While we have a favourable external environment with most global buyers looking to hedge their bets outside China, India must trigger a quality revolution among its manufacturers in order to grab this opportunity One of the most striking contrasts for global buyers in sourcing products from India visa-vis China remains an astonishing lack of attention to quality among a huge majority of Indian manufacturers. This problem is acutely pronounced at small and medium scale manufacturing (MSME) sector. For example, in the apparel and textiles sector, India is home to many world-class and quality-conscious manufacturers. Similarly, other industries also have top-quality manufacturers. It is outside the big-league players that we see a precipitous decline in adherence to the global quality standards. Contrast this with China, where there is no shortage of small or midsized firms following strict United States and European standards of quality. The pandemic brought this point home yet again. In early 2020, as the demand for threeply masks shot through the roof around the world, our teams struggled to find even a handful of manufacturers from India who were making masks that met the US FDA’s or EU CE standards for exports. In comparison, hundreds of such factories in China — a majority of them small or midsize units — were readily producing their FDA/CE certification on demand. This experience, among others, has led us to conclude that poor quality controls remain perhaps the biggest self-inflicted barrier to growth of Indian exports. This is a problem area which needs attention and the gaps need to be addressed. To begin with, we need to recognise that quality, like charity, begins at home. Most Indian small-scale units were set up to meet domestic or local demand, and they have bought into the self-perpetuating myth that Indian customers are fine with goods of lower quality. Garments and apparel manufactured in India and sold in Indian retail stores are rarely tested vigorously for strength, stretchability, and tear resistance of the fabric. This is readily apparent to anyone in India who has bought a pair of jeans or shirt from the US or Europe — the difference in quality is stark. This is changing, but not at the pace where India brands can be considered globally competitive. Now, when these very manufacturers aim for growth through exports, they are seldom aware of quality standards demanded by foreign buyers. In other cases, they decide that implementing higher quality controls in factories is not worth the significant time and investment for a reward in the distant future. Education and awareness-building are the keys to addressing this issue at an individual unit level. In some cases, local associations have also played a crucial role. In Ahmedabad, Gujarat, an association of chemical and pharma manufacturers formulated a set of worldclass standards for effluent treatment and disposal, which were then mandated for all member units. Pressure from industry peers eventually forced all units to invest in expensive yet effective waste treatment plants, allowing their products to pass even the strictest sourcing requirements from buyers around the world. Exports took off, and all units earned a handsome return on their investments. While the manufacturers don a big share of the responsibility to maintain global standards of quality, there is important work to be done by other stakeholders as well. Most critically, we need a thorough overhaul of our domestic standards enshrined under ISI/BIS, bringing the standards themselves as well as procedures for checks and audits as close to their global counterparts as possible. Our domestic standards are outdated or weak and are seldom accepted by international buyer of repute. Even if we were to concede that a complete overhaul of the ISI/BIS specifications may be a long-drawn and tiresome process, the job at hand can also be accomplished by a myriad of government-funded ‘export promotion councils’, who can each undertake promulgation and audit of world-class standards for industries and units falling under their respective jurisdiction. For India to be a key player in global exports it necessitates a pervasive attention and adherence to global standards of quality, particularly among small scale manufacturers. While we have a favourable external environment with most global buyers looking to hedge their bets outside China, India must trigger a quality revolution among its manufacturers in order to grab this opportunity
Source: Money Control
The Yogi Adityanath-led Uttar Pradesh government plans to set up overseas trade promotion and facilitation centres in every district of the state to boost exports further. Uttar Pradesh is fast emerging as an export hub of India. According to data released by the central government, Uttar Pradesh exported goods worth ₹21,500.85 crore in April and May this year, up 152.67 per cent compared to corresponding period previous year. Last year, goods worth ₹8,511.34 crore were exported between April and May, 2020. The major exports from Uttar Pradesh include leather, textile and glassware products. These products were exported to different parts of the world even during the ongoing coronavirus disease (Covid-19) pandemic, giving a major push to the Centre's 'Make in India' initiative. Buoyed by the response Uttar Pradesh's products are receiving from countries across the world, the state government has decided to set up overseas trade promotion and facilitation centres in all the 75 districts. The MSME department also plans to set up a centralised facilitation centre for better coordination among various hubs. The Adityanath government has claimed that these centres will increase the worth of exports by at least ₹400 crore and provide employment opportunities to 4,000 people. Uttar Pradesh is the sixth major exporting states of the country, after Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka, according to Centre's data. This year, a lot of goods like carpets, rugs, textile fabric, oven fabric, man made staple fabric, footwear, glassware, iron, steel, aluminum, rice, sugar, milk, flour, plastic products, silk, artificial flowers have been exported to different parts of the world. Nepal, Bangladesh and countries of Southeast Asia imported a large number of products from UP during the Covid-19 pandemic. According to state government, footwear and toys exports shot up from ₹147.04 crore and ₹26.19 crore in April-May last year to ₹742.47 crore and ₹120.83 crore respectively this year. Similarly, glassware exports increased from ₹39.99 crore during the same period last year to ₹310.77 crore this year. Furthermore, carpets and textile fabrics worth ₹744.15 crore were exported this year as against ₹247.63 crore last year. The export of leather products also saw massive increase from ₹79.21 crore last year to ₹493.80 crore this year.
Source: Hindustan Times
The Items and Providers Tax (GST) Council is more likely to contemplate a ministerial group’s report on introducing a differentiated regime for sectors the place tax avoidance may be very excessive, akin to brick kilns, sand mining and, gutkha and pan masala manufacturing, whilst consultants have urged warning about such carve-outs. The Council, which is able to meet bodily, for the primary time for the reason that pandemic’s onset, on September 17 in Lucknow, had earlier constituted a Group of Ministers (GoM) to contemplate calls for of some States to tax these merchandise based mostly on manufacturing capability quite than output and introduce Particular Composition schemes. Tax evasion is excessive in these sectors — for example, ₹830 crore of evasion was detected at a single pan masala unit earlier this 12 months. The 7-member GoM, convened by Odisha Finance Minister Niranjan Pujari, is tasked with inspecting the feasibility of a capacity-based tax regime and different options to plug tax leakages. “The largest danger of extending a capacity-based or composition scheme to such sectors is twofold — it goes in opposition to the very edifice of GST as one of many targets was to make sure buoyancy in revenues with enhance in gross sales volumes,” Atul Gupta, senior director at Deloitte India, mentioned, including it may open the floodgates for such calls for from different sectors, like textiles.
“It won’t be straightforward to implement… and it might not even yield the specified results of curbing evasion, the principle cause for which is extraordinarily excessive tax charges,” mentioned Rajat Bose, companion, Shardul Amarchand Mangaldas & Co. Such a levy “ provides the incorrect sign to an trustworthy taxpayer by conceding that Income authorities should not competent to verify evasion and… places a premium on tax evasion,” Mr. Gupta mentioned.
Source: The Hindu
While stressing on the need to make appointments to the unfilled vacancies in Tribunals across the Country, the Supreme Court on Monday asked the Central Government to constitute the GST Appellate Tribunal, which has not been constituted even after 4 years of the Act having come into force. When Solicitor General of India Tushar Mehta sought for time to file counter-affidavit in the petition which sought the establishment of CGST Tribunal, the Chief Justice of India NV Ramana orally told him. "The CGST Tribunal has not been constituted. That is also one issue. There is no question of filing counter. You've to constitute Tribunal that's all". A Special Bench comprising CJI Ramana, Justice DY Chandrachud and Justice Nageswara Rao was considering a writ petition by lawyer Amit Sahni seeking directions for constitution of the GST Appellate Tribunal in the interest of justice. Also Read - Supreme Court Issues Notice In Plea Filed By Student Challenging Rustication For Attempting To Organise Anti-CAA Protest The Bench will next hear the matter on September 13th, along with other petitions filed regarding appointments to be made to Tribunals across the country and challenging the validity of Tribunals Reforms Act 2021. The Supreme Court had earlier pulled up the Centre for not constituting an appellate tribunal under the CGST Act even after 4 years of the Act having come into force. The Bench had asked SG Mehta appearing for Union of India to get back to the Court on the issue of constitution of a GST Appellate Tribunal. " The CGST act came into force about 4 years back, you have been unable to create any appellate tribunal at all." CJI had told Solicitor General Tushar Mehta. The Top Court had observed that there has to an appellate tribunal under the Act for persons aggrieved by orders of appellate or revisional authority. However, the same has not been constituted yet. "For a person aggrieved by order passed by appellate authority under section 107 or revisional authority under 108 of the Act, an appellate tribunal has to be there period in 3 months time under 112. Under 109 of the CGST Act, you have to create a Tribunal." The Bench had said According to the petitioner, the constitution of National and other Benches of appellate tribunal under Section 109 of the CGST Act, 2017 has become an absolute necessity of the hour and the Respondents cannot drag its constitution for an indefinite period. The plea filed by Advocate Amit Sahni through Advocate Preeti Singh has argued that the citizen aggrieved of the orders passed by appellate/revisional authority, are constrained to approach the respective High Courts under 226 by way of Writ Petition. This is due to the absence of an appellate tribunal and the same is overburdening the High Courts as well. Further, it has been argued the period of limitation to file appeal before the Tribunal (90 days) cannot be extended by way of administrative order by the respondent in contravention of statutory provisions, and more particularly, such extension cannot be given for an indefinite period. The plea has stated that in a plethora of cases, the apex court has held that justice delayed is justice denied. However, in absence of an Appellate Tribunal, the litigants are not able to get justice within a reasonable period, and the same is causing extreme hardship to the litigants across the Country.
Source: Live Law
Kerala, after a long agitation by a section of women workers of textile showrooms in Thrissur and other cities demanding “right to sit”. Taking a leaf out of neighbouring Kerala’s footsteps, Tamil Nadu introduced a Bill to provide mandatory seating facilities for the staff working in shops in the state. The Bill introduced by Labour Welfare Minister and Skill Development C.V. Ganesan sought to amend the Tamil Nadu Shops and Establishments Act, 1947 by adding a subsection to facilitate seating arrangements to workers, mostly women, in textile showrooms and other shops. Kerala, after a long agitation by a section of women workers of textile showrooms in Thrissur and other cities demanding “right to sit” introduced a similar bill to provide seats to workers, mostly women, who were made to stand for long hours during their shifts. The proposed Section 22-A to the Act reads: “The premises of every establishment shall have suitable seating arrangements for all employees so that they may take advantage of any opportunity to sit which may occur in the course of their work and thereby avoid ‘on their toes’ situation throughout the working hours.”
Source: The Statesman
There is no reason why all the financial information that is available cannot be harnessed by lenders to provide loans directly into the bank accounts of borrowers Digital awareness needs to be enhanced along with the framing of a techno-legal policy that empowers MSMEs to fulfil their destiny. It suddenly seems like the 63-million-enterprises strong MSME sector (micro, small and medium-sized enterprises) is being recognised for what it truly is. This sector contributes about 45% to the overall manufacturing output, more than 40% of the country’s exports, over 28% of GDP, while creating employment for about 111 million people, which, in terms of volume, stands next only to the agricultural sector, according to an annual report of the Ministry of Micro, Small and Medium Enterprises. Manufacturing, services and trade each comprise about a third of the overall MSME sector. Clearly, MSMEs deserve a lot of attention and care, given that a majority don’t have websites, many are not registered, only 3.3 lakh of these are between Rs 5 crore and Rs 70 crore in size (in terms of annual turnover), with just a tiny number of 5,000 MSMEs being between the Rs 70 crore and Rs 250 crore turnover. Last year, the definition of MSMEs was changed to allow for turnover-based thresholds with enhanced limits as well as including services alongside manufacturing. In July, wholesale and retail trade were classified as MSMEs by the Reserve Bank of India (RBI) for the purposes of accessing credit. To address the effects of Covid-19 on MSMEs, the government announced a series of stimulus measures that included the Rs 6.28 lakh crore package, an equity infusion of Rs 88,000 crore into the ECGC (Export Credit Guarantee Corporation of India), loan guarantees of Rs 1.1 lakh crore and the passing of the Factoring Regulation Bill last year, an emergency credit line guarantee scheme (ECLGS) of Rs 1.5 lakh crore was also announced in June, among other efforts, to enhance credit to MSMEs. All of these measures were driven by the government and RBI through banks, which, in the absence of appropriate incentives (and a host of disincentives), naturally disbursed funds only to safe borrowers, i.e. those with an unblemished record of paying back. This focus on a narrow set of borrowers got exacerbated as the credit slippages increased to significant percentages of NPAs. The vicious cycle in motion made banks more nervous about lending, while leaving MSMEs struggling to find funds to manage their businesses. Greater throughput of settlement of trade credit (thanks to the Factoring Bill) will be helpful assuming the now eligible NBFCs can do so at low cost and high speed. So, how does one provide low-cost, risk-managed loans to MSMEs speedily? Resolving this requires us to think beyond silos and extant constraints of cost, time, paperwork, credit verification, disbursements and recovery, and the like. Otherwise, the 84% of MSME debt, amounting to about Rs 58.4 lakh crore, which is sourced from informal sources, will continue to remain informal, NPAs will continue to rise and banks will continue to practice lending to ‘safe’ borrowers. India’s digital platform stacks, protocols and frameworks—Aadhaar, UPI, eKYC, eSign, GSTN, IT, Account Aggregator, etc—provide the answer. There is no reason why all the financial information that is available cannot be harnessed by lenders to provide loans directly into the bank accounts of borrowers. The borrower’s financial health can be ascertained from the GSTN, bank and IT data, eKYC can be done through Aadhaar, documents can be eSigned, and money can be transferred via UPI into bank accounts that in many cases are Aadhaar-linked too. All of this can be enabled from the mobile phone of the borrower. The sharing of financial information with the permission of the borrower can also be enabled through the consent of the borrower, another pioneering feature of India’s digital stacks. In effect, usage of such digital means will ensure the creation of a credit score dynamically for each borrower that, over time, can create a credit history or bureau equivalent. The Open Credit Enablement Network (OCEN) is a related initiative that can democratise lending by making lenders of service providers, with access to potential borrowers. Think of, say, a food delivery company that can offer loans to restaurants using the order history of the restaurant, its GST, bank balance and IT and other information. Effecting the above requires multiple entities—regulators, ministries, lenders, MSMEs and third-party providers—to come together, cutting across silos, to use the existing digital frameworks and protocols. Digital awareness needs to be enhanced along with the framing of a techno-legal policy that empowers MSMEs to fulfil their destiny. It is time Indian MSMEs become like the vaunted German Mittelstand that have access to sound financial models, are innovative, and are supported for R&D, skills shortage, financing, starting-up and foreign trade. For that, we have to think differently. The good news is that all the blocks are in place. The talent and expertise exists. We have to act. Are we ready to create hundreds of thousands of Ubharte Sitaare from our MSMEs?
Source: Financial Express
Earlier this month former Australian Prime Minister Tony Abbott was on a visit to India to, “....energise and expand our bilateral trade and investment relationship with India”. That the visit had helped accelerate things was evident from last week’s joint statement after a video meeting between Piyush Goel, India’s Minister for Commerce and Industry and Dan Tehan, the Australian Minister for Trade, Tourism and Investment where the two ministers “directed officials to speed up the negotiations...to achieve an early harvest announcement by December 2021...and pave the way for a comprehensive agreement.” India and Australia did carry out at least 9 rounds of negotiations between 2011 and 2015 to finalise a Comprehensive Economic Cooperation Agreement (CECA). However differences in position on a number of issues including tariffs, movement of professionals and market access resulted in the agreement not achieving fruition. The two countries have travelled quite a distance since then and a converging regional strategic vision, increased defence cooperation as well as shared concerns about China have brought them closer than ever before. Both countries have already made a beginning by commissioning respective country strategies. Australia’s An Economic Strategy for India to 2035 envisages Australian exports rising by five times and investment by ten times in 20 years, making India among Australia’s top trade and investment partners. India’s reciprocal report, perhaps the first and the only one for any country, Australia Economic Strategy (AES) identifies 12 sectors for enhanced collaboration, a granular approach and increased trade and cultural exchanges. At a very fundamental level, a shorthand version of the deal-the ‘early harvest’- would be an effort by both countries to quickly increase market access for their own goods and services in each other’s markets. Australia is excited at the prospect of India’s large market and its expanding middle class. It would therefore be keen on access for its manufactured products through lower Indian tariffs, particularly since some of its Asian competitors would have already have this access through FTAs with India. India would similarly be looking out for increased exports in areas like textiles, apparel, vehicles and pharmaceuticals as also a levelling of the field by gaining access to the same (lower) tariffs which Australia currently gives to its FTA partners. Given that Australia is a welcoming home for skilled professionals, India would also be looking for gains from increased movement of its abundant and skilled manpower. However, from India’s perspective, there would be two caveats- one, to ensure that, as a NITI AAYOG study points out, trade deficits in the post agreement period do not widen and two, to see that non-tariff barriers, differences in standards or in recognition of qualifications do not offset the higher access achieved through a trade deal. Another note of pragmatism is in order here. The gains from a purely trade facilitation deal would be hamstrung, for India, by the relatively small size of Australia’s markets and, for Australia, by the immense competition it would face while accessing India’s larger markets. The real potential of an economic deal lies elsewhere. The question that both countries have to pose to themselves is whether a potential agreement between the two countries would have a bearing on their own long term economic goals? This is exactly the standpoint from which the two country strategies referred to above approach the issue. Australia’s India Economic Strategy to 2035 (IES 2035) argues that Indo-Australian relations should not be looked through the prism of current trade relations and strengths but with a view which is both long term and global. The report maps out India’s trajectory of growth which will create enormous opportunities for Australian firms in areas like water management and environmental services which have hitherto have escaped the attention of Australia Inc. India’s Australia Economic Strategy (AES) echoes this view and argues that the two economies are evolving and there exist (or will emerge) opportunities in areas which have been hitherto unexplored. A case in point is the complementarity between India’s need for critical minerals for its e-mobility and clean energy goals and Australia’s potential as a reliable supplier. Yet another area of promise is the A$ 2.3 trillion Australian Pension fund sector where funds like AustralianSuper or QSuper could be a good source for investment in India’s infrastructure. Indeed this argument can be taken much further. Take for example some Australian start ups especially in the areas of and IT which have drawn both interest and funding. If they are to complete their investment cycle and successfully establish a global presence, their rapid scaling up would be essential. That is best accomplished through backend offices in India where a vast pool of skilled manpower exists and very importantly where intellectual property rights are protected. A trade and investment agreement that facilitates these processes will help firms in both countries move towards global dominance with mutual complementarities. India has set an ambitious target of US $400 bill of exports this year. But it not only needs to export more, but also and more importantly needs to expand its basket of exports and adopt new technologies to improve productivity. This is where Australian expertise in mining, manufacturing and gaming- to just name a few sectors- can help. In agriculture, Australian technology, innovations and scale can help transform our agricultural economy towards value addition, commercial scale and climate resilience. The ongoing cooperation in education and skills can be further upgraded to certification to achieve mutually agreed standards and recognition. Australia has often looked at India as a country difficult to do business with. An early harvest agreement on tariff easing and increased access will help lay a foundation of trust between the two countries, move India out of the “...too hard” basket and belie critics who think that “...India just doesn't do trade deals. However, this would only be a beginning. To really unlock the full potential of the economic relation we need a comprehensive economic agreement that will enable entrepreneurs and investors in both countries to venture into mutually beneficent relationships and leverage their complementarities to achieve global success. Kansal is a senior IAS officer. He has been an Emerging Leaders Fellow of the Australia India Institute at the University of Melbourne. Sengupta is Professor of Economics at the University of Jammu.
Source: Economic Times
• Welspun India said it has got all required certifications to supply 3 ply surgical masks to global markets Welspun India on Monday announced that it has become the first Indian company to receive US FDA 510(k) approval for its 3 Ply Surgical Masks. Certified by BIS and CE already, the company said that this product from Welspun India Ltd has got all required certifications to supply to global markets including critical medical uses. Shares of Welspun India surged over 9% to ₹138 per share on the BSE. The company said that its 3 Ply Surgical Masks are made with 100% polypropylene and offer 98% protection against bacterial load. Simultaneously, the WN-95 FFP 2 Respiratory Masks have been CE certified, enabling exports to global markets including Europe, AsiaPacific, Middle East, and Africa amongst others. “The two clearances were received following due diligence including rigorous testing of both products by the accredited test laboratories and review by respective regulatory authorities. While CE marking implies conformity of the goods with European standards of health, safety, and environmental protection, the US FDA 510K clearance reflects that a particular product is both safe and effective for its intended use," Welspun India added in the communication to exchanges. Following the latest clearances, both masks can be supplied in the international market. Welspun had earlier also gained CE certification for a Half Face Respirator with Valve for increased Covid-19 protection, which was also tested and verified by an international agency, it added. “Welspun has always pioneered innovation and aimed to set global benchmarks for excellence. I am delighted that Welspun India is the first Indian Company to receive US FDA 510(k) clearance for its 3 Ply Surgical Masks. This is a remarkable validation of our philosophy of keeping ‘people ahead of everything’ and we will channelize the momentum to further take the quality of healthcare products a notch higher at the global stage," said Dipali Goenka, Jt. MD & CEO of Welspun India. Welspun India Ltd (WIL), part of $2.7 billion Welspun Group, is a global leader in Home textiles.
Source: Live Mint
Expects ₹12,500 crore total turnover by FY25 Welspun India, the largest terry towel producer in the world, is looking at a $100 million (₹730 crore) turnover from e-commerce as it looks at a larger play in the USA, UK and India through its own brands by FY23. According to Dipali Goenka, Joint Managing Director and CEO, Welspun India, the company is investing close to $10-15 million (₹70-100 crore) over a two-three year period towards the launch of own brands (including licensed ones) and putting in place of an ecommerce network – including the back-end and front-end and up-skilling of its workers. A part of the proposed investments have already been made. Digitisation of services and technical ramp-up across global warehouses has taken place. Marketplaces like Amazon are being tapped globally. “By 2023, e-commerce will have a $100 million contribution to our business. And this is going to come from our own brands like Welspun here in India, acquired ones like Christy in UK (which made towels for the Queen of England) or US-based brands like Martha (TV host Martha Stewart’s licensed offerings) and Scott Living (American TV show host brand),” Goenka told BusinessLine. “The new way visible to us is related to our emerging businesses – advanced textile, flooring, our licensed brands and e-commerce – and they will have a quite big contribution in our business,” she said, adding “the model (e-com) is very scalable in the UK and the US.” Emerging business verticals include floorings and advanced textiles businesses that the company has been investing in here over the last few quarters. With approximately ₹300 crore investments being further made in floorings, the company is expecting benefits of these verticals to accrue Q4FY22 onwards. Owned and licensed brands, and emerging businesses of advanced textile and flooring, have posted 87 per cent growth YoY and have a revenue contribution of 15 per cent to Welspun India’s revenues. Changing buying patterns So far global revenues for Welspun have been driven by private labels for organised retailers – Walmart, Costco, Carrefour, Macy’s, Ikea and Tesco among others – and star hotels like Marriott, Hilton, etc. Licensed brands include Wimbledon and Disney. Goenka says “business de-risking is being done” with the pandemic leading to change in consumption patterns. “Speaking from a global perspective, the US has been very-very robust in demand because the home economy has increased, and vaccination drive and stimulus drive are at their peak. So, our core business in the US along with the UK has been quite strong. Europe and the rest of the world are gradually coming online. So the core business is growing strong and new verticals like e-commerce too will grow,” she said. Rising Covid-19 cases in the USA do not pose an immediate risk, but a larger worry is the impact on trade due to non availability of containers and freight rate-led cost pressures. “Smaller shipments are happening. But turnaround time or inward time for large containers is a nightmare,” she added. Capex plans Welspun India, which reported a turnover of around $1 billion (₹7,408 crore) in FY21 at 8.4 per cent YoY growth, is looking at ₹600 crore capex this fiscal across its three business verticals – flooring, advanced textile, and home textile businesses. This is over and above the investments made towards e-com play. Plants at Vapi and Anjar, operated at peak capacities in FY21, and if demand “continues to rise” “de-bottlenecking and rebalancing is required to increase capacity for towels, bed linen, rugs, and carpets. “If capex plans materialise and demand is this buoyant, then we are expecting 15 per cent growth in FY22. By FY25, Welspun India is eyeing ₹12,500 crore turnover,” she said.
Source: The Hindu Business Line
The Bangladesh Bank on Monday gave another 45 days for the exporters who are eligible for cash assistance against their exports to apply to get the benefits for the fiscal year of 2020-2021. The exporters who failed to apply within the stipulated deadline were asked to apply as many of them were unable to do so amid the Covid outbreak, a BB circular issued on the day said. Apparel and jute exporters will have to get certificate against the export claim from the representing trade body of the two sectors. Exporters of products under 38 categories are eligible to receive subsidy at variable rates from the government. As per the rules, RMG exporters are enjoying 1 per cent additional special incentive in addition to the 4-per cent cash incentive against export of new textile and garment products and expanding export of textile items to new markets — markets other than the United States, Canada and the European Union. Besides, small and medium industries of the textile sector, export-oriented local textiles, exporters of apparel products to the eurozone, information technology-enabled services, information technology companies established in hi-tech park, exporter of elephant grass (hogla) and coconut coir, exporters of pharmaceuticals, surgical instruments and appliances, photovoltaic modules, motorcycles, chemical products, razors and razor blades, ceramic products, caps, crabs, mud eels and galvanised sheets or coils, among others, receive the cash incentive at different rates.
Source: Newage
Turkey’s export has benefited from the trade wars among China, the U.S. and the EU, Yeni Shafak newspaper reported on September 6, quoting various experts. The country's exports increased by 52 percent in August as against the same month in 2020 reaching $18.9 billion. On the other hand, exports in the past 12 months, broke the all-time record with $ 207.5 billion, the report added. Evaluating the growth in Turkey’s industry and increasing export figures, Marmara University Product Development Center (MURGEMER) Project Manager Selim Hartomacioglu said that the Chinese-U.S. trade wars, the change in the global supply chain during the pandemic, and the rising freight prices had played a key role in the process. The project manager drew attention to forecasts that the Chinese economy will surpass the U.S. within the next five years and become the largest global economy. Hartomacioglu underlined that both the U.S. and the EU are developing new strategies against China. “While the balances in world trade were changing, Turkey came to the fore with its production potential, product quality, and logistics advantage,” Hartomacioglu added. One of the prominent sectors in Turkey's exports after the pandemic was machinery. In the first seven months of 2021, $11.9 billion of machinery exports have been made, which is 15.9 percent and 31.7 percent more compared to 2019 and 2020 respectively. Moreover, among the sub-product groups of machinery, the textile machinery export saw 49.3 percent growth in the first seven months of 2021. Textile Machinery and Accessories Industrialists' Association (TEMSAD) President Adil Nalbant stated that the association expects the textile machinery export worth $ 1billion by late 2021. He stressed that this was set as a target for 2023. “The highest figure of all time has been reached in textiles with the export of $8.2 billion in the first eight months of the year. Last month, the sector reached the highest August export figure of all time, with an increase of 36 percent compared to the same month of 2020, with the export of $1 billion. Capacity utilization rates in textile production have also reached 85 percent,” Nalbant said.
Source: Azer News
Industrial surplus cannot be created unless factories are provided with latest machinery Pakistan spends over three times more on the import of mobile phones than it spends on machinery for textile products – the lifeline of its exports. In the last fiscal year ended June 2021, the country dished out $2.065 billion for importing mobile phones. But it imported textile machinery worth only $592 million. This comparison should not be misconstrued as an attempt to belittle the importance of smartphones in economic progress. These phones are undoubtedly playing a key role in boosting domestic e-commerce and e-banking as well as in facilitating exports of ITenabled services. However, the question is why Pakistan still has to spend a lot of foreign exchange on the import of cellphones? Why the country isn’t able to manufacture these phones domestically, and even export them? Policymakers in Islamabad answer these questions with the news that Pakistan has recently shipped a few thousand sets of locally manufactured smartphones to the UAE. They don’t tell why it took the country so long to do this. Nevertheless, the export of locally manufactured phones with foreign collaboration is a welcome move. What is even more encouraging is that between January and July this year, Pakistan’s local production of cellphones (12.27 million units) exceeded the number of imported sets (8.29 million), according to the Pakistan Mobile Phone Manufacturers Association. One hopes that this pace of domestic production of cellphones will be sustained and it will ultimately lead to a reduction in the import of these phones. The comparison of cellphone imports with those of textile machinery should also not be mistaken as an indirect suggestion that more of foreign exchange must be spent on machinery imports. The purpose of this comparison is to show how little importance is being attached to the import of capital goods. Pakistan has a long way to go to rise from the ranks of a semiindustrial to an industrial country. This means the country must continue to invest heavily in industrial inputs, particularly in capital goods and machinery. Replacing old machinery Economic development of a country depends hugely on industrial development. And, industrial output surplus cannot be created – nor its quality can be improved up to global standards – unless industries are provided with the latest equipment and machinery. From textile to food manufacturing to engineering to cement and fertiliser production to surgical goods and sport goods production to consumer durable manufacturing to construction, there are many areas of Pakistan industries that need partial or full replacement of old machinery, or installation of new plants. Delays in meeting this requirement only prevent the industries from becoming internationally competitive. The increasing requirement for tools, machinery and engineering products can be met with a combination of increased domestic production and imports. This means Pakistan’s engineering industry needs full support of the government and more aggressive participation of the private sector. Sadly, this is not happening on a grand scale. There are two proxies to have an idea about it: First, growth in the domestic output of engineering and second, exports of engineering products. In FY21, the engineering sector’s output showed an annualised decline of 15.4%, according to the Pakistan Bureau of Statistics, despite the fact that the overall large-scale manufacturing (LSM) rebounded strongly due to a low base effect of FY20. It is quite depressing to note that the 15.4% decline was preceded by an even larger decline of 18.7% in FY20 when the overall LSM sector’s output had declined by 10.2% due to the Covid-19 pandemic. From now onwards, the focus must be on revival of the local engineering industry. This will help meet some of the needs of industrial tools, equipment, machinery and plants with domestic resources, thus freeing up resources for the import of machinery to boost overall industrial production and exports of intermediate goods and industrial inputs. Engineering product exports With due attention paid to the engineering industry, even exports of engineering products can be increased substantially. In FY21, Pakistan earned just $226 million through the export of engineering products. This amount was higher by 30% from $173 million earned in FY20, which is a healthy development. But for a country like Pakistan whose engineering industry took off way back in the 1960s, the export of engineering products should be much larger. Pakistan can quickly boost overall production of engineering products in the short run by producing more of the agricultural machinery. Chinese are eager to help the country in this area. The government can set up publicprivate partnerships with Chinese firms or facilitate Pakistani companies in producing the agricultural machinery through joint ventures with Chinese companies, or in collaboration with any other country. The current state of agricultural machinery manufacturing is quite pathetic. In the agricultural machinery sub-sector of LSM, there are only three listed items – chaff cutters, sugarcane machines and wheat thrashers, which speaks volumes about it. It is true that a lot of agricultural tools and implements are produced in the SME sector and its products are not included in the LSM statistics. But one indicator of the overall low output of agricultural machinery manufacturing is that Pakistan continues to spend heavily on imports of agricultural machinery. Such imports consume a little less than $100 million a year, but mechanisation in agriculture remains a far cry. The Pakistan Tehreek-e-Insaf (PTI) government’s flagship housing project is bound to increase the demand for construction machinery. Currently, large construction machinery is routinely imported by the construction contractors and rented out to the builders undertaking construction projects. Construction and mining machinery imports cost Pakistan no less than $140 million a year. The country must explore possibilities of attracting foreign investment in the area of construction and mining machinery manufacturing as well. In the short term, this may not reduce the import bill. But in the medium to long term, it will surely cut imports besides creating employment and providing a solid base to the domestic construction industry.
Source: Tribune
National Assembly Chairman Vuong Dinh Hue will make working visits to the European Parliament (EP) and Belgium from September 8-9 after concluding a trip to Austria to attend the fifth World Conference of Speakers of Parliament (WCSP5). National Assembly Chairman Vuong Dinh Hue will make working visits to the European Parliament (EP) and Belgium from September 8-9 after concluding a trip to Austria to attend the fifth World Conference of Speakers of Parliament (WCSP5). Vietnam and the European Union celebrated the 30th anniversary of ties in November last year. Over the past three decades, the Vietnam-EU relations have grown rapidly from cooperation in a number of areas to a Partnership and Cooperation Agreement (PCA). The two sides have regularly exchanged high-ranking delegations, including EU visits by Party General Secretary and President Nguyen Phu Trong in 2013, Prime Minister Nguyen Xuan Phuc in 2018 and NA Chairwoman Nguyen Thi Kim Ngan in 2019. European Council President Herman Van Rompuy visited Vietnam in 2012, which was followed by visits of European Commission President José Manuel Durão Barroso in 2014 and Vice President of the European Commission and High Representative of the European Union for Foreign Affairs and Security Policy Federica Mogherini in 2019. Last year, despite the double crisis in health care and economy, both sides continued to realised their commitments with various cooperation activities in direct and online formats. They have coordinated closely in many areas, while supporting each other in COVID-19 fight. The signing and ratification of the EU-Vietnam Free Trade Agreement (EVFTA), which took effect on August 1, 2020, was a new historical milestone in the bilateral partnership. The deal has helped bring about new breakthroughs and opening up new prospects for the Vietnam-EU partnership. Only five months after the agreement was put into operations, two-way trade had seen strong progress, with surges recorded in the export of Vietnamese products such as aquatic products, rice, garment and textile products as well as leather and footwear. As of 2020, two-way trade reached 55.39 billion USD, of which 40.05 billion USD was Vietnam’s export revenue. Currently, the EU is the third largest export market of Vietnam after the US and China, and the country’s fifth biggest import market. Meanwhile, Vietnam is the 17th biggest trade partner of the EU and the 11th largest provider of goods of the union among Asian countries. The EU is also the biggest investor in Vietnam and the leading provider of non-refundable aid for the country. In the first seven months of this year, two-way trade hit 32.2 billion USD, with Vietnam’s exports valued at 22.5 billion USD, up 15.5 percent year on year. The relationship between the Vietnamese NA and the EP has developed soundly, becoming an important pillar of the partnership between Vietnam and the EU. The two sides have set up bilateral friendship parliamentarians’ groups. Chairman of the NA Committee for External Relations Vu Hai Ha said that during his upcoming visit to the EU, NA Chairman Hue will hold talks with the EP President, meetings with the President of the European Council and representatives of European parliamentarians from important committees of the EP such as Committee on International Trade. Ha said that along with the EVFTA, the NA leader will discuss with the European side the hastening of the ratification of the EU-Vietnam Investment Protection Agreement (EVIPA). Vietnam and Belgium have also enjoyed impressive growth in their bilateral partnership since the establishment of diplomatic ties in 1973. Belgium is one of the first European countries to engage in development cooperation with Vietnam. Since 1977, Belgium has provided soft loans and non-refundable aid worth nearly 300 million USD to Vietnam, 60 percent of which is non-refundable aid. Total trade between the two sides reached about 3.1 billion USD in 2019 and 2.7 billion USD in 2020 due to impacts of COVID-19. Belgium is currently the sixth biggest export market of Vietnam among European countries after Germany, the UK, the Netherlands, France and Italy. Partnership among central and local economic agencies as well as sectors of Vietnam with three Belgian regions of Wallonie, Flanders and Bruxelles has been expanded. As of July 2021, Belgium had 82 valid investment projects in Vietnam with total capital of 1.1 billion USD, ranking 23rd out of 131 countries and territories investing in Vietnam. As scheduled, during his visit to Belgium, NA Chairman Hue will hold meetings with the Belgium Prime Minister and the Speaker of the Chamber of Representatives, as well as with leaders of some major firms of Belgium to seek ways to promote the growing collaboration between the two sides in all fields such as politics-diplomacy, economytrade-investment, culture-education and particularly in medical and vaccine diplomacy. The visits of the Vietnamese top legislator is expected to promote international cooperation in COVID-19 prevention and control, while affirming Vietnam’s efforts in working with other countries and the international community to maintain global supply and production chains as well as to seek solutions for sustainable post-pandemic economic recovery.
Source: Vietnam Plus
