The first 'textile parcel' special train having 25 new modified goods wagons customised to carry textile material left from here in Gujarat to Bihar with an aim to boost Surat's textile market through an economical, faster and safer mode of transport, Western Railway officials said on Sunday. Minister of State for Railways and Textiles Darshana Jardosh flagged off the train on Saturday from the Udhna New Goods Shed in Surat for Danapur near Patna and Ram Dayalu Nagar near Muzaffarpur in Bihar, the Western Railway (WR) said in a release. "Textile traffic has been loaded for the first time in customised NMG (new modified goods) wagons at the Udhna New Goods Shed. In this direction, the textile parcel special train, consisting of 25 NMG wagons, was run for the first time from the Udhna New Goods Shed carrying textile material to Patna and Muzaffarpur," said the release issued by WR chief public relations officer Sumit Thakur. "It will especially benefit the textile market of Surat area as it's economical, faster and safer. This has in-turn provided an opportunity for tapping the huge potential of the textile market and will cater to the transportation needs of textile industry godown hubs in and around the Surat city," the release said. Recently, the Western Railway's Mumbai division had for the first time transported textile material weighing 202.4 tonne from Chalthan near Surat to Shalimar in Kolkata, it said. The WR has made available four terminals in the Mumbai division - Surat, Udhna New Goods shed, Chalthan and Gangadhara -for handling such type of traffic for NMG wagons loading, it said. "The running of the NMG rake will be a great booster for increasing the share of textile traffic moving from Surat area to various parts of India," said the release. As per the Western Railway, regular meetings with transport and traders' associations have helped change the industry's perception towards rail as a service provider. Local MLAs and representatives of the Federation of Surat Textile Traders Association were present on the occasion along with senior WR officials.
Source: Times of India
Demand for textile and clothing from India has revived, particularly in the U.S., EU and U.K. markets, and lends confidence that the industry can achieve a 33% growth in exports this financial year, said Upendra Prasad Singh, Secretary, Union Ministry of Textiles. Asserting that several factors were now in favour of Indian exporters, with many tops brands looking at alternative sources to China and that India was one of the main options, Mr. Singh said that government policies, especially RoSCTL and RoDTEP, would help exporters this year. Textile and clothing exports had been almost stagnant for the last seven years at less than $40 billion, the Secretary told The Hindu on Saturday. Union Minister for Commerce and Industry, Textiles, Consumer Affairs and Public Distribution, Piyush Goyal had on Friday urged the industry to aim to raise textile and clothing exports to $100 billion, from $33 billion, at the earliest and called on them to lift domestic output to $250 billion. Stakeholders should collectively look at achieving $44 billion exports in 20212022 for textiles and apparel, including handicrafts, Mr. Goyal told exporters. The different segments of the industry should support each other so that India was able to tap opportunities across the value chain in the global market, he added.
Source : The Hindu
KV Subramanian’s Chief Economic Advisor argued why the economic downturn would be small in the event of the third wave, adding that in the absence of the second wave, first-quarter growth would have been close to 30%. I did. Here’s an excerpt from a bohemian interview with Shantanu Nandan Sharma:
The number of GDP in the first quarter is good. But isn’t that because the base effect is low?First, we need to take into account the 20.1% GDP growth in the quarter (April-June) when the second wave of the Covid pandemic was intense. In terms of health, the second wave was several times more influential than the first wave. The entire May and part of June were closed in most states. Markets and malls in states such as Maharashtra, Gujarat, Tamil Nadu and Karnataka have been closed. Therefore, you need to read the numbers behind it. After the first quarter figures of last year (2020-21), he said there was a “V” -shaped recovery. After all, the downslide was the result of lockdown only. There was no problem with the macro fundamentals of our economy.
What would have been the numbers in the first quarter without a substantial second wave?Had it not been for the second wave, Q1 growth would have been close to 30%. The construction and manufacturing sectors are doing pretty well. However, contact-based services (such as travel and hospitality) were affected. Total consumption declined due to the closure of malls and market retail stores in May and June.The quarterly figures from last year (the sharp decline in the first quarter and the subsequent increase) only reflected the presence or absence of restrictions. Therefore, the criticism that consumer demand has not yet returned is not valid. Consumption usually has both supply and demand components. If someone wants to buy a shirt but the market is closed, it’s not a matter of demand. It’s a supply constraint.
How will the economy be affected if there is a third wave?
Given the pace of vaccination and high seroprevalence, the effects of the third wave, if any, are not very high. You can also re-implement the (economical) template generated in the second wave in terms of limitations and so on.
For example, in the second wave, there was some turmoil, but no national blockade. Therefore, the economic impact of the third wave is very limited. It is important to understand that 20% growth would not have been possible if there had been a national blockade during the second wave.
Which economic indicators are optimistic and worrisome to you?
Comparing the number of exports in the first quarter of this year with the number of exports in 2019-20 before the pandemic, we saw an increase of about 8%. Also, looking at the manufacturing and construction industries, the numbers are close to the pre-pandemic level. This is reflected in the Purchasing Managers Index (PMI), an index of economic trends in manufacturing and services. Since September 2020, PMI in the manufacturing industry has shown a solid trend. In fact, the industry as a whole is recovering steadily. As far as the contact-intensive service sector (social distance is essential), recovery is slow. But there are good reasons to be optimistic. Comparing the macro fundamentals after the global financial crisis (2008) and now, there have been changes in the ocean. Inflation was double digits, even without supply-side restrictions (such as blockages). Inflation has averaged 6% in the last 16-17 months, despite a great deal of supply-side turmoil today.
In addition, the current account deficit during the global financial crisis increased by 6%. Last year, we saw a current account surplus instead. For ongoing finances, there is a manageable current account deficit. In addition, the inflow of FDI into India after the global financial crisis was about 8 billion dollars, but now it is 80 billion dollars (2020-21), which is 10 times higher.
When do you think GDP will reach pre-pandemic levels?
It depends on the pandemic itself. If some additional restrictions are imposed, it will affect the contact-intensive sector. It also depends on the pace of vaccination. For example, on Tuesday (August 31st), we vaccinated more than 120 million rupees. By the end of this month, a total dose of 80-85 chlores can be reached. We expect double-digit growth this year. Given the high frequency indicators, I think the numbers for the second quarter will be surprisingly high. And next year it should be 6.5 to 7%. And as the reforms we make begin to take effect, we should be able to accelerate by more than 7%. There is nothing wrong with the macro fundamentals of our economy. Growth was adversely affected by blockages and restrictions.
Why is the government hesitant to loosen the purse despite the solid tax collection? For example, government spending in the first quarter is not very encouraging. right?
Looking at this year’s budget CAPEX, it is 35% higher than last year. Government spending fell due to so many restrictions in the first quarter. Also, the entire agency was more engaged in managing the second wave. Therefore, the focus has shifted from capital investment projects. We are confident that overall budget spending will be this year, although it may fluctuate from quarter to quarter.
Why is big private investment still unfounded?
Looking at the figures for the fourth quarter of the previous year, the ratio of total fixed capital to GDP was as high as six and a half years. The private sector has contributed significantly to that. Capital investment in the private sector is expected to be approximately Rs. 1.75 trillion this year as well. Many listed companies are profitable and have the potential to invest.
The economic impact of the third wave, if any, is very limited: KV Subramanian
Source : Economic Times
Under the TMA, which was valid for two years through March 2021, the government reimbursed exporters a certain portion of freight charges and offered assistance for the marketing of select agricultural produce. The crisis hits exporters at a time when they are striving to reap benefits of a resurgence in global demand for merchandise, and threatens the country’s ambitious $400-billion export target for FY22. Worried about an over 300% jump in shipping costs in August from a year before, the government is exploring a range of options–including incentivising the setting up of domestic shipping lines and temporary fiscal support — to soften the blow to exporters. The crisis hits exporters at a time when they are striving to reap benefits of a resurgence in global demand for merchandise, and threatens the country’s ambitious $400-billion export target for FY22. Sources told FE that the government is weighing both short-term and long-term measures, and a final decision will be made soon. For immediate relief, it’s considering demands to extend fiscal support to Covid-hit exporters for the next 6-7 months to bolster their ability to honour supply commitments on time. For exporters of specified farm products, it’s planning to re-introduce the Transport and Marketing Assistance (TMA) scheme for at least one more year. Under the TMA, which was valid for two years through March 2021, the government reimbursed exporters a certain portion of freight charges and offered assistance for the marketing of select agricultural produce. As for long-term measures, the government is weighing various ideas, including tax and other incentives, to woo large players to set up shipping lines in India. Since the state- run Shipping Corporation of India (SCI) caters for less than 5% of the $60-billion domestic market, it’s not in a position to ensure orderly evolution of the shipping cost curve, exporters say. As such, the government has put the SCI on the block for sale. The Centre also wants to encourage domestic companies to ramp up the production of containers, an acute shortage of which has accentuated the current crisis. The crisis has caught the attention of the higher echelons of the government. Cabinet secretary Rajiv Gauba held a meeting of top officials on Wednesday and the shipping ministry convened another one on Thursday, commerce secretary BVR Subramanyam said. Commerce and industry minister Piyush Goyal is expected to huddle with top government and trade officials again this week to zero in on viable solutions. To be sure, shipping costs have gone through the roof across the globe and India isn’t an outlier. In fact, the costs in China have surged at a much faster pace than in India. The resurgence of Covid infections in the world’s second-largest economy and consequent restrictions there have led to a delay in turnaround time for ships. Trade sources said Chinese suppliers are luring large ships with higher freight charges. However, given Beijing’s massive covert subsidies, the competitiveness of its exporters remains intact. So, the Indian government, too, must find ways to cushion the blow to them, domestic exporters say. Importantly, the suppliers’ delivery times index, which has a 15% weight in the manufacturing PMI, dropped again in August across Asia, indicating that supply woes are only exacerbating. Depleting inventories and input shortages could force firms to trim manufacturing and delay shipments. The crisis comes at a time when demands for merchandise from key western markets see a sudden spurt in the wake of an economic rebound there. After a Covid-induced 7% drop in FY21, the country’s exports until August have now exceeded even the pre-pandemic level for six months in a row. Outbound shipments in the first five months of this fiscal rose to $164 billion, recording a jump of 67% year-on-year and 23% from the pre-Covid (same period in FY20) level. The Cabinet, in July, approved a Rs 1,624-crore scheme to promote the flagging of merchant ships in India by extending subsidy to domestic shipping companies in global tenders floated by ministries and central public sector enterprises. Although it’s a good move for the medium-to-long term, it doesn’t really extend succour to deal with shortterm woes, exporters reckon. As such, the scheme alone won’t be adequate to address exporters’ woes. Ajay Sahai, director general and chief executive at apex exporters’ body FIEO, also called for substantially raising the budgetary outlay for the TMA scheme for farm exporters and relaxing the eligibility criteria. The budgetary outlay for FY21 was only Rs 100 crore. This crimps the government’s ability to undertake large-scale interventions. Also, many farm exporters are small businesses that supply in limited volumes. However, the government stipulates that, to be eligible for subsidy under the TMA scheme, an exporter needs to ship out at least a container full of goods.
Source: Financial Express
Data available from the Controller General of Accounts in the Union Ministry of Finance showed excise duty collections during April-July 2021 surging to over Rs 1 lakh crore, from Rs 67,895 crore mop-up in the same period of the previous fiscal. The government's collections from levy of excise duty on petroleum products have jumped 48 per cent in the first four months of the current fiscal year, with the incremental mopup being 3-times of the repaymentliability of legacy oil bonds in the full fiscal, official data showed. Data available from the Controller General of Accounts in the Union Ministry of Finance showed excise duty collections during April-July 2021 surging to over Rs 1 lakh crore, from Rs 67,895 crore mop-up in the same period of the previous fiscal. After the introduction of the Goods and Services Tax (GST) regime, excise duty is levied only on petrol, diesel, ATF and natural gas. Barring these products, all other goods and services are under the GST regime. The incremental collections of Rs 32,492 crore in the first four months of the fiscal year 2021-22 (April 2021 to March 2022) is three-times the Rs 10,000 crore liability that the government has in the full year towards repayment of oil bonds that were issued by the previous Congress-led UPA government to subsidise fuel. Bulk of excise duty collection is from the levy on petrol and diesel and with sales picking up with a rebounding economy, the incremental collections in the current year may be over Rs 1 lakh crore when compared with the previous year, industry sources said. In all, the UPA government had issued Rs 1.34 lakh crore worth of bonds (equivalent to a sovereign commitment to pay in future) to state-owned oil companies to compensate them for selling fuel such as cooking gas LPG, kerosene and diesel at rates below cost. Of this, Rs 10,000 crore is due to be repaid in the current fiscal, according to the finance ministry. First, Finance Minister Nirmala Sitharaman and then Oil Minister Hardeep Singh Puri had blamed the oil bonds for limiting fiscal space to give relief to people from fuel prices trading at near record high. Sitharaman had last month ruled out a cut in excise duty on petrol and diesel to ease prices, saying payments in lieu of past subsidised fuel pose limitations. She put the total liability that the BJP government has to service at Rs 1.3 lakh crore. On September 2 - a day after Congress leader Rahul Gandhi launched a scathing attack on the government for raising cooking gas prices - Puri put the total liability at over Rs 1.5 lakh crore. "In 'India's Lost Decade' known for rampant impunity & policy paralysis, UPA Govt saddled future govts with Oil Bonds. More than Rs 1.5 lakh cr of these remain to be repaid, thus tying up crucial resources, limiting fiscal space & restricting financial freedom of OMCs," he had tweeted. Puri, a 1974 batch Indian Foreign Service officer who served as the Permanent Representative of India to the United Nations from 2009 to 2013, went on to say that the exploration and production (E&P) sector was "fund-starved". "The important E&P sector was fund-starved. As a result, our import bill continues to be high. Nearly Rs 3.6 lakh cr profits of oil companies was instead used for price stabilisation by a remote controlled govt of 'economic experts' to hide behind a 'All is Well' smokescreen," he had tweeted. Bulk of the excise collections comes from petrol and diesel on which the Modi government had levied record taxes last year. Excise duty on petrol was hiked from Rs 19.98 per litre to Rs 32.9 last year to recoup gain arising from international oil prices plunging to multiyear low as pandemic gulped demand. Petrol and diesel as well as cooking gas and kerosene were sold at subsidised rates during the previous Congress-led UPA government. Instead of paying for the subsidy to bring parity between the artificially suppressed retail selling price and the cost that had soared because of international rates crossing USD 100 per barrel, the then government issued oil bonds totalling Rs 1.34 lakh crore to the state-fuel retailers. These oil bonds and the interest thereon are being paid now. Of the Rs 1.34 lakh crore of oil bonds, only Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26, according to information made available by the finance ministry. The government has to repay Rs 10,000 crore this fiscal year (2021-22). Another Rs 31,150 crore is due to be repaid in 2023- 24, Rs 52,860.17 crore in the following year and Rs 36,913 crore in 2025-26. Minister of State for Petroleum and Natural Gas Rameswar Teli had in July told Parliament that the Union government's tax collections on petrol and diesel jumped by 88 per cent to Rs 3.35 lakh crore in the year to March 31, 2021 (2020-21 fiscal) from Rs 1.78 lakh crore a year back. Excise collection in pre-pandemic 2018-19 was Rs 2.13 lakh crore. The hike in taxes last year did not result in any revision in retail prices as they got adjusted against the reduction that was warranted because of the fall in international oil prices. But with the demand returning, international oil prices have soared, which have translated to record high petrol and diesel prices across the country. More than half the country has petrol at over Rs 100-a-litre mark and diesel is above that level in Rajasthan, Madhya Pradesh and Odisha. The rates were not cut drastically when international oil prices fell from USD 77 a barrel to under USD 65. Petrol has been cut from a peak of Rs 101.84 a litre in Delhi to Rs 101.19 while diesel rates have declined to Rs 88.62 a litre from 89.87. LPG rates have been hiked by Rs 190 per cylinder since July. Industry sources said the government had ordered a pause on rates during the assembly elections in states such as West Bengal. That pause meant that the retail prices did not rise in line with cost and now the oil companies are recouping their losses when rates have fallen.
Source: Economic Times
The quantum of investment in the debt segment is highest in this calendar year so far. FPIs were net buyers to the tune of Rs 16,459 crore in Indian markets in August, with majority of investment coming in the debt segment. In equities, they invested just Rs 2,082.94 crore while debt segment saw inflow of Rs 14,376.2 crore between August 2-31, depositories data showed. The quantum of investment in the debt segment is highest in this calendar year so far. "The main reason for FPI buying debt is the rising spread between the bond yields in US and India. The US 10-year is below 1.30 per cent and the Indian 10-year has risen above 6.2 per cent. Also, the stability in INR has brought down the cost of hedging. Expectations regarding exchange rate also are favourable. At these high valuations in equity riskreward favour debt," said V K Vijayakumar, chief investment strategist at Geojit Financial Services. For equities, he said "the momentum in the market and the fear of missing the momentum might have brought FPIs back to equity in August. The global scenario also turned favourable with the Fed sending a dovish message that the economy has a lot more ground to cover and rate hikes are far away". The investment came after the FPIs remained net sellers in July to the tune of Rs 7,273 crore. Besides, in the first three trading sessions of September, FPIs have pumped in Rs 7,768.32 crore in Indian markets (both equity and debt). Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities, added that the rising pace of domestic vaccinations, a decent GST print for July and a sharp increase in August merchandise trade contributed to market sentiment even as PMI for August weakened. On future of FPI flows, he said India cannot be ignored by global investors considering higher growth opportunities. "In the remaining 2021, the global investment continues to remain challenging. Market is focusing on sustenance of growth in developed economies. As a result, global investors are looking on emerging markets to diversify risks," Chauhan said.
Source: Economic Times\
Textile merchants in Surat are anxious over pending funds of about Rs 4,000 crore from Afghanistan which have gotten stuck with the Taliban taking management of the nation. Afghanistan’s central financial institution has instructed the industrial banks to not enable company checking account holders to withdraw cash for any function or to hold out any digital transaction inside or outdoors of Afghanistan. “Earlier, we used to ship clothes and textiles via Dubai to Afghanistan. Currently, we had been exporting to the nation via Bangladesh as we noticed that it was cheaper to ship via Bangladesh,” Champalal Bothra, common secretary, Federation of Surat Textile Traders Association, advised ET. “Exports have stopped now, however we’re not positive after we will get our funds. Nearly Rs 4,000 crore is stuck.” Afghanistan used to purchase silk for turbans, textiles and readymade clothes corresponding to scarves, clothes and kaftans from India. The Federation of Indian Export Organisations (FIEO) has suggested exporters and importers to attend and watch earlier than taking any step. “The Afghani foreign money has depreciated to 87 Afghan afghani in opposition to US greenback from 80 Afghan afghani in the final one week. Whereas that augurs effectively for exporters, it pinches the importers,” mentioned Ajay Sahai, director common, FIEO. “Companies in Afghanistan have knowledgeable us that the central financial institution of the nation has mentioned that it’ll not present sufficient {dollars} to the native banks. Because of this Afghan enterprise homes will be unable to pay the exporters.” The textile commerce in Surat isn’t in a snug place both for the reason that outbreak of the Covid-19 pandemic. Bothra mentioned a lot of the mills are working with 60-70% capability because the demand has but to recuperate totally. “Lockdowns and native restrictions have impacted gross sales since April, when the second wave of Covid had hit the nation. We are actually pinning hopes on Durga Puja, Navratri and Diwali gross sales,” he mentioned. Surat has 380 textile mills, 650,000 looms, 65,000 merchants and 100,000 embroidery items. The textile commerce in Surat employs 1.1 million folks. “Largely migrant staff from UP, Bihar, West Bengal and Odisha are engaged in the textile commerce of Surat. For the reason that outbreak of Covid-19, 30% of the migrant staff who had left are but to return,” mentioned Bothra.
Source: Economic Times
Exports in August increased 45.2 per cent to $33.1 billion but declined sequentially by 6.5 per cent. India's trade deficit is likely to continue widening during the second half of the current financial year. Kotak Economic Research report noted that imports in August increased further as economic activity continued to normalize and exports continued to be strong but have stagnated at the current levels, for now, leading to a widening of the trade deficit. "We expect the current trend to continue in 2HFY22 and maintain our FY2022E CAD/ GDP estimate at 1.1 per cent. We continue to pencil in USD-INR within 72.5-74 in the near term," it said. Exports in August increased 45.2 per cent to $33.1 billion but declined sequentially by 6.5 per cent. Non-oil exports at $28.6 billion increased 36.6 per cent while falling 3.3 per cent sequentially. Compared to August 2019, exports were higher by 27.5 per cent and non-oil exports increased by 25.5 per cent. However, exports have been stagnating around the current levels after a sharp spike in March 2021. Top exports in August (over August 2020) were gems and jewellery (88 per cent), engineering goods (58.8 per cent), cotton and handloom products (55.6 per cent), and chemicals (35.8 per cent). Imports in August increased 51.5 per cent to $47 billion while increasing sequentially by 1.3 per cent (July: $46.4 billion). Non-oil import was at $35.4 billion increasing 43.9 per cent, while increasing sequentially by 5.6 per cent. Compared to August 2019, imports were higher by 18 per cent and non-oil imports increased by 22.6 per cent. "We expect the overall external sector to remain comfortable but will be subjected to risks from a widening trade deficit, high commodity prices, and policy normalization in the US, and spread of Covid cases," it said.
Source: Economic Times
The question of “Am I creditworthy?” is changing to “Who can understand my creditworthiness?” This technology-driven transition is visible in every step of the credit value-chain. Credit is traditionally understood as a provider’s market. In popular imagery, the customer, an MSME proprietor, stands in the queue whereas the “manager” intently assesses them from behind the desk. The power equation culminates in any rejection being attributed to the customer’s “credit-unworthiness” rather than the provider’s inability to underwrite that credit.We are in midst of a fundamental shift in that ideology. The lending value-chain and processes are being re-architected around the customer. We are realising that like in any other business, design-thinking and customer-centricity have a key role in credit inclusion. The enormity of this shift is evident merely by the ludicrosity of this realisation, especially to lending-business outsiders. This technology-driven transition is visible in every step of the credit value-chain. The first element is access itself—credit distribution. For millennia, credit was available where the customer traded. Even the highly vilified moneylender was a merchant transacting regularly with the customer. The birth of the formalised banking system about 600 years ago separated trade and finance. While this drove efficiency, the customer had to “approach” a bank and then other ones if the former did not work out. In recent times, this overhead, coupled with credit rejection at scale, has forced many MSMEs to exclude themselves from the formal financing system. This is reverting to its more natural state of credit being available where customers are. Platforms like Indifi now make credit available within the MSMEs’ business ecosystems—be it e-commerce marketplaces, payment facilitators, or through distributors. Proprietors don’t need to walk into a branch anymore—digital is becoming the preferred mode of credit provisioning. What’s better is that such platforms provide single-click access to multiple lenders—both banks and nonbanks—thereby making it convenient for customers to find the right credit fit. The question of “Am I creditworthy?” is changing to “Who can understand my creditworthiness?”. Embedded credit like this also has a critical influence on the determination of creditworthiness. Much of the disconnect around this is created due to “information asymmetry”—a notion that customers know more about their business than the bank can ever know. This phenomenon is exacerbated by the artificial separation of banking from trade. Once lending becomes “trade aware,” such information asymmetry reduces and lenders can base their decisions on more reliable and real-time information. For example, working capital can be accurately delivered on basis of order and shipment volumes even to an MSME—such consumerisation of trade-linked credit has been enabled by the business model innovation of ecosystem credit and cost reduction owing to technologybased automation. The other revolution that will progressively reduce information asymmetry is the shift of data rights from data-holders to the customer. The recent launch of account aggregators in India is a historic step in that direction. While currently limited to bank transactions and taxation data, this movement around putting customers in control of their data has the potential to redefine the contours of credit processes. The third key element of scaling up MSME credit is the ability to drive cost-efficient scale. The absolute cost of granting a `50-lakh loan is not very different from a `2-lakh loan, but the impact on the interest rate for the customer can be very high for the latter. Digital technologies are providing answers to these challenges. India has innovated even more disruptively in this space— the emergence of public digital infrastructure in form of Aadhaar, India stack, UPI, and the enabling regulatory mechanisms have the potential to reduce the operating costs by a lot, making credit more affordable and convenient. In the not-too-distant future, MSMEs should be able to avail credit on the tap, from right within their natural business ecosystems. A convenient technology-enabled process will put them in control of their finances at minimal cost and effort overheads. Data will flow seamlessly and consensually to provide an accurate view of the business, thereby allowing lenders to compete on basis of their understanding of the customers’ businesses. Supplywise, the most efficient balance sheets will plug into this infrastructure to reduce intermediation costs that exist presently. All this will happen while customers sit behind their desk and focus on their businesses.
Source: Financial Express
This is a first of a kind MoU the AMCHAM has signed with any state. It will see the formation of a joint working group (JWG), which will include members from Invest Punjab and Amcham India. The Punjab government and the American Chamber of Commerce in India (Amcham India) on Saturday signed a memorandum of understanding (MoU) to promote investment in the state as well as further increase the ease of doing business for US member companies. The MoU was signed during the 29th annual general meeting of the Amcham India. The first-of-its-kind MoU that Amcham India signed with any state will see the formation of a joint working group (JWG), which will include members from Invest Punjab and the American trade body. They will work together to support and develop investment cooperation, as well as for enhancing the ease of doing business in Punjab, India and the US. The MoU was signed by the CEO of Invest Punjab, Rajat Agarwal and the programme director of Amcham India, Wing Commander Rajiv Anand, in the presence of Punjab’s principal secretary, investment promotion, Hussan Lal. The Invest Punjab CEO Agarwal during the signing said that Punjab served as a launchpad to renowned MNCs who looked to start their India operations. He pointed out that there were opportunities for investment and collaboration with Punjab-based companies in multiple sectors such as agriculture and food processing, technical engineering, textile and pharma. Agarwal was speaking on the investment opportunities in the state for US-based companies across multiple sectors which have complementarities with the US. He also lauded the Punjab government for bringing in reforms such as Right to Business Act, deemed approvals and the Central Inspection System, among others, which led to reduction in time and cost incurred by businesses. Rajat Agarwal said that the Punjab government designated the US as one of the focus countries for it to promote industrialisation, trade and commerce. Global companies such as Amazon, Walmart, Quark, Cargill, Tyson, John Deere, Gates, Schreiber, Pepsi, Coca Cola, Teleperformance, Compu-Vision Consulting and Netsmartz Infotech are among the 20 firms which chose Punjab as their preferred investment destination. Invest Punjab or Punjab Bureau of Investment Promotion was set up by the state government in 2013 as a single point of contact for facilitation of investors who are looking to set up a business in Punjab. The government in a press release said that top management of Pepsico, Google, John Deere, Bausch & Lomb amongst other renowned US companies ‘showed confidence in State’s unmatched growth and inclusive development of all.’ Pepsico president, Ahmed ElSheikh and John Deere’s director of corporate affairs, Mukul Varshney also spoke of their experience of doing business in Punjab during the event.
Source: Hindustan Times
Ditching the Covid-19 pandemic blues, investors have proposed to invest close to Rs6,000 crore in Madhya Pradesh in the first five months of the ongoing fiscal 2021/22, pushing demand for developed as well asundeveloped land parcels. As many as 495 industries, including large and micro, small and medium enterprises (MSME) have proposed to invest Rs5,707 crore in the state so far in 2021-22 fiscal. Most of the industries taking up land in the state are from textile, pharmaceuticals and food processing sectors, followed by cement and other domains, according to the industry department. "Despite the pandemic, enquiries from industries taking up land in MP is extremely encouraging. We have received proposals for Rs5,707 crore till August this financial year. Land allotment is already under process to interested units," said Sanjay Kumar Shukla, principal secretary, industrial policy and investment promotion department and chairman of MPIDC. The industry department has allotted 832 hectare to industries so far this year. These industries have proposed to give employment to 25,186 people in FY 2021-22. Several large and medium textile units have taken up land in the Indore region for setting up integrated facilities. In Indore region, around 50 textile and garment industries have booked land by paying 25% of the total premium amount to set up factories by pumping investment of Rs1,560 crore, according to the regional office of MPIDC. Eyeing to surpass last year's land allotment numbers, the state government is identifying government land to offer as developed or undeveloped land parcels. In the last financial year, the industry department had received investment proposals for Rs11,000 crore from 384 industries. The department had allotted 840 hectare in the year 2020/21. Shukla said, "The trend looks upbeat and we hope to surpass last year's investment figures. In just five months, we have touched half of last year's total investment. We have an abundant land bank and are regularly adding to it. State's favourable policies, connectivity, water and electricity availability is definitely attracting a lot of industries." Around 10,000 acre has been added to the land bank in the last one year in different parts of the state. New land parcels were added in Ratlam, Ujjain, Indore, Bhopal, Satna, Hoshangabad Sehore, Rajgarh, Katni, Burhanpur, Khargone, Niwari, Panna, Damoh and Sagar.
Source: Times of India
Himachal Government on Sunday signed 27 Memorandum of Understandings (MoUs) worth Rs 3,307 crore with various industrial sectors at Chandigarh that would provide direct and indirect employment opportunities to around 15,000 persons. Director Industries Rakesh Kumar Prajapati signed the MoUs on behalf of the State Government. Speaking on the occasion, Industries Minister Bikram Singh asserted that the state leads in ease of doing business ranking amongst neighbouring States Punjab, Haryana, Uttarakhand and Delhi. The State Government offers distinct advantages to the investors such as affordable land cost, high quality and reliable power supply, proactive and accessible administration, he said adding that some investors had evinced interest in setting up ethanol units. He said that Himachal is perhaps the only state in the region to have a state-of-the-art Defence Park at Nalagarh. On the occasion, M/s Trident Co. signed a MoU worth Rs 800 crore for setting up a textile park in the state, M/s Better Tomorrow Infrastructure and Solution Private Limited signed a MoU worth Rs 490 crore for setting up a private industrial park. M/s Madhav Agro signed a MoU worth Rs 400 crore for setting up a private industrial park. M/s Himalayan Group of Institutions signed a MoU worth Rs 150 crore for setting up the first skill university in Himachal. M/s Pitaara TV signed a MoU worth Rs 100 crore for setting up a film city in the state. M/s Metaphysical Healthcare Private Limited, a franchise of Apollo Hospital signed a MoU worth Rs. 150 crore for setting up a 250 bedded hospital, M/s Nachiketa Papers Ltd. signed a MoU worth Rs 100 crore for manufacturing of craft and duplex boards. For achieving the target of the Government of India for blended fuel and making India selfreliant, the State Government also invited manufacturers from the ethanol sector. A total of 6 MoUs worth Rs 1,000 crore were signed for setting up of ethanol plants in the state. The Industries Minister said that the proposals received are intended to make investment in various sectors such as ethanol, medical devices, education and skill development, pharmaceuticals, paper manufacturing, food processing, healthcare, automobile, electronics manufacturing and industrial infrastructure also. He said that as a new trend in the state, few entrepreneurs have also shown intent in developing private industrial areas and theme parks in Himachal. The state Government has already made provision of incentives and concessions in the HP Industrial Investment Policy 2019 for setting up of private industrial areas and theme parks, he added.
Source: Daily Pioneer
The first-ever EU-Pakistan Business Forum for Small and Medium Enterprises will be launched on September 8 to provide opportunities for bilateral trade enhancement. The forum — to be launched by the delegation of European Union (EU) to Pakistan — will provide opportunities to enhance the use of Generalised Scheme of Preferences Plus (GSP+), bring in new EU investment, encourage European companies to import and promote international sustainability standards. The GSP+ is a special trading arrangement that provides developing countries preferential access to the European markets by slashing tariffs to zero on most of the products. The countries benefiting from the scheme have to implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance. The forum aims to assess the impact of Covid-19 on trade under GSP The forum will also focus on assessing the impact of Covid-19 on trade under GSP and engaging businesses to benefit from the facility. The EU is Pakistan’s second most important trading partner, accounting for 14.3 per cent of the country’s total trade in 2020 — and absorbing 28pc of Pakistan’s total exports. Pakistan’s exports to the EU are dominated by textiles and clothing, accounting for 75.2pc of the total exports to the bloc in 2020. As a result of GSP+, more than 78pc of Pakistan’s exports enter the EU at preferential rates. Around 80pc of the textiles and clothing articles imported to the EU from Pakistan enter the region at a preferential tariff rate. Around a quarter of these imports are bed linen, table linen and toilet and kitchen linen. The inauguration ceremony of the EU-Pakistan Business Forum is expected to be attended by the representatives of local SMEs from four key sectors including gems, jewellery and mining, information technology, handicrafts and fashion-wear as well as travel and tourism.
Source: Dawn
PROBLEMS of three types — the smuggling of fabrics into Bangladesh, the misuse of bonded warehouse facilities and misdeclaration in import, which also includes misinvoicing, in which prices of goods on invoices are stated less than the price actually paid to pay less in taxes — have largely held back the development of the primary textile sector. The sector, thus, loses business worth an estimated $6 billion a year on the domestic market. The value of the yearly commercial import fabrics, as the Bangladesh Textile Mills Association president says, is less than half a million dollars while almost a half of the demand for fabrics on the local market, about $6 billion in value, is met with foreign items. With such a negligible quantity of commercial import having happened on paper, saris and cloths for three-pieces, which are ensembles of three-part dresses of harmonious pieces, especially for women, and shirts have for long flooded the domestic market. The association at hand says that the size of the domestic fabric market is seven to eight billion metres worth $11–12 billion and the local produces can supply only three to four billion metres of the fabric worth an estimated $6 billion. The rest of the demand is met with fabric smuggled into Bangladesh and the fabric leaked from bonded warehouses. Export-oriented industries enjoy a duty-free import of raw materials on condition that they will produce finished goods with the materials and export the products. The facilities are meant to make goods export competitive on the international market. But allegations have for long been rife that many export-oriented industries that enjoy the duty-free import of raw materials often sell the warehouse products on the domestic market in breach of the conditions of the facilities. All this holds the local industries from tapping into the potential on the domestic market although the industries export premium quality fabrics to the international market. Added to this are issues of misdeclaration and misinvoicing in fabric import for tax evasion. There have been allegations that some businesses import fabrics measured in kilograms to evade paying taxes as a kilogram of denim cloths and a kilogram of chiffon fabric are not the same in quantity when they are measured in metres, which is the norm. The practice of stating price of goods on invoices as being less than the price actually paid so as to pay less in taxes has also been noticed. There has been the imposition of a 37 per cent duty on the commercial import of fabrics, which stops importers from selling the items at prices lower than the local fabrics after the duty is paid. But in all the three cases at hand, importers could sell the products at prices lower than what could be feasible for local industries. All this together warrants that the government should effectively attend to the troubling issues. The government is reported to have amended the Bonded Warehouses Licensing Rules 2008 to stop the misuses of bonded warehouse facilities. While the rules at hand may still not be effectively enforced, the two other issues remain largely unattended. The government must look into all of the issues simultaneously to give the local textile industry the fillip that it needs for a sound growth.
Source: New Age
Exporters say about August rebound Exporters of the country said that the rebound in export receipts for August in the current fiscal year was anticipated. Exports had suffered a setback in July, the first month of the current financial year 2021- 22. But it returned to positive growth the next month, banking on the support of the apparel sector. According to the recent data of the Export Promotion Bureau (EPB), export earnings saw a 14% growth year-on-year in August of this year, following a more than 11% slump just a month ago. Bangladesh earned $3.38 billion, backed by the apparel shipments, in the second month of FY22, which was $2.97 billion in the August of the last financial year, according to the EPB data. However, export earnings declined 0.31% year-on-year in July and August combined, which was $6.87 billion in the same period of the last year, and $6.85 billion in the current fiscal. Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that there was a backlog due to Eid, lockdowns and port issues in July, so a number of products were unshipped. “That's why exports increased last month. But our hope is that there will be growth in the coming months. Exports will increase further in November-December,” he added. He also said that, however, exports are still 1.27% lower year-on-year in July-August combined. This was mainly due to the 11% negative growth of exports in July which has also affected the exports of August. “We have plenty of purchase orders from our buyers as their stores are fully operational after mass vaccination. So, exports will increase significantly in the coming months,” he added. He also said that, unofficially, Bangladesh has already gotten back the 2nd place by overtaking Vietnam again and it will be announced officially soon. Exporters also said that major export sectors of the country have experienced a rise in the export in August and it is a positive vibe for them. Mohammad Hatem, vice-president of the BKMEA, said that more than 17% growth in knitwear exports is certainly expected and desirable. “We expect export earnings to be 20- 25% in the coming months. Demand for this specialty has grown significantly as a result of the return of normalcy in Europe and the Americas. The sector is getting more purchase orders,” he added. He also said that they are not able to take adequate orders due to the instability of yarn prices. The price of yarn in Bangladesh is much higher than any other country, like India, Pakistan. Sources from Bangladesh Tanners Association said the leather and leather goods registered a positive growth in the last month and it is good news for them. The stores in Europe and America are being opened on a large scale after the mass vaccinations during the pandemic, so the demand is increasing significantly. However, Moniruzzaman Mridha, vice-president of the Bangladesh Jute Spinners Association (BJSA), said that the jute industry has been lagging behind for a long time due to the pandemic. “Illegal stockpiling of jute should be stopped. Many unlicensed people are entering the industry despite not having industrial knowledge, they need to be controlled,” he added. He also said that steps should be taken to boost domestic consumption by implementing the governmental instructions of using jute bags for packaging. The EPB data said that all major sectors such as agriculture products, leather and leather products, home textiles, frozen and fresh fish, engineering products, pharmaceuticals, specialized textiles, plastic products have recorded positive growth except jute and jute goods. Apparel sector, bearer of more than 82% of the export earnings, fetched an 11.56% growth year-on-year last month with exports worth $2.75 billion, up from $2.46 billion in the same month last year. But shipments of the apparel sector slightly dipped by 1.27% year-on-year to $5.64 billion in July and August combined in 2021, which was $5.71 billion in the same period of the last year, said the EPB data.
Source: Dhaka Tribune
The former foreign minister's remark underscores the rising risk of a delay in compiling the budget for next fiscal year as economic policy is in limbo during the campaign for premier Fumio Kishida, a key contender to succeed Yoshihide Suga as Japan's prime minister, said on Sunday that debate on funding economic stimulus measures he has proposed should wait until after a general election later this year. The former foreign minister's remark underscores the rising risk of a delay in compiling the budget for next fiscal year as economic policy is in limbo during the campaign for premier after Suga's abrupt withdrawal last week. "I'll lay out the general direction of my stimulus package idea, but it won't be easy for the government to boil down details of the plan," Kishida said in a television programme. "How to fund the package ... will be something that will be discussed once the general election is over." In a surprise announcement on Friday, Suga said he will not run for reelection as head of the ruling Liberal Democratic Party (LDP). The party president becomes prime minister because of the LDP's majority in parliament. The winner of the now wide-open LDP race must call a general election by Nov. 28. Suga's exit has heightened uncertainty on the outlook for economic policy as contenders emerge to replace him. Kishida has said he would compile a spending package worth several tens of trillions of yen (hundreds of billions of dollars) to cushion the blow from the coronavirus pandemic, which is surging in a fourth wave in Japan. The timing of the general election could affect procedures for drafting the budget and additional pandemic-relief spending plans. The government usually compiles a budget in late December, after months of preparation, to submit to parliament in January for enactment before the April start of the fiscal year.
Source: Business Standard/ Reuters
•Mathuki told EAC Partner States’ governments to enhance industrial productivity and strengthen institutional frameworks and policies to accelerate economic growth in the region. •The Secretary General also reaffirmed EAC´s commitment to finalize the Common External Tariff (CET) before the end of 2021. The regional body is committed to finalising the Common External Tariff (CET) by the end of the year The East African Community (EAC) Secretary-General, Peter Mathuki has urged the EAC Partner States to invest in industrial parks and infrastructure to improve the competitiveness of the region and increase Intra-EAC trade. Mathuki told EAC Partner States’ governments to enhance industrial productivity and strengthen institutional frameworks and policies to accelerate economic growth in the region. “Currently, manufacturing contributes to GDP a meager 8.9 per cent. To achieve the set target of 25% in 2032, there is a need for diversification of the manufacturing base and raising local value-added content resource-based exports,” he said. He spoke during the East Africa Trade and Industrialization Week (EATIW 2021), held at the Julius Nyerere Convention Centre, in Dar es Salaam, Tanzania. The Secretary-General called for the promotion of rural industrialization through an agricultural development-led industrialization strategy and strengthening of research, technology and innovation capabilities of all EAC Partner States, to foster the structural transformation of the manufacturing sector and industrial upgrading. As a strategy towards economic recovery amid Covid-19 in the region, Dr. Mathuki called upon EAC Partner States Governments to offer long-term stimulus packages for private sector development and sector-specific incentives for the established regional value chains such as cotton, textile and apparel, leather livestock and Agro-processing. “Instead of competing, EAC Partner States need to complement each other. Harnessing our comparative advantage by collectively improving infrastructure connectivity will fasttrack regional development,” Mathuki added. “The EAC is committed to finalising the Common External Tariff (CET) by the end of the year, in a move set to promote the Community´s domestic industries & safeguard the region from international shocks,” he said. The conference adopted a four-band CET structure (0, 10 and 25per cent). The EAC states have been asked to speed up the finalisation and implementation of EAC Regulations on liberalisation of air transport services, in a move set to lower flight costs and in turn reduce the cost of doing business in the region. “With only about two per cent of East Africans vaccinated, it is critical that the private sector leads deliberate public campaigns on Covid-19 vaccination and jointly to enhance EAC as an investment destination,” Mathuki said. On his part, David Osiany, Kenya’s Chief Administrative Secretary, Ministry of Industrialization, Trade and Enterprise Development, called for consistent public-private sector dialogues and collaboration to develop policies corresponding with the current business environment. In his remarks, Tanzania’s Kitila Mkumbo, Minister for Industry and Trade, called for joint investment by EAC Governments and the Private sector in skills development. “Only 5per cent of our workforce are employable in the current job market. The publicprivate sector should come up with a strategy on skills development to fill this gap,” said Mkumbo.
Source: The Star
