|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
990.73 |
USD/Ton |
0.00% |
12/16/2015 |
|
VSF |
2092.74 |
USD/Ton |
-0.95% |
12/16/2015 |
|
ASF |
1928.14 |
USD/Ton |
0.00% |
12/16/2015 |
|
Polyester POY |
927.36 |
USD/Ton |
-1.64% |
12/16/2015 |
|
Nylon FDY |
2364.77 |
USD/Ton |
0.00% |
12/16/2015 |
|
40D Spandex |
4945.92 |
USD/Ton |
0.00% |
12/16/2015 |
|
Nylon DTY |
2612.06 |
USD/Ton |
0.00% |
12/16/2015 |
|
Viscose Long Filament |
5758.91 |
USD/Ton |
0.00% |
12/16/2015 |
|
Polyester DTY |
1174.66 |
USD/Ton |
-2.56% |
12/16/2015 |
|
Nylon POY |
2179.30 |
USD/Ton |
0.00% |
12/16/2015 |
|
Acrylic Top 3D |
2113.61 |
USD/Ton |
0.00% |
12/16/2015 |
|
Polyester FDY |
1004.64 |
USD/Ton |
-1.52% |
12/16/2015 |
|
30S Spun Rayon Yarn |
2782.08 |
USD/Ton |
0.00% |
12/16/2015 |
|
32S Polyester Yarn |
1576.51 |
USD/Ton |
0.00% |
12/16/2015 |
|
45S T/C Yarn |
2550.24 |
USD/Ton |
-0.60% |
12/16/2015 |
|
45S Polyester Yarn |
1746.53 |
USD/Ton |
-0.88% |
12/16/2015 |
|
T/C Yarn 65/35 32S |
2194.75 |
USD/Ton |
0.00% |
12/16/2015 |
|
40S Rayon Yarn |
2936.64 |
USD/Ton |
0.00% |
12/16/2015 |
|
T/R Yarn 65/35 32S |
2503.87 |
USD/Ton |
0.00% |
12/16/2015 |
|
10S Denim Fabric |
1.08 |
USD/Meter |
0.00% |
12/16/2015 |
|
32S Twill Fabric |
0.91 |
USD/Meter |
0.00% |
12/16/2015 |
|
40S Combed Poplin |
0.99 |
USD/Meter |
0.00% |
12/16/2015 |
|
30S Rayon Fabric |
0.73 |
USD/Meter |
0.00% |
12/16/2015 |
|
45S T/C Fabric |
0.74 |
USD/Meter |
0.00% |
12/16/2015 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15456 USD dtd. 16/12/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Maharashtra Textile Policy 2011-17 seems to have failed miserably to meet its target – both on revenue and employment fronts. As many as 967 projects worth Rs9,749 crore were approved in the state, which were to generate employment for 57,000 people – 5 per cent of the total target of 11 lakh jobs. A mid-term assessment, however, revealed an even more grim situation. Only 112 projects, worth Rs3,300 crore, have been completed till now, creating 27,700 jobs, according to the data obtained from the Maharashtra textile department. This means, only 2.5 per cent of jobs and nearly 8.25 per cent of the projected investment have come into existence, as the policy crosses the halfway mark.
Launched during the previous Congress-NCP regime, the policy had stipulated generation of 11 lakh jobs and investment worth Rs40,000 crore in five years. The aim was to utilise 45 lakh surplus cotton bales produced in the state. While the figures highlight skewed response by the investors, the huge mismatch between the projected targets of revenue and employment also indicate the government's flawed approach, when it comes to crucial calculations. A textile expert said, "It is impossible to create 11 lakh jobs with Rs40,000 crore investment. This could be due to ignorance or an errant approach while correlating investment and employment. A possibility of deliberate misrepresentation can't be ruled out."
Interestingly, half of the jobs in the second-largest sector will be created through smaller projects, worth Rs10 crore or lesser each. Over 840 projects in this category are expected to give jobs to 27,000 people. On the other hand, 18 projects worth Rs100 crore each will generate only 4,846 new jobs. The statistics also cast aspersions over the functioning of the BJP-Sena government, which is in power for the last one year. According to the sources, the new government has virtually junked the policy. "The Fadnavis government constituted a committee to formulate a new textile policy under BJP MLA from Ichalkaranaji, Suresh Halwankar, within two months of it taking over. The committee submitted its report in January. Now a fresh policy based on Halwankar committee report will be presented in the winter Assembly," said sources. The BJP leaders, however, hope things will improve once the government starts implementing some of the provisions of the new policy, as the existing one can't be abolished. Textile minister Chandrakant Patil said, "We have already announced several measures to boost the textile sector. This includes realigning the policy as 'fibre to fashion' by setting up a mega textile hub in cotton-growing areas of Vidarbha. This will reduce the input cost, boosting investors' confidence. They would be able to compete in the international market."
What is textile policy?
The current textile policy seeks to offer equity support to new cooperative spinning mills in Vidarbha, Marathwada and north Maharashtra as per the financial pattern 5:45:50, besides 10 per cent capital subsidy for new projects in the three regions. The policy assures launch of skill development programme with the help of the Higher and Technical Education Department for this purpose. It also seeks to review and modify various regulatory provisions of labour and environmental laws, which adversely affect the growth of textile sector.
SOURCE: The DNA
The government on Wednesday increased excise duty on petrol by Rs 0.30 per litre and by Rs 1.17 a litre on diesel to make use of slump in oil prices to garner an additional Rs 2,500 crore. Basic excise duty on unbranded petrol has been increased from Rs 7.06 per litre to Rs 7.36 and the same on unbranded diesel from Rs 4.66 to Rs 5.83 per litre. Finance Minister Arun Jaitley said the increase in duty will yield an additional Rs 2,500 crore in revenue during the remainder of the 2015-16 financial year, which ends on March 31, 2016. After including additional and special excise duty, the total levy on unbranded petrol will be Rs 19.36 per litre as against Rs 19.06 currently. Similarly, on unbranded or normal diesel, total excise duty after including special excise duty will be Rs 11.83 per litre as compared to Rs 10.66 now. Basic excise duty on branded petrol has been raised from Rs 8.24 per litre to Rs 8.54 a litre and the same on branded diesel from Rs 7.02 to Rs 8.19 per litre. This is the second increase in excise duty in less than six weeks. The government had on November 7 raised excise duty on petrol by Rs 1.60 per litre and on diesel by 30 paise a litre.
In anticipation of the hike, oil companies had on Tuesday announced decrease in petrol price by just 50 paise a litre and by 46 paise on diesel, even though oil rates slumping to multi-year low warranted a bigger cut. Through the previous excise duty hike, the government had mopped up Rs 3,200 crore. For a government which is facing a likely shortfall in direct tax mobilisation, the two excise duty hikes have yielded Rs 5,700 crore. Prior to the two hikes since November, the government had previously - in four instalments - raised excise duty on petrol and diesel between November 2014 and January 2015 to take away the reduction in retail rates that was warranted from falling international oil rates. The four excise duty hikes during this period totalled Rs 7.75 per litre on petrol and Rs 6.50 a litre on diesel. It led to about Rs 20,000 crore in additional revenue to the government, helping it meet its fiscal deficit target. The government had collected Rs 99,184 crore in excise collections from the petroleum sector in 2014-15. This was Rs 33,042 crore in the first quarter of the current financial year.
SOURCE: The Business Standard
Finance minister Arun Jaitley on Wednesday hinted the standard goods and services tax rate could be lower than 18%. An expert panel headed by chief economic adviser Arvind Subramanian had recently recommended the rate to be 17-18%, in view of the estimated revenue-neutral rate of 15%. The minister added that the government was open to dropping the plan to impose a 1% origin-based tax on interstate movement of goods, one of the main demands of the Congress party, which is blocking the passage of the GST Constitutional Bill in the Rajya Sabha. “The issue (of 1% tax) is eminently resolvable,” he said. However, during an interaction with industry leaders on GST here, the minister said the other demand of constitutionalising a tax rate could not be accommodated as tariffs are never specified in the Constitution. Also, the Congress’ demand to have a dispute resolution mechanism within the proposed GST Council comprising central and state finance ministers can be accepted to the extent that the council could decide the modalities of dispute resolution but not actually adjudicate. Jaitley is keen to roll out GST from next fiscal as this would add to the economic growth prospects.
Referring to Congress opposition to the GST Bill, he said that many express only lip sympathy for GST without actually supporting the reform on the floor of the House. “Let me concede that one of the three Congress demands is a fair arguable point. On the 1% additional tax for two years, I told my friends, we are willing to go back to manufacturing states and say that since we have agreed to compensate you for full five years, this provision can be done away with. It is a resolvable issue,” said Jaitley. It was at the insistence of states like Gujarat and Tamil Nadu this provision was introduced. “After all, when states and the Centre are surrendering sovereignty to the GST Council, the council will decide (the rates). In any case, there cannot be only one rate… So we can’t put a rate in the Constitution. Since the rate is much less than 18%, the issue gets resolved,” Jaitley said
According to the minister, the economy, which is currently growing below its real potential, could add another 1-1.5 percentage point to its current growth rate — 7.4% recorded in the second quarter — if a few variables turn more favourable. Jaitley said such an outcome would depend on whether global oil price continues to be favourable, the country gets a normal monsoon next year and whether there would be some revival in global economic growth. “Our real potential is more than what we are achieving today. Our emphasis on infrastructure spending continues to increase because oil price remains favourable. If the next monsoon season is at least normal and some revival of global growth starts taking place, in addition to where we are now (of 7.4% GDP growth), I do not see any difficulty why India cannot improve upon its growth rate by 1- 1.5 percentage point. That brings us close to our real potential,” Jaitley told business leaders while reassuring that the government would continue to carry out structural reforms.
Growth in the second quarter was better than the 7% recorded in the first quarter but was lower than the 8.4% recorded a year earlier. The minister said he would go ahead with reducing direct tax exemptions and gradually bring down the highest marginal rate of corporate tax to 25%. He also said that there cannot be just one GST rate. “There would be a lower rate for commodities (for the common man), a standard rate for most other products and a higher rate for super-luxury or ‘sin’ products. So we cannot put a rate in the Constitution,” the minister said. “Can tariffs be cast in stone? If there is a drought and you need to raise the tax, can you amend the Constitution? The understanding with the states is that the council will decide (the tax rate),” said Jaitley. Subramanian said GST would be a buoyant source of revenue over the medium term. The indirect tax reform, along with the phasing out of corporate tax exemptions and addressing of legacy tax issues would lead to a clean, efficient, modern and broad tax regime replacing tax terrorism. GST represents continuity of Indian thinking over the years and is a bipartisan effort, he said.
Factfile
SOURCE: The Financial Express
The US Federal Reserve's decision to formally mark an end of its unconventional monetary policy is a welcome sign of normalisation, which will augur well for domestic financial markets, said India Ratings and Research. It said bond and currency markets stand to gain in the near term; and the 10-year benchmark G-sec yield is likely to soften around the 7.70 per cent mark with a bias towards further softening. The rupee, on the other hand, will stabilise between 66.3-66.6 to the dollar during the week. With the Fed's policy normalisation under way, the Reserve Bank of India's (RBI) focus during the forthcoming money policy reviews will increasingly shift towards domestic parameters-critical being the growth-inflation rhetoric. For financial markets, with looming uncertainty over the Fed policy path behind, the driver for markets hereon will be more inward focused than external developments. Ind-Ra said the elimination of uncertainty post the Fed event emerges as a major positive for domestic bond market, which has been witnessing foreign outflow. Between November 2015 and first week of December, equity outflow stood at around $1.7 billion, while debt outflow totaled $580 million. Incrementally, outflow from India is likely to moderate. The bond market is likely to stabilise in the near term on the back of (1) lack of supply pressure of G-sec this fortnight (2) the next tranche of debt limit hike for portfolio investors for both central and state government bonds opening on January 1 2016 (3) gradual and non-disruptive rate hikes by Fed in 2016 keeping the door open for RBI to ease rates and basis assessment of evolving macro parameters.
Ind-Ra believes future inflow is likely to be more long term in nature than 'hot' money. The rupee is likely to emerge as a gainer in near term. Ind-Ra believes the rupee is likely to gain and consolidate in the 66.3-66.6 range. Its better-placed macro fundamentals indicate that the currency could continue to outperform both in absolute and relative terms. "In the currency space, we have been highlighting that the rupee is likely to correct from the recent lows of 67 to around 66.3-66.6 mark. A dovish rate hike by the Fed is likely to be positive for the emerging market forex space, as questions persist not only over the timing of further rate hikes but also on the extent. The first rate hike comes against the backdrop of low inflation. The weakness in the US dollar, consequently, may be an interim phenomenon with subsequent rate hikes likely to shift the orbit of dollar strength outward," said Bansi Madhavani, Analyst, India Ratings & Research. However, the impact of policy normalisation by Fed is unlikely to have any fundamental shifts in the outlook for the Indian economy. Indian companies continue to face pressure of excess leverage at a time when the growth recovery is protracted, leaving a debt overhang. An appreciation in the currency, accompanied by low energy prices, will have a salutary impact on corporate balance sheets. Any meaningful turnaround, however, is likely to be only slow and gradual.
SOURCE: The Economic Times
India has ranked a low 97th out of 144 nations, behind Kazakhstan and Ghana, on Forbes’ annual list of the best countries for business in 2015, scoring poorly on metrics like trade and monetary freedom and tackling challenges like corruption and violence. Denmark topped the list of the 144 nations on the Best Countries of Business in 2015 list by Forbes. The US has dropped four spots to number 22, continuing a six-year descent since 2009 when it had ranked second overall. The US is the financial capital of the world and its largest economy at USD 17.4 trillion (China is second at USD 10.4 trillion), but it scores poorly on monetary freedom and bureaucracy/red tape, Forbes said. India is ranked 97th on the list, with Forbes saying that while the country is developing into an open-market economy, traces of its “past autarkic policies” remain. “The outlook for India’s long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. “However, India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities,” Forbes said.
The publication added that India faces other challenges like high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Forbes further said that growth in India last year fell to a decade low, as its economic leaders struggled to improve the country’s wide fiscal and current account deficits. “However, investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilisation of the rupee,” it said.
The country performed moderately well on certain factors, ranking eighth on investor protection, 41st on innovation, 57th on personal freedom and 61st on property rights. It scored low on trade freedom, ranking 125th and on monetary freedom it ranked 139th. On technology it ranked 120th, 77th on corruption and 123rd on red tape. The United Kingdom and Japan both moved up three spots to No 10 and No 23 respectively. Germany improved two places to No 18 and China rose from No 97 to No 94. South Africa is ranked 47th on the list followed by Mexico (53), Kazakhstan (57), Zambia (73), Ghana (79), Russia (81), Sri Lanka (91), Pakistan (103) and Bangladesh (121). The very bottom of the list features a number of emerging markets restrained by high levels of corruption and little freedom.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 34.20 per barrel (bbl) on 16.12.2015. This was lower than the price of US$ 34.25 per bbl on previous publishing day of 15.12.2015.
In rupee terms, the price of Indian Basket decreased to Rs 2286.11 per bbl on 16.12.2015 as compared to Rs 2296.04 per bbl on 15.12.2015. Rupee closed stronger at Rs 66.85 per US$ on 16.12.2015 as against Rs 67.04 per US$ on 15.12.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on December 16, 2015 (Previous trading day i.e. 15.12.2015) |
Pricing Fortnight for 16.12.2015 (Nov 27 to Dec 11, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
34.20 (34.25) |
39.02 |
|
(Rs/bbl |
2286.11 (2296.04) |
2603.80 |
|
|
Exchange Rate |
(Rs/$) |
66.85 (67.04) |
66.73 |
SOURCE: PIB
With rich countries pushing for a deal at WTO on phasing out export subsidies, India today asserted there is little convergence of views among members of the global trade body on this issue and objected to any such pact without a permanent solution to farm subsidies. "We are disappointed at the cavalier manner in which these issues are being pushed into the future. On the other hand, there is a sudden inexplicable zeal to harvest Export Competition. On this we are told that there is convergence when in fact, there appears to be little," Commerce Minister Nirmala Sitharaman today said at the Plenary Session here. The European Union and some other countries, including Brazil, are seeking a deal on export competition during the ongoing WTO's Ministerial meeting here. Sitharaman's statement counters the claims being made in some quarters here about emergence of a consensus on the issue.
Developed countries, which are accused of giving huge 'trade-distorting' farm subsidies, want emerging nations like India to take greater commitments in terms of reducing their export support. "We're on the verge of an important agreement on agricultural export competition," the UK said. "Australia believes it would not be acceptable to finish MC10 without an outcome on export competition in agriculture," Australia said at the Plenary Session. A deal on export competition could lead to phasing out of India's transport subsidies and market allowances being given for exports of commodities like sugar.
EU trade Commissioner Cecilia Malmstrom said that a deal in export competition would be beneficial for developing countries. It is learnt that traction is picking on developing countries including India's demand to start discussions on special safeguard mechanism (SSM) along with the export competition. SSM is important to protect interest of poor farmers in case of sudden surge in imports or dip in prices. During an open-ended agriculture meeting, Sitharaman said that export competition is one of the pillars of agriculture negotiations and these negotiations are finely balanced on three pillars and "taking out one pillar will disturb the balance".
SOURCE: The Economic Times
India and the European Union will hold their long-pending summit in the first half of next year and resume negotiations on a free trade agreement in January to bring relations back on track. Newly-appointed ambassador of European Union Tomasz Kozlowski said the issue of European Union restricting sale of around 700 generic drugs clinically tested by India's GVK Biosciences does not stand any more and both are now set to open a "new page" in their ties. FTA talks between the two sides will be held in Delhi mid-January. Officials sources hinted that the "stock taking" FTA talks will be held on January 18. "The summit meeting will be held in first half of 2016. We are now working on mutually convenient dates for the summit," he told reporters while describing India an engine of growth of the global economy. The envoy who had earlier served as Polish Ambassador to Pakistan indicated that meeting between Modi and European Union leadership on the sidelines of the G-20 summit in Antalya in Turkey last month paved the way for the decision to hold summit talks in first half of next year and resumption of FTA negotiations. The last India-EU Summit had been in 2012. Ties saw some strain after the bilateral summit could not be arranged during the PM's Europe trip in April apparently over the Italian marines issue. Later efforts to arrange it in September and November during Modi's trip to Ireland, US and UK could not materialise. It is scheduled to be held in Brussels. Kozlowski said, "We are now set open a new page in our ties," adding the two sides were also finalising a pact to facilitate better movement of people from India to EU and vice versa. When asked about Italian fishermen issue, Kozlowski said it remained a matter of concern.
SOURCE: The Economic Times
There is renewed interest in Africa for Indian industry participation and hence the opportunity should be utilised, said M Senthilnathan, Executive Director, Export Credit Guarantee Corporation. The ECGC is ready to give the necessary push to small and medium enterprises (SMEs) to explore the growing scope in many African nations. These countries are looking to India after their experiences with China. The Chinese companies that execute major projects tend to bring expertise and labour from back home. Hence, the locals do not benefit much, he explained. In contrast, Indians tend to utilise local labour and collaborate easily, thus generating participation and benefits. This has caught the attention of policymakers there. The recent Africa Summit in New Delhi, where heads of 54 countries participated, has helped take things forward, he told BusinessLine on the sidelines of a seminar here on Wednesday.
On the issue of falling exports, especially of petroleum products, traditional gems & jewellery, and engineering goods, Senthilnathan listed a couple of reasons: . slowdown in the main export markets of the US, Europe and the UK; and fall in iron ore prices and the crude oil rates impacting exports in value terms. Earlier, speaking at EXIM Conclave 2015, organised by the CII-Telangana State, he urged Indian companies, especially SMEs, to be bold and enter the world markets, learn the nuances and take risks as the returns are high. In his address, Krishna Ella, MD of Bharat Biotech, said simple strategies are required to boost exports. He wanted Indian consulates abroad to help companies promote their business. He narrated his experience of how a foreign diplomat told him that his job was to ensure that their companies do good business in India.
Similarly, the Centre’s focus on skill development, Ella said, is much needed and must be implemented. A skilled youth can turn into an entrepreneur, which in turn can lead to innovation. The CII-Telangana Chairperson, Vanitha Datla, said Indian companies were poor at marketing, though they had good products and the country has large and rich resources to exploit. The necessary changes in export policy could help encourage SME exporters.
SOURCE: The Hindu Business Line
China Consulate General of Eastern Zone, MA Zhanwu addressing a meet organized by the Indian Chamber of Commerce (ICC) in Bhubaneswar on Tuesday informed that Odisha is a good place for investment and China is keen to invest in the state of Odisha especially in textile sector, port development and food processing. He also said that they can facilitate trade and investment between Odisha and China in the textile industry, port development, food processing, etc,. The people in the state of Odisha have lots of opportunities and they are doing well. He further said that China economy has slowed down and this year China’s growth rate is not as much as India. China would form an economic corridor, where Bhutan, India, Bangladesh and Myanmar would be part of it and Odisha would also be benefited from it. Earlier on Monday MA Zhanwu met Chief Secretary AP Padhi and gave a proposal to have bilateral trade between China and Odisha
SOURCE: Yarns&Fibers
Commerce Minister Nirmala Sitharaman on Wednesday told the World Trade Organization (WTO) that development issues agreed at Doha could not be brushed aside. Addressing the plenary session of the 10th WTO ministerial conference in Nairobi, Sitharaman said the Doha Development Agenda (DDA) should be respected and advised the trade body to move towards a more equitable international trade structure before taking up new issues. She also pulled up rich countries for failing to reduce massive agricultural subsidisation in their own countries while demanding subsidy cuts in developing economies, especially India. Sitharaman had earlier referred to the slow progress on the DDA, adopted during the fourth ministerial conference in Doha in 2001, as frustrating for developing countries.
In her address to trade ministers from 160 countries on the second day of the conference, she said sudden focus on newer issues of limited consensus like export competition by the US-led developed bloc was baffling. "The manner and haste with which important negotiating meetings are being convened does not inspire confidence,” she added. She also brought up the issue of agriculture, which is dominating the ongoing conference owing to a schism between the developed and developing blocs over special safeguards and public stockholding of food. While India has consistently termed special safeguards for developing countries a priority for protecting poor farmers from sudden surges in imports or dips in global commodity prices, Sitharaman declared the support of international groupings like the G-33 and the Africa bloc. Developing countries have demanded that a provision already existing in Article 5 of the multilateral body’s Agreement on Agriculture be amended to provide them the same benefit that rich countries derive from the special (agricultural) safeguards.
Referring to vested interests blocking the policy, she said, “For decades, a handful of farm lobbies of some countries have shaped the discourse and determined the destiny of millions of subsistence farmers of the developing countries.” The Trade Facilitation Agreement signed by India in 2014 allows it to maintain its food buffer stocks till a permanent solution is found. But it still cannot export such subsidised food owing to opposition from developed countries alleging it distorts market prices. A ‘peace clause’ signed with the US that allows India temporary immunity from complaints by other WTO members has been described by India as off the negotiating table. Rich members at the WTO also oppose India’s food security programme, especially the policy of providing minimum support prices for food crops to farmers, alleging they distort trade prices. However, the same countries have refused to reduce their own massive subsidisation. Saying such reduction had been the clear mandate of the WTO, Sitharaman said it was surprising the issue was not even a subject matter of discussion. Kenyan President Uhuru Kenyatta had earlier said Africa’s farmers simply could not compete against heavily subsidised farmers in developed countries.
On the matter of services, Sitharaman called for greater liberalisation of services trade, particularly in Modes 1 and 4 under the WTO charter. While Mode 1 pertains to business process outsourcing, which India wants completely liberalised, Mode 4 negotiations provide for movement of people. Here India has been demanding the bound rate for granting visas for professionals should be substantially increased. Sitaraman also pushed for a strong package for least developed countries (LDCs) in the form of trade concessions. She said India was the first developing country to extend duty-free quota-free access to all LDCs. Pointing out that the current ministerial was the first one being held in Africa, she called for stronger integration of LDCs in the global market. Sitharaman defended the WTO’s multilateral trading system and said plurilateral agreements between countries impinged upon it. India has maintained silence on the recently announced Trans-Pacific Partnership among the US, China and Japan. However it is working actively on the Regional Comprehensive Economic Partnership involving China, Australia and the ASEAN countries and is also closely pursuing free trade agreements with a host of countries.
SOURCE: The Hindu Business Line
The second day of the WTO's tenth ministerial started with strong statements from trade ministers of India and China who said the reform process of the organisation was in peril and it would be a retrograde move if it were to be absent from the development agenda. Indian commerce minister Nirmala Sitharaman on Wednesday stated the country's disappointment at the "manner and haste with which issues are being taken up selectively to suit a few", while Chinese trade minister Gao Hucheng bluntly said: "How can we negotiate new issues if we cannot find solutions to the agriculture issues?" An official aware of the negotiations said that the 162-member WTO is fragmented on the question of new issues as there are many of them.India and China have joined hands in their fight against the developed countries' efforts to end the Doha Round and issued a joint ministerial statement along with 45 other countries "with the purpose of strengthening the multilateral trading system and ensuring that development is at the centre of the ongoing negotiation". "WTO must not be absent from the development agenda... This would be myopia, irresponsibility but also retrograde," the Chinese minister said, citing lack of firm conviction as the biggest enemy while resolving such issues. However, both Hucheng and Sitharaman praised the WTO for having achieved its first multilateral trade agreement in the form of Trade Facilitation Agreement, or TFA. "We all welcome the TFA but equally important is the general council decisions on public stockholding of food security purposes. The G-33 has suggested a special safeguards mechanism. It is regrettable that these issues are being pushed into the future while others being brought to forefront," Sitharaman said.
SOURCE: The Economic Times
India and Iran are trying to iron out irritants and conclude contract by January for the expansion project of the strategically located Chabahar Port after over six months Shipping Minister Nitin Gadkari had concluded MoU on the project - proposed gateway to landlocked Afghanistan. Official of both sides are negotiating terms of the contract with a hope to conclude the document by next month for an Indian investment of $ 85 million to construct two berths at the Chabahar port. The MoU for much delayed Indian investment to expand Chabahar port was signed last May when Road Transport, Highways and Shipping Minister Nitin Gadkari visited Tehran weeks before Iran's landmark nuclear deal with the Western powers. An Indian team was in Tehran this week to discuss contract of the project. Iran affairs experts point out that negotiations with Iran are less easier said than done. It is understood that the Chabahar contract is being negotiated clause by clause. Earlier differences developed after Iranian port authorities told India that the port building contract had been awarded to an Iranian company Aria Badaner even after the MoU was signed with Delhi. Senior Iranian Ministers have sought to downplay the issue as local problem. Iran has also conveyed to India that it wants to utilise part of the amount (oil payment dues) remaining with Delhi to fund joint venture projects including in Chabahar. Iran has conveyed to India that it is not seeking to take back entire oil payment dues.
Experts pointed out that an early visit by the PM to Tehran will give push to bilateral relations and enable to remove irritants in implementing projects in Iran. Sources recalled that Narendra Modi and the Iranian President had excellent meeting in Ufa last July where all bilateral issues and projects were discussed. Senior Indian officials later visited Tehran to discuss bilateral cooperation including security partnership. The atmosphere for Indian investments in Chabahar and other areas in the Persian Gulf country will be further conducive after the IAEA on Tuesday ended its 12-year investigation into concerns that Iran might be developing nuclear weapons. The move is seen as a key step towards lifting UN, EU and US sanctions. The lifting of sanctions, agreed in a July deal with world powers, hinged on the IAEA's findings on the issue. The Iranian side has been pushing India for honouring the investment commitment for Chabahar port at an early date with the issue figuring at many senior-level bilateral meetings. The Shipping Ministry is the nodal ministry from the Indian side. The remaining $ 15 million of the total $ 100 million commitment for the project in Southeastern Iran will be invested in other areas of Chabahar port complex. Delhi will also consider at a later stage to invest in the railway project to connect Chabahar with Iranian rail network. Tehran has offered a proposal to Delhi to help build over 500-km-rail link from the Chabahar in Southeast Iran to connect with Zahedan, capital of Sistan-Baluchistan province. Zahedan is connected with the main Iranian railway network and the proposed rail link when concluded will join Chabahar with International North South Transport Corridor and provide access to Azerbaijan, Turkmenistan and beyond.
Chabhar could also be linked with Delaram-Zaranj road (built by India in Afghanistan & connects at Afghan-Iran border) via rail through Zahedan. A road already connects the Iran-Afghan border point to Chabahar. The 218-km road from Zaranj on the Afghanistan- Iranian border to Delaram in Nimruz province where it connects the Afghan Garland Road. The grand strategic plan is to connect Chabahar through Zahedan into Afghanistan and on the other side, have a shipping line to key Indian ports on the Western coast. Delhi and Tehran are sorting out differences over India's participation to build rail link between Zahedan and Afghan-Iran border connecting Delaram Zaranj road. India would also be keen to invest Rs two lakh crore in the Special Economic Zone in Chabahar at a later stage, officials hoped. Indian private players could play key role in this. Meanwhile, Delhi is also exploring possibility of trilateral shipping and connectivity arrangement between India-Oman-Iran. Oman is building a new port and SEZ in Duqm (midway between Muscat and Salala) and India is keen to take advantage of that, people familiar with the developments said. Experts on West Asia point out that Oman enjoys better relations with Iran compared to other five hydrocarbon-rich Gulf nations.
SOURCE: The Economic Times
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for signing of a Memorandum of Understanding (MoU) between India and Spain on cooperation in Port matters. Recognizing the significant mutual benefit that can be derived from cooperation in the port matters between the two countries, it has been decided to sign the Agreement with a view to strengthening cooperation and to render sustained mutual assistance and advice on port matters and other related maritime matters. Signing of the MoU will help both countries in encouraging and facilitating the development of Ports and provide a cooperation platform for enhancing and stimulating steady growth of maritime traffic, exchange and training of staff and students from various maritime establishments, exchange of information necessary for accelerating and facilitating the flow of commercial goods at sea and at ports, establishment of joint ventures in the fields of port led development, port efficiency, modernization of existing ports, dredging, particularly maintenance dredging in riverine ports, environment and green port intiative, port engineering, maritime training, information technology including development of simulators, port facilities and related maritime activities, etc. The MoU would be signed on a mutually convenient date and venue.
SOURCE: PIB
The cabinet has cleared the revised Model Text for the Indian Bilateral Investment Treaty, which seeks to plug loopholes in earlier agreements ensuring that India does not get dragged into international arbitration on any issue settled by a judicial authority. The template will be used for renegotiation existing agreements and future ones the country will enter into. The revised text provides for a refined Investor State Dispute Settlement (ISDS) that requires that foreign investor exhaust local remedies before commencing international arbitration. As many as 17 companies or individuals including Vodafone International Holdings BV, Deutsche Telekom, Germany, Sistema of Russia, Children's Investment Fund and TCI Cyprus Holdings served arbitration notices to India under various bilateral investment protection agreements after their investments ran into trouble in India or they faced adverse policy action. These notices have created lot of adverse publicity for the government and impression of a hostile investment environment. White Industries Australia has even got a favourable award against India. "The model excludes matters such as government procurement, taxation, subsidies, compulsory licenses and national security to preserve the regulatory authority for the Government," the government said in a statement. It also proposes limiting the power of the tribunal to awarding monetary compensation alone. New Delhi will renegotiate all existing 82 treaties to safeguard country's interests as most were signed much earlier and do not have provisions to address situations arising now due to changes in the overall business environment. "A BIT increases the comfort level and boosts the confidence of investors by assuring a level playing field and non-discrimination in all matters while providing for an independent forum for dispute settlement by arbitration," the statement said.
SOURCE: The Economic Times
The US Federal Reserve has raised interest rates by 0.25 percentage points - its first increase since 2006. The move takes the range of rates banks offer to lend to each other overnight - the Federal Funds rate - to between 0.25% and 0.5%. The move is likely to cause ripples around the world, and could increase pressure on the UK to raise rates. It could also mean higher borrowing costs for developing economies, many of which are already seeing slow growth. Rates in the US have been at near-zero since 2008.
There are concerns that a rise will compound that slowdown, as higher rates in the US could strengthen the dollar, the currency in which many countries and companies borrow. It puts US policy at odds with that in Europe, where even easier borrowing terms are being implemented. The European Central Bank earlier this month cut overnight deposit rates from minus 0.2% to minus 0.3% and extended a €60bn stimulus programme. The Bank of England this month voted to keep rates on hold at 0.5%, with its next move in interest rates not expected until late 2016.
'Improvements'
The US rate rise vote was unanimous. The US central bank also raised its projection for its economic growth next year slightly, from 2.3% to 2.4%. That suggests the bank does not think the rate increase will damage growth. US share markets jumped in response. The Dow Jones went from a 50-point rise to stand up 79 points, and later added to that to close up 224 points at 17,749 points, a 1.3% gain.
Analysis
It doesn't sound like much - but its significance is mighty. After nearly a decade of what has been, essentially, a global economic effort - and experiment - to save the world from financial calamity, the Federal Reserve, the central bank to the world's largest economy, has decided, finally, to try a touch of "normalisation". Getting economies "back to normal" was always the hope during that remarkable time when the financial system was in danger of going bust. Central banks around the world slashed interest rates to near zero and created billions of pounds of support for governments and the wider economy. I'm not sure anyone thought that, eight years on, we would still be in a near zero interest rate world. Or, in cases such as the eurozone, a negative interest rate world.
The US central bank cited as the reasons for its action increased household spending and investment by business, along with a continued low rate of inflation. In its statement, the committee said: "The committee judges that there has been considerable improvements in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2% objective." The Fed has said it will continue to monitor inflation and employment to determine if and when further rise are justified. The chairman of the Federal Reserve, Janet Yellen, said the committee was confident the economy would "continue to strengthen" but it still has "room for improvement".
2017 'normal'
Future action will depend on how the economy moves forward and will be gradual. Ms Yellen acknowledged weakness remained in the labour market, particularly wage growth. She warned that if the Fed had continued to delay a rate rise, it could have been forced to tighten monetary policy too quickly, something that could have led to another recession. The Fed's medium-term projection for the Federal Funds rate is 1.5% in 2016 and 2.5% in 2017. The Fed will not get close to normal levels of around 3.5% until 2018 when it expects the economy will be back on a solid track: "Were the economy to disappoint, the Federal Funds rate would likely rise more slowly," said Ms Yellen. She gave little clue as to the timing of the next move, saying: "I'm not going to give you a simple formula for what we need to raise rates again."
Tight security at the press conference seemed to add even more gravity to the importance of the announcement about to be made. Getting stuck at the security desk - while insisting Zoe is your legal name - seemed like a bad omen. In fact it was an opportunity to see Chair Yellen up close in the moments before the announcement, as she walked past. After every pause by Janet Yellen, reporters' hands shot into the air, eager for answers as to the Fed's thinking. At one point a reporter lifted himself out of his chair. Most reporters' questions focused on what the Fed would be looking at next. Some bolder reporters though challenged whether the Fed's decision was made out of vanity. One reporter asked if the Fed was raising rates now because its image would be hurt if it did not. Chair Yellen did not rise to the bait. Despite that enthusiasm, as the last question was asked, two reporters shared a celebratory bumping of their fists under the desk. After all, the conference had gone on for more than an hour. But when Ms Yellen left the room reporters stayed seated, staring at the empty podium as if waiting for another announcement.
SOURCE: The BBC News
Euro zone businesses are about to mark their best quarter in 4-1/2 years but those in core economies reported a slight loss of momentum running into year-end with still no sign of inflation picking up, surveys showed on Wednesday. The data, compiled by Markit, leave open the debate over whether the European Central Bank's loose monetary policy will have to be made even looser still in the coming year to meet its inflation goal of close to, but just below, 2 percent. Businesses in the euro zone's smaller economies made up for what the core members lost, Markit said. Growth in Germany's private sector slowed and in France, the euro zone's second largest economy, activity fell to near-stagnation with the services sector decelerating sharply following the Nov. 13 attacks on Paris. But that did not spread to the wider euro zone data. "Euro zone PMIs showed good resilience in December, remaining at healthy levels even in the wake of the headwinds from the Paris terrorist attacks," said Marco Valli, economist at UniCredit. "Low (and falling) energy prices, stimulus from past euro depreciation and improving domestic fundamentals continue to shield the euro zone economy from a persistently weak global trade environment." Markit's Composite Flash Purchasing Managers' Index (PMI) for the euro zone, based on surveys of thousands of companies and seen as a good guide to growth, slipped to 54.0 from November's 54.2.
While a Reuters poll had suggested it would hold steady at November's level, it has been above the 50 mark that separates growth from contraction since July 2013. Markit said the PMI pointed to fourth quarter economic growth of 0.4 percent, in line with predictions from economists in a Reuters poll published last week. The ECB eased policy again earlier this month, cutting its deposit rate and extending its asset-buying program. ECB President Mario Draghi said on Monday inflation should reach its 2 percent target ceiling "without undue delay". But that easing fell short of market expectations, leaving many speculating that larger monthly asset purchases may still be required. The latest PMIs showed firms cut prices for a third month as they struggled to generate meaningful growth. "Growth is not strong enough to generate inflationary pressure and we suspect that it will slow further as the effects of falling inflation and the earlier depreciation of the euro fade," said Jennifer McKeown at Capital Economics. "As such, pressure is likely to mount on the ECB to offer bolder policy support after its disappointingly timid action earlier this month." The likelihood the ECB tops up the 60 billion euros (£43.6 billion) a month it is currently spending on buying government bonds is just 40 percent, a Reuters poll found, as Draghi faces opposition from more conservative policymakers on the ECB's Governing Council.
As investors debate whether the ECB does loosen policy again, most are convinced the United States Federal Reserve will increase borrowing costs for the world's largest economy later on Wednesday. [ECILT/US]. Britain's Bank of England is expected to follow the Fed's path - albeit not until the second quarter of 2016 - although the pay of workers in Britain grew at its slowest in pace since early 2015 in the three months to October, underscoring one of the reasons why the BoE is in no rush. Shares and bond markets rose and the dollar dipped on Wednesday, as investors readied for what would be the first rise in U.S. interest rates in almost a decade.
FACTORY STRENGTH
Prices rose just 0.2 percent in the euro zone last month on a year ago, official data showed on Wednesday. Perhaps worryingly for policymakers, the composite output price index was below 50 for a third month, holding steady at 49.5. Despite that, a PMI covering the bloc's dominant service industry fell to 53.9 from November's 54.2. But firms were more optimistic about the coming year. The business expectations sub-index climbed to a four-month high of 63.0 from 62.4. Manufacturers had a better end to the year than expected. Their PMI rose to a 20-month high of 53.1, confounding forecasts for it to hold steady at November's 52.8. The output index, which feeds into the composite PMI, jumped to 54.4 from 54.0, also a 20 month high. Growth was driven by new orders coming in at their fastest rate since early 2014 - the sub-index rose to 54.0 from 53.5 - with demand picking up as a weaker euro made manufactured goods cheaper abroad.
SOURCE: The Reuters
Clear battle-lines have been drawn at the World Trade Organization’s (WTO) on-going trade ministers’ meet at Nairobi between developed membersand developing countries on the future of the Doha development round and introduction of new issues, with a cloud of uncertainty hovering over the outcome of the Ministerial meeting. “Apart from the future of the Doha round, no convergence has also been reported on the issues of special safeguard measures, food security and export competition, despite efforts made by the negotiating group on agriculture to reach some middle-ground,” an official monitoring various meetings at the Nairobi meet said.
Speaking at the plenary session of the meet on Wednesday, trade ministers from both India and China — the two important countries that could determine the fate of the Nairobi meet —lashed out against members rooting for the closure of the Doha development round cherry-picking issues such as export-competition and bringing in new issues not part of the Doha mandate.
WTO Director-General Roberto Azevedo met Commerce and Industry Minister Nirmala Sitharaman after the plenary session to discuss ways in which a break-through could be reached on the sticky issues between developed and developing countries. An informal meeting of all trade ministers was also called by the WTO to devise ways out of the log-jam. Developed country members are holding on to their views that since the Doha round has not delivered much in 14 years, it was time to move on and hold talks under a new round which could include new issues such as investment, competition policy, government procurement and environment, the official said. “It is regrettable that longstanding issues of interest to a large number of developing countries strongly pushed by the G-33, such as an effective special safeguard mechanism for developing countries and for changing the rules relating to public stockholding for food security purposes, are being put aside for the future and new issues of recent vintage are being taken up with unusual enthusiasm,” Sitharaman said at the plenary session.
No convergence
The Minister said that while ‘export competition’, an issue of interest to a few farm lobbies such as Australia, the EU and Brazil that want all subsidies to be dismantled, was being pushed as a strong deliverable at Nairobi without any convergence on the matter. The Chinese Trade Minister Gao Hucheng, in his address, said that there was no basis for some countries to talk about new issues, without concluding the development issues of the Doha Development round launched in 2001. “If we throw away what we have been discussing for the last 14 years, what will it say about the credibility of the multilateral body,” he asked, adding that the right to development was a basic human right and needs to be respected. The representative of the African Group, the trade minister from Lesotho, in his speech, said that the developed countries should not internationalise their domestic rules. He added that if the Nairobi ministerial meet did not take political calls on deliverables for the poor, it would be a betrayal of the faith of poor farmers.
SOURCE: The Hindu Business Line
Even as the 10th Ministerial of the World Trade Organisation (WTO) gets under way in Nairobi to facilitate smoother global trade, a new report has revealed that the G-20 nations have taken fewer steps to remove trade barriers in recent months than earlier, although the growth in restrictive measures imposed by them has remained stable. Only 62 measures aimed at facilitating trade were initiated by the G-20 nations between mid-May and mid-October, with a monthly average of just over 12, the slowest pace since November 2013, according to the WTO report. However, the G20, accounting for more than 85% of the world’s GDP, imposed 86 new trade-restrictive measures between mid-May and mid-October, with a monthly average of just over 17, the same pace at which the group had slapped curbs between mid-October 2014 and mid-May 2015, as noted in the previous report of the WTO. Of the 1,441 trade-restrictive measures — including trade remedies — adopted by the G-20 economies since 2008 and recorded by the WTO, only 354 had been removed by mid-October 2015, it said. Consequently, the overall stockpile of restrictive measures introduced by G-20 continues to grow unabated.
SOURCE: The Financial Express
South Korea and Vietnam after starting negotiations in September 2012, the two sides formally signed the free trade agreement (FTA) on May 5, with South Korea's National Assembly approving the trade agreement on Nov. 30. The free trade pact between South Korea and Vietnam now will go into effect on Dec. 20, and will help fuel trade and expand investment opportunities, the government said Wednesday. According to the Ministry of Trade, Industry and Energy, Seoul and Hanoi agreed on the effective date through diplomatic channels, with both sides wanting the pact to come into force as soon as possible. The ministry said that with the FTA to be placed within the year, companies from the two trading partners can benefit from more tariff cuts starting 1st January 2016. Under the deal, tariffs would go down at the start of every new year, so 2016 will mark the "second year" of rate cuts. The ministry in charge of trade and industry promotion said that with the FTA in place, it will become easier for local companies to do business in the Southeast Asian country.
Besides textiles and car parts, the bilateral FTA will open Vietnam up to South Korean consumer electronics and even cosmetics. The latter could provide more export opportunities for South Korea's medium-size enterprises. The pact will, moreover, allow greater access to Vietnam's service sector. Seoul agreed to open 94.7 percent of its market, while corresponding numbers for Hanoi will reach 92.4 percent. Vietnam is South Korea's third-largest export market after China and the United States. In the first 10 months of this year, outbound shipments to the country topped US$23.39 billion. The FTA will create a more stable business and investment environment.
SOURCE: Yarns&Fibers
As the country with the lowest per capita GDP among Trans Pacific Partnership Agreement (TPP) signatories, Vietnam will enjoy comparative and unique advantages such as labor-intensive manufacturing and fewer tariffs when TPP comes into effect, the Vietnamese media said quoting the World Bank. At the Taking Stock report, the international lender published a special section on the TPP Agreement, in which it argues that the TPP is expected to generate considerable benefits for Vietnam. According to the report, the TPP could add as much as 8 per cent to Vietnam's GDP, 17 per cent to its real exports, and 12 per cent to its capital stock over the next 20 years. Despite various implementation challenges, the impact of the TPP on Vietnam is expected to be positive. The simulations suggested that the TPP would boost Vietnam's real GDP to over 8 per cent by 2030 thanks to fewer tariffs on its exports especially garments and textiles. So far, the US still applies 17 per cent import tariffs. The TPP is expected to pave the way for Vietnam to penetrate and expand its export markets. As almost all tariffs and non-tariffs on industrial and agricultural products will be eliminated or gradually reduced, both export and import activities will strengthen thanks to fewer trade costs, the report said.
TPP would boost trade growth towards trade liberalization. The TPP would diversify Vietnam's exports towards export-oriented manufacturing. The Southeast Asian country has transformed export structure from reducing raw materials and raising manufactured products. According to the World Bank, the density of manufactured products is accounting for around 58 per cent of total export turnover, but would rise additional 30 per cent while other sectors like agriculture, petroleum, mining, and services would experience slightly decreases. The World Bank also projected that the TTP would help Vietnam deeply integrate into the global chain; create conditions on economic restructuring; encourage investment; and nurture a more competitive and creative economy.
SOURCE: Fibre2fashion
Vietnam's fast-growing market has attracted a large number of Taiwanese companies with investment plans. In fact Taiwanese companies are among the first foreign investors in Vietnam with plan to invest in a textile production chain to benefit from the upcoming, Trans Pacific Partnership (TPP) said John Tang, director of the Taiwan Trade Centre (TAITRA) office in HCM City at a recent press conference. Taiwanese businesses have pumped US$1.11 billion into 154 projects in Vietnam over past 11 months, making the territory one of the leading sources of foreign direct investment in the country, according to the Foreign Investment Agency's year review. During the period, the processing and manufacturing sector attracted the largest share of investment with $890 million, about 80 percent of newly registered Taiwanese capital in the country. The largest Taiwan-invested project is Polytex Far Eastern Vietnam's 99ha-plant, which will manufacture supporting products like cotton yarn and polyester, in Binh Duong's Bau Bang Industrial Zone. Investment was over $274 million for just the first phase. Typically, Taiwanese investors have a tendency to invest in the country's key southern region due advantages in market and support industries, the report said. Binh Duong Province took the lead with $427 million, a third of total Taiwanese investment, with Dong Nai Province in second with $242 million.
SOURCE: Yarns&Fibers
