May include inputs such as fabric, fibre, filaments to ensure greater value addition The Textile Ministry is re-considering the products shortlisted so far for qualification under the production-linked incentive (PLI) scheme for the textiles sector and is looking at including inputs such as fabrics and filaments in both the man-made fibre (MMF) and technical textiles categories to incentivise more value addition in the country…….
Source: The Hindu Businessline
Exporters, which are majority MSMEs dealing with uncertainty while finalising and negotiating new export orders, have been urging the government for immediate notification of rates to factor them and overall guidelines while executing new orders. Remission rates and guidelines for export items under the new Remission of Duties and Taxes on Exported Products (RoDTEP) scheme are likely to notified in 10 days, Ajai Sahai, Director General and CEO, Federation of Indian Export Organisations (FIEO) told Financial Express Online. During the implementation of the scheme on January 1, 2021, the Ministry of Finance had said that it would “shortly” notify the details of export goods (tariff lines) eligible for the scheme, the applicable RoDTEP rate, value caps (wherever applicable) on such eligible goods/tariff lines, the excluded category of exports, other conditions and restrictions, and the procedural details for grant of RoDTEP duty credit, and utilisation. However, exporters — majority MSMEs dealing with uncertainty while finalising and negotiating new export orders — have been urging the government since then for immediate notification to factor rates and overall guidelines for executing new orders. “We are expecting rates to be notified very shortly, in a week to 10-day time or maybe this week only. I have been given to understand that it has come to Commerce (ministry) and the issue has been discussed. I’m pretty hopeful that rates and guidelines will be notified this week or latest in the next 10 days,” Sahai said. Comments from Director General of Foreign Trade (DGFT) Amit Yadav were not immediately available to confirm the timeline for notification of rates. The RoDTEP scheme, which had replaced the Merchandise Exports from India Scheme (MEIS) on January 1, 2021, to improve the global competitiveness of Indian exports, was approved last year for reimbursement of taxes, duties, and levies at the central, state, and local level. These were earlier not refunded but incurred in the process of manufacture and distribution of exported products. The scheme was budgeted only Rs 13,000 crore for FY22 — way below its initial estimated annual cost of Rs 50,000 crore and also only a third of the Rs 39,097 crore approved by the government for exporters in FY20 under MEIS for many sectors, Financial Express had reported in March. Last month, Commerce Minister Piyush Goyal had also informed Rajya Sabha MP Suresh Prabhu that the Department of Commerce and Department of Finance are under active consultation for early finalisation of the scheme’s guidelines and rates. The GK Pillai panel was tasked with rates recommendation for the RoDTEP scheme. With a budget lower than expected, exporters believe that RoDTEP rates would be less than the MEIS rates. The incentives under MEIS ranged from 2 per cent to 5 per cent of the free-on-board (FOB) value of exports. “In most of the cases, we should be ready for less than the MEIS rates looking into the budget which has been allocated or unless the government takes a call to not to restrict it with the budget allocation. But if rates are restricted with budget indication, I think we should expect them in most of the cases to be less than MEIS,” added Sahai. Moreover, Indian exporters have been facing challenges in terms of lack of liquidity amid the Covid pandemic. However, there has been no loss of orders. “Since we have a very good order booking position, the delay in rates notification has not impacted much but it has caused liquidity challenge. Fortunately for India, the orders are constantly flowing and we are still flush with orders. Of course, it has put pressure on liquidity, affected the profitability of exporters as the money which was due to them in January, if it comes in June or July then they would have to borrow for that much of time. So, the profitability of the exporter today is probably at the lowest ebb at this point of time,” said Sahai. To avail scheme, the exporter has to claim for RoDTEP in the shipping bill by making a declaration. The claim will be processed by the Customs post export general manifest (EGM) is filed. Further, a scroll with all shipping bills for admissible amount is generated and made available in the user’s account at Indian Customers Electronic Gateway (ICEGATE).
Source: Financial Express
As the UK kickstarts trade negotiations with India, UK Fashion and Textile Association (UKFT) director of international business Paul Alger discusses the potential impacts on the fashion industry. On 25 May trade secretary Liz Truss launched a 14-week consultation to seek the views of the public and businesses on a trade deal with India. The UK government wants a deal that slashes barriers to doing business and trading with India’s £2trillion economy and market of 1.4 billion consumers. Any deal will have a huge impact on the UK fashion and textile industry: India is the largest country in the Commonwealth, has strong links to the UK, and English is used as a lingua franca, so ultimately, it is a part of the world with which the UK would like a free trade agreement. A deal will be politically and symbolically important for the UK. However, from UKFT’s point of view, there are several big issues.
1 Overcoming obstacles to exporting
We’re keen to see UK companies being able to export more easily to India. That would require a more level playing field, as India is notoriously protectionist. One of the big things to remember is that textiles, and fashion manufacturing and exporting, are at the very heart of the Indian psyche. India used to be forced to buy its fabrics from the UK, especially from Manchester. The “homespun” spinning wheel at the heart of the Indian flag is a constant reminder that manufacturing raw materials is not only a very, very important part of its export machine, but it is also hot wired to national identity. It makes it very difficult to export anything to India but some UK brands have found ways to get their goods into the market, especially if they are made locally under licence. However, there is potential to sell British textiles – for example, suiting fabrics – to India’s tailors. For the UK textile companies it is of interest. The problem is that India is notoriously difficult, albeit that it now ranks 63rd in the World Bank’s "Ease of Doing Business index" – way ahead of Bangladesh and Pakistan – but UK companies will tell you that the business culture is not supportive of fashion and textile imports, and that brands will need to consider relocating their manufacturing to India or nearby Sri Lanka. Menswear brand Simon Carter, for instance, has built a fantastic business in India, and its eponymous founder has had to become very nimble to do so with local production. It can be done, but India remains a net exporter to the UK and a free trade agreement is only likely to increase what we buy in from the country.
2 Generalised Scheme of Preferences (GSP)
While we are interested to see if there is potential for the UK to be an export hub of premium and luxury goods to India, there is also an opportunity for us to reduce the costs of imports. This would give our manufacturers access to cheaper raw materials. However, if you bring in cheap goods from places where there is no social protection and worker conditions are worse than they are in the UK, this is effectively lowering standards, and potentially undermines the UK's commitment to sustainability and ethical trade, which we all want to develop. The UK already imports a lot of fashion and textiles from India but duty and import VAT are paid at the most-favoured-nation rate [the World Trade Organization estimates that India's applied most-favoured-nation rate import tariffs are 13.8% and the highest of any major economy]. Depending on what deal is done, those rates would drop but we would hope they would not drop to 0%, as this would undermine our Generalised Scheme of Preferences (GSP) – a set of European Union rules that allow exporters from developing countries to pay less or no duties on their exports to the bloc. The UK has its own GSP and India is not on that scheme, but Pakistan and Bangladesh are. Unlike India, they are emerging economies, and are supposed to benefit from preferential tariff treatment when goods arrive in the UK. While our retailers are interested in getting easier and cheaper access to Indian products, we’re making it clear to government we do not wish to do so at the expense of GSP relating to Bangladesh and Pakistan, in particular.
3 Level up not level down
We believe that a deal will be done sometime this year and that it will change the way UK businesses think about India. UK companies have been relatively slow to invest in India, but I think it is important to make sure we get a trade agreement that works for the UK (as much as it will for India) and enables the UK to do more than sign trade deals – that is merely the beginning of the journey. If we think back to the swinging sixties, when the UK was booming, part of this was the appeal of British fashion that benefited from quality embroidery from India. There is the potential for this to be a success and for it to be a useful complement of the government’s levelling-up agenda – if we get the deal right. Get it wrong, and we’ll be at a dangerous long-term disadvantage, which will lead to more discontent. The wrong kind of deal would be where India gets all the benefit and the UK does not benefit. So, for example, if the UK were to reduce or drop all our tariffs on imported goods from India without insisting on similar standards to those we expect from UK suppliers, and secure realistic access to the Indian market for UK goods, that would be a failure for UK plc as a whole. Similarly, if UK banking and insurance, for example, benefit but other UK consumer goods industries are written off, or if the deal does not protect British intellectual property, that would be a failure. What is needed is a deal that protects British jobs and employment throughout the whole UK, and across the majority of industries to support “levelling up”, and enhances mutual trade between the two nations at the same time as raising standards rather than levelling them down. UKFT is broadly supportive of the government’s intention to secure an agreement with India but the challenge is to make sure that, beyond the short-term political and symbolic benefit of a deal, the government does not lose sight of the fact that Indian producers will benefit massively from a free trade agreement. It’s also important for the UK government to support British businesses looking to take advantage of any deal as the Indians will, quite rightly, waste no time in getting their businesses into the UK market. The UK will need to up its game in India. With trade agreements, the devil is always in the detail and, as our exporters are already finding out, the main detail is very much about who physically manufactures what and where. There is no point in having them if your partner gets all the commercial benefits or you fail to help them take advantage of the opportunities.
Source: Drapersonline
Gadkari also stressed on making the country self-sufficient in edible oil production. Union minister Nitin Gadkari on Saturday stressed on increasing the share of the MSME sector in the country's GDP to 40 per cent from 30 per cent currently. Addressing a virtual event, Gadkari said the world is now favouring India instead of China. "We need to increase our GDP growth and agriculture growth rate. We can make Indian economy as one of the strongest economy of the world," the road transport, highways and MSME minister said. Gadkari also stressed on making the country self-sufficient in edible oil production. Noting that due to COVID-19 pandemic, the whole world is in danger, he said, "We are going to win the war against the COVID-19 pandemic." Gadkari said US-based Triton Electric Vehicle LLC will soon enter the Indian market. "Triton Electric Vehicle LLC will enter into Indian market . And this company's electric truck is better than American electric car Tesla," he said.
Source: Economic Times
State industries minister Shahnawaz Hussain said on Monday that the leather, textiles, ethanol production and food processing units, along with the proposed mega food park together have a huge potential to improve the state's economy and also take it to new heights. While a leather hub can be established in Kishanganj district and a leather processing unit in Muzaffarpur, Bihar has become the first state to have its ethanol production policy, as a result of which companies like JSW, Micromax and Indian Smart have submitted their project proposals, Hussain also said. At present, the state has project proposals worth Rs6,199 crore, including Rs4,616 crore for the establishment of food processing units, he said. Shahnawaz was speaking at a webinar organized jointly by the Press Information Bureau, Regional Outreach Bureau and the state's industries department. The theme of the webinar was the scope for food processing units in the state. S K Malviya, additional director general at PIB’s Patna branch also spoke on the occasion. Shahnawaz said Majhipada in Kishanganj is a centre from where raw leather is being sent to other states, besides being exported to other countries. The government’s plan is to create a leather hub in Kishanganj district and a leather processing unit in Muzaffarpur. As to the scope for ethanol production in Bihar, the minister said the companies have been showing active interest in establishing their units in the state, since it has become the first to have its ethanol policy. The establishment of ethanol production plant will help farmers in selling their damaged grain to the industries department at the rates fixed for fresh grains. It, in turn, will enhance the income of the farmers. The damaged grains will be used to produce ethanol fuel, which is cheaper than petrol and diesel, Hussain said. He said the companies offering to open their units in the state will be allotted land within seven days of the submission of the proposal. Besides, the state government has already transferred the land of all the closed sugar mills to the industries department. Presenting the overall scope for the food processing, leather and textile units, as well as ethanol production plants and the mega food park, Hussain said the state has improved infrastructure like road, air and waterways, while an inland container depot was under construction. Trade and commerce will be conducted smoothly with other states and neighbouring countries, he added.
Source: Times of India
Industry and investment-friendly policies made it No 1 even amid pandemic and the momentum will only continue. Due to the Covid-19 pandemic, since March 2020 the economy of not only India but the entire world has weakened tremendously and a major factor is unemployment. The challenge before the nation is how to push the economic growth in next financial year. As foreign direct investment can provide a major boost to the economy, the central government has taken several measures for FDI policy reforms. Investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. In this context, the Government of Gujarat, under the leadership of chief minister Vijay Rupani, has set an example for other states on how to handle both the pandemic and the economy simultaneously. According to official data released late last month, Gujarat has received the highest FDI during FY 2020-21 with 37% share of the total FDI equity inflows, followed by Maharashtra (27%) and Karnataka (13%). Majority of the equity inflow of Gujarat has been reported in the Computer Software & Hardware sector (94%). Despite the health crisis, the country’s inflows grew by 19 percent year-on-year to a record $59.64 billion. Gujarat recorded garnered Rs 1.77 lakh crore among them. Gujarat attracts investments due to its industrial and investment friendly policy. It is one of the leading industrialised states in India and one of the fastest growing economies in the world. One of the most progressive states of the country, Gujarat and its transformational model today is one of the key contributors towards shaping a New India. The corridors of the government offices during the lockdown experienced the state’s re-strategizing of the industrial growth model. Gujarat is not only among the pioneers of India’s growth story but also a leader in various sectors including petrochemicals, textiles, pharmaceuticals, automobiles, and gems and jewellery, and now the government is focusing on computer software and hardware. Although the 2021 edition of the biennial Vibrant Summit had been called off because of the pandemic, the intent is to keep the investment momentum going. The state government has written personal letters to the chairmen and CEOs of over 700 global companies based in over 50 countries, inviting them to invest in Gujarat. The companies which have been approached are those which are looking to expand their operations or shift their units out of China in the post-Covid era. These companies are from about 40 diverse sectors ranging from pharmaceuticals to finance technology (fintech). The government of India is also partnering with the state government in its endeavour to attract fresh investment. Union ministries and departments like department for promotion of industry and internal trade (DPIIT), department of electronics & IT, and the ministries of textiles, pharmaceuticals and chemicals have assured full support to the latest endeavour by the state government. Armed with a new industrial policy which offers several incentives to businesses, plugand-play infrastructure for industries at the special investment regions (SIR) of Becharaji and Dahej and the GIFT city which is a hub for fintech companies, the Gujarat government aims to provide the best business environment to companies from a variety of sectors. In India, Gujarat has been the most preferred business and investment destination for large multinationals for the past several years. The state government has set out a target to attract at least 10% of these companies who are looking to set up new facilities in the ASEAN region.
Source: Governance Now
High import tariffs and inverted duties are hurting all export businesses which use imported ingredients. The exchange rate is too strong and hurting export prospects. We also need to aggressively welcome and set up global value chains on Indian soil. All these aspects have to be taken care of and only then can we hope to ride the ex-port opportunity. Otherwise, we will miss the bus once again India’s export of goods has been clocking a healthy performance for the past three months. It has been $34, 30 and 32 billion in March, April and May respectively. These are a substantial jump over corresponding numbers for the three months of the last year. That’s because the whole world had gone into a lockdown by March last year, and the global movement of merchandise had slumped. So compared to last year, the growth rate of the April number is around 195 per cent, and for March and May, the growth number is equally impressive. So, the proper perspective is to compare the present performance to pre-Covid levels. Here, interestingly, the export number for May 2021 now exceeds that of May 2019 too, showing a healthy growth of around 8 per cent. If this momentum continues, it bodes well for the overall export of goods, which constitute a significant driver of growth. India is a major exporter of refined petrol and diesel, thanks to giant refining capacities which are much in excess of domestic demand. Hence, nearly one-fifth of the merchandise exported constitutes refined petrol and diesel. It is thus an important source of earning foreign exchange for the country. There is a large import component to these petroproduct exports, since crude oil has to be completely imported. There is a similar situation in the gems and jewellery sphere, where uncut diamonds are imported, and polished stones and ornaments are exported. India is a major player in the export of these items and just like petro-products, these too add to the overall dollar earnings. Both of these crucial exports depend on the state of the world economy. For instance, the demand for gems and jewellery would naturally fall during economic slump, as consumer sentiment is weak. But thanks to the stock market rally, if wealth is rising, that will induce an increase in demand for luxury goods. However, in the present context, even if one excludes these two components - petro products and gems and jewellery, the country’s export performance is still impressive and rising. It is powered by agricultural products like cereals, jute and other fibres, by electronic goods, specialty chemicals, iron ore, metal products and textile and clothing. Of course, one needs to examine the data in more granular detail to understand areas of maximum potential and growth momentum
4 sources of spending
The engine of economic growth can be revved up by four demand drivers, or rather four sources of spending. These are consumers, investments (i.e. the demand coming from building new factories), government spending (on things like highways, or rural jobs scheme) and exports (i.e. foreigners spending on Indian goods and services). Presently, as the country is grappling with the second wave of Covid, both the consumer and investment sentiment is weak. This has been confirmed by the Reserve Bank of India’s latest report, as also by the surveys of various industry chambers. One proxy for investment demand is the growth in bank credit, which is barely 5 per cent. This should be growing at around 25 percent to achieve a healthy growth of 8 per cent. Of course, ‘sentiment’ is as much a matter of psychology, as of economics. It can turn positive quite quickly with the right combination of policy, fiscal stimulus, progress of vaccinations, favourable monsoons, and a pick-up in infra spending. If one looks at India’s stock markets, the sentiment there remains quite bullish and the market is scaling new heights every week. Maybe the stock market is anticipating a strong economy a year from now. But the rally is also due to excessive liquidity induced by a liberal monetary policy pursued by the Reserve Bank of India. With so much liquidity and growth in money supply, it is bound to fuel a stock rally. It is important to note that when stock market zooms, it increases the wealth of those at the higher end of the income spectrum. This might actually worsen inequality, since the incomes of the poor are still stagnant, owing to the economic slump.
US, China economies
The situation overseas is quite different. The two largest economies in the world, the US and China, are experiencing very strong economic momentum. This is mainly on account of two reasons. One is vaccine optimism. The rate of vaccination is high and the proportion of the population covered is reaching, or has crossed critical mass. The second reason is a very strong fiscal stimulus. In the US, the stimulus was 15 per cent of the GDP last year, and is expected to exceed that amount this year too. China too has injected strong fiscal support, although its slowdown wasn’t as acute. Due to these factors, these two economies, which are about $35 trillion of the world economy, will grow by at least 5 per cent or even more. India’s economic size is one-tenth of that. So, 5 per cent growth of US and China together is equivalent to India’s economy growth by 50 per cent! That’s the impact of a high base. That’s the scale of the aggregate demand that’s out there. No wonder there are supply bottlenecks becoming visible. Input costs are rising. The Bloomberg commodity price index is nearly 60 per cent higher than last year. Iron ore prices reached nearly $250 a tonne, thanks to the demand from China. Steel prices reached $1,000 a tonne, a price never seen before! World trade is also experiencing an adrenaline rush, manifested in shipping costs. Bulk freight prices are 700 per cent higher compared to one year ago. The question is whether India is ready to tap into this great export opportunity. Even if India’s share in world merchandise trade goes from the present 1.5 per cent to 3 per cent, which is eminently achievable, it will mean a doubling of exports to around $600 billion annually. This will be a boon not just to big industry, but also to small and medium enterprises, and employment intensive sectors like garments, footwear, electronic assembly. For all this to happen, India must ensure that the export incentive schemes are in place. The Return of Duties and Taxes on Export Scheme (RODTEP), which was supposed to replace the Manufacturing Export Incentive Scheme (MEIS) and for services (SEIS) has been delayed by six months. GST refund delay is still a problem. High import tariffs and inverted duties are hurting all export businesses which use imported ingredients. The exchange rate is too strong and hurting export prospects. We also need to aggressively welcome and set up global value chains on Indian soil. All these aspects have to be taken care of and only then can we hope to ride the export opportunity. Otherwise, we will miss the bus once again. Learn from Bangladesh, our neighbour, who is enjoying that bus ride.
Source: Free Press Journal
Demand for consumer goods to go up’ Micro, small and medium enterprises and retailers need to adapt to the home delivery model at the earliest to leverage the anticipated pent up demand for consumer goods over the next three months, according to a survey….
Source: The Hindu
India ranks below four South Asian countries -- Bhutan, Nepal, Sri Lanka and Bangladesh, it said. The overall SDG score of India is 61.9 out of 100. India's rank has slipped by two places from last year to 117 on the 17 Sustainable Development Goals (SDGs) adopted as a part of the 2030 agenda by 193 United Nations member states in 2015, a new report has said. The State of India's Environment Report 2021 revealed that India's rank was 115 last year and dropped by two places primarily because major challenges like ending hunger and achieving food security (SDG 2), achieving gender equality (SDG 5) and building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation (SDG 9) remain in the country. India ranks below four South Asian countries -- Bhutan, Nepal, Sri Lanka and Bangladesh, it said. The overall SDG score of India is 61.9 out of 100. Elaborating statewise preparedness, the report said Jharkhand and Bihar are the least prepared to meet the SDGs by 2030, which is the target year. While Jharkhand lags in five of the SDGs, Bihar lags in seven. It said the states/UTs with the best overall score which are on the path to achieving the SDGs are Kerala, Himachal Pradesh and Chandigarh. The 2030 Agenda for Sustainable Development, was adopted by all United Nations Member States in 2015, which provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. There are 17 SDGs which are an urgent call for action by all countries - developed and developing - in a global partnership. The 17 SDGs adopted by UN member states are SDG1- no poverty, SDG 2-zero hunger, SDG3-good health and well-being, SDG4- quality education, SDG 5- gender equality, SDG 6- clean water and sanitation, SDG 7- affordable and clean energy, SDG 8 - decent work and economic growth, SDG 9-industry, innovation and infrastructure. SDG 10 - reduced inequalities, SDG 11- sustainable cities and communities, SDG 12- responsible consumption and production, SDG 13- climate action, SDG 14- life below water, SDG 15- life on land, SDG 16- peace, justice and strong institutions and lastly SDG 17- strengthening global partnerships for the goals. The report also said that India ranked 168 out of 180 countries in terms of Environmental Performance Index (EPI) which is calculated on various indicators, including environmental health, climate, air pollution, sanitation and drinking water, ecosystem services, biodiversity, etc. India's rank was 172 in the environmental health category, which is an indicator of how well countries are protecting their populations from environmental health risks. According to the EPI 2020 report by Yale University, India ranked 148, 21 positions behind Pakistan which was at 127th position in the category of biodiversity and habitat which assesses countries' actions toward retaining natural ecosystems and protecting the full range of biodiversity within their borders.
Source: Economic Times
The loan has a maturity of 18.5 years including a 5.5-year grace period. The World Bank's Board of Executive Directors has approved a USD 500 million program to support India's nationwide initiative to revitalise the MSME sector, which has been heavily impacted by the COVID-19 crisis. According to a statement released last Friday, the program targets improvements in the performance of 555,000 MSMEs and is expected to mobilise financing of USD 15.5 billion, as part of the government's USD 3.4 billion MSME Competitiveness - A Post-COVID Resilience and Recovery Programme (MCRRP). The USD 500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) Program is the World Bank's second intervention in this sector, the first being the USD 750 million MSME Emergency Response Program, approved in July 2020 to address the immediate liquidity and credit needs of millions of viable MSMEs severely impacted by the ongoing COVID-19 pandemic. "To date, 5 million firms have accessed finance from the government program. With the program approved today, the World Bank's financing towards improving the productivity and financial viability of the MSME sector amounts to USD 1.25 billion over the past year," the statement said. "Having supported the immediate liquidity and credit needs of viable MSMEs in the first phase, the RAMP Program will support the Government of India's efforts to increase MSME productivity and financing in the economic recovery phase, crowd in private sector financing in the medium term, and tackle long-standing financial sector issues that are holding back the growth of the MSME sector," it added. According to the release, the MSME sector is the backbone of the country's economy, contributing 30 percent of India's GDP and 40 percent of exports. Out of some 58 million MSMEs in India, more than 40 percent lack access to formal sources of finance. "The MSME sector, a critical backbone of India's economy, has been hard hit by the Covid-19 pandemic," said Junaid Ahmad, World Bank Country Director in India. "The RAMP program will intensify efforts to support firms to return to pre-crisis production and employment levels, while laying the foundations for longer-term productivity-driven growth and generation of much-needed jobs in the MSME sector." The RAMP program will provide better access to finance and working capital for MSMEs by strengthening the receivable financing markets; and scale up online dispute resolution mechanisms to address the problem of delayed payments. Such efforts are expected to improve the cost-effectiveness, quality, accessibility, impact, and outreach of such schemes. "The MSME sector in India faces several challenges. There is need to strengthen access to formal sources of financial and non-financial services, including of women headed MSMEs, and strengthen coordination in the national and state MSME support programs. Given the magnitude and geographical spread across the country, direct interventions can be prohibitively costly," said Peter Mousley, Lead Private Sector Specialist and World Bank's Task Team Leader for the program. "The RAMP program will support the Government's MCRRP objective of providing a more comprehensive and coordinated Centre-State approach to improve MSME sector productivity, reduce the gender gap, and promote more environmentally sustainable investments." The USD 500 million loan from the International Bank for Reconstruction and Development (IBRD), has a maturity of 18.5 years including a 5.5-year grace period.
Source: Business Standard
India’s goods and services tax (GST) revenue in May amounted to Rs 1,02,709 crore as several states imposed curbs due to the second wave of the pandemic, down from April’s record Rs 1.41 lakh crore. It was 65% higher than Rs 62,009 crore in the year earlier, when the lockdown was in place. May revenue exceeded Rs 1 lakh crore for the eighth month in a row. Some experts said the numbers were higher than expected and pointed to the economy getting back on track.
Source: Economic Times
The Coimbatore District Small Industrial Association (Codissia) on Monday requested the Centre for extending the moratorium period for another year for both term loan repayment and interest dues till June 30, 2022. The industries have been under complete lockdown and have not been able to operate business for the last four weeks and the lockdown of all industries and commercial establishments has now been extended for further one week considering the high number of COVID-19 cases. Codissia president M V Ramesh Babu said in identical letters to different Union Ministries: "We are not confident when we will be allowed to resume normal business operations. There has not been any support from banks/financial institutions." "In spite of all the financial hurdles, considering that our employees have to meet their basic requirements, we have made due payment of wages/salaries for the month of May, 2021," he said in the letter. "There have been no business operations for the entire period of four weeks ZERO collections from our customers and this has completely paralysed our working capital," he said. Thanking Finance Minister Nirmala Sitharaman for granting various stimulus packages to cover the financial impact on the MSME sector during the first wave of COVID-19, the representation said the second wave has been highly strenuous on the entire society. The MSME industry has been affected and the members had taken the social responsibility towards the welfare of their employees and all people in their supply chain, he said. The expenditure for the welfare of the employees and COVID treatment has been huge, he said. Seeking to waive the late fees applicable on delayed filing of GSTR 1, Codissia also requested the Centre to extend the due dates without any condition as to the turnover or tax payable. "Further, due to the complete lockdown, we are not allowed to travel even for submission of documents to banks. In this regard, banks have initiated charging penal charges/penal interest," he said. Therefore, he added, the time limit for submission of stock/book debts statements, end-use certificates, renewal of bank limits shall be given a blanket extension of 90 days and there shall not be any levy of penal charges/penal interest on any account during the period April 2021 to July 2021.
Source: Business Standard
China’s exports rose 27.9 per cent in May while imports grew at the fastest pace in more than a decade as the global economy powers back from the COVID-19 crisis, official data showed yesterday. Demand for China’s goods has bounced after economically painful lockdowns last year due to the pandemic, and as vaccines are rolled out across much of the world. The figures are also boosted by last year’s low base of comparison when the coronavirus was spreading rapidly. Exports from the world’s second-largest economy posted strong growth but came in lower than expectations of 32 per cent. “To be honest, that is a cracking number by anybody’s standard and shows that global demand remains robust,” said OANDA’s Jeffrey Halley. In May, import growth hit its highest rate since January 2011, coming in at 51.1 per cent on-year, also slightly below expectations of a Bloomberg poll of analysts. But still, imports and exports to China’s major trade partners including the Association of Southeast Asian Nations (ASEAN) bloc, the European Union and the United States have risen in the first five months of this year, said customs authorities. “It’s still a fairly healthy set of numbers,” Jonathan Cavenagh, senior market strategist at Informa Global Markets, told Bloomberg TV. “We know that global demand is still recovering and that trend is likely to continue towards the end of the second quarter and into the third quarter as the major developed economies open up.” The lower-than-expected export figure was likely due to port disruptions due to tighter COVID-19 control measures in late May after the coronavirus was detected among staff. “I think there was some disruption in May from ports,” ING Chief Economist for Greater China Iris Pang said, referring to recent congestion at southern China’s Yantian port. Pang added that the Suez Canal incident – when a stranded mega-ship blocked the critical maritime artery for six days in March – had also affected China’s export and import trade. Electronics shipments have bolstered Chinese exports, rising 31.9 per cent on-year in the January to May period, although growth in demand for textiles – including masks to guard against the spread of the virus – have eased, dropping 10.3 per cent. Nomura chief China economist Lu Ting noted that factors behind import growth include rising commodity prices and strong yuan appreciation. Authorities said yesterday the volume and prices of iron ore, crude oil and soya beans imports have risen. China’s overall trade surplus came in at USD45.53 billion in May, an on-year decrease of 26.5 per cent.
Source: Borneo Bulletin
Trade experts and industry leaders welcome the return of freeports - but warn that bespoke detail could be needed to maximise benefits for UK manufacturers. Fleur Doidge reports. Freeports, done wrong, could create a dynamic in which the mightiest or best located stand to gain most – whether the manufacturers seeking favourable taxes and tariffs are UK-based or headquartered abroad. Tax savings and tariff inversion – where manufacturers might enjoy lower tariffs on imported components coupled with lower export charges for the finished items – by their nature are likelier to benefit larger manufacturers than small ones, warns Phil Tomlinson, Professor of Industrial Strategy at the University of Bath. “Empirical evidence suggests freeport status tends to encourage firms to relocate – often a few miles down the road – to be inside the boundary. Thus, freeports are sometimes seen as a ‘beggar thy neighbour’ policy, displacing rather than generating investment,” he says. “Yet, as trade experts at the University of Sussex have shown, the opportunities for UK manufacturers to take advantage of ‘tariff inversion’ is limited, largely because average import tariffs into the UK are already very low, typically lower than export tariffs on final goods.” Phil says manufacturers will likely need to choose either duty drawback or free-trade agreement-based preferential tariffs, with those betting on the latter less likely to invest in or relocate to freeports. Also, high-end or advanced manufacturers, demand for whose products may be less about price, may be less affected by export tariffs anyway. Goods shipped in and out of freeports from elsewhere in the UK may also attract additional paperwork, customs forms and checks, potentially most burdensome for SMEs, Phil notes. Andrew Thurston, Customs Duty Consultant at MHA MacIntyre Hudson accountants, agrees that benefits predicted for the “well intended, ambitious” freeport plan remain uncertain. However, alcoholic drinks, textile, confectionery and food-processing sectors with tariffs over 8% and potential excise may stand to gain most. “The customs-related benefits are certainly less than before 1 January 2021 (before Brexit). Manufacturers may simply move production to freeports for the tax benefits. There’s also uncertainty over controls on manufacturers within a freeport and whether these will be financially viable or burdensome for both HMRC and ports,” Andrew warns.
Will the devil be in the detail?
Johnathan Dudley, National Head of Manufacturing at Crowe UK tax advisers and accountants, sums it up: manufacturers prepared to relocate or partner within a freeport could benefit, as long as services are competitive and not tied up in red tape. “Just like in enterprise zones, there is a danger that they will create areas of poverty ‘around’ the freeport area, too,” Jonathan adds. “It’s essentially a postcode lottery for businesses and those not in the area will be at a disadvantage.” Richard Austin, Head of Manufacturing at business advisory firm BDO, says industry and business clustering, as in freeport zones, can indeed be beneficial. However, a more bespoke approach to manufacturing in particular than is represented in the UK Government freeport plan could be needed. “Businesses need full transparency and long-term industrial strategy that outlives political cycles,” he says, adding that 65% of manufacturers in a BDO survey said they would invest more in the UK if incentivised. Richard Parkinson, Port Director at Marchwood logistics and port managers Solent Gateway, notes that manufacturers setting up new facilities in a freeport that require significant investment, including heavy industry with sufficient footprint, may enjoy customs relief. “Industries that benefit least include those that want to push items straight through a port – customs benefits are centred on storage over 90 days or assembly/manufacture inside a customs site,” he explains.
Will it be worth moving to a freeport?
Christy Wilson, associate at law firm Katten Muchin Rosenman UK, says freeports are intended to be special economic zones in which doing business becomes easier and cheaper. Wilson says manufacturers in UK freeports may enjoy: • Duty deferral for goods on site • Duty inversion where tariff on finished goods is lower than on components • Duty exemption for goods imported for processing, then re-exported • Suspension of import VAT • Simpler importing procedures • Tax incentives enhanced 10% over 10 years for non-residential buildings (until 2026) • First-year capital allowance of 100% for plant and machinery investment (until 2026) • Stamp Duty Land Tax (SDLT) exemption on property acquisition (until 2026) • Five years of business rates relief for new or relocated businesses • 0% Employer’s National Insurance Contributions for up to nine years
Source: The Manufacturer
Ventile has launched an all-new fabric construction for the brand in the form of the 100 per cent recycled cotton, Ventile Eco 430 and Ventile Eco 420. The company, based in Switzerland, produces the most effective, natural, all-weather cotton textile, which is grown sustainably. It is the best choice for durability, reliability, and all-round performance. Harnessing the heritage of constructing innovative fabrics, Ventile launched its first recycled cotton range in 2018 with the Ventile Eco Recycled 400, a higher-weight recycled fabric. Now, the experts behind the brand have expanded the range to include a higher-weight contrasting-weave 100 per cent recycled cotton fabric, the Eco Recycled 430 and Eco Recycled 420, which is markedly different from anything produced by the brand before, according to a media statement by the company. The brand wanted to challenge what is possible with coarse recycled yarns. The result is this; a woven, textured fabric made from a contrasting weave and weft. It utilises strands that are pre-dyed before weaving and are five times heavier than those used in previous fabrications, a first for the range. Combining a coarse, heavier-weight recycled yarn with weaving techniques known as a Twill weave, and a Panama weave, gives the fabric its rigid properties as well as making it suitable for machine washing, Ventile said. Unlike many recycled fabrics on the market, both the 420 and 430 are made from 100 per cent recycled cotton. The fabrics are sourced from pre-consumer off-cuts which are then stripped and re-purposed into the finished product. In addition, both the 420 and 430 have been tested to 300 mm pressure under a hydrostatic head test. With a weight of 420 grams and 430 grams respectively, the new fabrications are the heaviest weight fabrics to be available from Ventile and offer designers a great ecological option for shoes, bags, and mid-weight jackets, according to Ventile. “When we go through the process of developing a new fabric, we are always guided by our heritage. The inspiration behind the 430 and 420 fabrics is the drive to innovate, just like the scientists that developed Ventile back in 1943. For these new products we wanted to add a different dimension to our Eco range and play with how we use colour and coarse yarns in our fabric and we are thrilled with the results,” Ventile marketing manager, Daniel Odermatt said.
Source: Fibre2Fashion
