Indian exporters are expecting continuous growth in the country's outbound shipments despite increase in COVID-19 cases as their order books are encouraging and there is a pick-up in demand in rich markets.
Federation of Indian Export Organisations (FIEO) President S K Saraf said that in most of the states , manufacturing and exports related services have been exempted from the restrictions and inter-state movement of cargo is permitted by the central government.
"However, a pandemic of such magnitude does cause disruptions since various stakeholders are not operating with full manpower including the industry.
“We expect the peak to come before mid-May and the situation should improve thereafter. With such assumptions, we expect exports to continue on the growth trajectory as the order booking position of exporters is very encouraging," he said.
He also said that exporters are better equipped to deal with the situation with lockdown and shut down this time.
When asked about buyers demand for quick delivery of consignments, he said majority of buyers are more understanding and accommodating as they have also gone through or going through similar challenges and they have extended the delivery period with mutual agreement.
Seeking government intervention, Saraf said the government should open the filing facility for the Merchandise Exports from India Scheme (MEIS) for 2020-21 (upto December, 2020), and Services Exports from India Scheme (SEIS) facility.
Sharing similar views, Ludhiana-based Hand Tools Association President S C Ralhan said that in the engineering sector, the order books are good and demand is picking up in the US and Europe.
"In the sector, the government should promote exports of manufactured and value-added goods. Key raw materials should not be encouraged for exports," Ralhan said.
He added that the government should not curtail economic activities in the name of containing COVID-19 cases as it would impact migrant labours.
Apparel Export Promotion Council of India (PTI) Chairman A Sakthivel said that all the states have agreed for functioning of export units and the sector is not facing any kind of labour shortage.
"The order books are looking better. We need government support to further push the exports and they should not go for nation-wide lockdown," he added.
India's exports in April jumped nearly three-fold to USD 30.21 billion on account of healthy growth in key sectors including engineering, gems and jewellery and petroleum products, even as trade deficit widened to USD 15.24 billion, according to the commerce ministry's preliminary data.
Source: The Economic Times
The Trade Promotion Council of India (TPCI) on Monday said that healthy exports growth in labour-intensive sectors such as jute, carpet, handicrafts and leather indicates that demand is picking up in the western markets. India’s exports in April jumped nearly three-folds to USD 30.21 billion on account of healthy growth in key sectors including engineering, gems and jewellery and petroleum products.
TPCI Founder Chairman Mohit Singla said that April exports growth is one of its kind optimistic and is a healthy sign, reflecting a balanced overall growth across sectors. Not just agri and pharma but all other sectors have bounced back indicating a big confidence booster and the emergence of a stable market order, he said in a statement.
“I am particularly happy to see the growth of labour-intensive sectors such as carpet, handicrafts, leather, ceramic products and glassware, which shows that demand in the western markets is picking up as these counties are coming out of the pandemic woes gradually,” he added.
The US and Europe are key export destinations for Indian exporters
Source: The Financial Express
A day after advocating a nationwide lockdown and curtailment of economic activity to control the spread of Covid-19, CII President Uday Kotak on Monday called on the industry to take voluntary measures to break the chain of transmission of the virus.
Reiterating ‘safeguarding lives’ as the highest collective national priority amidst the second wave of Covid-19 that is ravaging India, Kotak urged the industry “to curtail all non-essential economic activity requiring physical presence of employees at the workplace, for the next two week.”
Industry should review operations and minimise the use of in person manpower, limiting it to only critical operations or activities required by law, Kotak was quoted as saying in a statement issued by the industry body.
Kotak on Sunday said that the government should heed advice of experts-- both at home and abroad-- to tackle the mounting pressure on India’s healthcare system as a result of the virus.
India last week crossed the grim milestone of adding 400,000 new Covid cases in a single day. India's Covid-19 caseload as of Monday stood at 1,99,25,604 cases.
CII and industry are working shoulder to shoulder with the government, in tackling the massive tsunami of Covid infections that has hit India, causing much suffering, the industry body said in the statement.
The industry is lending a helping hand augmenting the critical oxygen supplies and bed capacities, CII said, adding that production capacities of medicines and other medical supplies are being ramped up.
“However, in spite of all efforts the overall numbers continue to rise. The healthcare system and medical personnel are stretched to the limit and exhausted,” Kotak said.
Measures to break the chain of transmission are of paramount importance to mitigate human tragedy and loss of lives, alongside augmenting health infrastructure and medical supplies”, he added.
Several auto majors like Maruti Suzuki, Hero MotoCorp, JCB India, MG Motor, Honda Motorcycle and Scooter India, have taken the lead halting production temporarily or advancing maintenance schedules in the interest of the safety of their employees.
Service sector organisations such as Kotak Mahindra Bank,which is led by Kotak, TCS, and Infosys have adopted work from home.
CII has suggested making testing available for employees whose presence at the workplace is necessary for critical operations, besides making quarantine facilities available for infected employees, as proactive measures.
Source: The Economic Times
The corporate affairs ministry (MCA) has provided relaxations on the timelines of various statutory requirements and waived late fees for various filings under the Companies Act, LLP Act and rules till July 31 on account of disruptions caused by the second wave of Covid-19.
The period between two consecutive board meetings has been extended to 180 days from 120 days for the first two quarters of this fiscal while the months of April and May will not be counted as part of the timelines for filing of charge-related forms, circulars released by the ministry on Monday said.
“In view of the difficulties arising due to the resurgence of Covid-19 and requests received from stakeholders, it has been decided that the requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (120 days) stands extended by a period of 60 days for first two quarters of Financial Year 2021-22,” the circular said.
The relaxation of charge-related timelines shall apply in cases where the creation or modification of the charge falls between April 1 and May 31, or where due date for filing charge-related forms falls between those dates. Under the Companies Act, firms have to register a charge with the Registrar within 30 days of its creation.
Source: The Economic Times
There are over 10 crore registered users of which 7.38 crore filed their tax returns online for FY21, as per the latest tax data. E-filling of Income Tax Returns (ITRs) for FY21 registered a 9% increase over FY20 with 7.38 crore returns filed till March 31, against 6.77 crore filed in FY20, and 6.68 crore in FY19.
Over five crore individuals with annual income equal or less than ₹5 lakh filed their returns. Around 81,653 individuals with income above Rs 1 crore filed their returns, an so did 44,752 companies, 836 trusts, 16,420 firms and 62 local authorities with annual income above a crore.
Maharashtra topped the list with 1.14 crore ITRs filed using e-filing system of the tax department. 74.50 lakh e-returns were filed from Gujarat, 71.47 lakh from Uttar Pradesh, 48.29 lakh from Rajasthan, 46.15 lakh from Tamil Nadu, 43.15 lakh from Karnataka and 38.20 lakh e-returns were filed from Delhi.
As per the tax data, there was a growth of 1.72% in filing growth with 6.83 crore ITRs in AY 20-21 against 6.72 crore in AY 19-20.
Source: The Economic Times
The UK India Business Council (UKIBC) on Monday said that businesses are looking forward to an Enhanced Trade Partnership (ETP) that addresses market access barriers in the short- and medium-term and begins the journey to an eventual free trade agreement between India and the UK.
The two sides had decided earlier this year to launch an ETP to develop a roadmap that would lead to a potential comprehensive FTA, including considerations on an interim pact on a preferential basis.
The council said that by reducing tariff and non-tariff barriers, including the alignment of standards, the benefits will be felt across many sectors, most notably digital and ICT, food and drink, defence, healthcare and pharma, and advanced manufacturing.
As per the UKIBC, alongside the reduction and removal of tariffs and non-tariff barriers to goods trade, it is important that the ETP recognises the critical importance, to both countries, of knowledge- and technology- driven trade, such as digital, data, and financial services.
“With our economies growing and the barriers reducing, we at the UKIBC expect to see a step-change in the volume and nature of the trade and investment relationship,” UKIBC said, adding that bilateral trade grew 10% in the year before the pandemic.
India is the second largest investor in the UK and, over the last decade, the UK has been the second fastest growing G20 investor in India.
“The trade and investment partnership is particularly important, and the UKIBC hopes that the meeting tomorrow will provide more details of the Enhanced Trade Partnership initiated by Piyush Goyal, Minister of Commerce and Industries, and his UK counterpart, Liz Truss, Secretary of State for International Trade,” the council said in a statement.
On Covid-19 recovery and healthcare, the council said the two sides can work on R&D and production, combining the best of their medical technology – including digital and AI- and our drug discovery capabilities.
On climate issues, it said tech-rich UK businesses are keen to collaborate with their Indian counterparts in a wide range of areas, including waste to energy, solar, wind, electric vehicles and associated infrastructure, and in hydrogen.
Source: The Economic Times
On 29 April 2021, the European Parliament passed a resolution decrying the deterioration of what was already a terrible record of religious persecution in Pakistan. The resolution was overwhelmingly passed, 662 to 3, with 26 not voting.
Significantly, the resolution also called for the Commission and the European External Action Service (EEAS) to immediately review Pakistan’s eligibility for GSP+ status in the light of current events and whether there is sufficient reason to initiate a procedure for the temporary withdrawal of this status and the benefits that come with it.
The argument was based on the recent case of a Christian couple, Shafqat Emmanuel and Shagufta Kausar, who was sentenced to death for allegedly sending a text message insulting the Prophet Mohammed; whereas the couple denied any responsibility.
In January 2014, the EU granted Pakistan status under its flagship trading scheme, the General Scheme of Preferences Plus (GSP+). The GSP+ provides enhanced and preferential free trade between the EU and a small list of countries that are meant to be among those developing countries with the best human rights records.
The EU resolution mentions the recent clashes by TLP, saying, “the repeated and deceptive attacks against the French authorities by members of the Pakistani government and from radical Pakistani groups, including the extremist religious party Tehreek-e-Labaik, have escalated on the ground of blasphemy since the French authorities reactions after the terrorist attack against a French school teacher for defending the freedom of expression; leading the French authorities, on April 15, 2021, to recommend to their nationals to temporarily leave the country”.
The EU resolution also mentions that the appeal to release the Christian couple has been constantly delayed, and the latest postponement occurred in February 2021.
Economic Impact
In March last year, Pakistan’s GSP+ status was extended till 2022. As a result of this duty-free access available to Pakistan in 27 EU member states, Pakistan’s exports to the EU enhanced from 4.538 billion euros in 2013 (before the GSP-Plus status) to 7.492 billion euros in 2019, registering an increase of 65 percent.
Textile and garments have been the major benefactor of the GSP+ status, along with increased employment opportunities availed by women of Pakistan in Europe.
It is worth mentioning that amidst the pandemic has seen an increase in exports in textile to Europe as the regional competitors suffered lockdowns due to high COVID 19 cases.
EU is Pakistan’s second-largest trading partner next to the United States, as Pakistan has a huge potential market of 500 million customers for Pakistani products. According to Pakistan Textile Exporters Association, Pakistan’s exports to the EU may stay in a danger zone, as the review is to happen in the future.
This step by the EU can prove detrimental to Pakistan’s economic recovery during the pandemic, as Pakistan already faces another International Governmental Organization, FATF’s plenary hearing in June, over whether to remove the country from the grey list or not.
Talking to GVS news, All Pakistan Textile Mills Association’s (APTMA) Executive Director, Mr. Shahid Sattar said, “Pakistan has $6 billion worth of exports to EU and almost 5.25 billion of them are textiles. If the GSP+ status is withdrawn, Pakistan’s textile exporters would have to pay 20 percent tariff, making the industry uncompetitive compared to the regional exporters, or the exporters would have to reduce the selling price”, to keep their products attractive still to the buyers.
He added that the additional price due to tariff would deter people from buying our products, resulting in loss of potential consumers for the exporters.
The FATF plenary in June along with the GSP+ review by the EU could deter investments from entering Pakistan until the country gets a clean bill of health from both Organizations.
Source: Global Village Space News
Faruque Hassan, newly elected president of the Bangladesh Garment Manufacturers and Exporters Association, said that it would be very tough for the readymade garment sector to recover from the Covid-19 fallout due to cancellation of orders by buyers amid the resurgence of the pandemic.
In an exclusive interview with New Age, the business leader on April 25 expressed his determination to turn the existing challenges into opportunities through adopting timely policies.
The BGMEA president said that in order to tap into the potentials of the post-pandemic era, the trade body would emphasise the development of man-made fibre-based products in line with global demand.
Encouraging new orders through developing new products and tapping into the potentials of new markets will be the priority of the new BGMEA board, Faruque said.
‘We are passing through a tough time as both consumption and prices of apparel products have declined all over the world due to unprecedented crises across the globe,’ he said.
When the factories started to recover from the impacts of the first wave of the pandemic, export orders started to witness fresh cancellations in recent months as sales declined in global markets and many of the buyers went out of business due to lockdowns, the BGMEA president said.
‘Although the country’s RMG sector is facing a shortage of orders at this moment, I think we have a lot of opportunities to grow in the coming days once the pandemic comes to an end,’ Faruque said.
The newly elected BGMEA president said that he and his team wanted to work on man-made fibre, product development and market diversification on a priority basis to turn existing challenges into opportunities.
‘Our export earnings declined to $28 billion in the financial year 2019-20 from $34 billion in FY 2018-19. Covid-19 was definitely the main reason declining export earnings but other issues, including product and market diversification, also played a part,’ he said.
He said that the BGMEA was interested in working on MMFbased garments as the country’s exporters had already invested in technology and process modernisation in the last 10 to 12 years.
‘We are ready to produce MMF but we lag behind in competitiveness in this area than China,’ Faruque said.
He said that the RMG exporters would have to gain competitiveness in MMF step by step as it would not be possible to arrange huge investment all at once for the subsector.
Demanding 10 per cent cash incentive on export of MMF-based garments, Faruque said that policy support was a must for increasing competitiveness.
If the government provides 10 per cent cash incentive on MMFbased RMG export, it will bring in new export orders to the country which will create new employment, the BGMEA president said.
‘We are now getting 1 per cent cash incentive from the government but the incentive never brings in new orders and new products as 1-per cent support cannot increase competitiveness of a sector,’ he said.
The BGMEA president said that they would work intensively on diversification to reduce dependency on a few products and a few markets.
He said that they would work on efficiency and innovation to identify the demand for a specific product in a specific country to avert raising additional capacity of factories in the same products.
If new investments in the factories increase their capacity in the same products, it will create uneven competition and the buyers will take advantage of the overcapacity, Faruque said.
He urged all the stakeholders to unite and not to engage in any unnecessary competition saying that reduction in prices of products and declining export orders were the big challenges for the factories amid the pandemic.
The BGMEA president said that the export earnings from RMG declined in FY20 mainly due to Covid-19 but it was also a fact that the global apparel business had slowed down since 2015.
‘In 2013, we had set a vision to increase our export to $50 billion by 2020 but we failed due to the global slowdown,’ Faruque said.
He said that apparel export achieved very nominal growth in the period of 2015-2018 due to the global slowdown.
Global business in RMG started to rebound in 2019 but the pandemic caused business to a come to a standstill in 2020, the BGMEA president said.
Regarding the future of the apparel industry, Faruque said that it was a unique sector which had created jobs for a huge number of unskilled people and had empowered women in the country.
Along with building a skilled labour force, the sector was producing efficient mid-level management personnel that will bring about positive changes in the sector in future, he said.
Faruque said that the number of foreign nationals had decreased significantly in the sector as some of the local educational institutions had introduced curriculums in line with the industry needs.
‘Earlier, our education was mostly class-based and not practical. Now, many of the universities have included garments and textiles in their curriculums and are producing merchandisers, industrial engineers and textile engineers,’ he said.
The newly elected BGMEA president requested all the stakeholders, including the buyers, development partners, the government, trade union leaders and players of forward and backward linkage industries, to work together to turn existing challenges in the business into opportunities for the future.
Both the suppliers and buyers have been facing trouble amid the pandemic and considering the situation, the buyers should not ask their suppliers for discount or for airfreight for missing the shipment deadline, he said.
He said that the government should allow deferred payment of existing loans as many factories would have to shut down without the facility.
In order to protect employment in the industry, the government should provide support to the factories as the world has never experienced such a pandemic before, Faruque said.
The BGMEA president also demanded a stimulus package like that given in the previous year to pay workers’ wages for the months of April, May and June along with festival allowances.
Source: NewAge Business News
