Faced with the industry’s demand for increasing rates under the recently announced input duty reimbursement scheme for exporters and the inclusion of certain excluded sectors, the Commerce & Industry Minister has proposed that the requests be placed before the Department of Revenue for consideration. The rates of reimbursement under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme announced by the government this month disappointed exporters as they are lower for many sectors than what they had expected based on their calculations of taxes paid. The RoDTEP rates are also mostly lower than the reimbursement rates under the Merchandise Export from India Scheme (MEIS), which it replaced, since the older scheme was non-transparent and hence, not compatible with WTO rules. “At the recent meeting held by Commerce & Industry Minister Piyush Goyal with various industry bodies, representatives were informed that the best possible rates under the RoDTEP scheme were announced by the Commerce & Industry Ministry based on the available resources. They were asked to take their case to the Department of Revenue if they wanted more under RoDTEP,” an official tracking the matter told BusinessLine. The Finance Ministry had sanctioned a limited budget of ₹13,000 crore for the RoDTEP scheme, as opposed to over ₹40,000 crore budgeted for MEIS when the scheme was functional, while it covered 8,555 items as compared to around 8,000 items under the MEIS.
Rates of remission
The rates of remission range between 0.01 per cent to 4.3 per cent of the exported value under the RoDTEP scheme, but a majority of items are entitled to 1 per cent or lower . Items entitled to 4 per cent or more are less than 400 with many textile items included in the category. “There was no way the Commerce & Industry Ministry could give comparable rates under RoDTEP with such a low budget,” the official said. Although, RoDTEP is supposed to provide for rebate of all Central, State and local duties/taxes/levies on exported goods which have not been refunded under any other duty remission schemes, including embedded taxes, exporters complain that the actual rates are not fully compensating for taxes paid.The iron and steel, chemicals and pharmaceuticals sectors have been excluded while initially there were no indications that they would be left out. “The Commerce & Industry Ministry believes that the grievances of exporters can be addressed only by increasing the budget for the scheme and the Department of Revenue can take a call on the matter,” the official said.The government has set an ambitious export target of $400 billion for the on-going fiscal as opposed to $292 billion of exports in 2020-21 and is looking at all possible ways to boost shipments.
Source: The Hindu Business
State industries minister Syed Shahnawaz Hussain met Union education minister Dharmendra Pradhan in New Delhi on Thursday and held discussions on restarting the Bihar Institute of Silk and Textiles (BIST), situated at Nathnagar. The BIST is the only high-level technical institution in textile sector in Bihar run by the department of industries which has been closed for a long time. The industries minister said that efforts are on to launch BTech courses in silk technology, textile technology and textile chemistry under the aegis of NIT, Patna. “With the commencement of BTech courses not only youths from the state will get an opportunity of technical education but the state will also have skilled manpower required to boost the textile sector,” he said. On Wednesday, Shahnawaz met Union food and textiles minister Piyush Goyal. He demanded that ethanol units of Bihar also should get benefits of the Centre’s subsidy scheme and the financing scheme of banks, in addition to the seven-year tripartite agreement among ethanol units, banks and oil marketing companies (OMC) for 100% buy-back of ethanol. During his meeting with Goyal, which was held at the Udyog Bhawan in Delhi, Hussain also made demands for two textile parks in Bihar. He said that the government of Bihar has two land parcels of 200 acres each for textile parks and if the Centre accepts the demand of Bihar then immediately two textile parks could be developed in the state.
Source: Times of India
For decades, the services industry powered India’s growth and tempered unemployment in the world’s second-most populous nation. The coronavirus pandemic is now leading to calls for an urgent rebalancing of the economy toward manufacturing. High-contact services jobs from airlines to hotels and malls to multiplexes were the first to collapse amid protracted lockdowns aimed at containing the virus. The decline of the sector, which typically accounts for 55% of the economy, is forcing people to seek work on rural farms or in the undersized manufacturing industry. The Indian economy’s resilience will be tested by its ability to overcome a devastating outbreak of Covid-19, although no one’s yet doubting its potential to pull off the world’s fastest pace of growth among major economies this year. Ramesh Jakhar, 55, is among those hit. He used to drive a bus for the Sam International School in New Delhi, where he earned 16,000 rupees ($215) a month. Now he tends buffaloes and sells milk after returning to his village near the capital. “Times are really tough,” said Jakhar, whose unemployed adult son has also returned to their village with his young family. “We’ve been forced to cut back on what we can spend.” Unlike China, which saw workers move en masse from farms to factories, India transitioned into a services economy -- with the sector providing more than 32% of overall employment as of 2020, up from 17% in 1981. At the same time, the share of agriculture in jobs dropped to 42% from 72% and manufacturing has plateaued at 25%. “India has leapfrogged from agriculture to services, and missed on manufacturing so far,” said Sonal Varma, an economist at Nomura Holdings Inc. in Singapore. “This is a gap we should fix.” Boosting labor force productivity is the key to faster economic growth for India, which is recovering from an unprecedented contraction brought on by the pandemic. Data due Aug. 31. will likely show gross domestic product grew 21% in the April to June quarter from a year ago, setting the stage for an expected 9.5% full-year expansion. But India has repeatedly failed to grow its manufacturing base despite demand from a captive market of more than 1.3 billion people. It has instead relied on a flood of imports for everything from heavy machinery to toys. Even Prime Minister Narendra Modi’s ‘Make in India’ initiative to boost manufacturing to 25% of the economy has floundered in the absence of supporting infrastructure and ease of doing business. Manufacturing has shrunk to about 13% of gross domestic product from a peak of almost 18% in 1995, according to the World Bank. “There is a need to rebalance via targeted policy within the sectors,” said Arpita Mukherjee, a professor at the Indian Council for Research on International Economic Relations. “We can give incentives to services that have inputs in manufacturing.” rate is still above pre-pandemic levels and most high-contact service establishments from cinema halls to schools remain shut. With millions of workers mostly in the nation’s vast informal sector facing unemployment or pay cuts, households are limiting discretionary spending. That’s bad news for an economy in which private consumption accounts for 60% of growth. For spending to be sustained, India needs jobs for its 986 million working-age population, and ensuring productivity will be key to the durable recovery of Asia’s thirdlargest economy from the pandemic shock. “India will suffer from some degree of medium to long-term scarring,” said Sanjay Mathur, chief economist for Asean and India at Australia & New Zealand Banking Group Ltd. “Various companies in recreation and hospitality will not be hiring for some time.” India's services activity fared poorly compared with manufacturing The impact of the pandemic will be felt for years. Almost 18 million people in India will be forced to switch to a different occupation by 2030, according to a report by the McKinsey Global Institute. To create new jobs, Modi is trying to reboot his Make in India plan by offering subsidies to everyone from smartphone to specialty steel makers. Besides, he is simplifying tax procedures to woo global investors. Still, the job creation push likely won’t come quickly enough for people like Gaurav Kashyap, 31, who earned 50,000 rupees a month taking students to and from school in a hire-purchase van that he’s been forced to surrender. He now works as a security person in New Delhi. I sat at home for the first six months of the pandemic with no work,” said Kashyap. “I am hopeful of driving again if schools re-open.”
Source: Economic Times
Finance Minister Nirmala Sitharaman on Thursday discussed with her BRICS counterparts the key areas of cooperation that would be crucial in supporting recovery of the grouping's economies Finance Minister Nirmala Sitharaman on Thursday discussed with her BRICS counterparts the key areas of cooperation that would be crucial in supporting recovery of the grouping's economies and maintaining macroeconomic stability, while protecting against future uncertainties posed by the COVID-19 pandemic. She highlighted that BRICS (Brazil, Russia, India, China and South Africa) has been playing and will continue to play a crucial role in dealing with crises such as the pandemic. Sitharaman virtually chaired the second meeting of BRICS Finance Ministers and Central Bank Governors (FMCBG) along with Reserve Bank of India (RBI) Governor Shaktikanta Das under the Indian BRICS Chairship, a finance ministry statement said. During the meeting, the FMCBGs endorsed the BRICS Finance Ministers and Central Bank Governors Statement on Global Economic Outlook and Responding to COVID-19 Crisis with an annexure on snapshot of policy experiences of member countries in dealing with the economic impact of the pandemic, it said. Sitharaman, as the chair, remarked that India attaches great significance to presenting this statement before the global community since it unanimously voices the view of BRICS countries on the critical aspects underpinning current international policy conversations on post pandemic recovery. A 'Technical Report on Social Infrastructure: Financing and Use of Digital Technologies' was also endorsed, it said. This report is an exercise towards collaborative knowledge sharing between BRICS economies on social infrastructure, including on how the governments have leveraged digital technologies to enhance access and improve service delivery, especially in the health and education sectors. The BRICS finance ministers also welcomed the conclusion of negotiations on the text of Cooperation and Mutual Administrative Assistance (CMAA) in customs matters, along with deliberating progress made on other customs related issues. The RBI Governor chaired the discussions on central bank issues and their outcomes, including financial inclusion, Contingent Reserve Arrangement (CRA) and Information Security Cooperation. Both Sitharaman and Das appreciated the BRICS members for their cooperation and support to the Indian Chair in preparation as well as finalisation of the significant and relevant deliverables of BRICS Finance, it added. Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. We, however, have a request. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Source: Business Standard
Similarly, for bolstering farm and processed food exports, the country needs to renegotiate imports tariffs and firm up trade pacts with the EU, the US and the UAE. Rigorous brand-building exercise must be undertaken to promote Indian products. Similarly, for bolstering farm and processed food exports, the country needs to renegotiate imports tariffs and firm up trade pacts with the EU, the US and the UAE. Rigorous brand-building exercise must be undertaken to promote Indian products. The panel’s suggestions for the priority sectors aim to double manufacturing exports over the next five years, reduce imports by two-thirds and drive up annual domestic consumption growth to about 9% from roughly 7% in a normal year. India needs to incentivise multinational corporations in sectors like auto components to set up mother plants here, scrap import duties on principal raw materials for furniture and toys, fix anomalies in existing free trade agreements (FTAs) and forge new ones with key economies to boost exports of manufactured products, a government-backed panel has suggested. The Steering Committee for Advancing Local Value-Add and Exports (SCALE) – headed by former Mahindra & Mahindra managing director Pawan Goenka — has recommended that the government incentivise multinational original equipment manufacturers (OEMs) to use India as a sourcing base for auto parts. The panel, set up under the ministry of commerce and industry, has firmed up specific suggestions for boosting exports of manufactured products in 24 priority sectors. These include auto components, textiles, marine products, farm and processed food items, certain electric vehicles, toys and furniture. While global trade in auto components stood at $1.3 trillion in 2019 (before the pandemic), India’s share was just $15 billion, the panel said, flagging the untapped potential. It has set an export target of $30 billion for the auto parts industry by FY26. The country should revisit the South Asian Free Trade Agreement (SAFTA) to better suit current realities and “explore favourable trade agreements” with Canada, the US, the EU and Mexico to brighten export prospects, it added. It acknowledged the crucial role of the proposed Rs 57,042-crore production-linked incentive scheme for the auto parts sector. At the same time, it also wants the government to develop dedicated export hubs, incentivise spending on research & development and promote investment in auto electronics and semiconductor. To boost exports of furniture, in which India’s share in the $240-billion global trade was less than 1% in 2019, the panel has suggested that at least 3-4 integrated hubs be developed near ports. MNCs should then be lured into investing in the hubs through incentives. Appropriate policy interventions, such as duty-free imports of key inputs and a favourable timber policy, need to be initiated. In textiles, the panel wants India to revisit both SAFTA and the Asean FTA and have sectoral trade pacts with Canada, the UK & the EU. India must focus on downstream value addition, diversify into man-made fibre products in a big way and facilitate mega clusters to address cost competitiveness. It has set an ambitious export target of $80 billion for textiles and garments in the next five years from about $37 billion (in 2019). Similarly, for bolstering farm and processed food exports, the country needs to renegotiate imports tariffs and firm up trade pacts with the EU, the US and the UAE. Rigorous brand-building exercise must be undertaken to promote Indian products. In the leather and footwear segment, India’s costs are about 20% higher than that in China, Vietnam and Indonesia, which needs to be removed, according to the panel. It has pitched for setting up export-oriented integrated plug-and-play clusters for footwear with common infrastructure facilities to enable even small players to operate with minimal costs. The country should create port-based processing parks for value addition in marine products and develop cold chain infrastructure at harbours as well as airport at Kochi, Vizag and Chennai. It has set a marine export target of $14 billion by FY25 and $28 billion by FY30 from about $6 billion in FY20. The panel’s suggestions for the priority sectors aim to double manufacturing exports over the next five years, reduce imports by two-thirds and drive up annual domestic consumption growth to about 9% from roughly 7% in a normal year. SCALE has estimated that focus on these three critical factors would catalyse incremental domestic value addition of $350-380 billion over the next five years. The panel was tasked with identifying steps to improve the growth of manufacturing, the share of which in the GDP has remained stagnant at around 16% for decades now.
Source: Financial Express
In my opinion, startups are doing exceptional work and are making concerted efforts towards consolidating the manufacturing ecosystem in India, bringing in efficiencies much needed by the industry,” Bagla said on Wednesday at Zetwerk Dialogues, a public advocacy programme aimed at raising awareness about opportunities in India's manufacturing, infrastructure, and supply chain ecosystem. The business-to-business (B2B) startup economy has been contributing to some remarkable work bringing in innovation that is translating ‘Make in India’ growth story, Invest India CEO Deepak Bagla has said. “In my opinion, startups are doing exceptional work and are making concerted efforts towards consolidating the manufacturing ecosystem in India, bringing in efficiencies much needed by the industry,” Bagla said on Wednesday at Zetwerk Dialogues, a public advocacy programme aimed at raising awareness about opportunities in India's manufacturing, infrastructure, and supply chain ecosystem. Bengaluru-based Zetwerk Manufacturing produces components and equipment and offers design structures for various sectors including aerospace, automotive, oil & gas, energy, cement, steel, sugar, infrastructure, and material handling. “These are the kind of passionate and young start-ups which will play an instrumental role in evangelizing and disrupting innovations which are made in India,” Bagla said. He added that strategies are being worked out to focus on the products which are in high demand and are being imported as of today despite having the manufacturing capabilities at home. “It is important to identify such sectors, products and existing capabilities to consolidate the manufacturing space to eventually strengthen India’s position on the global supply chain map,” Bagla said. India has already announced an outlay of Rs 1.97 lakh crore for production-linked incentive (PLI) schemes for 13 key sectors to improve domestic manufacturing and reduce the country’s dependence on imports.
Source: Economic Times
The Uttar Pradesh government has allotted 1,100 plots to apparel and toy manufacturers and various other MSME units along the Yamuna Expressway Industrial Development Authority (YEIDA) during the past over four years, industrial development minister Satish Mahana said at a virtual conference held by ASSOCHAM on Thursday. “I feel proud to share that during the past 4-4.5 years, UP has emerged as the most preferred investment destination in the country. There has been a lot of transformation in the state as far as industrial development is concerned owing to the government’s zero-tolerance policy on law and order,” said Mahana at the conference on ‘Building state capabilities for global value chain-Uttar Pradesh’. Discussing the state’s investment policies, Mahana said earlier there was a huge trust deficit between the industry and the government but now the chief minister, the minister himself and senior officials of the department were ready to support the industry. “I am sure that UP is now the largest industrial state across the country. It has both dedicated freight corridors running through it, while new policies have been designed to help bring further investments in the state. However, for better coordination, I urge the industry to engage with relevant departments for issues related to different sectors like power, environment, tax etc,” he said. The minister said that many textile units in UP were shut down earlier due to primitive machinery and related issues, which pushed the state backward but now with better policies, ease of doing business and a cooperative government, the state had become a hub of investments.
Source: Times of India
The fact that only a handful of companies are exploring the restructuring option could be reflective of a relatively improved business outlook accompanying a pick-up in economic activity in the aftermath of the pandemic’s second wave. Barely 1% of eligible companies in the portfolio of NSE -0.05 % Ratings have opted for the debt restructuring facility offered by the Reserve Bank of India (RBI) under its Resolution Framework 2.0, a CRISIL Ratings survey of nearly 4,700 companies it rates showed. As much as 95% of those opting for restructuring, belong to the sub-investment grade rating category, it said. Though this is not reflective of the vast segment of MSMEs in India which are unrated.
Source: Economic Times
Credit and Finance for MSMEs: The expert committee on MSMEs headed by U.K. Sinha in its June 2019 report had recommended SIDBI the use of Priority Sector Shortfall (PSS) funds to create a low-cost lending window for state governments for infrastructure projects in clusters, civil works for rehabilitation of existing industrial estates and setting up of new industrial estates. Two weeks after the principal financial institution for MSME financing and development — SIDBI announced its Cluster Development Fund to give a thrust to hard infrastructure support to state governments for MSME cluster development, it has provided the first approval under the fund beginning with the Tamil Nadu government. According to SIDBI, the project-specific “moderately priced loan assistance” under the fund will be extended to the state government for upgrading various existing MSME clusters and for developing new industrial infrastructural facilities in the state. However, SIDBI didn’t disclose the loan amount and tenure. The thrust shall be laid on clusters in sectors/subsectors which can directly benefit the MSMEs in the state and to bring them to a level ‘NEXT’ wherein they emerge vibrant, higher on the value chain and become sustainable. SIDBI shall complement these with its customized direct lending products being channelized in the supported clusters,” Sivasubramanian Ramann, IA&AS, Chairman and Managing Director, SIDBI said in a statement. He added that the bank shall also examine supporting the soft infrastructure issues in select clusters. The issues could be relating to technology, skilling/upskilling, energy efficiency, market, and credit. Ramann said a pilot has been launched for the same in the Ambattur leather cluster. “There are two crucial aspects to a cluster – hard and soft infrastructures. We have set up a Cluster Development Fund with the Reserve Bank of India’s support that will attend to the hard infrastructure side of a cluster. We have also launched the Business Development Services Intervention programme in five clusters that will attend to the soft side of it and we think it can impact 20,000-25,000 MSMEs,” Ravindra Kumar Singh, General Manager and Head — Promotion and Development, SIDBI had told Financial Express Online. Apart from the Ambattur cluster in Chennai, the other four clusters were tourism cluster in Jammu & Kashmir, Delhi-NCR innovation cluster; Jodhpur wood furniture cluster, and Sambalpur textile cluster. The expert committee on MSMEs headed by U.K. Sinha in its June 2019 report had recommended SIDBI the use of Priority Sector Shortfall (PSS) funds to create a low-cost lending window for state governments for infrastructure projects in clusters, civil works for rehabilitation of existing industrial estates and setting up of new industrial estates. SIDBI has so far setup Project Management Units (PMUs) in 11 states namely, Assam, Andhra Pradesh, Rajasthan, Gujrat, Haryana, Maharashtra, Delhi, Uttar Pradesh, Uttarakhand, and Tamil Nadu. “We will rope in an agency and that will, based on the diagnostics, do action plan formulation that will have a break of short-term and long-term goals. In discussion with clusters stakeholders, it will formulate an action plan for twothree years,” Singh had said.
Source: Financial Express
The pathways include shifting focus from cost arbitrage to capability advantage through workforce skilling, innovation, quality, and sustainability; accelerating integration in global value chains by reducing trade barriers; and enabling competitive global market access for Indian manufacturers. Coordinated action between the government and the private sector can help create globally competitive manufacturing companies in the country, according to a WEFKearney report. It said India's manufacturing sector exports can help drive more than USD 500 billion in annual economic impact for the global economy by 2030. The report outlined five possible pathways for India to realise its manufacturing potential. The pathways include shifting focus from cost arbitrage to capability advantage through workforce skilling, innovation, quality, and sustainability; accelerating integration in global value chains by reducing trade barriers; and enabling competitive global market access for Indian manufacturers. It also suggested reducing the cost of compliance and facilitating faster set-up of new manufacturing capacities; and focusing on infrastructure development. "The COVID-19 pandemic prompted global corporations to rethink their supply chains and manufacturing bases/operations. "This re-balancing of global value chains presents India's government and business leaders with a unique opportunity to transform and accelerate the trajectory of the manufacturing sector and transform India into a global manufacturing hub in the coming years," it added.
Source: Economic Times
Tiruppur, India’s knitwear city is all set to emerge as the fashion capital in gents’ wear. A mega programme has been launched by Tiruppur Exporters’ Association (the collective of all knitwear manufacturers in the district) in collaboration with the Union Government to train and professionalise youngsters hitherto working as labourers in knitwear units. “Till now, they were just workers. Our mission is to elevate them as designers and master craftsmen who would be able to design fashionable wears of global standards,” Raja M Shanmugham, president, TEA, told The Pioneer. He said lakhs of workers are employed in the knitwear units. “Many unemployed youths make a beeline to Tiruppur to get a job and they end up as working in the assembly line. They use their physical prowess but not their hearts. The programme SAMARTH (Scheme for Capacity Building in Textile Sector) launched by the Ministry of Textiles intends to train 16,000 workers over the next two years as full time designers, dress makers and craftsmen,” explained Shanmugham. Tuesday evening saw 95 students passing out of the first batch of SAMARTH initiative, a 45-day residential programme with monthly stipend of Rs 14,000/- and refreshments. “We have two schemes to mould skilled workers. There is a programme to up-skill and re-skill existing workers while fresh workers are trained under SAMARTH for 300 hours,” said S Sakthivel, executive secretary, TEA. He pointed out that the SAMARTH and up-skill programmes are meant to increase the competitiveness and enhancing the productivity of the workers. “The day is not far off when these trained and up-skilled staff would sit with our buyers and chalk out designs and fashion wears as per the need of the latter,” said Sakthivel. Jyothi, an 18-year-old girl, who was selling millet soup in Chennaimalai is one of the candidates who underwent the programme under SAMARTH scheme. “I had completed Plus Two but could not pursue higher education because of financial issues. The training programme helped me to know more about designing of fashion wears and formal wears. Now, I can operate automatic machines and design any kind of T-shirts and banians,” said Jyothi. Raja Shanmugham said that casualwears from Tiruppur are establishing as a strong brand in markets in Europe and USA. “With these skilled staff the factories in Tiruppur would emerge as design studios and we will produce fashion and casual wears for the world,” said a beaming president. Tiruppur could be India’s answer to Savile Row, according to Sakthivel who points out that skilled labourers are the biggest capital in this kind of industry.
Source: Daily Pioneer
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday called on the Indian high commissioner to expedite and facilitate trade through the land ports, including Benapole, in order to reduce time and cost. The trade body also called for easing travel procedures, including visa, and resuming flights, especially for businesspeople from Bangladesh, according to a statement. BGMEA President Faruque Hassan made the requests during a meeting with Indian High Commissioner in Bangladesh Vikram K Doraiswami, who paid a courtesy call on the BGMEA leaders at its office in the city. The BGMEA president said, "There are huge opportunities for Bangladesh and India to complement each other in boosting apparel and textile business in both countries." Both the parties had discussions about existing problems in export-import, especially in RMG and textile industry, and possible ways to address them, added the statement. They also discussed potential areas of further collaboration between Bangladesh and India to derive mutual trade benefits. BGMEA President Faruque Hassan said: "While Bangladesh relies on India for import of raw materials including machinery, cotton, yarn, fabrics, chemicals, and dyes, India is a potential RMG-export market for Bangladesh." "Indian domestic apparel market is growing and Bangladesh can tap the opportunity. So, there lies reciprocal trade benefits for both Bangladesh and India," added the BGMEA president. The BGMEA leaders sought the cooperation of the Indian high commissioner in exchanging knowledge and expertise in the apparel and textile industry. Bangladesh RMG industry is focusing more on production of valued-added apparel items and innovation in product development and process optimisation. India has a huge pool of designers and technical experts and exchange of knowledge and expertise will benefit both the countries, Mr Hassan noted. BGMEA Vice President Shahidullah Azim, directors Asif Ashraf, Md Mohiuddin Rubel, Tanvir Ahmed and Abdullah Hil Rakib, Deputy High Commissioner of India to Bangladesh Dr Binoy George, and commercial representative of the high commission Dr Pramyesh Basall, among others, were also present at the meeting.
Source: The Financial Express
The country’s textile group exports declined by 11.32 percent on month-on-month basis and remained $1.471 billion in July 2021 compared to $1.658 billion in June 2021, says the Pakistan Bureau of Statistics (PBS). The exports and imports data released by the PBS revealed that textile group exports have witnessed a growth of 15.61 percent on year-on-year basis and remained $1.471 billion in July 2021 compared to $1.272 billion in July 2020. Cotton yarn exports decreased by 25.68 percent during July 2021 and remained at $89.87 million compared to $120.931 million during June 2021 and increased by 48.49 percent when compared to $60.52 million during the same month of last year. Raw cotton exports witnessed 100 percent decline on month-on-month basis. Petroleum group imports witnessed an increase of 76.79 percent as it reached $1.330 billion in July 2021 compared to $752.46 million during July 2020 and registered 9.85 percent negative growth when compared to $1.475 billion in June 2021. Construction machinery imports have witnessed a massive decline of 33.03 percent during the July 2021 and remained at $10.821 million compared to $16.157 million during June 2021; however, it registered 10.31 percent growth when compared to $9.810 million during July 2020. The country’s exports during July, 2021 were $2.340 billion (provisional) as compared to $ 2.728 billion (provisional) in June 2021 showing a decrease of 14.22 percent but increased by 16.94 percent as compared to $2.001 billion in July 2020. The country’s imports during July 2021 were $5.601 billion (provisional) as compared to $6.352 billion (provisional) in June 2021, showing a decrease of 11.82 percent but increased by 52.45 percent as compared to $3.674 billion in July 2020. The country’s trade deficit widened by 94.92 percent from $1.673 billion in July 2020 to $3.261 billion in July 2021, but narrowed by 10.02 percent, when compared to $3.624 billion in June 2021. Main commodities of exports during July 2021 were knitwear (Rs62,681 million), readymade garments Rs48,070 million, bed wear (Rs42,030 million), cotton cloth (Rs28,639 million), cotton yarn (Rs14,344 million), rice, others (Rs12,510 million), towels (Rs12,420 million), made-up articles (excl towels and bed wear (Rs10,707 million), Basmati rice (Rs9,785 million), and fruits (Rs7,736 million). Main commodities of imports during July 2021 were petroleum products (Rs103,337 million), petroleum crude (Rs60,077 million), natural gas, liquefied (Rs43,359 million), palm oil (Rs40,542 million), plastic materials (Rs37,685 million), iron and steel Rs37,488 million, medicinal products Rs37,367 million, electrical machinery and apparatus (Rs29,205 million), power generating machinery (Rs26,308 million), and iron and steel scrap (Rs21,302 million).
Source: Brecorder
Zhongyuan Group started its export business in 2019. Located in Qidong City, east China's Jiangsu Province, the company exported 1,000 to 2,000 tonnes of polyester every month before. But in recent months, orders from countries like Vietnam, India and Honduras dropped dramatically due to rising logistics costs and container shortage. "Our waiting period for a container has increased from a week to a month. We can also see an increase in shipment costs by three, four or even five times for some regions. The shipment costs rise is a major issue for our export business," said Chen Yiren, assistant president of Zhongyuan Group. One container from China's eastern coastal regions to the UK currently costs about $14,000. It costed only one-fifth of the price before the COVID-19 pandemic. The higher fees are affecting foreign trade, and the situation is especially severe in the textile industry. Fabrics don't provide as much bang for their buck compared to high-end products, but the cost of containers remains the same regardless of what's inside. For example, one container of Zhongyuan's recycled polyester yarns cost about $40,000, but shipment to as far as Honduras account for half of the total goods value. "That high rate [makes] our buyers quite reluctant to purchase our products. They either wait to see if the shipment costs will decline, or they just look for raw materials somewhere else," said Chen. What's happening at Zhongyuan Group is reflective of the state of China's textile exports. Data from China Customs shows China's export value for textiles recorded a decline of 26.78 percent in July. Beside the rising logistic costs, the dropping demand of masks and protecting suits was the other factor behind the decline. Customs data shows that exports of masks and protective clothing accounted for only 6.3 percent of total textile exports in the first half of the year, compared with 22.4 percent recorded last year. "More people in Europe, North America and Japan are being vaccinated and they are promoting so-called herd immunity. So their demand for masks has obviously dropped since the second quarter of this year. This is why July's textile exports obviously declined from last year," said Ivy Sun, partner expert at consulting firm Roland Berger China. Textile exporters are hoping for the best. September and October are usually the "golden period" for the textile industry, as demand for fabric increases due to winter temperatures. But Sun says whether textile exports pick up in the coming months remains an open question, as the pandemic shows no sign of fading worldwide.
Source: CGTN
US -Vietnam ties have gone through tectonic change – from mid-1970s to the early 2021. The two countries have acknowledged the need for cooperation in areas such as regional security, maritime issues, trade and commerce, defence, and technology cooperation. The visit of Vice President Ms Kamala Harris is coming at a time when UN has discussed issues related to maritime security and maintaining international order at sea. Vice President Kamala Harris visit to Singapore followed with the visit to Hanoi to promote US interest in the two countries which are seen as pivot to US strategic interests in the Southeast Asian region. During her visit to Singapore, it is expected that she will bolster its engagement with the island nation and develop its capacities in terms of base facility and promoting the economic ties and health cooperation with Singapore. Singapore itself is facing lockdown because of the COVID-19 pandemic and it is expected that these two economies would be suffering slow down because of impending recession. US during the US-ASEAN summit has promised medical assistance and developing medical capacities in select Southeast Asian countries. While Obama and Trump have visited Vietnam although for different objectives, but it has been seen through the US Quadrennial Defence Reviews that Vietnam is seen as a critical destination and a likely partner for promoting US strategic interests. US has been keen on developing military ties with Vietnam and would be interested in undertaking bilateral exercises with the littoral nation in the South China Sea. Also, it is seen that with the degraded trade relations between China and US, the country would be interested in exploring possibilities for setting up factories and industries in South Vietnam. US will be exploring possibilities to export COVID-19 vaccines to Vietnam including those which can be administered to children above 12 years of age. For the purposes of research, US will be collecting variant samples from Asian countries about Delta variant to develop more potent vaccines in future. Vice president Harris is likely to announce you support with regards to Agent Orange, seeking Vietnam support for finding remains of Missing in Action (MIA) American pilots and soldiers who fought during Vietnam war as well as possibly exploring export of US defence equipment to Vietnam. US is also seeking possibility of drone operations to conduct surveillance sorties in South China Sea and given the wide spread of Vietnamese control islands, US will be looking for certain rights to operate drones from Vietnamese islands. United States is also looking for logistics sharing agreement, more identical with what it has signed with India, and looking for defence trade and technology cooperation agreement. With regards to white shipping information and training, cooperation between US coast guards and Vietnamese sea police for maritime border patrols might be also in the agenda. Vice President Kamala Harris is interested in developing encrypted military communications set up with Vietnam to know more about Chinese adventures and manoeuvres not only in South China Sea but in and around the Gulf of Thailand. US might like to engage Vietnam to know more about Chinese activities in Ream Base in Cambodia. It has been also found that with Taiwan increasingly getting stressed out because of semiconductor industry, the United States is looking for other destinations to set up chip fabrication unit and Ho Chi Minh city might be the preferred destination. In the past, it has been seen that with the withdrawal of US from the Trans Pacific Partnership (TPP) agreement there has been certain problems in running this Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)which is among the rest eleven members of the grouping. The US is also going to make a proposal regarding stringent rules of origin and agreements on intellectual property rights to counter China’s dumping of goods in US market through redirecting its exports through other countries. The Democrats in the United States has already raised the issue of religious freedom, right to political dissent and the prosecution of few of the dissident leaders in Vietnam. Even though this might not be acceptable to Vietnam, but Vice President Harris is going to make a point that Vietnam should not be worried about US position on these issues and that the country is very keen to engage Vietnam in a more constructive way. Already there has been talks with regards to Vietnam getting included in the Quad plus arrangement along with Korea and New Zealand as well as the US is making a strong proposition regarding its proposed Blue Dot network and would urge Vietnam to join the build back a better world (B3W) which is an initiative undertaken by the G7 countries. The United States is very serious regarding freedom of navigation and operations (FONOPS) in South China Sea and would urge Vietnam to undertake group sails along with Japan and US to thwart any Chinese adventure in this region. The joint statement between Vietnam and the US Vice President would be seen as an important precursor for greater engagement between the two countries. Vice President Kamala Harris has been insistent on upgrading the relationship from comprehensive partners to strategic partnership and would seek Vietnam’s indulgence in upgrading the embassy strength and increasing staff strength in each other countries to promote official ties and visits, and regular interaction between the two defence ministers. It has been also seen that Vietnam is looking for greater support and market access to its packaged marine exports including catfish and textile exports to the US. The US vice president is going to make a concerted appeal for Vietnam to undertake negotiations regarding US-Vietnam trade deal which should be like the Vietnam and EU trade deal which came into being from August of this year. Given the fact that the United States is keen on developing ties with Vietnam and undertake confidence building measures which would include regular port calls by the US ships to Vietnam and deployment of each other’s armed forces personal in higher defence courses in each other countries. Vice President Kamala Harris is going to make pronouncements with regards to reinforcing ASEAN centrality and making a strong pitch for support to Vietnam with regards to maritime security and maintaining rules-based order in South China Sea. This comes in the wake of diplomatic show-off of between the two countries in the UNSC meeting on maritime security. US is going to buttress the fact that Vietnam is one of the important stakeholders in Southeast Asia and therefore it needs cooperation and support with regards to fighting the pandemic and undertaking serious technological upgradation in the field of cyber security, digital trade and integrating Vietnam into the larger supply chain initiatives. One of the purposes of Vice President’s visit to be a term is to promote education and knowledge ties between the two countries. This will help US Universities to set up branches across Vietnam and help in developing business links. Under the US under Biden administration an Interim Strategy Guidance which was released in March 2021, it was stated that Vietnam and Singapore are critical partners in regional security and capacity building, particularly in the context of maritime security and law enforcement in the marine zones. Given the fact that both Japan and US are interested in developing high tech electronics industry in Vietnam therefore a likely trilateral arrangement between the three countries is on the cards. During the ASEAN meetings held in 2020, Vietnam has proposed to set up medical emergency units and coordination centres along with creating a network of research institutions and the US is keen to know Vietnamese proposals in this regard. Even though this visit will be a short one but is going to resonate in terms of supporting Vietnam through establishment of US sponsored Centres for Disease Control and Prevention, and Hanoi might be one of the beneficiaries of starting the public health initiative with the support from the US government. Kamala Harris is going to make a strong pitch to developing trade and investment linkages between USA and Vietnam and is also going to propose that US and Vietnam should enter into defence trade and technology agreement.
Source: Modern Diplomacy
