Industry bodies are set to elevate a number of issues with the federal government associated to items and companies tax (GST) compliances, laws and administration forward of July 1, which marks the fourth anniversary of the oblique tax reform. Simplifying enter tax credit score procedures, addressing issues arising from inverted obligation construction, exploring faceless evaluation inside the GST construction, introducing means of rectification of returns and enhancement within the GST Network system are a number of the suggestions that will probably be highlighted by the business. Issues comparable to blocking of enter tax credit score of patrons or motion by GST authorities due to provider default or non-compliance and parallel investigation proceedings by state in addition to central GST authorities regardless of assesse being beneath one of many jurisdictions are amongst different essential ones that will probably be highlighted. “We will send detailed recommendations to the government on the legislative, administrative and compliance challenges being faced by industry,” mentioned Pratik Jain, chairman of the oblique tax committee at Assocham. “It’s been four years, now time has come to simplify and align our laws with global practices.” “While the federal government has offered reduction to customers by lowering the GST price on Covid-related reduction materials to 5%, the benefit must also be given to stockists and sellers which have already paid the tax at greater price… that cash needs to be refunded to present liquidity to commerce,” mentioned Bimal Jain, head of oblique tax committee at PHDCCI. Tax charges on 18 gadgets together with medical oxygen, oxygen concentrators, medicine prescribed by the ministry of well being and welfare for Covid therapy, Covid testing kits amongst others had been decreased to 5% from both 12% or 18% charges this month. The discount has been utilized on present inventory as effectively, main to sellers having to ship out revised price lists, nevertheless the stability GST already paid to the federal government has not been refunded. The business physique will take up the matter alongside with different issues with the GST Council Secretariat. Seeking reduction for the infrastructure sector, the business may even search for making tax credit score paid out there to constructors of malls, motels or places of work that are used for taxable functions and, on which GST is being charged on the development. The subject is pending with the Supreme Court following a beneficial ruling by the Orissa High Court. Another subject that the business is probably going to elevate is aimed toward serving to small companies which have to pay the GST on the time of elevating bill reasonably than paying tax on receipt of billed quantity, which was the case prior to the tax regime. Small companies have to pay an 18% annual curiosity on the deposit cash to the federal government, which causes a burden on the business in case of delayed or non-payments.
Source: Economic Times
Against the revenue neutral rate of 15.5%, the actual average GST rate is ~11.8%, need to either increase rates or reduce exemptions Indian policymakers are marsupials by design; they birth policy that needs nurturing on the ground. Waiting for perfection is not advisable. Launching a reform and then continuously improving or adapting it to the ground level realities is an integral part of its implementation. Goods and Services Tax (GST), when enacted in 2017, was admittedly a work-in-progress and its implementation is still ongoing. In the past four years, while the reform has achieved a fair bit of maturity is some aspects, the GST child needs more nurturing on several fronts and deal with several impending challenges. The GST digital compliance and tax administration framework is unprecedented in its scale and ambit, and forms the backbone for the reform. Achievements on this front are exemplary and will be emulated globally. Last year, it was visionary of the revenue secretary to push ahead with the digital agenda through the pandemic, despite protests. E-invoicing for large taxpayers having turnover above Rs 100 crore was implemented. This, coupled with a proactive use of analytics, has enabled the administration to check evasion. The collection efficiency has significantly improved. The Q4FY21 collections indicate a 15-20% growth compared with FY 19 (see graphic). Stronger collections should provide flexibility to focus on the necessary structural reforms. In FY21, approximately `7 lakh crore (based on Union Budget RE and all states BE) excise duties and state VAT collected on commodities excluded from the GST net account for 30% of all commodity taxes and duties. A lion’s share of these collections relate to petroleum products. Further, budgeted collections of state electricity duty for FY21 is around Rs 46,184 crore (as per the RBI report on state finances—A study of Budgets 2020-21). Inclusion of these sectors within the GST net will reduce cascading impact of these taxes by tens of thousands of crores of rupees. However, the present political and economic scenario would not allow both the states and the Centre to agree over any dilution of fiscal independence, and this agenda is unlikely to be addressed. States were guaranteed a 14% compounded annual growth of their revenues subsumed within GST for five years. Any shortfall was to be funded by the compensation cess. This year, the compensation is estimated to be around Rs 2.5 lakh crore. This guarantee ends in June 2022 and the states would want an extension of the compensation safety net for a few years more. This revenue shortfall is primarily on account of the steep reduction of tax rates during GST implementation. Against a planned revenue neutral rate of 15.5%, the actual average GST rate is around 11.8%. Rate rationalisation, either by reducing the number of exemptions or by increasing GST rates, could be considered. The recent integration and tightening of the compliance framework definitely reduced evasion. At present, non-filing of returns precludes a taxpayer from receiving or despatching goods, thereby forcing closure of business operations. This is too harsh. Decoupling payment of taxes from filing of returns is desirable as this will enhance the quality of compliance and enable businesses to revive and recover. Evasion concerns should be addressed by better use of analytics. The impending states’ revenue crisis is likely to pressurise tax administrations to take on aggressive tax collection targets triggering combative and high-pitched assessments. Indian GST, being a new law with several complexities, exacerbates the problem. Unless pragmatic steps are taken to reduce disputes, the ensuing deluge of litigation will breed massive uncertainty for businesses and choke the already burdened judicial infrastructure for the foreseeable future. The steps could include issuing clarifications, rationalising legislation to address ambiguities in the law as also notifying schemes allowing people to resolve or compound disputes or non-compliances. Further, active focus should be given to decriminalisation of offences under the law. As GST enters its fifth year, tremendous work has been done to get its physical bearings in place. Revenues and collection efficiencies have improved and stabilised. Next year, the agenda should ideally aim at building on this strong foundation and work on imbibing the right values in GST. This is the time to ensure that the law doesn’t become troublesome but contributes to the economic well-being of the society and country at large.
Source: Financial Express
As nations battle with COVID-19 pandemic and economic downturn, textile and apparel manufacturers the world over are trying to increase their exports. Favourable policies announced by the government has helped the Indian textile and apparel industry to some extent. But more is required for export promotion push and to overcome pandemic infused constraints. The Indian government has targeted to increase the country's contribution in global textile and apparel market from 6 per cent at present to 15-20 per cent. It has removed anti-dumping duty on purified terephthalic acid (PTA), thereby drastically decreasing the cost of polyester. In addition, the Cabinet has approved the scheme for the remission of duties and taxes on exported products under which a mechanism would be set up for reimbursement of taxes, duties and levies, at the Central, state and local levels. It has further approved the continuation of RoSCTL till it merges with RoDTEP. Last year, at the peak of the pandemic, the Indian government allocated ₹20 lakh crore for the Aatmanirbhar Bharat package, which included benefits to the textile industry as well. The Indian government has introduced a contactless process that would boost the inhouse testing capability of the customs. New modern testing equipment for faster imports and exports clearances. Online B2B marketplaces are aiding the growth of global trade, in the post-COVID situation. Several manufacturers have registered their company on Fibre2Fashion’s F2FMART to take their business to many buyers internationally. Fibre2Fashion has 20 years of experience in textile and apparel industry, with more than 1.5 million monthly visitors across the globe.
Source: Fibre 2 Fashion
During a meeting with senior officials to review the status of implementation of Budget announcements and measures to expedite infrastructure investment, she also urged the ministries and their Central Public Sector Enterprises (CPSEs) to ensure clearance of Micro, Small and Medium Enterprises (MSME) dues by July 31. Finance Minister Nirmala Sitharaman on Tuesday exhorted ministries to aim to achieve more than their capital expenditure (capex) targets for this fiscal, highlighting that enhanced spending will play a critical role in revitalising the economy post-pandemic. During a meeting with senior officials to review the status of implementation of Budget announcements and measures to expedite infrastructure investment, she also urged the ministries and their Central Public Sector Enterprises (CPSEs) to ensure clearance of Micro, Small and Medium Enterprises (MSME) dues by July 31. This was the sixth review meeting by the finance minister with ministries and departments on the infrastructure roadmap. Sitharaman further urged the ministries to explore Public Private Partnership (PPP) mode for viable projects, the finance ministry said in a statement. "While reviewing the capital expenditure performance of the ministries and their CPSEs, the Finance Minister emphasised that enhanced CAPEX will play a critical role in revitalising the economy post-pandemic and encouraged the ministries to front-load their capital expenditure," it said. Ministries were also requested to aim to achieve more than their capex targets, it added. Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 per cent over the Budget Estimate of 2020-21. However, the efforts from the budgetary side to increase the capital expenditure have to be complemented by the public sector enterprises, she added. Infrastructure expenditure is not just the central government budgetary expenditure on infrastructure but also includes infrastructure spending by state governments and private sector, the minister said. It also includes government expenditure through extra-budgetary resources. Therefore, Sitharaman said, ministries are to actively work on getting projects funded through innovative structuring and financing and provide all support to private sector for enhancing infrastructure spending. The finance minister asked the secretaries of ministries to push expenditure on large important projects to ensure that the achievement is commensurate with timelines. She also asked the ministries to take up regular reviews of sector-specific projects with the concerned state governments for effective implementation of the same. The meeting was attended by Finance Secretary, Secretary (Economic Affairs), Secretary (Public Enterprises), Secretary (Steel). Secretary (Housing & Urban Affairs), Secretary (Petroleum & Natural Gas) and Secretary (Space) as well as CMDs/CEOs of CPSEs of these ministries and departments. While reviewing the progress, Sitharaman asked the Ministry of Housing and Urban Affairs to expedite the capital expenditure and make efforts for front-loading it, while the Ministry of Steel was asked to front-load capex and facilitate private investment by providing support and removing bottlenecks. She asked the Ministry of Petroleum and Natural Gas to expedite monetisation of assets during 2021-22. The Department of Space was asked to focus on domestic procurement wherever possible.
Source: Economic Times
Chief Economic Adviser K V Subramanian on Tuesday said a number of reforms undertaken by the government in the last one year especially focused on removing supply side frictions are expected to spur investment, including foreign investment. Speaking at a virtual discussion on World Investment Report 2021 organised by Institute for Studies in Industrial Development (ISID), Subramanian said the fact that India recorded the highest growth amidst pandemic when FDI has shrunk by about 50 per cent for the emerging economies, indicates that foreign firms put their money where their mouth is. Observing that FDI in merger & acquisition (M&A) versus greenfield that distinction is pertinent, he said, "the fact that the same M&A did not happen as much in other countries but happened in India actually thereby recording significant growth ... is indicative of the India story." As per the report by the UN Conference on Trade and Development (UNCTAD) released earlier this month, India received USD 64 billion in foreign direct investment (FDI) in 2020, the fifth largest recipient of inflows in the world, pushed up by acquisitions in the information and communication technology (ICT) industry. Major project announcements in the ICT industry included a USD 2.8 billion investment by online retail giant Amazon in ICT infrastructure in India, the report said. Stressing that India is the only country among large economies that has done a slew of reforms in the last one-and-a-half years, Subramanian said these are especially focused on removing a lot of supply side frictions paving way for investment to flow in. Citing Say's law, he said, supply eventually creates its own demand. "The labour reform, the agricultural reform, the change in definition of MSME to avoid the phenomenon of dwarfism and most importantly, the enterprise policy focused on the private sector...this is where path of future FDI must be understood in the context of the enterprise policy focused on the private sector," he said. Unveiling the PSE policy in Budget 2021-22, Finance Minister Nirmala Sitharaman had said barring four strategic areas, public sector enterprises (PSEs) in other sectors will be divested. The policy would give a clear roadmap for disinvestment in strategic and nonstrategic sectors. The four sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services in non-strategic sectors. Talking about role of investment in economy, Subramanian said the gross fixed capital formation in the March 2021 quarter increased by almost 30 per cent year on year. As a result the ratio of gross fixed capital formation to GDP hit 34.3 per cent, he said, adding, this 26 quarters high primarily led by government's capex programme. The spillover effect of this was consumption after declining for last three quarter witnessed a growth of 2.7 per cent and it was able to arrest the decline in contact sensitive sector during the last quarter and this illustrates the linkages at the macroeconomic level from investment to consumption and service sector activity as well, he added.
Source: Economic Times
In fact, the share of raw inputs in China’s purchases from India rose at a brisk pace last fiscal, at the cost of more value-added consumer or capital goods, according to an FE analysis. China may have emerged as India’s second-largest export destination in FY21 but sustaining the high growth rate in shipments would be a daunting task for New Delhi, given that Beijing’s purchases comprise mostly low value-added products where growth prospects are typically limited. In fact, the share of raw inputs in China’s purchases from India rose at a brisk pace last fiscal, at the cost of more value-added consumer or capital goods, according to an FE analysis. India’s shipments to China jumped an impressive 28% last fiscal from a year before to $21 billion, even when overall merchandise exports shrank 7%. But as much as 81% of the supplies to Beijing, worth $17 billion, were just raw materials and intermediate goods, up from 74% five years ago (FY17), showed the commerce ministry data. Raw materials, mainly iron ore, cotton and plastics, and intermediate goods such as lowgrade iron & steel, chemicals and copper were shipped to China in large volumes last fiscal. However, being the world’s largest producer of capital and consumer goods, Beijing doesn’t really import these products – where value addition can be substantial – from New Delhi. In fact, it dominates the global export market in these segments, and remains way ahead of India. As such, New Delhi’s ability to supply to Beijing at cheaper rates than the local producers there has long remained stunted due to inherent structural weaknesses, including high logistics costs. On top of that, China’s stubborn denial of credible market access in goods segments where Indian producers are competitive, often through the employment of nontariff barriers, have long tilted bilateral trade balance in Beijing’s favour. Relying on just raw materials and intermediate goods is unlikely to push up India’s exports to China year after year. New Delhi has to capture markets there in high-value segments by sorting out legacy issues and removing structural obstacles. As such, growth in exports of raw materials and intermediate goods greatly hinges on global commodity prices and it tends to lose steam as the prices go down. Importantly, while China has been vacating export space in labour-intensive sectors due to rising wage costs, India hasn’t been able to capitalise on it, losing out to competitors like Vietnam. According to former chief economic advisor Arvind Subramanian, China has vacated close to $150 billion in exports in low-skilled labour-intensive sectors, including apparel, leather and footwear since the global financial crisis in 2008-09. But India has cornered at most 10-15% of the vacated market. India has also not been able to quite cash in on a trade war between the US and China, partly due to the outbreak of the Covid-19 pandemic. While trade deficit with China declined to $44 billion last fiscal from nearly $49 billion in FY20, the neighbour’s share in India’s total goods trade deficit still zoomed to 43% in FY21 from 30% a year before. This is because the country’s imports from China were in excess of $65 billion last fiscal, almost the same as in FY20, even though its total inbound shipments faltered by 17% from a year earlier.
Source: Financial Express
Personal loans continued to grow at a robust pace and recorded 13.5 per cent growth yo-y in March 2021. Credit to the household sector rose by 10.9 percent and its share in total credit rose to 52.6 per cent in March 2021 from 49.8 percent a year ago, the central bank said. Credit growth to industry remained in the negative territory during all the four quarters of FY21, the Reserve Bank of India (RBI) said in a quarterly report on June 29. A decline in private consumption and investments by companies during the first year of the COVID pandemic and a shift to the markets for fund-raising may have led to a decline in loan growth by companies. “Working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21,” the central bank said in a release. Growth in credit to the private corporate sector declined for the sixth successive quarter in January-March 2021 and its share in total credit stood at 28.3 percent. Overall credit growth was supported by personal loans, or loans to individuals, which recorded a 13.5 percent growth year-on-year (y-o-y) in March 2021. Credit to the household sector rose by 10.9 percent y-o-y and its share in total credit increased to 52.6 per cent in March 2021 from 49.8 percent a year ago. Analysts have also pointed out that the slowdown in loan growth in FY21 was led by a tendency among companies to deleverage, or reduce the debt they carry on their books. “We believe such low credit growth was a direct fallout of corporates rapidly deleveraging by repaying high cost loans through funds raised through bond issuances,” Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, said in a report earlier this month. An analysis by SBI’s economic research wing showed that the top 15 sectors reported more than Rs 1.7 lakh crore of debt reduction in the pandemic year 2021. Refineries, steel, fertilisers, mining and mineral products, and textiles alone reduced debt by more than Rs 1.5 lakh crore during FY21. “Simultaneously, primary issuance of bonds increased by nine percent. This trend is continuing in FY22 also,” Ghosh said. With companies increasingly shifting to the bond markets for raising money rather than tapping into bank loans, bankers have begun to insist on their loan books being seen in conjunction with their investment portfolios. They are also betting on foreign fund flows into Indian markets slowing in order to bring corporates back to loans. “Now that in the West practically all the economies have vaccinated themselves well, I expect that there will be huge growth opportunities there. So, perhaps some money which used to flow in here may not be available,” said SBI chairman Dinesh Khara on May 21. As liquidity in the system moderates, corporates might come back to the banking system for drawing funds, Khara added.
Source: Money Control
As per the Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2021' released by the RBI, private sector banks registered a higher loan growth compared to the other bank group. Credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns, RBI data showed on Tuesday. However, "personal loans continued to grow at robust pace and recorded 13.5 per cent growth (Y-oY) in March 2021; industrial loan growth, on the other hand, remained negative during all quarters of 2020-21." The RBI further said working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21, indicating the impact of the coronavirus pandemic. The data further revealed that private sector banks recorded higher loan growth when compared to public sector lenders. Their share in total credit increased to 36.5 per cent in March 2021 from 35.4 per cent a year ago and 24.8 per cent five years ago, it said. Credit to household sector rose by 10.9 per cent (Y-o-Y) and its share in total credit increased to 52.6 per cent in March 2021 from 49.8 per cent a year ago, as per the 'Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2021', released by the central bank. Growth in credit to the private corporate sector, however, declined for the sixth successive quarter and its share in total credit stood at 28.3 per cent. RBI said the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2020- 21, including a decline of 21 basis points in Q4. It also said bank branches in urban, semi-urban and rural areas recorded double-digit credit growth (Y-o-Y) in March 2021, whereas metropolitan branches, which accounted for 63 per cent of bank credit, logged 1.4 per cent growth.
Source: Economic Times
The following press release comes to you under an arrangement with Newsvoir. PTI takes no editorial responsibility for the same.) Mumbai, Maharashtra, India (NewsVoir) Indo Count Industries Ltd., one of India’s leading Home Textile manufacturer-exporter is delighted to announce its new partnership with Jasper Conran O.B.E. for an exclusive bed and bath collection, launching in Spring 2022. The range will be sold and marketed internationally under the Jasper Conran London brand, exclusively through Indo Count. Attention to detail and the integrity of the product will be central to the values of the brand. The collection will feature bold graphic prints, organic and supima cotton with a fresh and contemporary colour palette. Jasper Conran is a very established and well respected British designer, recognised within homewares, having had longstanding partnerships with, amongst others, British homeware brands Waterford and Wedgewood. Jasper Conran expressed, “I am very pleased to be partnering with Indo Count to produce the Jasper Conran London Bed and Bath Collection. Indo Count’s stance on ethical trading resonates with me and their ambition to continually improve the sustainability of the product and production and the care they afford their workforce; these tenets are important for me. I am looking forward to working with them and I feel confident that this partnership will deliver a shared vision.” Commenting on the above, Mr. Mohit Jain, Executive Vice Chairman said, “This affiliation is a strategic move, that mirrors our growth in the branded business segment. This partnership with Jasper Conran will create a high quality bed and bath brand incorporating natural fibres in superior thread counts and fabric constructions, using our most advanced technologies. Through this partnership, we aim to further strengthen the Company’s long term vision to be the cornerstone for home textiles across the globe.” About Indo Count Industries Ltd. Indo Count Industries Ltd. (ICIL), is one of India’s largest Home Textile manufacturer, exporting to more than 54 countries across the globe. Mr. Anil Kumar Jain, Executive Chairman, has been ranked 10th amongst the India’s Best Top 100 CEO’s 2017 by Business Today. Under his leadership, the Company has focused on some of the world’s finest fashion, institutional and utility bedding and has built significant presence across the globe. Over the years, the Company has successfully carved out a niche for itself and has become a total bedding solutions provider. The Company has been honoured with Gold Trophies by TEXPROCIL for highest export performance in bed linen for consecutive two years. Safe Harbor Statement Statements in this document relating to future status, events, or circumstances, including but not limited to statements about plans and objectives, the progress and results of research and development, potential project characteristics, project potential and target dates for project related issues are forward-looking statements based on estimates and the anticipated effects of future events on current and developing circumstances. Such statements are subject to numerous risks and uncertainties and are not necessarily predictive of future results. Actual results may differ materially from those anticipated in the forward-looking statements. The company assumes no obligation to update forward-looking statements to reflect actual results changed assumptions or other factors.
Source: Outlook India
Good Fashion Fund, the Fashion for Good initiated fund to drive sustainable manufacturing practices, has signed its first deal with Indian manufacturer Pratibha Syntex Limited. The $4.5 million long-term loan will support Pratibha Syntex's planned capital expenditures for replacing machinery and expansion of sustainable equipment in various divisions. The $4.5 million investment will replace machinery in the spinning, processing, and garmenting divisions, as well as provide new equipment for the expansion of their activities and facilities. The new equipment will lead to a significant reduction in water, energy and chemical usage. This will enable Pratibha Syntex to meet the manufacturing demands of its clients, whilst furthering their sustainability agenda to meet their climate positive ambitions. Pratibha Syntex supplies textiles and garments to popular brands including C&A, H&M, Patagonia and Zara. It is a sustainably oriented, vertically integrated ‘farm-to-fashion’ textile and garment producer founded in 1997 in Pithampur, India. The company employs over 6,000 persons, connects 35,000 farmers and apparel brands from over 20 countries, for whom they produce over 40 million garments annually. Apart from manufacturing cotton, fibres, fabrics and apparel, Pratibha Syntex Limited is also engaged in social initiatives to generate employment for women in rural communities, Netherlands-based Fashion for Good said in a press release. “With the capital provided by the Good Fashion Fund, Pratibha Syntex can invest in securing a sustainable future for our processes which will have positive, compounded effects along the value chain. We’re extremely pleased with the partnership and excited to continue on our journey for positive impact,” said Shreyaskar Chaudhary, managing director, Pratibha Syntex Limited. The Good Fashion Fund is initiated by Fashion for Good, launched in 2019, and is a collaboration between Laudes Foundation, Hong Kong-based The Mills Fabrica and FOUNT. The vision for the Good Fashion Fund is for manufacturers in the apparel supply chain to invest and reinvest in innovations that deliver both economic growth and good fashion practice. FOUNT provides investment and fund management expertise in emerging countries while Fashion for Good (also acting as sub-advisor to the fund) provides an unrivalled industry network and strong deal pipeline, as well as access to innovations and technical knowledge. With a target size of $60 million, the fund provides long term funding to apparel and textile manufacturers in Asia, mainly in India, Bangladesh and Vietnam, to implement impact technologies. The fund aims to mobilise the use of safe and recyclable materials, clean and efficient energy, closed-loop manufacturing and the creation of better working conditions and fair jobs and growth.
Source: Fibre2Fashion
Macao's total merchandise import swelled by 267.6 percent year on year to 15.69 billion patacas (about 1.96 billion U.S. dollars) in May 2021, while total merchandise export went up 59.6 percent to 990 million patacas, the special administrative region's statistical service said on Tuesday. The latest report from the Statistics and Census Service (DSEC) showed that the imports of mobile phones, gold jewelry, watches and beauty, cosmetic and skincare products rocketed by 2,616.0 percent, 2,362.4 percent, 1,145.1 percent and 846.5 percent respectively, whereas that of other textile made-up articles declined by 56.1 percent. The value of re-exports rose by 64.2 percent to 820 million patacas in May, with that of diamond and diamond jewelry, wine and watches surging by 843.0 percent, 663.9 percent and 248.0 percent respectively. Meanwhile, the value of domestic exports grew by 40.8 percent to 171 million patacas, the DSEC report added. Merchandise trade deficit in May totaled 14.70 billion patacas. From January to May this year, the total value of merchandise import expanded by 142.7 percent year on year to 59.03 billion patacas, whereas the total value of merchandise export increased by 29.9 percent year on year to 5.51 billion patacas. Merchandise trade deficit totaled 53.52 billion patacas for the first five months of 2021, up by 33.44 billion patacas from a year earlier. Analyzed by place of origin, merchandise import from the mainland and the European Union in the first five months surged by 119.9 percent and 184.2 percent to 19.83 billion patacas and 18.48 billion patacas respectively year on year. Analyzed by destination, merchandise export to the mainland rose by 17.3 percent year on year to 755 million patacas from January to May 2021. Exports to the Hong Kong SAR and the United States grew by 37.7 percent and 57.1 percent respectively year on year, whereas exports to the EU dropped by 3.6 percent. External merchandise trade totaled 64.54 billion patacas from January to May 2021, up by 125.9 percent from a year earlier. (1 pataca equals 0.1250 U.S. dollar)
Source: China Economic Net
As part of our North Sumatra program, the Embassy connected more than 100 North Sumatra-based SMEs with Dutch experts in an online session in June, when we deepdived into best practices and know-how on exporting products to the EU market. The interactive discussion touched upon the many reasons to export, things to consider, ways to be successful, and who to partner with. The event aspired to contribute to strengthening the Dutch-Indonesian trade ties. Mr. Hans de Brabander, Head of the Economic Department, kicked off the session by explaining how this event was intended to assist the Small and Medium-sized Enterprises (SMEs) to gain access to market their products to the EU through the Netherlands as gateway. Acting Provincial Secretary of North Sumatra, Mr. Afifi Lubis, in his remarks expressed his appreciation for this initiative, particularly with regard to supporting local SMEs by upgrading their product quality. He also hoped that the bilateral relation will continue to be able to realize further economic partnerships. This event was also in line with the efforts of the Indonesian Ministry of Trade and Bank Indonesia North Sumatra to support the local SMEs to go global. Mr. Marolop Nainggolan (Director Export Development Cooperation, Ministry of Trade) and Mr. Soekowardojo (Head of Bank Indonesia North Sumatra) elaborated upon how both institutions provide assistance for SMEs through their export development programs, for instance with capacity building. The Embassy highly values the collaboration with the Indonesian Ministry of Trade, the Provincial Government of North Sumatra, and Bank Indonesia North Sumatra in this activity, particularly in connecting with the SMEs in the Province. Ms. Dika Rinakuki, expert and an experienced exporter at the Dutch Centre for the Promotion of Imports from developing countries (CBI), presented a complete picture on the European market, including market trends, demanded products, and how COVID-19 has shaped consumer needs. She also elaborated on ways to start exporting, while focusing on the Province’s top commodities like coffee and home textiles. Matching the audience profile, her explanation triggered enthusiasm during the Q&A session, where participants showed curiosity over European requirements, such as sustainability & traceability, as well as utilizing digital platforms to promote their products to potential buyers. CBI itself currently runs coaching sessions for selected Indonesian SMEs specifically on Natural Ingredients and Home Décor & Home Textiles. From the Dutch consumer market perspective, experts of the Dutch program Netherlands senior experts (PUM), Ms. Christa Nollen and Mr. Frits van Leer gave valuable tips and insights on being a successful exporting entrepreneur. Among others, the participating SMEs were highly advised to thoroughly research the characteristics of their destination markets, as exporting activities require a lot of preparation, varying from logistics up to bureaucratic matters. While investigating the opportunities, it is also crucial to learn from experienced mentors, which can be done through PUM representatives in Indonesia. Ms. Nollen herself resides in Kisaran, North Sumatra and is ready to help committed local SMEs in upscaling their businesses and aim for global market. For more information, SMEs can contact PUM experts through https://www.pum.nl/en. This event once again re-confirmed the strong appetite of both Dutch and Indonesian partners to strengthen the bilateral trade relations. The Embassy-led Virtual “Focus Sessions” and Economic Mission to North Sumatra contribute to reaching this goal, by gathering Dutch and Indonesian companies to explore sustainable business opportunities in the region. Find out more through our online platform (bit.ly/Register_VM) or through email to JAK-EA@minbuza.nl. The recording of “Exporting Indonesian Products to Europe” session and presentation materials can be accessed through the platform.
Source: Netherlands and You
As the industry emerges from the pandemic and Brexit, and starts to take advantage of new FTAs and adapts to new ways of working, international trade will be crucial to the success of the industry, according to a UK Fashion and Textile Association (UKFT) report. Whether one is an importer or an exporter, UKFT expects the industry to remain global. “2021 is likely to be a year of many challenges for the UK fashion and textile industry, but also one for hope. Hope that life will get back to some form of normality. Hope that businesses can navigate the relaxing of lockdown and that commercial life in the UK can start to get back on its feet, as we find a way to work through the realities of Brexit,” the association outlined in its Business Outlook Report for 2021. The report was produced in collaboration between Smart Currency Business and UKFT who shared its valuable insights on what the year ahead looks like for UK fashion businesses, the implications of the Brexit deal, considerations for protecting the businesses against the pandemic and more. “UK companies will have to remain vigilant with their existing wholesale customers and agents, as many of them have been substantially weakened in 2020. The same could also apply to some factories. Pricing will be especially sensitive in 2021 and 2022 as consumers can see the price of almost everything,” according to the report. “Credit Insurance is a tool that can protect your business against a loss incurred due to insolvency, protracted default or political event, and subsequent non-payment of an invoice. Insurer appetite for the fashion and textile sector has been low, given that clothing sales decreased by more than 25 per cent in 2020. However, insurers are now seeing a small bounce back, with March 2021 showing a 5.4 per cent increase on the previous month and a 1.6 per cent growth against February 2020,” the report added. “There is likely to be a lot of physical retail space available in 2021 and 2022, often in prime city centre sites. This could be a good opportunity for those looking for a central site or to run a pop-up. However, tourists may take a while to come back and the UK may become less attractive as a retail destination if the government does not reverse its decision to cancel the VAT refund scheme,” UKFT mentioned.
Source: Fibre2 Fashion
