing, embroidery, and weaving machines at the four-day expo which was aimed at helping manufacturers source machines and technologies in order to increase fabric production. This year's event held great importance due to the successful negotiation of Trans-Pacific Partnership (TPP) agreement between Vietnam and 11 other countries. Vietnam is expected to have a competitive edge over the other exporting countries once the agreement comes into effect.
Along with match-making and networking activities, seminars discussing Vietnam's investment environment, solutions to improve efficiency and quality in the industry, and Free Trade Agreements and its impact on the textile industry were also conducted at the event. The exhibition and its concurrent event Textile & Apparel Accessories Exhibition (VTG 2015) was officially organised by Ministry of Industry & Trade, Vietnam National Trade Fair & Advertising Joint Stock Company (VINEXAD), Yorkers Trade & Marketing Service and Chan Chao International. Vietnam requires over 8 billion metres of fabric annually for manufacturing garments but it produces only 3 billion metres, according to estimates.
SOURCE: Fibre2fashion
