Mr. Dhirubhai R. Shah, Chairman, Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) while welcoming the announcement of RoDTEP rates noted that although the announced rates needs to be revised to compensate the actual embedded taxes and levies paid by the exporters in case of the MMF textile lines, inclusion of the entire value chain will encourage inclusive growth in exports of the MMF textiles from the country. He informed that the RoDTEP scheme will be WTOcompliant and hence not likely to face any issue under any international arena as the RoDTEP is one such reform, based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters. Mr. Bhadresh Dodhia, Vice Chairman, SRTEPC, stressed that the announcement of the RoDTEP rates is a muchneeded initiative of the Government for improving the health of the industry and exports in the covid-pandemic period. This will significantly help in increasing our exports, Mr. Dodhia stated.
Source: Tecoya Trend
Surat: The man-made fiber (MMF) textile sector is celebrating the announcement of the much-awaited Remission of Duties and Taxes on Exported Products (RoDTEP) by the Government of India on Tuesday. The RoDTEP, one of the flagship schemes of the government under the leadership of Prime Minister Narendra Modi, covers the entire MMF textile value chain. Currently, the RoDTEP scheme has an outlay of Rs 12,454 crore in the current fiscal, with the refund rates ranging from 0.5% to 4.3%. Chairman of Synthetic and Rayon Textile Export Promotion Council (SRTEPC), Dhirubhai Shah said, “Although the announced rates need to be revised to compensate the actual embedded taxes and levies paid by the exporters in case of the MMF textile lines, the inclusion of the entire value chain will encourage inclusive growth in exports of the MMF textiles from the country.” Shah informed that the RoDTEP scheme will be WTO-compliant and hence not likely to face any issue under any international arena the scheme is one such reform, based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.The SRTEPC chairman has thanked PM Modi, Union Finance Minister Nirmala Sitharaman, Union Minister for Textiles, Commerce, and Industry, Consumer Affairs, Food, and Public Distribution Piyush Goyal, and Minister of State for Textiles Darshana V Jardosh for introducing the scheme and announcement of the rates covering entire MMF textile value chain, which was one the requests of the SRTEPC and MMF textile fraternity.Shri Bhadresh Dodhia, Vice Chairman, SRTEPC informed that the announcement of the RoDTEP rates is a much-needed initiative of the Government for improving the health of the industry and exports in the covid-pandemic Bhadresh Dodhia, vice-chairman of SRTEPC informed that the announcement of the RoDTEP rates is a much-needed initiative of the Government for improving the health of the industry and exports in the covid-pandemic period. This will significantly help in increasing our exports and it will go a long way in achieving our vision of building an Aatmanirbhar Bharat. According to Shah, the announcement of the RoDTEP rates will substantially help in increasing competitiveness of our exports globally and it will also improve the liquidity position of the exporters. This will also provide encouragement and support to achieve the combined export target of US$ 400 billion in the current fiscal.
Source: The Blunttimes
Hard to say if anxiety over size of RoDTEP allocation justified or not, but need for FTAs, labour reforms is genuine To that extent, the allocation of Rs 40,000 crore under MEIS should also not be compared with Rs 19,400 crore for RoDTEP and Rebate of State and Central Taxes & Levies (RoSCTL). Exporters may be disappointed, but the government’s latest initiative to encourage exports with an outlay of Rs 19,400 crore is a reasonably good one. Those that argue this is unexciting must view the allocation in the context of budget constraints and almost a whole year’s unpaid arrears under the erstwhile Merchandise Exports from India Scheme (MEIS). To be sure, the tax refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, notified by the government on Tuesday, are strictly not comparable with the incentives under the MEIS. RoDTEP is WTO-compliant and seeks to reimburse exporters for duties paid across the supply-chain and, thus, make exports zero-rated. To that extent, the allocation of Rs 40,000 crore under MEIS should also not be compared with Rs 19,400 crore for RoDTEP and Rebate of State and Central Taxes & Levies (RoSCTL). For their part, exporters are concerned the RoDTEP allocation of Rs 17,000 crore—over 15 months starting January 2021—might fall short of the amount needed to cover the levies paid across various stages of production but not subsumed by the GST. It is hard to say how much of the anxiety is genuine, and there is a need to wait and watch whether exports become uncompetitive vis-a-vis peer exporting nations, especially China. RoDTEP covers as many as 75% of the tariff lines and 8,555 products, with the rates ranging between 0.3% and 4.3% of the freight-on-board value of the exported products. The list includes some 1,000 more products than under MEIS. Exporters in the steel, pharma and chemicals businesses are miffed because they have been excluded from the reimbursements; the government believes these sectors are doing well and, therefore, do not need to be reimbursed. Although this might seem unfair, these sectors have probably been excluded to accommodate others with greater needs. The government is clearly unwilling to commit larger sums at a time when the economy is yet to recover; the services PMI contracted yet again in July, indicating the biggest segment of the economy, accounting for 58% of the GDP, is yet to get back on track. Buoyed by a revival in global growth and trade, India’s exports have been impressive in the current year and, at $131 billion, exports during the first four months of FY22 have been higher than that in the corresponding period of the previous four years. According to Credit Suisse, rolling 12-month exports hit a record high of $347 billion, with the momentum holding up in August. While this is no doubt encouraging, it is important not to get carried away because much of this comes off a low base. Exports were very subdued, at $291 billion, in FY21, thanks to the pandemic. But, even before that, exports had slumped to $262.3 billion in FY16 from $314.4 billion in FY14; they recovered only very slightly to $276 billion in FY17 before bouncing back to $303.5 billion in FY18. Again, exports are impacted by several factors. India’s exporters, for instance, have been opposed to FTAs though the government has been pushing for these. Again, New Delhi has been unwilling to become a member of a trading bloc like the RCEP, which, experts argue, should be done. But to boost exports, the government must ease labour laws which are way too restrictive, repair the poor infrastructure and also cut down the number of permissions and approvals required. That would make life a lot easier for exporters.
Source: Financial Express
The Union Commerce and Industry Minister Shri Piyush Goyal has said that the nation is working towards making a quantum jump in merchandise exports. He said this has been made possible, thanks to the structural changes initiated by the government under the leadership of Prime Minister Narendra Modi. The Minister said that the merchandise export target of $400 billion for the year 2021-22 has been set, in line with the Prime Minister’s clarion call, “Local goes Global: Make in India for the World”. The Minister said this during a meeting with Export Promotion Councils (EPCs), Commodity Boards and Authorities and other stakeholders in Mumbai today, to discuss measures to enhance and increase exports. "The target has been generated through a bottom-up and consultative approach, wherein specific targets for each country, product, Export Promotion Council and foreign mission has been set", said Shri Goyal. “Act immediately to rise to the ambitious challenge of $400 billion export target” The Minister exhorted all Export Promotion Councils to take immediate and effective steps to rise to the challenge of achieving the merchandise export target of $400 billion for 2021-22. "We need to maintain the export momentum for the next 8 months, with $34 billion exports per month to achieve this target, he informed. The goal is ambitious, but possible if all including EPCs and their members work together", added Shri Goyal. Target $2 trillion exports by 2030 The Minister asked the export community to also target $2 trillion exports by the year 2030, comprising $1 trillion merchandise exports and $1 trillion services exports. The Minister announced that two separate divisions are being set up in the Commerce Ministry focused on the services sector, in order to attain the $1 trillion services exports target.
New FTAs slated for early conclusion.
The Minister informed that the Free Trade Agreement (FTA) strategy is being revamped. “Free Trade Agreements are being formulated in a much more interactive process, we are engaging with industry to ensure that FTAs are fairly and equitably crafted. At the same time, FTAs cannot be a one-way traffic, we also need to open our markets, if we want a larger share in foreign markets. So, we need to identify areas where we can withstand competition. We can sort out FTAs fairly quickly, if the areas where we have the ability to compete internationally can be identified, as part of a collective effort.” Informing about the progress of FTAs with various developed countries, the Minister informed that we are at a very positive momentum in terms of FTAs, with the UK, EU, Australia, Canada, UAE, Israel and the GCC countries. “Our effort is to ensure focus on countries where we have significant potential, where we can compete better and where market size is significant.”
Working towards Early Harvest Agreements with UK and Australia
Shri Goyal said that India is looking at identifying areas of immediate interest for India and UK, and conclude an Early Harvest Agreement with UK. Australia has shown the highest level of engagement and has shown significant interest to do an Early Harvest Agreement, this will help us engage with others too on similar lines, he informed. On the FTA with the EU, the Minister stated that it is only due to the Prime Minister's good will and credibility that the EU has agreed to once again engage in negotiations for an FTA. India will be working very hard to speed this up, he said. He added: “If the FTA with UAE happens, FTAs with GCC countries too will get expedited. The USA has kind of indicated that they are not looking at new trade agreements, however, we will work with them to address market access issues on both sides, this will be a big opportunity for our export sector.
Let Quality be our mantra: Minister tells industry
The Minister exhorted the industry to study both domestic and international quality standards and work towards aligning the standards. “Let us accept and adopt quality standards voluntarily and happily and build our industries to meet global quality standards.”
Focus on shipping and semiconductor industries
The Minister spoke of two sectors which he said should occupy a more prominent role in the industrial landscape -shipping and semiconductors. He also urged the textiles industry to
“Do participate in World Expo, Dubai” The Minister said that World Expo is going to be a big opportunity for Indian industry. “The Indian Pavillion at World Expo, Dubai is going to be absolutely fabulous, it will make you proud, I can assure you.”
“Time to take exports to the next level”
The Minister told the export community that they - Export Promotion Councils, and Commodity Boards can play a key role in export promotion. They can provide market intelligence, explore new markets and destinations, arrange trade fairs and buyer-seller meets, handhold exporters and work closely with Ministries/Departments, he said. Shri Goyal told the export community that India needs to once again become “Duniya ka Bazar” and “Duniya ka Karkhana”, reclaiming its historical position as a great trading nation.
Policy Measures taken to Boost Exports
Underlining various steps taken to boost exports, the Minister recalled that the Draft National Logistics Policy has been introduced. Districts are being developed as Export Hubs and Free Trade Agreements are being fast-tracked. Compliance requirement has been reduced, Production Linked Incentive Scheme has been introduced for 13 sectors and SEZ reforms have been brought in. Trade facilitation is being done on digital platforms and a comprehensive Agriculture Export Policy has been made. A New Foreign Trade Policy will be announced on October 1, 2021 and Indian missions abroad will play an active role in its implementation. A single-window customs clearance has been extended for exporters. The Commerce & Industry Minister thanked all EPCs who he said have served selflessly during the challenging times of COVID-19. He recalled that India became the pharmacy of the world, supplied high-quality and critical health items and sent millions of vaccine doses. It also became a reliable supplier of food to the world during the pandemic and met all our international service commitments even during the lockdown. This has helped India earn the trust of the world, said the Minister. Shri Goyal said "Our Exporters have made us proud by achieving record trade volumes in April- July 2021." Exports in July 2021 was $35 billion, the highest-ever monthly export in Indian history, and an increase of 35% with respect to July 2019. erchandise exports in Apr-July 2021 were $130 billion, an increase of 22% with respect to April-July 2019.
Speaking on the occasion
Commerce Secretary Shri B.V.R Subrahmanyam said, Government of India has set a very solid export target of $ 400 billion for 2021-22. The target has been arrived at through a systematic assessment of export potential. “Trade has been laid down as the top priority for our diplomats, foreign missions will help in facilitating exporters. We are working on creating state-level export commissioners, district-level export hubs and other infrastructure for export facilitation”, informed Shri Subrahmanyam. Engagement with states and districts is a key focus area. Through their role in District Export Promotion Councils, the EPCs should actively contribute in preparing strategy for promoting exports of identified products/services from the districts, said Shri Yadav.
The participants
The Export Promotion Councils (EPCs), Commodity Boards and Authorities present in the meeting included IOPEPC (Indian Oilseeds & Produce Export Promotion Council), EEPC India, PLEXCONCIL (The Plastics Export Promotion Council), Services Export Promotion Council, SRTEPC (Synthetic & Rayon Textiles Export Promotion Council), Export Promotion Council for EOUs & SEZs, Powerloom Development & Export Promotion Council, Texprocil, GJEPC (Gem & Jewellery Export Promotion Council), AEPC (Apparel Export Promotion Council), CII, FIEO (Federation of Indian Exports Organization), Project Export Promotion Council of India and others. The EPCs and other participants joined physically in Mumbai as well as online from other places. The Minister and senior officials of the government took note of the various issues and suggestions given by the industry and assured them to continue to address them suitably, in line with the Government’s goal of boosting exports and the economy.
Source: PIB
With the Centre announcing the new rates under the Rebate on Duties and Taxes on Export Products (RoDTEP) scheme, textile exporters are expecting a boost in order volumes backed by better cost-competitiveness. According to the new rates, RoDTEP extends incentive of 2.5% to 4.5% on the export of yarn and fabrics of different kinds. Even though ceilings have been imposed on procurement price to be able to avail the benefit, exporters in the textile sector say that the rebate will sure improve their costcompetitiveness. “Price competition from textile makers in Vietnam and Bangladesh is one of the major challenges Indian exporters face. Both these countries enjoy a free trade agreement (FTA) with European and other markets, giving them a clear edge over Indian manufacturers. This is especially true for garments and made-ups, where staying cost-competitive was not sustainable for Indian textile makers after the government withdrew the Merchandise Export Incentive Scheme (MEIS),” said Chintan Thaker, chairman, Assocham – Gujarat state council. However, with new incentives rolled out as part of RoDTEP, exporters will now be able to offer a competitive price to their customers. Better pricing will help manufacturers gain more order volumes and in turn boost their revenue,” Thaker added. In the textile sector, export demand has begun to increase with inquiries pouring in for yarn, fabric as well as garments from various countries. The rate announcement, according to industry players, has come at the right time, when exporters can leverage the demand. Industry estimates suggest that the textile sector and its ancillaries provide employment to an estimated 75 lakh persons across Gujarat. Manufacturers of technical textiles as well as manmade fibre (MMF) will have an edge, said industry players. “As demand rises, our competitiveness will surely go up and bring in greater order volumes. Although the announced rates need to be revised to compensate the actual embedded taxes and levies paid by the exporters in case of the MMF textile lines. Inclusion of the entire MMF textile value chain will encourage inclusive growth in exports of MMF textiles,” said Narain Agrawal, past chairman, Synthetic and Rayon Textile Export Promotion Council (SRTEPC).
Source: Times of India
We will look at working with them on market access issues, says Union Commerce and Industry Minister. Hopes of an India-U.S. trade pact are off the table for now, with the Joe Biden administration conveying to India that it is not interested in a free trade agreement (FTA), Commerce and Industry Minister Piyush Goyal said on Thursday. The minister also said that India has begun working on an FTA with Bangladesh, and is close to sealing an early harvest deal with Australia ‘which has almost agreed’ on the matter, with a similar deal being worked out with the U.K.. “The US, as of now, has kind of indicated that they are not looking for new trade agreements, but we will look at working with them on market access issues on both sides,” Mr. Goyal said in an interaction with exporters, adding that even resolution of these issues will boost outbound trade to the U.S.. Resolving issues like non-tariff barriers, entering mutual recognition agreements and aligning on higher quality international standards, will help spur trade between the two countries, the minister said. “Australia is first on the list, UK, then the UAE, and if the UAE happens, the pact with GCC will also be expedited. We have already started the dialogue with the UAE and one more country from the Middle East,” said Mr. Goyal on the FTAs currently on the government’s priority list, which also includes Israel. While talks with Canada got waylaid amid the COVID-19 pandemic, the ministers said the dialogue is expected to pick after Canadian elections conclude in the next few months. The EU, he said, had agreed to restart renegotiations after abandoning earlier talks in 2013, purely on the basis of Prime Minister Narendra Modi’s ‘goodwill’. However, given that there are 27 countries involved, he said one shouldn’t expect a pact to happen ‘very quickly’. Assuring industry that the government won’t repeat ‘mistakes of some past FTAs’ and reminding them about the government’s ‘unexpected’ decision to walk out of the RCEP based on their feedback along with that from farmers and the people at large, Mr. Goyal also urged exporters to appreciate that FTAs cannot be ‘one-way traffic’. “We also have to open our markets to others if we are wanting a larger pie in their markets. Therefore, my appeal to all of you is to also identify areas where we have confidence that we can withstand competition,” he said. “If we make the decisions without your concurrence, that is also harmful… On our engagement with other countries on FTAs, we will be very sensitive to your demands, but you should also be sensitive that trade is a two-way affair,” he underlined.
Source: The Hindu
Goyal was apprising exporters of the opportunities on the FTA front that they can reasonably expect over the short-to-medium term and manage their expectations accordingly and boost exports. The US is India’s largest export market, having made up for outbound shipment of almost $52 billion in FY21. (Representative image) The US has hinted that it no longer wants a “limited” trade deal with India that was negotiated for months under the Trump administration and was to cover products with annual bilateral trade of about $13 billion. Addressing top representatives of over a dozen export promotion councils and others at a meeting in Mumbai on Thursday, commerce and industry minister Piyush Goyal said: “The US, as of now, has kind of indicated that they are not looking for a new trade agreement. But we look at working with them on market access issues on both sides. That will also be a big opportunity for our export sector.” The talks on market access issues will likely cover non-tariff barriers, mutual recognition agreements and quality standards of imported products. The US is India’s largest export market, having made up for outbound shipment of almost $52 billion in FY21. However, Australia has shown interest in hammering out an early-harvest deal with India soon, which will possibly be followed by similar pacts with the UK and the UAE, the minister said, as he elaborated on the government’s efforts to expedite talks with key economies to forge fair and balanced trade ties. Broader free trade agreements (FTAs) involving a vast number of tariff lines can be taken up with these economies once the early-harvest deals are clinched. Addressing concerns of exporters over the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, the minister said certain sectors (steel, pharma and chemicals) had to be kept out of its ambit this fiscal due to funds constraint. However, going forward, if there is any issue, the government could have a relook at it. Goyal said he had already urged the finance ministry to set up a panel, either under former commerce secretary GK Pillai who headed the RoDTEP panel or somebody else, to look at any issue that may arise out of the operationalisation of the RoDTEP scheme, including requests of special economic zones or export-oriented units that felt left out of the refund programme. However, the minister made it clear that both RoDTEP and RoSCTL (for garments and made-up exporters) are fully WTO-compatible, and are not incentive programmes (like the MEIS). As for trade deals, Goyal exuded confidence that once a deal with the UAE is signed, the stage will be set for similar pacts with other west Asian nations. India is looking at a trade pact with Israel as well. Trade negotiations with Canada could resume after elections are over there later this year. However, the FTA negotiations with the EU, expected to resume later in 2021 after a gap of about eight years, could be a time-consuming process, he said, as the Bloc has 27 members with different interests. Though the EU has lost some sheen after Brexit, it still remains an important market for India. The EU, including the UK, was India’s largest destination (as a trade bloc) in FY20 (before the pandemic struck), with a 17% share in the country’s overall exports. Importantly, the UK accounted for 16% of India’s $53.7- billion exports to the EU in FY20. Goyal was apprising exporters of the opportunities on the FTA front that they can reasonably expect over the short-to-medium term and manage their expectations accordingly and boost exports. “Our effort is to ensure focus on countries where we have significant potential, where we can compete better and where market size is significant,” he said, as he asked exporters to strive hard to achieve the lofty FY22 merchandise export target of $400 billion. The minister also told the exporters that the country has revamped its FTA strategy. These pacts are being formulated after a comprehensive interactive process with domestic industry to ensure that “FTAs are fairly and equitably crafted”. “At the same time, FTAs cannot be a one-way traffic, we also need to open our markets, if we want a larger share in foreign markets. So, we need to identify areas where we can withstand competition. We can sort out FTAs fairly quickly, if the areas where we have the ability to compete internationally can be identified, as part of a collective effort,” he said, according to an official statement. The minister impressed on all export promotion councils (EPCs) to take immediate and effective steps to rise to the challenge of achieving the merchandise export target of $400 billion for FY22 from $291 billion in FY21. He has also set a lofty target of $2 trillion for both goods and services exports by FY30. “We need to maintain the export momentum for the next 8 months, with $34 billion exports per month to achieve this target. The goal is ambitious, but possible if all including EPCs and their members work together,” he said. To help ramp up exports, the commerce ministry will have two dedicated divisions for the services sector alone, Goyal said. Currently, one joint secretary looks after the services sector, in addition to his other responsibilities at the ministry.
Source: Financial Express
The fund, jointly sponsored by Exim Bank and SIDBI, will invest by way of equity, and equity-like products in export-oriented units, both in the manufacturing and services sectors. Finance minister Nirmala Sitharaman will launch an alternative investment fund for export-oriented small and mid-sized companies on Saturday. The 'Ubharte Sitaare' fund size is ₹250 crore with a green shoe option of ₹250 crore. The fund, jointly sponsored by Exim Bank and SIDBI, will invest by way of equity, and equity-like products in exportoriented units, both in the manufacturing and services sectors. According to a press release, Exim Bank's Ubharte Sitaare Programme (USP) identifies Indian companies that have the potential to be future champions in the domestic arena, while meeting global demands. Exim Bank along with SIDBI has developed a robust pipeline of over 100 potential proposals across a range of sectors, such as pharma, auto components, engineering solutions, agriculture and software
Source: Economic Times
The Centre's Mega Integrated Textile Region and Apparel (MITRA) Park scheme which aims textile industry to become globally competitive, attract large investments, boost employment generation and exports, seems to be a boon for the Kakatiya Mega Textile Park (KMTP), in Sangem mandal, touted as a fibre-to-fabric integrated textile cluster, that has been struggling to take off for the last three years. It may be mentioned here that the Centre has plans to establish seven textile parks in the next three years under the MITRA scheme, which is touted as a game-changer for the country's textile industry. According to industry sources, the scheme gives domestic manufacturers a level-playing field in the international textiles market. KMTP has all the ingredients to make it to the seven textile parks to be selected by the Centre. Although the KMTP is yet to equip with modern state-of-the-art infrastructure, plug-and-play facilities and R&D Lab etc, it has nearly 1,200 acres at its disposal to cover all the aspects required under the scheme. The onus is on the State Government to fulfill all the requisites as early as possible to grab the attention of the Centre to bring KMTP under the ambit of MITRA scheme. It may be recalled here that the State Government has been urging the Centre to allocate funds for the KMTP for the last few years, but in vain. Against this backdrop, the MITRA scheme has come in like a shot in the arm for the State. With the several States vying for the textile parks under the scheme, Telangana Government has also entrusted MPs Pasunuri Dayakar and Banda Prakash with the responsibility of lobbying up the matter with the Centre, it's learnt. The fund-starved State Government is now pinned its hopes on Centre for the operationalising the KMTP. On the other hand, Korean Textile major Youngone Corporation has already proposed to invest Rs 1,000 crore to set up manufacturing units of synthetic jackets, boots, track suits and other apparel used in trekking was allotted 290 acres in the KMTP. Recently, Ernakulam-based Kitex Group, one of the largest kids apparel manufacturers, has also announced to invest Rs 1,000-crore in the KMTP.
Source: The Hans India
Minister bats for widening the scope of NDB to strengthen social infra Commerce and industry minister Piyush Goyal on Wednesday described the Aatmanirbhar Bharat initiative as a way to engage with the world. Chairing the fifth meeting of BRICS (Brazil, Russia, India, China and South Africa) industry ministers, Goyal said Aatmanirbhar was not an inward looking policy but was about global competitiveness and expanding the frontiers from a position of strength. He also expressed India's desire to widen the scope of New Development Bank (NDB) for strengthening social infrastructure, besides promotion of the industrial sector, according to a ministry statement. “We have also announced the PLI (production-linked incentive) schemes worth $26 billion covering 13 champion sectors in the next five years to create and nurture manufacturing global champions for an Aatmanirbhar Bharat. The mission is expected to boost all round trade,” the statement said quoting Goyal. The minister said that emerging technologies would be an indispensable part of almost all activities, including manufacturing. Adoption of new technologies by small businesses would play a crucial role in achieving the target of inclusiveness, he pointed out. “India has developed a vibrant and dynamic start-up ecosystem, leveraging existing platforms and digital technologies such as Aadhar and UPI payments for ensuring delivery of critical services to the last mile. Online systems like COWIN and digital vaccination certificates are being cited as success stories across the world today,” he said. He also said that the government was working towards reducing compliances on businesses and citizens. India has improved its rank from 142 to 63, a leap of 79 ranks, during the last five years in the World Bank’s Doing Business Report. Other BRICS nations reiterated their commitment to make efforts to foster open, fair, and non-discriminatory trade environment, ensure greater participation in global value chains, promote digital inclusion, assess the implications, and encourage the progressive, safe, equitable, and sustainable use of disruptive technologies for advancing growth.
Source: Business Standard
"In addition to this, dues on account of MEIS scheme should be cleared. The working capital limits should be increased by banks as steel prices have increased by double and freight rates by 3 to 4 times. These support are needed to meet US$ 107 billion exports target for the sector in FY22," EEPC India chairman Mahesh Desai said. The government should relook refund rates under RoDTEP and ensure full rebate on the taxes in the export production chain failing which Indian engineering goods exporters could lose some of the markets, said EEPC India chairman Mahesh Desai in a release issued on Thursday. "In addition to this, dues on account of MEIS scheme should be cleared. The working capital limits should be increased by banks as steel prices have increased by double and freight rates by 3 to 4 times. These support are needed to meet US$107 billion exports target for the sector in FY22," he said. Mr Desai said that a representation has been given to the government in this regard and hopefully the demands would be positively considered. The EEPC chairman also called for extending the Interest Equalization Scheme till March 31, 2024. The EEPC chairman noted that RoDTEP rates have not taken into account the taxes embedded in raw materials like steel in the engineering products in a large number of cases. "MSMEs exporters like those in castings, fasteners, flanges and others, have not been considered for RODTEP which is deeply disappointing," he said. On problems faced by the engineering goods sector, the EEPC chairman said that both local and sea freight rates had spiralled and container shortage problem ensued. With respect to the new FTAs, Mr Desai said that if the downstream HS chapters are opened up then the upstream chapters should also be opened up in the same manner.
Source: Economic Times
India's exports to Afghanistan came to $826 million in the financial year that ended on March 31, consisting mainly of sugar, cereals, tea, spices, pharmaceutical and textile products India's trade with Afghanistan has dried up as borders and banks have closed since the Taliban took over the country, but industry officials said that the disruption was temporary and that it would be business as usual soon. New Delhi is one of the leading suppliers of essential commodities to Afghanistan, which exports mainly dry fruits to India. Shipments between the two countries were delayed or disrupted after Taliban insurgents started making military advances earlier this month, leading to the fall of the capital Kabul on Sunday, industry officials said. "There is a temporary glitch in trade as Afghanistan is witnessing a transition of power. But within a few days trade will restart," said Rahil Shaikh, managing director of Mumbaibased MEIR Commodities, which exports sugar to Afghanistan. India's exports to Afghanistan came to $826 million in the financial year that ended on March 31, consisting mainly of sugar, cereals, tea, spices, pharmaceutical and textile products. In the same year, New Delhi's imports from Kabul came to $509 million, consisting mainly of figs, raisins and apples. Afghanistan has been the second-biggest buyer of Indian sugar in the 2020/21 marketing year ending on Sept. 30, purchasing a record 624,000 tonnes, according to the All India Sugar Trade Association. Indian shipments for Afghanistan usually land at Pakistan's Karachi port and from there are moved to Afghanistan through road. Demand for sugar and other essential commodities is robust from Afghanistan and imports could rise once banks start operations, said Tayyab Balagamwala, director at Karachi-based Seatrade Group. "Taliban has slashed import taxes on many commodities. This will lead to more imports," Balagamwala said. India was importing and exporting commodities from Afghanistan even during the previous Taliban rule during 1996 to 2001, said a Mumbai-based exporter, who declined to be named. The United States or European Union might impose sanctions on Taliban but even those sanctions would exclude trade of essential commodities, he said. The Federation of Indian Export Organisation told Reuters partner ANI on Thursday that the Taliban have stopped all imports and exports from India through transit routes of Pakistan. Taliban spokesperson Zabihullah Mujahid denied this in a Tweet saying "The Islamic Emirate wants better diplomatic and trade relations with all countries."
Source: Reuters
As per the Economic Survey 2017-18, a 10% decrease in indirect logistics cost could lead to an export growth of 5-8%. It had predicted that the Indian logistics market would be around $215 billion by 2020. The challenges prompted the government to work towards reducing structural bottlenecks. The Cabinet will soon take a proposal on the National Logistics Policy that aims to reduce elevated costs – long blamed for eroding the competitiveness of Indian exporters – from the current 13-14% of the country’s gross domestic product (GDP) to about 8% over five years. The commerce ministry has floated the Cabinet note, an official source told FE. The move is important, as a 2016 HSBC report had suggested that domestic bottlenecks, including elevated logistics costs, accounted for a half of the slowdown in the country’s exports. An earlier draft of the policy, firmed up about two years ago, had targeted to reduce logistics costs to 10% of GDP by 2022. However, the government now intends to set a more ambitious target to bring down the cost to the global average of about 8% of GDP. The logistics sector in India remains very complex, with the involvement of more than 20 government agencies under various ministries, 40 partnering government agencies and 37 export promotion councils. They deal with 500 certifications covering 10,000 commodities, officials had said when they embarked on firming up the policy. The sector also involves 12 million jobs, 200 shipping agencies, 36 logistic services, 129 inland container depots, 50 IT ecosystems and banks and insurance agencies. Further, 81 authorities and 500 certificates are required for exports or imports. Given the complexities, the government turned the logistics division of the commerce ministry into a full-fledged department in 2019. The comprehensive policy is expected to ensure greater synergy between various Central government departments, agencies, private players and states to also ensure that issues that inflate logistics costs are swiftly resolved. This would, in turn, help Indian exporters regain their competitive edge in the global markets. As per the Economic Survey 2017-18, a 10% decrease in indirect logistics cost could lead to an export growth of 5-8%. It had predicted that the Indian logistics market would be around $215 billion by 2020. According to an assessment by Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council, and Kishore Desai in late 2017, as much as 70% of the delays (both in exports and imports across Delhi and Mumbai) were on the account of port or border handling processes, which essentially pertained to the multiplicity and complexity of the overall procedures at ports. The challenges prompted the government to work towards reducing structural bottlenecks. Apart from the move to cut a complex maze of trade documentations and other initiatives in recent years, some relief on the logistics front has come after the stabilisation of the goods and services tax regime. It has not only cut complexities generated by multitude of indirect taxes that slowed trade but also benefitted the logistics sector by facilitating faster conversion of informal logistics setups to formal setups and increasing the speed of movement of freight at inter-state borders due to dismantling of check posts. “Trading across the border” (in which logistics play a key role) was one of three parametres where India’s rank has improved in recent years in the World Bank’s ease of doing business index. From 126th in the Bank’s 2015 report, the country’s rank improved to 68th in the 2020 report. Of course, it still trailed the country’s rank of 63rd in the overall doing business index.
Source: Financial Express
The Southern Gujarat Chamber of Commerce and Industry (SGCCI) will prepare a report on the issue of yarn availibity which is affecting the local textile industry and represent it to the union minister of textile, commerce and industry Piyush Goyal. “Currently, due to various factors affecting import of yarn, the local textile industry is facing some issues. There is also a need to improve the quality of locally produced yarn for which manufacturing plants with latest technology are a must,” said Ashish Gujarati, president of SGCCI. Along with issues related to yarn, SGCCI is preparing a project report on development of a common facility centre for textile where manufacturers can be provided multiple facilities at one place. “In some cases, a small-scale unit owner does not have the financial capacity to install machines of the latest technology. CFC will have such machinery that can be used by unit owners,” Gujarati added. SGCCI will also push for a specialized education hub for textile research. “We are preparing a report on Textile University. All major textile centres in the world have high class education and research facilities for textiles. This will help us develop new technologies locally and we will not have to depend upon other countries,” he added.
Source: Times Of India
• Vietnam’s economy is expected to grow by 6.5 percent in 2021 subject to how the country can control the latest COVID-19 outbreak • The US remains Vietnam’s biggest export market, followed by China and the EU. • We look at Vietnam’s sustainable trade industries suited for high-growth import and export. The US was Vietnam’s largest export market in the first four months of the year with a value of US$30.3 billion, up 50 percent year-on-year with China coming in at second, followed by the EU according to Vietnam’s General Statistics Office (GSO). We examine the five most sustainable trade industries, suited for high-growth export and import.
Electronics
Vietnam has emerged as a major electronics exporter, with electrical and electronic goods overtaking textiles, coffee, and rice to become the top export item. This has been attributed to increased imports from several Asian countries including, Japan, South Korea, and China. In 2019, electronics accounted for 36 percent of the country’s exports, up 1.15 percent in 2018. To move domestic manufacturing up the value chain, many companies in the country are investing in machinery and technology to support more exports. Currently, 95 percent of electronic exports are dominated by foreign-invested businesses, particularly those that produce smartphones and CCTVs. Vietnam relies heavily on imported machinery and equipment from China, followed by South Korea and Japan, in this industry. Businesses that need to import machinery to produce electronics should note that the authorities passed Decree No 18/2019/QD/TTg to ban the import of outdated, poor quality, and unsafe equipment.
Footwear
The footwear industry has benefited from several favorable factors throughout its growth in the country. The EU-Vietnam free trade agreement (EVFTA) is expected to significantly help the sector. Top footwear exports were to China, the EU, and the US. Major US footwear companies such as Nike and Sketchers have already shifted production to Vietnam. The Producers Guild of America (PGA) is also working on a tax bill that will cut tariffs on several lines of imports that include footwear and textile produced from Vietnam. Vietnam is able to supply leather materials and accessories for the footwear market. It’s forecast that Vietnam will be able to supply 60 percent of the leather materials required domestically by 2030, compared to the 45 percent manufacturers sourced locally in 2018. Footwear and leather exports hit nearly US$16.5 billion in 2020, down 10 percent due to the pandemic. Due to the disruption caused by the pandemic, Vietnam Leather, Footwear and Handbag Association (LEFASO) noted that local firms should take advantage of the opportunities such as the free trade agreements and US-China tensions to boost productivity and exports. The industry still needs to address increasing labor costs, and the Industry 4.0 question mark, but many analysts expect the industry to remain competitive for the next two decades.
Garment and textiles
Vietnam has approximately 6,000 garment and textile manufacturing companies employing 2.5 million people, and its top export destinations are leading consumer markets – the US, Europe, Japan, and South Korea. The industry’s growth is also being fueled by increased domestic consumption, fueled by a young demographic, and increasing urbanization. Retail sales are growing at a rate of 20 percent annually and are forecast to expand, thanks to several free trade agreements. Germany-based Amann Group and US-based Kraig Biocraft Laboratories are among the companies that are poised to scale up manufacturing production in Vietnam. Due to the US-China trade war, the help of Vietnam’s FTAs, analysts believe the industry will maintain high growth potential, with a forecast export turnover of US$200 billion until 2035. Furniture, prefabricated buildings Furniture, lightings, and prefabricated buildings feature high on Vietnam’s export list. The sector accounted for 4.4 percent of Vietnam’s exports in 2020. The effect of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EVFTA is further expected to propel Vietnam as the second-largest interior furniture exporter after China in the next seven to eight years with new markets in Canada and Mexico, apart from traditional markets like the US, EU, China, and South Korea. The industry is expected to grow by 16 percent year on year. Even with this growth, the furniture industry remains small and has immense potential to become a major supplier and exporter. The same can be said about prefabricated buildings, which are building structures that are manufactured offsite and transported for onsite assembly. Such types of buildings are gaining in popularity not only in the commercial sector but also in the residential living space. The government wants the building materials sector to achieve a higher level of automation by 2030. Oil As the country grows, its energy needs grow as well. Between 2012 and 2017, Vietnam exported more oil than it imported, with average exports at about 8.3 million tons a year and imports at 750,000 tons a year. This trend reversed in 2018, with imports at 5.17 million tons and exports at 3.96 million tons, down 41.8 percent compared to the previous year. This trend is likely to continue, particularly due to the demand for jet fuel. With more tourists, the aviation industry is growing significantly, leading to higher fuel consumption. While Vietnam started two refineries in 2018, they mainly produce gasoline and diesel; demand for jet fuel will continue to remain from existing suppliers like Singapore, Thailand, and China. While it’s true that oil demand has been significantly affected by border closures and covid-related restrictions, it will change once the pandemic is brought under control. Vietnam’s oil industry remains heavily state-controlled. To address falling oil output and meet demand, Vietnam will need to explore untapped deep waters as compared to its present shallow southern basins. Long-term gas development will largely depend on government commitment to monetize reserves and taking a hit on prices. Vietnam is also a big oil importer due to the lack of its refining capacity. With domestic consumption growing faster than China due to a surging economy, petroleum product demand is expected to rise 660,000 barrels of oil per day in 2030. While Vietnam has the resources to meet future needs it will need to attract private investment with the right regulations and policies to meet growing energy demand.
Source: Vietnam Briefing
The global merchandise trade is continuing its robust recovery from the shock of the Covid19 pandemic, according to the WTO's Goods Trade Barometer, which hit a record high in its latest reading The global merchandise trade is continuing its robust recovery from the shock of the COVID-19 pandemic, according to the WTO's Goods Trade Barometer, which hit a record high in its latest reading issued on Wednesday. The latest barometer reading of 110.4 is the highest on record since the indicator was first released in July 2016, and up more than 20 points year-on-year, the Geneva-based 164- member multi-lateral body World Trade Organisation (WTO) said. The reading will augur well for India, as the country's exports are recording healthy growth rates. "The rise in the barometer reflects both the strength of current trade expansion and the depth of the pandemic-induced shock in 2020," it said adding the latest barometer reading suggests that goods trade will see an even larger year-on-year increase in the second quarter. However, it said that the outlook for world trade continues to be overshadowed by downside risks, including regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries. COVID-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine the recovery, it added. Further, it said that global goods trade has grown steadily since it registered a sharp decline in the second quarter of 2020 during the early days of the pandemic. "The volume of merchandise trade was up 5.7 per cent year-on-year in the first quarter of 2021, the largest jump since the 5.8 per cent rise in the third quarter of 2011," it said. It added that the latest barometer reading is broadly consistent with the WTO's most recent trade forecast of 31 March, which foresaw an 8 per cent increase in the volume of world merchandise trade in 2021 following a 5.3 per cent drop in 2020. India has been a member of the WTO, which deals with global trade norms, since 1995.
Source: Business Standard
The Ambassador of Italy to Pakistan Andreas Ferrarese on Wednesday said that there are vast opportunities for mutual trade and investment between Pakistan and Italy from which businessmen and traders of both the countries can reap the benefits. Pakistani businessmen and traders move forward and work to promote mutual trade and economic ties between Pakistanis in Italy, he said. Economic, trade and cultural relations between Italy and Pakistan are at an all-time high, he said this while hosting a dinner in honour of senior business leaders and Presidents of different trade chambers of the country at his residence. While renowned business leaders including former President of Islamabad Chamber of Commerce, Zafar Bakhtawri, Chairman Federation Pakistan Chamber of Commerce and Industry (FPCCI) Capital Office Qurban Ali, President Rawalpindi Chamber of Commerce and Industry (RCCI) Muhammad Nasir Mirza, President Gujranwala Chamber of Commerce and Industry, Umer Ashraf Mughal, President Sarhad Chamber of Commerce and Industry, Sherbaz IIyas Bilour and Abdullah Shad Abbasi participated on the occasion. The Ambassador informed that Italy hosts the largest Pakistani diaspora in the European Union (EU) countries. In FY 2020-21, workers remittances from Italy reached $601 million which is an all-time high figure, he said. It has made Italy, Pakistan’s 7th largest destination for workers remittance globally and No.1 from the EU. He said that there was huge trade potential in different sectors of the economy which needed to be explored and in this regard both sides were engaged in the dialogue process through the Pak-Italy Joint Economic Commission was the forum for bilateral economic engagements. The Ambassador said that currently Italy was providing technical assistance in Agriculture and textiles up-gradation through modern machinery, value addition in agriculture, leather and marble sectors. He said Pakistan was working to expand it to Agricultural items including dairy and livestock, olives and olive products, plastics, processed food and the construction sector in the Italian market. Andreas Ferrarese was of the view that Italy wanted to start a new era of economic and trade cooperation with Pakistan through transfer of technology and for up-gradation of Pakistan’s textile industry. He said green economy, transfer of technology for the industrial sector including textiles and agro industry, construction sector, education and health are major areas of focus to extend the bilateral cooperation. The ambassador said through the green economy, Italy wanted to cooperate with Pakistan for environment protection, circular economy, resource saving and management, ecosystem protection and recovery, water conservation and natural disaster prevention. The Ambassador said that Italy has established the Italy-Pakistan Textile Technology Center (IPTTC) in Faisalabad at the National Textile University (NTU) to upgrade the local textile sector. He said the training centre, which was the first of its kind for Italian textile machinery technology in Pakistan, was inaugurated in the recent past. He said this project was financed by the Italian government to support the development of the local textiles industry, by equipping it with Italian machinery.
Source: Brecorder
Thai Acrylic Fibre Co Ltd (TAF), a part of Aditya Birla Group, and World Knitting Textiles, a garment manufacturer and exporter, have together developed a new fabric range for innerwear and base layers with the combination of wool and Pilbloc, the everlasting antipilling acrylic fibre with super soft touch, while still providing a great thermal comfort. “Our customers always look for innovation and good quality. Everyone knows that acrylic’s unique property is its keep warm similar to wool. Therefore, it is popular for winter clothes especially in innerwear and base layers in the cold countries,” Sombat Chatromyen, managing director of World Knitting Textiles, said in a press release. “When TAF contacted us and introduced their VAPs, we saw the potential in the innerwear market, especially with Pilbloc. It is unlike other anti-pilling fibre in the market as the function is inherent in the fibre itself. Another benefit is that the hand-feel of the fabrics produced with Pilbloc is very soft that would make the users feel very comfortable while wearing the garments made with it,” Chatromyen said. “Our Pilbloc is well-known and popular in sweaters and flat knit applications for years. Pilling is one of the major problems in synthetic fibre, which causes the garment to look old,” Ashwini Chotani, chief marketing officer of TAF said. “Pilbloc and its anti-pilling function is generated with a specially engineered process, and hence the anti-pilling function of Pilbloc will last until life of the garment. Another big advantage with this production process is that it gives very soft hand-touch which makes the consumer feel very comfortable while wearing it. “Initially we used to produce it in coarser deniers, but now, we also offer micro denier which makes Pilbloc perform even better and can be used for circular knit and very lightweight fabrics that are suitable for innerwear and base layers. World Knitting is one of the top circular knitting mills in Thailand with a good portfolio of overseas customers. It is our pleasure to support them in innovation that they can offer to their customers,” Chotani further added. World Knitting Textiles was established in 1986 under the name World Knitting Industries - as a garment manufacturer and exporter with the major markets in USA, EU, and Japan. Later in 1990, the knitting department was set up. Until 2004, they have expanded the business to be one-stop-service with dyeing and finishing facilities, and move their knitting department together under World Knitting Textiles Co Ltd.
Source: Fibre 2 Fashion
After reaping the benefits from the large amount of personal protective equipment (PPE) exports in 2020, textile mills in China now face an export dip as disruptions in global shipping industry are causing prices to spike, squeezing the profits of the low-margin clothing and textile sector. In July, China's textile products exports dropped 26.78 percent to $11.7 billion, official customs data revealed. From January to July, China's textile industry exported $80.25 billion worth of textile products, down 10.8 percent compared with the corresponding period of 2020 when medical supplies were in short supply due to the raging coronavirus then. verseas orders placed in July were down from March and April levels, Shaoxing-based Yao Xiang Textile Factory told the Global Times on Monday. The firm mainly sells textile products to Japan and the US. The factory was the beneficiary of unique market dynamics. The more infectious Delta variant has wreaked havoc across countries in South and Southeast Asia earlier this year, forcing some textile orders to shift to China which had all but contained the virus, resilient supply chains and stable manufacturing capacity. However, the skyrocketing shipping prices and rising raw material costs squeezed profits amongst Chinese textile firms. Some are even unwilling to receive new orders and ship goods. Profits bite As a world-class textile industry hub, Keqiao district in Shaoxing city, East China's Zhejiang Province, functions as a window to global industry dynamics. Often referred to as China's Textile City, Keqiao has the largest professional textile market in Asia, where around 25 percent of the world's global shell fabric is traded annually. Tan Ke, head of Keqiao District Commerce Bureau, told the Global Times on Monday that containers held up at ports overseas had led to the latest decline in textile exports. In tandem with a flare-up of the coronavirus within China, the partial shutdown of the world's third-busiest container port - Ningbo-Zhoushan port - further hit already fragile supply chains. An employee at an export-oriented clothing company in South China's Guangdong Province told the Global Times that the shipping prices for large containers jumped four to eight times from last year, leaving vendors to consider air freight as an alternative. "What concerns the industry is the unprecedented disruption to the global shipping sector. It only takes one second to shift the clothing orders from India to China, but it requires months to ship a container to a port in China," Chen Jing, vice president of the Technology and Strategy Research Institute, told the Global Times on Monday. "I have never seen such a phenomenon in the shipping industry." For the low-margin textile industry, when transport spending accounts for one-fourth of the total costs, the economics stop making sense for many textile firms, said Chen. Surging raw material costs worsened the situation. "The increasing prices of shell fabric failed to catch up with the growing pace of the prices of raw materials. For textile plants, if they don't spin the machines, they would break the contracts; but if they do, they accept a bad deal," Tan said. However, the exports drop didn't mean textile mills in China have been idle. When the garment manufacturing factories in emerging economies in Southeast Asia and South Asia ground to a halt due to the Delta variant, orders again shifted to China, expanding the businesses of Chinese mills from producing upstream textile materials to garment processing, according to Tan. With the coronavirus halting personnel exchanges and leading to cancelled industry expos, small companies found it hard to get to know new customers while big companies were increasing their businesses with old clients, the official explained that this secured the district's position in global textile industry. As of Monday, pilot checkpoints in Keqiao reported 11,044 pieces of custom clearances, sending the district's exports value to $47.16 billion in the first half of 2021. "It proved that Keqiao's textile industry remains complete and its supply chains are indeed resilient," Tan said.
Job opportunities
Textile remains one of the pillar industries in China which has generated significant employment opportunities. China's textile products and clothing exports value accounted for more than one-third of the world's total, Chinese financial media outlet 21jingji.com said. With multiple constraints China's economy - ranging from the sudden Delta variant outbreak and regional flooding, to a spike in bulk commodity prices and flattening overseas demand as shown in July's slower economic growth, observers in textile industry remain optimistic as a key shopping season in September and October draws closer. "It is notable that 2020 was so distinctive when a large number of Chinese companies churned out masks and protective suits to support the global war against the coronavirus. It makes sense to see exports drop in textile," Chen said. US, EU, Japan and ASEAN nations account for 55 percent of China's exports in textile and clothing, according to China Chamber of Commerce for Import and Export of Textiles. Keeping a steady export growth to US and ASEAN in the first half of the year, China has witnessed slower growths to markets of Europe and Japan. Softening demand for PPE reduced the exports. In the second quarter, China's exports of medical masks and protective suits to EU fell 94 percent year-on-year, according to the chamber. With the global demand returning to traditional needs of clothes, socks and shoes, the industry should accept these changes, Chen noted. "The world's demand for textile products remains rigid. China has an advantage on the production side compared with South Asia and Southeast Asian countries so we should not give up this advantage. It requires time for the shipping industry to improve so the textile industry must consolidate its strengths in stable production and wait for opportunities to thrive," he said.
Source: Global Times
