Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman here today announced a slew of measures to provide relief to diverse sectors affected by the 2nd wave of COVID-19 pandemic. The measures announced also aim to prepare the health systems for emergency response and provide impetus for growth and employment. Union Minister of State for Finance & Corporate Affairs Shri Anurag Singh Thakur; Finance Secretary Dr T.V. Somanathan; Secretary, DFS, Shri Debashish Panda and Secretary, Revenue, Shri Tarun Bajaj were also present during the announcement of relief package. A total of 17 measures amounting to Rs. 6,28,993 crore were announced. These included two measures announced earlier, i.e. the additional Subsidy for DAP & P&K fertilizers, and extension of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from May to November, 2021.
The measures announced today can be clubbed into 3 broad categories:-
1. Economic Relief from Pandemic
2. Strengthening Public Health
3. Impetus for Growth & Employment
I. Economic relief from Pandemic
Eight out of 17 schemes announced here today aim at providing economic relief to people and businesses affected by the COVID-19 pandemic. Special focus is on health and reviving travel, tourism sectors.
Under this new scheme, additional credit of Rs 1.1 lakh crore will flow to the businesses. This includes Rs 50,000 crore for health sector and Rs 60,000 crore for other sectors, including tourism. The health sector component is aimed at up scaling medical infrastructure targeting underserved areas. Guarantee cover will be available both for expansion and new projects related to health/medical infrastructure in cities other than 8 metropolitan cities. While the guarantee cover will be 50% for expansion & 75% for new projects. In case of aspirational districts, the guarantee cover of 75% will be available for both new projects and expansion. Maximum loan admissible under the scheme is Rs. 100 crore and guarantee duration is up to 3 years. Banks can charge a maximum interest of 7.95% on these loans. Loans for other sectors will be available with an interest cap of 8.25% p.a. Thus the loans available under the scheme will be much cheaper compared to the normal interest rates without guarantee of 10-11%.
The government has decided to expand the Emergency Credit Line Guarantee Scheme (ECLGS), launched as part of Aatma Nirbhar Bharat Package in May, 2020, by Rs 1.5 lakh crore. ECLGS has got a very warm response with Rs 2.73 lakh crore being sanctioned and Rs 2.10 lakh crore already disbursed under the scheme. Under the expanded scheme, limit of admissible guarantee and loan amount is proposed to be increased above existing level of 20% of outstanding on each loan. Sector wise details will be finalized as per evolving needs. The overall cap of admissible guarantee is thus raised from Rs. 3 lakh crore to Rs. 4.5 lakh crore
This is a completely new scheme announced today which aims to benefit the smallest of the borrowers who are served by the network of Micro Finance Institutions. Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or MFIs for on lending upto Rs 1.25 lakh to approximately 25 lakh small borrowers. Loans from banks to be capped at MCLR plus 2%. Maximum loan tenure will be 3 years, and 80% of assistance to be used by MFI for incremental lending. Interest rates will be at least 2% below maximum rate prescribed by RBI. The scheme focuses on new lending, and not on repayment of old loans. MFIs will lend to the borrowers in line with extant RBI guidelines such as number of lenders, borrower to be member of JLG, ceiling on household income & debt. Another feature of the scheme is that all borrowers (including defaulters upto 89 days) will be eligible. Guarantee cover will be available for funding provided by MLIs to MFIs/NBFC-MFIs till March 31, 2022 or till guarantees for an amount of Rs. 7,500 crore are issued, whichever is earlier. Guarantee will be provided upto 75% of default amount for upto 3 years through National Credit Guarantee Trustee Company (NCGTC) No guarantee fee to be charged by NCGTC under the scheme.
Another new scheme announced today aims at providing relief to people working in tourism sector. Under new Loan Guarantee Scheme for COVID-affected sectors, working capital/personal loans will be provided to people in tourism sector to discharge liabilities and restart businesses impacted due to COVID-19 pandemic. The scheme will cover 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments; and about 1,000 Travel and Tourism Stakeholders (TTS) recognized by Ministry of Tourism. TTS’s will be eligible to get a loan upto Rs. 10 lakh each while tourist guides can avail loan upto Rs 1 lakh each. There will be no processing charges, waiver of foreclosure/prepayment charges and no requirement of additional collateral. Scheme to be administered by the Ministry of Tourism through NCGTC.
This is another scheme aimed at boosting the tourism sector. It envisages that once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued visa free of charge to visit India. However, the benefit will be available only once per tourist. The facility will be applicable till 31st March, 2022 or till 5 lakh visas are issued, whichever is earlier. Total financial implications of the scheme to the government will be Rs 100 crore.
Aatma Nirbhar Bharat Rozgar Yojana was launched on 1st Oct, 2020. It incentivises employers for creation of new employment, restoration of loss of employment through EPFO. Under the scheme, subsidy is provided for two years from registration for new employees drawing monthly wages less than Rs. 15,000 for both Employer’s and Employee’s share of contribution (total 24% of wages) for establishment strength upto 1,000 employees; and only employee’s share (12% of wages) in case of establishment strength of more than 1,000. Benefit of Rs. 902 crore has been given to 21.42 lakh beneficiaries of 79,577 establishments under the scheme till 18.06.2021. The government has decided to extend the date of registration under the scheme from 30.6.2021 to 31.03.2022.
Additional subsidy to farmers for DAP and P&K fertilizers was announced recently. Details of the same were furnished. Existing NBS subsidy was Rs. 27,500 crore in FY 2020-21 which has been increased to Rs. 42,275 crore in FY 2021-22. Thus, the farmers will benefit by an additional amount of Rs. 14,775 crore. This includes Rs. 9,125 crore additional subsidy for DAP and Rs. 5,650 crore additional subsidy for NPK based complex fertilizer.
Free food grains under Pradhan Mantri Garib Kalyan Yojana (PMGKY) from May to November, 2021
In the last Financial Year, the government has spent Rs. 133,972 crore under PMGKY to ameliorate the hardships faced by the poor due to economic disruption caused by COVID19 Pandemic. The scheme was launched initially for the period from April to June 2020. However, keeping in view the need for continuous support to the poor and the needy, the scheme was extended till November 2020. In the wake of the second wave of COVID-19 pandemic, the scheme was relaunched in May 2021 to ensure food security of poor/vulnerable. Five kg of food grains will be provided free of cost to NFSA beneficiaries from May to November 2021. Estimated financial implications of the scheme will Rs 93,869 crore, bringing the total cost of PMGKY to Rs 2,27,841 crore.
II. Strengthening Public Health
Rs. 23,220 crore more for public health with emphasis on children and paediatric care/paediatric beds Besides supporting the health sector through credit guarantee scheme, a new scheme for strengthening public health infrastructure and human resources with outlay of Rs. 23,220 crore was also announced. The new scheme will focus on short term emergency preparedness with special emphasis on children and paediatric care/paediatric beds. An outlay of Rs. 23,220 crore is earmarked for the scheme to be spent in the current financial year itself. Under the scheme funds will be available for short-term HR augmentation through medical students (interns, residents, final year) and nursing students; increasing availability of ICU beds, oxygen supply at central, district and sub-district level; availability of equipment, medicines; access to tele-consultation; strengthening ambulance services; and enhancing testing capacity and supportive diagnostics, strengthen capacity for surveillance and genome sequencing.
III. Special attention has been paid by the Government to provide impetus for growth and employment. For this the following eight schemes were announced: -
Earlier focus on developing higher yield crop varieties lacked attention towards nutrition, climate resilience and other traits. In these varieties, concentration of important nutrients was far below required level, and they were susceptible to biotic and abiotic stresses. ICAR has developed bio-fortified crop varieties having high nutrients like protein, iron, zinc, vitamin-A. These varieties are tolerant to diseases, insects, pests, drought, salinity, and flooding, early maturing and amenable to mechanical harvesting also developed. 21 such varieties of rice, peas, millet, maize, soyabean, quinoa, buckwheat, winged bean, pigeon pea & sorghum will be dedicated to the nation.
North Eastern Regional Agricultural Marketing Corporation (NERAMAC) was established in 1982 to support farmers of North-East in getting remunerative prices of agri-horticulture produces. It aims to enhance agricultural, procurement, processing and marketing infrastructure in North-East. 75 Farmer Producer Organisations/Farmer Producer Companies are registered with NERAMAC. It has facilitated registration of 13 Geographical Indicator (GI) crops of North-East. The company has prepared business plan to give 10-15% higher price to farmers by-passing middlemen/agents. It also proposes to set up North-Eastern Centre for Organic Cultivation, facilitating equity finance to entrepreneurs. A revival package of Rs 77.45 crore will be provided NERAMAC.
National Export Insurance Account (NEIA) Trust promotes Medium and Long Term (MLT) project exports by extending risk covers. It provides covers to buyer’s credit, given by EXIM Bank, to less credit-worthy borrowers and supporting project exporters. NEIA Trust has supported 211 projects of Rs 52,860 crore in 52 countries by 63 different Indian Project Exporters till March 31, 2021. It has been decided to provide additional corpus to NEIA over 5 years. This will enable it to underwrite additional Rs. 33,000 crore of project exports.
Export Credit Guarantee Corporation (ECGC) promotes exports by providing credit insurance services. Its products support around 30% of India’s merchandise exports. It has been decided to infuse equity in ECGC over 5 years to boost export insurance cover by Rs. 88,000 crore.
Out of 2,50,000 Gram Panchayats, 1,56,223 Gram Panchayats have been made service ready by 31st May, 2021. It is proposed to implement BharatNet in PPP model in 16 States (bundled into 9 packages) on viability gap funding basis. For this, an additional Rs. 19,041 crore will be provided. Thus, total outlay under BharatNet will be enhanced to Rs. 61,109 crore. This will enable expansion and upgradation of BharatNet to cover all Gram Panchayats and inhabited villages.
PLI scheme provides incentive of 6% to 4% on incremental sales of goods under target segments that are manufactured in India, for a period of five years. Incentives are applicable from 01.08.2020 with base year as 2019-20. However, the companies have been unable to achieve incremental sales condition due to- disruption in production activities due to pandemic related lockdowns; restrictions on movement of personnel; delay in installation of relocated plant and machinery; and disruption in supply chain of components. Therefore, it has been decided to extend the tenure of the scheme launched in 2020-21 by one year i.e. till 2025-26. Participating companies will get option of choosing any five years for meeting their production targets under the scheme. Investments made in 2020-21 will continue to be counted as eligible investments.
Revamped Reforms-Based, Result-Linked power distribution scheme of financial assistance to DISCOMS for infrastructure creation, up-gradation of system, capacity building and process improvement was announced in the Union Budget of 2021-22. It aims at state specific intervention in place of “one size fits all”. Participation in the scheme is contingent to pre-qualification criteria like publication of audited financial reports, upfront liquidation of State Government’s dues/subsidy to DISCOMS and non-creation of additional regulatory assets. Under the scheme, it is aimed to provide assistance for installation of 25 crore smart meters, 10,000 feeders, 4 lakh km of LT overhead lines. Ongoing works of IPDS, DDUGJY and SAUBHAGYA will also be merged in the scheme. Total outlay for the scheme is Rs. 3,03,058 crore, out of which the Central Government’s share will be Rs. 97,631 crore. The amount available under the scheme is in addition to the allowed additional borrowing of 0.5% of Gross State Domestic Product which will be available to the States annually for the next four years subject to carrying out specified power sector reforms. The amount of borrowings available this year for this purpose is Rs 1,05,864 crore.
Current process for approval of Public Private Partnership (PPP) projects is long and involves multiple levels of approval. A new policy will be formulated for appraisal and approval of PPP proposals and monetization of core infrastructure assets, including through InvITs. The policy will aim to ensure speedy clearance of projects to facilitate private sector’s efficiencies in financing construction and management of infrastructure.
Source : PIB
• The program will begin from Nagpur followed by other important cities in Maharashtra Indian Bank launches its flagship Business Mentoring Program ‘MSME Prerana’ in the state of Maharashtra. ‘MSME Prerana’ is a novel, unique and innovative business mentoring program, first of its kind to empower MSME Entrepreneurs. The program will begin from Nagpur followed by other important cities in Maharashtra. While launching this flagship program, Shri Nitin Gadkari, Hon’ble Union Minister of MSME and Road, Transport and Highway said, “I thank and appreciate Indian Bank team for thinking out of the box and introducing this great initiative for MSMEs." He further added, "The sector contributes 30% to Indian GDP and 48% to exports while creating 11 crore jobs in India. I suggest banks to introduce a mechanism which can help in evaluating the financial ratings of the MSMEs at the preliminary stage. New entrepreneurs have the energy, skill and talent and timely support to MSMEs by financial institutions like Indian Bank will help expedite the growth of this sector. Such steps can helps us in bringing down the imports by becoming Atmanirbhar. With this initiative I am confident that the MSME sector will succeed in this field." Indian Bank is providing financial support to its 20 lakhs MSMEs with credit exposure of over ₹70,180 cr ‘MSME Prerana’ has been launched with an aim to develop managerial and financial capabilities of MSME Entrepreneurs besides creating awareness on various initiatives taken by GOI / State Govts. / RBI and Other agencies. Currently, Maharashtra accounts for ~15% of India’s GDP gained through some of the prominent sectors such as BFSI, Entertainment, Textiles, auto & auto ancillary space. As per the MSME Annual Report by the Ministry, Maharashtra is one of the top 5 states with ~48 lakh estimated MSMEs reflecting the relevance of this program to enhance productivity of the businesses in the state. Smt. Padmaja Chunduru, MD & CEO, Indian Bank said, “We are delighted to extend our flagship program MSME Prerana to our customers in Maharashtra. We are the 7th largest Public Sector Bank in the country, and in the MSME segment we are the second largest in terms of % growth (15%). Maharashtra being one of the important markets for our Bank, it is our endeavour to instil confidence among small entrepreneurs and equip them with business acumen. We are committed on taking this one of its kind program to other cities and empower the entrepreneurial community."The program christened MSME Prerana has been designed in collaboration with Poornatha and Co. to empower entrepreneurs in driving business more efficiently by optimizing value and capacity. ‘MSME Prerana’ adopts a step-by-step approach in providing training to MSME,to understand their business numbers, concept of balance sheet, cash flow management, managing their business during the crisis time, decision making, communication and leadership skills, awareness on various initiatives taken by Govt. / RBI / Bank. The trainers/coaches extend hand holding supports to Entrepreneurs for on boarding to various digital platform viz Udayam Registration, TReDS, MSME SAMADHAN, GeM portal etc. This business mentoring program enhances the confidence & sense of empowerment especially among women Entrepreneurs. Women found that knowledge and business planning helped them to set goal and target for their enterprises. MSME Prerana’ has broken the geographical and language barriers by extending web based training to Entrepreneurs in local dialects using simple terminologies without using jargons. A series of 10 virtual programs have been successfully conducted in the state of Uttar Pradesh, Tamil Nadu, Pondicherry and parts of Uttarakhand. According to a release by the bank, ‘MSME Prerana’ is spreading its outreach to Andhra Pradesh, Telangana and Gujarat during June/July, 2021 and will be conducted in all major languages pan India in a phased manner.
Source: Livemint
Minister for MSME and Road Transport and Highways Shri Nitin Gadkari has emphasized that all-round efforts are required for implementation of various initiatives undertaken as part of Aatmanirbhar Bharat. Addressing, a Virtual Conference on Indian MSMEs as Growth Engines to Economy on the occasion of International MSME Day the minister mentioned that in the journey of making Aaatmanirbhar Bharat, it is imperative that special focus is laid towards Agriculture, Food Processing industry, Leather and Tribal Industries. Further he also urged to make use of technology and mentioned that research, innovation and quality improvement can play a major role in industrial development. On this special occasion, Minister for MSME, Shri Nitin Gadkari launched the integrated services of Udyam Registration Portal with Common Service Centre (CSC) Portal to increase penetration of benefits of various Government schemes amongst MSMEs in far-flung areas. Minister of State for MSME and Animal Husbandry, Dairying & Fisheries, Shri Pratap Chandra Sarangi stated that Ministry is supporting MSMEs through various schemes and initiatives to enhance manufacturing competitiveness and unleash the true potential of MSMEs. He also emphasized on the importance of Import substitution and encouraged MEMEs to adopt digital tools and techniques in unprecedented times, to re-build and craft new models that will ensure speedy revival of their businesses and become future ready. During the Panel Discussions chaired by Secretary (MSME) and Additional Secretary & Development Commissioner (MSME), special emphasis was laid on Export promotion and making use of Free Trade Agreements (FTA) for achieving India’s goal of becoming a $5 trillion economy by 2025. In another Session on Enabling MSME E-commerce for Business Beyond Borders, it was highlighted that in recent years, the emergence of online markets through e-commerce has boosted and had a positive impact on MSMEs. By adopting e-commerce, MSMEs stand to gain significant advantages such as increased revenues and margins, improved market reach, access to new markets, savings in marketing spending, customer acquisition and enhanced customer experience. Ministry of MSME is committed towards providing requisite support to the MSMEs and upcoming entrepreneurs in strengthening Indian economy and working towards vision of Aatmanirbhar Bharat. On the occasion of International MSME Day,the Virtual Conference on Indian MSMEs as Growth Engines to Economy was organised by the Ministry of MSME in association with India SME Forum, Electronics & Computer Software Export Promotion Council, Export Promotion Council for Handicrafts, the Gem & Jewelry export promotion council, Council for Leather Exports and All India Plastics Manufacturers’ Association on role of MSMEs in fueling the growth to achieve the PM’s vision of USD 5 Trillion Economy.
Source: PIB
India likely to kick start talks for FTAs with UK and EU by 2021-end, is also focusing on resuming trade talks with Canada, Australia Inking free trade agreements (FTAs) will India’s major trading partners such as the United States, United Kingdom, European Union, Australia, New Zealand, Canada, Israel, among others, will boost exports and help in attracting more foreign investments into the country, Federation of Indian Exports Organisation (FIEO) said on Monday. “One of the reasons for the success of Vietnam, in attracting investment and relocating units, is its effective FTAs with the rest of the World. It is extremely encouraging that the government is moving simultaneously with many trade partners in this direction. We are confident that the Industry will play a proactive role in such negotiations and will give required elbow room to our negotiators,” FIEO’s new President A Sakthivel said in a virtual briefing. India is likely to kick start formal negotiations for FTAs with the UK and EU by the end of 2021, soon after the preparatory work is completed. India is also focusing on resuming trade talks with Canada, Australia. Negotiations with new countries such as Israel are also being considered. While the Centre’s $400 billion target for exports for 2020-2021 looks ‘little ambitious', Sakthivel said that in order to achieve this, it would require aggressive marketing strategy and venturing into new markets. According to official data, merchandise exports in the first two months of the fiscal year was $62.9 billion, up 12 per cent as compared to AprilMay 2019. FIEO has urged the government to look into increasing market access initiative funds and formulate a scheme for marketing with a minimum corpus of Rs 1,000 crore annually, to take exports to $1 trillion in the next five years. Since traditional export sectors have not been losing their share in the global market amid stiff competition from other nations, there is also a need to push growth in sunrise sectors such as electronics, machinery, pharma, networking products, among others, according to the apex trade promotion organisation. Sakthivel further said that delay in issuing refunds on exports has resulted in limiting liquidity for exporters. For instance, as far as the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is concerned, in the absence of the rates, exporters are perplexed as to how they compute the benefit in the scheme for quoting for new orders. The liquidity of exporters have also been affected as they could not get refunds for exports made from 1st January, 2021 onwards, FIEO said, adding that there is also a need to release the benefits under Merchandise Exports from India scheme (MEIS) scheme for April-December 2020.
Source: Business Standard
In a new initiative by Indian railways, the transportation of raw material like yarn, fabric and goods from Ludhiana’s textile and garment companies will be exported directly by train to Bangladesh. Railway’s Ambala division in collaboration with MGH Group has started this facility and on Sunday it was for the first-time railways loaded a special parcel train full of cotton yarn beyond the country borders to Benapole in Bangladesh from Ambala Cantt station. This train, which consists of 20 parcel vans (VPU), was flagged off on Monday in the presence of senior railway officials at Ambala. According to the Railways, the customers opting for this facility will get end to end transportation solution like exporting yarn, Fabrics & FMCG (Fast Moving Consumer Goods) from their respective factories across Ludhiana and Baddi to their buyers’ factories in Bangladesh including the customs clearance on both the sides of border. Some of the potential customers form Ludhiana include Aarti International, Cedaar Textiles, Garg Acrylic, Nahar Spinning & Vardhman Textiles. Speaking on the occasion, Senior DCM, Vivek Sharma said, “Earlier, the businessmen in and around Punjab & Haryana were transporting commodities like yarn, fabrics & goods by road to Bangladesh in small quantities and at very high freight cost. During the lockdown period, they were unable to transport these by road and it was then Railway staff and Officials approached the consignors and explained them about the facilities to transport by Rail. Accordingly, they have moved the cotton yarn by rail in bulk through goods trains, but for moving the consignment by Goods trains, it is mandatory for the farmers and merchants to mobilise the quantity in bulk.” Sharma also added, “To mitigate this problem and to facilitate the Rail users to move their quantities in smalls like up to a maximum of 500 tonnes in each trip, Ambala Division of Northern Railway took the initiative and started the Special Parcel train to Bangladesh. This has helped the merchants to market their products beyond the country border by transporting the Cotton Yarn in small quantities through Special Parcel train. Accordingly, one special parcel train consisting of 20 parcel vans moved to Benapole in Bangladesh. Each VPU was loaded with 430 cartons, weighing around 23 tonnes and the total weight carried by the special parcel express is around 468 tonnes. The cost per tonne for carrying by Special Parcel train is Rs 5,491 and which is very cheap and economical as compared to Road transport which is much higher. This will be the first of its like traffic from Northern Railway catering the yarn industry of Northern India & earned the freight of Rs 25,69,630 According to Sunil Tangri, commercial head of Vardhman Textiles, Ludhiana, "The train service to Benapole will help the whole textile industry in this region to commit to stringent delivery schedule and that in turn will increase India’s exports and boost economic trade between two neighboring countries." Other officials who were present on the flagging off ceremony of the train included Dr Ritika Vashisht, DCM-I Ambala, Dr Kanishka, DCM-II Ambala, Himanshu Pant, director & CEO of MGH India.
Source: Times Of India
The park will not only enhance Noida’s stature in the garment and textile sector within the country, but also contribute significantly towards making UP the textile hub of North India. Decks have been cleared for the construction of the first textile park of Uttar Pradesh in Noida with the Yamuna Expressway Industrial Development Authority (YEIDA) allotting 150 acres of land for the park. The Apparel Export Cluster (textile park) to be built in Noida is yet another initiative by the Yogi Adityanath Government to make UP the textile hub of North India. A total of 152 companies will set up their factories at the textile park at the estimated cost of Rs 8365.73 crore while about five lakh people will get employment in these firms. The construction of 91 textile and garment factories is expected to start in the first month of next year. On completion of construction of 91 textile and garment factories, two lakh people will get employment. The park will not only enhance Noida’s stature in the garment and textile sector within the country, but also contribute significantly towards making UP the textile hub of North India. It is worth mentioning here that Uttar Pradesh is the third largest textile producing state of the country. The share of Uttar Pradesh in textile production at the national level is 13.24 percent. Uttar Pradesh ranks fifth in the country in terms of handlooms and silk production. There are 2.58 lakh handloom and 5.5 lakh powerloom weavers in the state. There are 58 spinning mills and 74 textile mills in the non-small scale industrial sector in the state. The share of Uttar Pradesh in carpet production in the country is 90 percent. Besides, of all the sectors, the textile and garment sector has provided employment to the highest number of people in UP. Meanwhile, impressed with CM Yogi’s investor-friendly policies, 66 major industrialists of the country and abroad have submitted lproposals to the Government to invest Rs 8715.16 crore in the textile and garment sector in the last four years. Out of these 66 proposals, 12 textile factories have already been set up in the state while construction of 18 others is in progress. The target is to start production in the 18 textile factories this year itself. In addition, construction of 17 textile units is expected to start this year. These 17 factories will start production from next year. UP government intends to develop more such integrated textile parks in major textile producing areas of the state, where the manufacturing units can benefit from the entire value chain. It can also enhance employment and export prospects in the state. Countries such as Bangladesh, Vietnam and Indonesia have emerged as major textile producers in the recent years. The intention of the UP Government is to be ahead of these countries in textile production. There is a lot of potential for expansion in the textile and garment sector in the state, but the number of fully integrated textile parks in the state is negligible. Taking cognisance of this, Chief Minister Yogi Adityanath decided to promote construction of integrated textile parks. Following the Government’s decision, YEIDA allotted 150 acres of land in Sector 29 for the construction of the textile park of the Society of Noida Apparel Cluster. CM Yogi Adityanath is contemplating construction of similar integrated textile parks in Meerut, Agra, Jhansi, Gorakhpur, Varanasi, Lucknow and Kanpur divisions where textile production has been carried out all along in collaboration with the private sector. These integrated textile parks include readymade factory sheds/plots, warehousing facilities, tool rooms, raw material banks, common facility centres for testing and research and research, skill upgradation centres, truck terminals and parking facilities, machines repair shops, dormitories or hostels for emplyees, incubation centres, fashion institutes and training centres etc. The Department of Handlooms and Textiles will ensure that the benefits of the State Government’s policies reach investors while providing them with all necessary support. The Yogi Government believes that once the integrated textile park is completed in Noida, big investors in other districts of the state will also be interested in setting up similar textile parks elsewhere in the state as well. The main reason for this is the presence of a large number of people in the state who are keen on working in the textile and garment sector. That is why big companies in the textile and garment sector in the state are setting up their factories in Kanpur, Gorakhpur and Varanasi. According to Lalit Thukral, president of the Society of Noida Apparel Export Cluster, the initiative of the Chief Minister to build a textile park in Noida is motivating Tamil Nadubased industrialists to build their own factories in the state. The textile park will employ a large number of people for different jobs ranging from thread making, dyeing and sewing to their packing and transportation. It will offer job opportunities to those interested in designing, accountancy and managerial posts also.
Source: Newsroom
Assam chief minister Dr Himanta Biswa Sarma on Monday visited handloom, textile and sericulture department in Guwahati to take stock of various schemes and activities of the department. In his meeting with the officials in the presence of minister UG Brahma, the chief minister asked the department to provide quality yarn to the weavers. He asked to revive Assam Apex Weavers and Artisans Cooperative Federation (ARTFED) and set up display counters for handloom products at Assam Bhawans and different cities. “Instructions issued: Transform the dept into a potent platform for weavers of the State. Revisit Yarn Bank Scheme to maximise benefit to weavers. extensive forward & backward market linkages for weavers,” stated a tweet by chief minister office.
Source: News live TV
After seven months of investigation, Peru has backtracked in surcharging imports of textile items like apparel and bed, table and bath products from Brazil. Announcing the decision on June 22, the Peruvian ministries of economy and foreign affairs said the safeguard would have a negative impact on Brazilian exports, a Brazilian government statement said. Brazil was able to prove, with textile sector entrepreneurs, that its exports do not affect Peruvian producers, it said. "The Brazilian government took part in all stages of the investigation, in defense of the interests of national exporters. The Brazilian position added to those of other countries and business sectors against the adoption of measures. In the end, the Peruvian authority concluded that the technical conditions for applying the safeguards were not met,” the statement said. The decision is a positive outcome for the Brazilian textile sector and for the economic and trade relations between Brazil and Peru, it added. In 2019, Brazilian sales of textile products to Peru totaled $ 3.3 million, and Peru was the seventh-largest destination for its exports in the sector.
Source: Fibre2Fashion
China’s tariff commitments to Japan and South Korea under RCEP is expected to boost their bilateral trade flows and create multilateral trade opportunities. In November 2020, China, the 10 ASEAN members, Japan, South Korea, New Zealand, and Australia signed the long-awaited Regional Comprehensive Economic Partnership (RCEP) Agreement. While most signatory countries have existing free trade agreements (FTAs) with each other – even prior – the RCEP’s multilateral agreement is the first ever FTA between China and Japan as well as between Japan and South Korea. Thus, the conclusion of the RCEP agreement also raises hopes for a trilateral free trade deal between these three East Asian economies, which has been under negotiation for as long as the RCEP. China, Japan, and South Korea, as the world’s second, third, and 12th largest economies, respectively. Together, they account for more than 80 percent of the total GDP of the RCEP region and nearly 70 percent of the total population of the RCEP signatory countries. However, the trio’s trade within the RCEP region accounted for only 19.8 percent of their total global trade in 2018; in comparison, this is lower than the 45.2 percent share for other RCEP countries within the region out of their global trade and the 60.7 percent for the EU within the EU region out of the EU countries’ global trade. Market analysts expect there will be great potential for economic and trade cooperation opportunities among China, Japan, and S. Korea as well as between the trio and other RCEP members with the effectiveness of the Agreement. Existing trade flow between China, Japan, and South Korea China has long been the largest trading partner of Japan and South Korea. Chinese products made up more than 23 percent of the total imports of Japan and South Korea in 2020. And over 22 percent of Japanese exports and 25 percent of South Korean exports flowed into the Chinese market last year. Japan and South Korea also feature on China’s top five trading partners’ list. In 2020, Japan and South Korea were the second- and third- largest exporters to Chinese markets, respectively. They were also the third- and fifth-largest export destinations for Chinese goods. China-Japan trade data and tariff commitments.
China-Japan trade date
In 2019, Japanese exports to China were worth US$128 billion. The top five categories of Japanese goods exported to China were machines (US$52.6 billion), chemical products (US$17 billion), vehicles and their parts (US$14.2 billion), instruments and apparatus (US$14.1 billion), and plastics and rubbers (US$9.02 billion). The most popular Japanese goods for Chinese markets included machinery having individual functions (US$8.5 billion), cars (US$7.51 billion), and integrated circuits (US$7.24 billion). In turn, China sold goods worth US$152 billion to Japan the year in 2019. The top five categories of Chinese exports to Japan were machines (US$66.6 billion), textiles (US$19.4 billion), chemical products (US$8.76 billion), metals (US$9.32 billion), and foodstuff (US$5.42 billion). Main Chinese export products to Japan were broadcasting equipment (US$11.5 billion), computers (US$10.1 billion), and office machine parts (US$4.32 billion).
China-Japan tariff commitments
Because Japan and China had never signed an FTA, trade tariffs between China and Japan adopt the most favored nation treatment (MFN) standard stipulated by the World Trade Organization (WTO). According to data from the World Integrated Trade Solution (WITS) in 2018, among China’s imports from Japan, 7.79 percent of the number of tariff items are duty-free; on the contrary, 59.98 percent of the number of Chinese tariff items are free from Japanese tariffs. After the RCEP comes into effect, under China’s Schedule of Tariff Commitments, China will ultimately cut tariffs to zero on 86 percent of Japanese goods (a big increase from around eight percent, which is the case currently). Under Japan’s Schedule of Tariff Commitments, Japan will eventually cut tariffs to zero on 88 percent of Chinese goods (a fair increase from the current around 60 percent). Under the framework of the RCEP, each member country, based on their Schedules, will abolish tariffs on specific products imported from other RCEP members, in phases, over a transition period of about 20 years. According to the Schedules of China and Japan, soon after the RCEP agreement takes effect – a) minerals, textiles and clothing, chemicals, and metals exported from Japan to China and plastics and b) rubbers, textiles and clothing, and chemicals exported from China to Japan – are expected to enjoy zero or reduced tariffs. China promised to gradually reduce tariffs on imports of Japanese products to zero in the first, the 11th, the 16th, and the 21st year upon the effectiveness of the RCEP agreement. In the first year, Chinese will further impose zero tariff on 68.7 percent of the number of tariff line items of Japanese minerals, 38.1 percent of the chemical products, 32.8 percent of fuels, and 30.8 percent of metals. In the first 11 years, 83.3 percent of the number of tariff line items of textile and clothing, 82.6 percent of chemical products, 75.4 percent of mineral products, 74.8 percent of base metals and their products, and 72.6 percent of leather goods, will be gradually subject to zero tariff. Eventually, after 21 years’ effectiveness of the RCEP, the percentage of newly added dutyfree items in all categories of Japanese products, except wood products and transport products, will be above 65 percent. In return, Japan has also pledged to gradually reduce tariffs on most Chinese imports to zero over a period of more than 20 years. In fact, so far, most of Chinese machinery, electronics, and transport products have already enjoyed zero MFN tariff rates when exporting to Japan. In the first year after the RCEP enters into force, 99.57 percent of Chinese machinery products and 100 percent of Chinese transport products will receive zero-tariff treatment from Japan, as well as 97.4 percent of the number of tariff line items of mineral products and 85.02 percent of stone and glass products. In the first 11 years, Japanese tariffs on 53.7 percent of plastic and rubber products, 34.2 percent of textile and clothing products, and 20.3 percent of chemical products will be gradually reduced to zero. Eventually, within 21 years, 62.1 percent of Chinese textiles, 58.5 percent of plastics and rubbers, 50.0 percent of footwear products, and 41.8 percent of leather products will enjoy zero Japanese tariff. The percentage of the number of duty-free items of the five categories – food, beverage, tobacco, and liquor, animal products, fuels, chemicals, and plant-based products – will reach more than 20 percent. China, South Korea trade data and tariff commitment
China-South Korea trade date
In 2019, South Korea exported worth US$136 billion to China. The five big categories of South Korean products exported to China are machines (US$70.5 billion), chemical products (US$18.7 billion), instruments (US$11.4 billion), plastics and rubbers (US$10.5 billion), and mineral products (US$8.56 billion). The main products exported to China are integrated circuits (US$33.8 billion), refined petroleum (US$6.5 billion), cyclic hydrocarbons (US$6.36 billion), machinery having individual functions (US$6.1 billion), and LCDs (US$5.27 billion). China exported worth US$108 billion to South Korea, including machines (US$52.3 billion), metals (US$11.4 billion), chemical products (US$9.54 billion), textiles (US$7.07 billion), and instruments (US$3.72 billion). Similar to what are exported to Japan, the main products that China exported to South Korea were integrated circuits (US$15.1 billion), broadcasting equipment (US$4.85 billion), and office machine parts (US$3.69B).
China-South Korea tariff commitment
China and South Korea already have an existing bilateral FTA – the China-South Korea FTA, which came into effect on December 20, 2015. So, there is limited space for the two sides to expand their zero-tariff products or increase tariff cuts under the RCEP. Nevertheless, South Korea will further cut tariffs on Chinese deer antler, dextrin, and scallop to zero, and reduce tariff on Chinese products, such as clothing and ceramic tiles. China will impose zero tariff on textiles and stainless steel from South Korea, while some tariffs have been reduced on South Korean generators and auto parts.
Source: China Briefing
A coalition of 13 European business associations, representing different sectors have called for the swift ratification of the EU-Mercosur association agreement. With the political agreement reached already two years ago (June 2019), now is the time to move forward and unlock the manifold mutual benefits that the agreement will deliver, the associations said. The EU-Mercosur agreement is the largest and most ambitious trade agreement ever negotiated by both sides. It provides regulatory certainty for both trade in goods and services, and establishes better trade links between countries of respectively 440 and 260 million citizens. It also includes the most advanced sustainable development provisions that will foster partnership, help mitigate climate change and bind both sides to effectively implement the Paris Agreement. Moreover, it includes enforceable commitments on workers' rights and environmental protection through a dedicated dispute settlement mechanism. "Failure to ratify the agreement would leave the EU and Mercosur with fewer instruments to build mutual trust and cooperate to face the biggest challenge of our time. Moreover, non-ratification will lead to Mercosur countries continuing to trade, or even expanding their trade, with other trading partners that have substantially lower environmental and labour standards," the associations said in a joint business statement. The EU-Mercosur association agreement is very important for both the EU and Mercosur: in 2019, EU-27 exports in goods to Mercosur accounted for €41.2 billion, whereas export in services reached €21.1 billion in 2019. EU27 headquartered firms invested €114 billion in Mercosur markets since 2010, creating 290,000 jobs in Brazil, Argentina, Uruguay and Paraguay. On the other hand, in 2019, Mercosur countries exported to the EU €35.9 billion in goods and €10.8 billion in services. Mercosur headquartered firms invested €1.7 billion in the EU27, creating more than 7,000 jobs across the continent since 2010. "The agreement is expected to grow imports from Mercosur by 10.6 per cent and exports to Mercosur by 52.0 per cent, creating jobs and allowing a better flow of goods and services. The challenge of mitigating climate change while maintaining prosperity, is too big to let tariffs limit the affordability of the most sustainable and innovative goods and services. The agreement will not only improve trade in goods and services, but also protect IPRs - including GIs, increase regulatory transparency and alignments, as well as cooperation on standards, including those for future technologies that will be critical to realise a sustainable economy," the statement said. "Based on assessments by the EU Commission and the London School of Economics, we estimate that the EU-Mercosur Agreement could create up to 390,000 jobs in the EU, resulting from an increase of exports to Mercosur. Moreover, the reduction of tariffs on EU exports to Mercosur will be making EU companies more competitive by saving €4 billion worth of duties per year and the progressive elimination of export restrictions and import duties will allow EU operators to source competitively essential raw materials. This is particularly important since many EU sectors and businesses face current high tariffs of up to 35 per cent while exporting to Mercosur," the statement added. Euratex—the voice of the European apparel & textile industry, the European Footwear Confederation, COTANCE—the European confederation of the leather industry, and EuroCommerce are among the 13 associations that have issued the joint business statement.
Source: Fibre2Fashion
Perennials and Sutherland, American leader in the international design industry and the preeminent provider of luxury furniture, performance textiles and accessories, has announced the expansion of Perennials Textiles Mexico (PTM). The company will double the amount of operational space, as well as add an additional hundred full-time positions. The expansion represents a multimillion-dollar investment by the company and full operations are expected to commence by Q1 2022. The epicentre of Perennials' 100 per cent solution dyed acrylic yarn production, PTM houses state-of-the-art facilities featuring safe and sustainable practices. PTM provides room to meet the rapid increase in product demand, where electronically controlled looms can produce thousands of yards of fabric per month, the company said in a press release. "We are calling this investment, Megalodon Project, due to its immense impact in creating a brighter future," says Miguel Maciel, the general manager of PTM who is spearheading the onsite operations. "We are pleased that Perennials continues to grow in San Luis Potosi, which will provide direct benefits to our community and the state." The expansion demonstrates Perennials' resolve to supply the domestic and global market with the highest quality 100 per cent solution dyed acrylic performance textiles available to the trade as well as select retail partners, such as Restoration Hardware and Serena and Lily.
Source: Fibre2 Fashion
