• CCI AD FROM 5th April 2021

MARKET WATCH 17 SEPT, 2021

NATIONAL

INTERNATIONAL

Finally, policy cottons on to MMF

Modi government’s recent steps will help MMF segment evolve but is it enough for India to regain ground globally? Indian policy makers, for decades, had preferred a textile policy that significantly favoured cotton. The reasons are not far to seek. India is the largest producer of cotton in the world accounting for 25 per cent of global output. At around 125 lakh hectares, the country has the largest acreage under cotton with six million or so farmers growing the fibre. Despite the support, India’s cotton dominated textile exports have faltered over the years. Share of readymade garments (RMG) in the nation’s export basket has fallen from 11 per cent in 2001 to 4 per cent in 2020. Cotton yarn’s share has halved since the turn of the century. Overall share of textile exports has dived sharply from 24 per cent to 11 per cent in the last two decades. This is because the world has moved away from natural fibres like cotton to man-made fibres (MMF) such as polyester, viscose and Kevlar. MMF-based RMG today accounts for 70 per cent of the global trade (will be 80 per cent by 2025) and India’s share in that is a mere 2 per cent. This, despite the fact that it is the second largest producer of MMF. Other textile majors have adapted to the change. China’s share in MMF textiles (as of 2019) is 38 per cent while new entrants Bangladesh and Vietnam have already mopped up 9 per cent and 6 per cent share respectively. Continued focus on cotton even after the fashion shifted away from it has proved to be India’s undoing and no government, despite the data staring at the face, had the political will to make the course correction. The change began when Prime Minister Narendra Modi met eight representatives from the textile industry in December 2019. He had called them to understand the steps to be taken to revive the textile sector (a major employment generator) and boost exports. In the 2020-21 Budget, the government removed the anti-dumping duty levied on purified terephthalic acid (PTA), a key raw material to make Polyester Staple Fibre — a MMF. Now PSF is available in India at international prices.

Textile parks push

In February 2021, the government announced the Mega Investment Textiles Parks (MITRA) policy under which seven large integrated textile parks, each spread over 1,000 acres, will be set up in the next three years. The industry representatives had said that such infrastructure would help smaller players scale up rapidly (critical for competitiveness) apart from attracting foreign direct investment. Along with capital will come latest technology and modern processes, they had argued. MITRA will benefit both cotton and MMF segments. In August, the government scrapped the anti-dumping duty on viscose staple fibre (VSF), another critical input for MMF textiles. This was quickly followed by Remission of Duties and Taxes on Export Products (RoDTEP) scheme to reduce the tax burden on exporters and make them more competitive. Earlier this month a production-linked incentive (PLI) scheme for textiles with focus on MMF and technical textiles was announced involving incentives worth ₹10,683 crore. Experts have called the scheme attractive and expect investments of at least ₹25,000 crore to ₹30,000 crore in the MMF space including in ramping up raw material capacity, processing facilities and setting up of design studios. If implemented properly, the PLI scheme will bridge India’s gap with its competitors when it comes to MMF capabilities. Will these measures help India regain its dominance in textile exports? They will, no doubt, help the country increase its share in the MMF pie globally. But any talk of regaining lost glory is premature. Consider this: according to CRISIL, in the US where import duties are same for India and its competitors, Bangladesh and Vietnam offer their products 34 per cent and 19 per cent cheaper respectively. A lot more needs to be done for Indian exporters to become competitive.

Tax matters

GST structure for MMF is inverted. GST on fibre is 18 per cent, on yarn 12 per cent and 5 per cent on fabric. This needs to be corrected as MMF manufacturers are unable to take input credit in full and this adds to their cost. In the case of cotton, GST is uniformly 5 per cent. It is time for a fibre neutral policy. Indian exporters also lose their cost competitiveness on account of higher power and logistics cost Labour is pricey too. Monthly wages in Bangladesh ($101), Sri Lanka ($148) and Vietnam ($216) is a lot lower than India ($257). More reforms and investment in infrastructure are needed to bring these costs down. Automation, especially in RMG, will help increase productivity and reduce costs. Till the time Indian exporters gain competitiveness, it is important for the government to incentivise them. Bangladesh and Vietnam are going out of the way to do so. Indian government’s allocation towards incentives for the textile sector have, on the other hand, reduced sharply. It is almost 70 per cent lower in FY21 and 56 per cent in FY22 over FY20. Another critical element is the market access. Competitors have moved fast to stitch preferential trade agreements with importing countries. Vietnam has FTAs with the UK, Canada and the EU. It has a most favoured nation status with the US. Bangladesh exports to Canada and the EU at zero duty on account of its least developed nation status. It also has a FTA with UK. India, for its part, is struggling to improve its pathetic record in concluding FTAs. Talks with EU, Canada and Australia have seen no progress for ages. The US has said that it is not interested in a trade pact with India. If all goes well we may have a deal with the UK next year. Without preferential access, Indian exports will face strong headwinds. Textiles is one sector that is already self-sufficient and with little more support, can grab a strong share of the global market. In other words, it has the potential to showcase the success of Modi government’s Atmanirbhar Bharat initiative.

Source: The Hindu Businessline

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Packed agenda for first in-person GST Council meeting in nearly two years

 The Council is expected to discuss the extension of compensation to states beyond 2022, rationalizing the inverted duty structure on supply chain of certain items, bringing petrol and diesel under GST, extending the GST exemption on Covid-essential items, and deciding the future of profiteering cases, since the tenure of the National AntiProfiteering Authority ends in November. Finance Minister Nirmala Sitharaman will chair the 45th meeting of the Goods and Service Tax Council in Lucknow on September 17. It will be the first in-person meeting of the all-powerful federal body in nearly two years. And given the loaded agenda, it is likely to be an action-packed one. The Finance Minister and her counterparts from States and Union Territories are expected to discuss the extension of compensation to states beyond 2022. They are also likely to deliberate on rationalizing an inverted duty structure on the supply chain of certain items, bringing petrol and diesel under GST, extending the GST exemption on Covid-essential items, and deciding the future of profiteering cases since the tenure of the National Anti-Profiteering Authority ends in November. "The GST Council is physically meeting after a long time, and the industry is keenly looking forward to this meeting. Issues such as bringing petroleum products, natural gas under GST ambit, capacity-based taxation for tobacco products, future of compensation levy, GST rate rationalizations are expected to be discussed in the meeting,” said Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co. “It will also be interesting to see if the GST council extends the GST exemptions for essential COVID supplies for a further period,” Bose said. The last in-person GST Council meeting was held in December 2019 in New Delhi. Since then five more meetings have been convened through video conferences.

Compensation Extension

While the centre has in principle agreed to extend the compensation cess and the shortfall due to states, the modalities and details will be discussed at the Lucknow meeting. It is understood that the centre will present various options for a compensation formula When the GST came into being, states had agreed to join the new tax regime provided they were compensated for any revenue loss in the first five years from July 1, 2017, to June 2022. It was in October 2020 that the Council had decided, in principle, to extend the compensation beyond the original five years. Section 18 of the Constitution (101 amendment) Act, 2016 and Section 7 of GST (Compensation to State) Act, 2017 permits the loss of revenue will be compensated to states at the end of every two months for five years. The shortfall is calculated assuming a 14 percent annual growth in GST revenue over the base year of 2015-16. One of the points of discussion is whether to stick to this assumed rate beyond 2022. “The pandemic has hit the finances of the centre as much as the states. To compensate states at an assumed rate of 14 percent GST growth, something which was decided preCovid, that is something we will discuss with states,” a senior official told Moneycontrol. For the current 2021-22 financial year, the centre has already released Rs 75,000 crore to the states and union territories to compensate them for the shortfall in GST revenue.

Petroleum Products under GST

More than four years after the implementation of the nationwide GST, the Council seems finally ready to discuss bringing petrol and diesel under GST. However, this issue is understood to be a complex one, and it will take many meetings before a decision is made on the issue. This comes at a time when petrol and diesel prices are reaching record highs across the country due to incessant hikes in rates since May. Central and state-level taxes contribute about 55 percent of the retail price of petrol and 51 percent for diesel. The Centre’s excise duty collection in 2020-21 was Rs 3.9 lakh crore, about 62 percent higher than the Rs 2.4 lakh crore in 2019-20. Out of the Rs 3.9 lakh crore, Rs 3.45 lakh crore was collected only in excise duties on petroleum products. In just the April-June quarter of the current financial year, the Centre collected about Rs 94,181 crore in revenue through excise duties on petrol and diesel. States have also used their taxation power on fuel to raise resources. The price of fuel differs from state to state, depending on the rate of local taxes like VAT and also freight charges in that state, as the attached charts show.

Inverted Duty Structure and Other issues

"It is essential to overcome the challenges arising from the inverted duty structure on certain products, in addition to extending relief for pharma products required for treatment of Covid patients,” said MS Mani, Senior Director, Deloitte India. The Council will take up the matter of inverted duty structure on the advice of the Supreme Court. A recent judgement by the apex court had clarified that a refund of unutilized input tax credit will not be available in case of a refund due to an inverted duty structure. The Court in its judgement has accepted that there is an anomaly in the formula for computing the quantum of eligible refund and has urged the GST Council to reconsider and take a policy decision regarding the same. The Council will also take up the matter of how to deal with profiteering cases. It may also take a call on extending the concessional rates for Covid-19-related drugs, including remdesivir, by another three months. The Council will decide whether the term of the National Anti-Profiteering Authority will get over after November 30, and instead, the Competition Commission of India (CCI) or any other authority could be given its mandate.

Source: Money Control

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Rs 31,000-crore support for bad bank: Finance minister Nirmala Sitharaman

 Typically, the NARCL will acquire assets by making an offer to the lead bank. Once its offer is accepted, the IDRCL will then manage the bad loans, add value to them and finally sell them off. Some analysts have, however, raised the issue of moral hazard in such guarantees, arguing that it amounts to the government bailing out lenders for their failure in due diligence and, in some cases, complicity with unscrupulous elements. Finance minister Nirmala Sitharaman on Thursday said the government will offer guarantee to the tune of Rs 30,600 crore on the security receipts (SRs) issued by the National Asset Reconstruction Company (NARCL), or the so-called bad bank, while acquiring non-performing assets from lenders. While this amount will reflect in the government’s contingent liability, the actual fiscal outgo could be lower if the recovery from the bad assets turns out to be higher than expected. The guarantee, cleared by the Cabinet, is a decisive step towards the resolution of toxic assets worth Rs 2 lakh crore through the NARCL structure, as sovereign backing is expected to make the entire process a lot more viable and credible. The guarantee will cover the shortfall between the face value of the SRs and the actual realisation from the stressed assets. It will be valid for five years and can be invoked only in case of resolution or liquidation of the assets. The SRs will be tradable. “The backstop (guarantee) gives credibility to the process…So, once you take the bad assets out (of banks’ books), manage them, re-evaluate them and put them on the block for sale, there is certainly a greater prospect of getting a higher value for them. That’s why this route has been adopted,” Sitharaman said. Some analysts have, however, raised the issue of moral hazard in such guarantees, arguing that it amounts to the government bailing out lenders for their failure in due diligence and, in some cases, complicity with unscrupulous elements. But RBI governor Shaktikanta Das and chief economic adviser KV Subramanian have defended the government’s plan. In an interview to FE in July, Das said even globally, whenever there is a systemic clean-up of bad assets, the sovereign plays an important role. The US government, for instance, came out with the policy of TARP (Troubled Asset Relief Program) after the global financial crisis. What is important, therefore, is to ensure that this ARC framework being put into place is driven by market principles, Das had added. Though the government is giving guarantee on the SRs, it has not contributed to the equity of the so-called bad bank. In fact, public-sector banks (PSBs) will hold 51% in NARCL. Similarly, the PSBs and public financial institutions will have a 49% stake in the India Debt Resolution Company (IDRCL), which is being set up as an asset management company to work out the NPAs under the overarching NARCL structure, and the rest will be owned by private lenders. As many as 16 banks – both public and private — and some NBFCs have evinced interest in contributing to equity of these entities. Financial services secretary Debasish Panda said the NARCL is expected to resolve stressed loan assets above Rs 500 crore each amounting to a total of about Rs 2 lakh crore. But in the first phase, fully-provisioned bad assets of about Rs 90,000 crore will likely be transferred. The remaining assets with lower provisions would be transferred in the second phase. The NARCL will acquire the assets at net book value by offering 15% of them upfront (in cash), and the rest (85%) in SRs. Once the bad loan is resolved, realisation for the relevant bank would be in sync with its SR interest in that asset. Typically, the NARCL will acquire assets by making an offer to the lead bank. Once its offer is accepted, the IDRCL will then manage the bad loans, add value to them and finally sell them off. To disincentivise any delay in resolution, the government has stipulated that the NARCL will have to pay it a guarantee fee of 0.25% (of the outstanding guarantees) from the second year of its incorporation. This will then be increased progressively – to 0.5% in the third year, 1%in the fourth year and 2% in the fifth year. The sovereign guarantee comes at an opportune time. Gross NPA ratio of banks may surge to 9.8% by March 2022, under a baseline scenario, from 7.48% in March 2021, the Reserve Bank of India (RBI) has warned in its Financial Stability Report in July. Explaining the reason as to why the Centre chose to back the NARCL when 28 private ARCs are already operational, government officials have said they lacked adequate financial and operational muscle to work out large stressed assets of Rs 500 crore or more — the kind of NPAs that will be transferred to the so-called bad bank.

Source: Financial Express

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Big Setback to China and Korea! DGTR recommends imposing anti-dumping duty on sodium hydrosulphite – check how it helps THESE textile and paper shares

In apparent good news for domestic textiles and paper companies and big setback to Korea and China, the Directorate General of Trade Remedies (DGTR) has recommended imposition of anti-dumping duty on sodium hydrosulphite, a notification has been issued for the same, Zee Business Special Correspondent Anurag Shah reported. In apparent good news for domestic textiles and paper companies and big setback to Korea and China, the Directorate General of Trade Remedies (DGTR) has recommended imposition of anti-dumping duty on sodium hydrosulphite, a notification has been issued for the same, Zee Business Special Correspondent Anurag Shah reported. According to Shah, an investigation was announced on 16 September 2020 for the period April 1, 2019, and March 31, 2020. And, eventually, the DGTR, which falls under the Ministry of Commerce and Industry, had recommended imposing anti-dumping duty on sodium hydrosulphite imported from China and Korea, the special correspondent tells.

Source: Zeebiz

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Tamil Nadu to announce technical textiles policy

 State signs up for Techtextil India 2021, a leading international trade fair for technical textiles and non-wovens The Tamil Nadu government has signed up for Techtextil India 2021, a leading international trade fair for technical textiles and non-wovens, aimed at strengthening indigenous textile production and attracting textile investments into the State. The State government will be promoting technical textile policies through both physical and virtual segments of the hybrid fair organised by the Messe Frankfurt Trade Fairs India.

Hybrid edition

One of the first major business events in India for the technical textile sector since the pandemic, Techtextil India 2021 will bring together the entire industry to showcase technical textile technologies across industries such as healthcare, agriculture, construction, infrastructure, sports, apparel etc. The first hybrid edition will take place from November 25–27 at the Bombay Exhibition Centre in Mumbai. “While there are several inherent advantages for the growth of technical textiles in Tamil Nadu specifically, many raw materials used in the production of sanitary products, artificial ligaments, seat belt webings, airbags are still heavily imported. The Techtextil India Forum can help us reduce import dependency and bring investments in R&D, manufacturing, innovation by partnering with global technical textiles companies,” Pooja Kulkarni, MD & CEO, Guidance Tamil Nadu said in a press release. According to the release, technical textile players from Tamil Nadu including Cyber Textiles India, Jayashree Spun Bond, Lenzing Ag India, Liester Technologies, Loyal Textile Mills, Milltex Engineers, Superfil Products and Uster Technologies (India) have confirmed their participation for in the event.

Source: The Hindu Businessline

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Only 20% of the items responsible for more than 50% of the inflation: RBI's Michael Patra

On inflation, the deputy governor said that core inflation remain sticky even though headline number has moderated since May. India's economy is emerging from the second wave's debilitating impact with manufacturing as its pivot, RBI's deputy governor Michael Patra said during an address at CII. "The recovery appears broad-based and the pivot is manufacturing, but output is still below pre-pandemic levels, especially in contact-based services." Patra noted. Manufacturing showed a decent pull back in the first quarter of the current fiscal with a growth of 49.6%. Contact-intensive sectors like hospitality are holding back the recovery process as the economic activity bounces. On inflation, the deputy governor said that core inflation remain sticky even though headline number has moderated since May. "Contributions to inflation are emanating from a narrow group of goods – items constituting around 20 per cent of the CPI are responsible for more than 50 per cent of inflation. The analysis of inflation dynamics indicates that the easing of headline inflation from current levels is likely to be grudging and uneven," he noted. Retail inflation moderated to 5.3% in the month of August but remain above the mediumterm target of the RBI. The wholesale prices, however, went in the opposite direction after easing for two months and climbed up to 11.39% on the back of hardening of prices of fuel and manufactured items. Patra said that the envisaged inflation glidepath should bring down inflation closer to RBI's medium-term target of 4% by 2023-24. "The envisaged glidepath should take inflation down to 5.7 per cent or lower in 2021-22, to below 5 per cent in 2022-23 and closer to the target of 4 per cent by 2023-24. The rebalancing of liquidity conditions will dovetail into this glidepath, but the choice of instruments is best left to the judgment of the RBI with its considerable experience with such tapers." Patra said that even though the first quarter GDP growth came in a shade lower than RBI's estimate, the economy is set to grow at 9.5% this fiscal. However, he highlighted that even with the projected growth of 9.5% the economy may just about exceed pre-pandemic levels. "For the economy as a whole, the output gap - which measures the deviation of the level of GDP from its trend – is negative and wider than it was in 2019-20. Given these developments and with the GDP outcome for the first quarter coming in just a shade below the RBI’s forecast, the projection of growth of 9.5 per cent for the year as a whole appears to be on track. Even so, as Governor Shri Shaktikanta Das pointed out in a recent interview, the size of the economy would just about be exceeding the pre-pandemic (2019-20) level," Patra said. Speaking on the extraordinary decision to lower the reverse repo more than proportionately, Patra said that onset of pandemic called for some out-of-the-box solution to ensure that liquidity kept flowing specially when the credit demand had dropped due to risk aversion. He said that the "RBI decided to operate through other segments of finaccial markets to keep the lifeblood of finance flowing". "The reduction in the reverse repo rate eased financial conditions so much that it facilitated record levels of access to finance by corporates and governments at low interest rates/spreads," Patra noted.

Source: Economic Times

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India expected to grow at 7.2% in 2021: UN report

 After a 3.5 per cent fall in 2020, the United Nations Conference on Trade and Development (UNCTAD) expects world output to grow 5.3 per cent this year, partially recovering the ground lost in 2020. India is expected to grow at 7.2 per cent in 2021 but economic growth could decelerate next year, according to a United Nations report which said the recovery in the country is constrained by the ongoing human and economic cost of the Covid-19 pandemic and the negative impact of food price inflation on private consumption. The UNCTAD Trade and Development Report 2021, released here on Wednesday, sounded a cautiously optimistic note to say that the global economy is set for a strong recovery in 2021, albeit with a good deal of uncertainty clouding the details at the regional and country levels over the second half of the year. After a 3.5 per cent fall in 2020, the United Nations Conference on Trade and Development (UNCTAD) expects world output to grow 5.3 per cent this year, partially recovering the ground lost in 2020. The report said that India “suffered a contraction” of 7 per cent in 2020 and is expected to grow 7.2 per cent in 2021. “The recovery in India is constrained by the ongoing human and economic cost of Covid19, and the negative impact of food price inflation on private consumption,” the UNCTAD report said. The report projects that India will clock an economic growth of 6.7 per cent in 2022, slower than the country’s expected 2021 growth rate. However, even with a slower growth rate of 6.7 per cent, India will still be the fastestgrowing major economy in the world next year. “India, which experienced a contraction of 7.0 per cent in 2020, showed a strong quarterly growth of 1.9 per cent growth in the first quarter 2021, on the back of the momentum of the second half of 2020 and supported by government spending in goods and services," the report said. "Meanwhile, a severe and broadly unanticipated second wave of the pandemic, compounded by bottlenecks in the vaccine roll out, hit the country in the second quarter, on top of rising food and general price inflation, forcing widespread lockdowns and drastic consumption and investment adjustments,” it said. It noted that income and wealth inequalities in the country have widened, and “social unrest has increased”. The Central Bank estimates another sharp contraction (quarter-on-quarter) in the second quarter followed by a rebound afterwards. “Given the inherent fragilities in coping with the pandemic and restoring employment and incomes, growth in 2021 as a whole is estimated at 7.2 per cent, insufficient to regain the pre-COVID-19 income level," the report said. "Going forward, assuming away a resurgence of the pandemic to the degree experienced in the second wave, a revitalisation of private sector activity, subject still to a slow recovery of jobs, is likely to be matched with a more adverse policy environment, especially on the fiscal front, and with continuing pressures on the trade balance. On these conditions, the economy is expected to decelerate to 6.7 per cent growth in 2022,” the report said. Further, it said that in India, consumer inflation was already at 6 per cent before the pandemic. The Covid-19 shock caused a temporary dip in prices, but as the economy recovered and food prices accelerated, the country returned to a 6 per cent inflation rate in mid-2021. The UNCTAD said that global growth is expected to hit 5.3 per cent this year, the fastest in almost half a century, with some countries restoring - or even surpassing - their output level of 2019 by the end of 2021. "The global picture beyond 2021, however, remains shrouded in uncertainty,” it said, adding that looking ahead, the UNCTAD expects world output to grow 3.6 per cent in 2022. South Asia suffered a sharp contraction of 5.6 per cent in 2020, with the region’s economic activity brought to a halt thanks to widespread restrictions. Deficient public healthcare systems and high levels of informality magnified the impact of the pandemic in terms of both health and economic outcomes, which was reflected in a stark rise in poverty rates, the report said. The UNCTAD expects the region to expand by 5.8 per cent in 2021, with the more vigorous recovery signalled at the beginning of the year muted by a rapid surge in infections during the second quarter of 2021. Moreover, the limited progress made in terms of vaccine rollouts continues to leave the countries of the region susceptible to future outbreaks. For 2022, the UNCTAD expects the region’s growth rate to moderate to 5.7 per cent. The US is projected to grow at 5.7 per cent in 2021 followed by a three per cent GDP growth next year. “In the Americas, the fast recovery in the United States recovery is expected to raise GDP to 2 per cent above its pre-Covid-19 level,” it said. China, estimated to grow at 8.3 per cent this year, will see its growth slow down to 5.7 per cent in 2022. The report said that the world needs more effective multilateral coordination, without which recovery efforts in advanced countries will damage development prospects in the South and amplify existing inequalities. “The global recovery from the pandemic must reach beyond emergency spending and infrastructure investments to embrace a reinvigorated multilateral model for trade and development,” said Rebeca Grynspan, the secretary-general of the UNCTAD. “Only a concerted rethinking of priorities holds out hope of addressing the inequality and climate crises that have come to define our era.”

Source: Hindustan Times

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Tirupur garment sector’s illegal foreign workers

Nobody at Chinnakarunaipalayam in Tirupur district ever doubted the nativity of 23- year-old Jakir Hussain who was living in a rented house there for the past six months. He was earnest at his work in a mid-sized textile unit in the locality and his employers had no reason to suspect him when he identified himself as a Bengali. He had submitted a copy of his Aadhaar card. But he largely restricted his interactions to a small bunch of people, who too identified as natives of West Bengal. All this changed on September 7 when police arrested Jakir Hussain and seven of his friends. That’s when his colleagues and his employer realised that they were not Bengalis, but Bangladeshis with fake Aadhaar cards. Like Jakir, more than 20 Bangladeshi nationals who sneaked into India through West Bengal were arrested in the textile town of Tirupur over the past three months. Some of them had fake Aadhaar cards, while others didn’t bother to get forged documents, but managed to land jobs in various garment units in the textile town. Though Bangladesh too is a thriving global garment hub, the pay in Tirupur is much better, which attracts Bangladeshis. “Bangladeshis tell us that they come here only for better pay. Roughly, the wages here are three times higher than Bangladesh, they say,’’ said a police officer who interrogated a bunch of Bangladeshi immigrants. The porous Indo-Bangladesh border makes it easy for them to cross over. Once they reach West Bengal, there are agents who create fake Aadhaar cards for anything between ₹15,000 and ₹20,000. After a short stay of about six months in Bengal, the immigrants take the trains to Tirupur. “If one person manages to reach Tirupur and get a job, within the next one year he would try to bring his friends and relatives,’’ said a garment unit owner. They speak Hindi and Bengali and blend in with other guest workers living in rented accommodations. Police said there were instances where they would travel to Bangladesh, meet their family and return to Tirupur. “When they produce Aadhaar cards, we don’t probe further. With an acute labour shortage, the garment units would only focus on getting work done,’’ the garment unit owner said, passing the buck to the law enforcement agencies. Some of the Bangladeshis would have experience back home and would become tailors or cutting masters while those without experience would start from packing and slowly learn skilled work. For police, it has become a headache. Three years ago, they stumbled upon a Bangladeshi who was living at Sevanthampalayam in Tirupur for 13 years. The man identified as Mohamed Babul Hossen, from Khulna in Bangladesh, was running a grocery shop and acting as an agent to bring more people from his country. In another instance, a local woman went missing and later was found to have married a Bangladeshi national and left with him. Though there are no instances of Bangladeshi nationals indulging in antisocial activities, many want this unfiltered entry to stop. Police launched a project to collect details of all guest workers and create a database in 2018, but the pandemic and manpower shortage left it a nonstarter. “Now that Covid is down we will resume the work to collect the details of guest workers,” said a senior police officer in Tirupur. Tirupur Exporters and Manufacturers Association president M P Muthurathinam says it’s time that a mechanism is evolved to keep a tab on guest workers. “Right now, there is no system of registry. They come here, stay in places of their choice. Some move to other cities like Coimbatore, Erode or Karur. So a statewide registry of guest workers has to be prepared,” he said. “They should be given an identity card by the state government,” he said. Trade unionists say that one has to be considerate towards someone who takes the pain of travelling several thousand kilometres leaving his country in search of livelihood. “This is a serious issue which is not being given due attention,” says G Sampath, CITU secretary, Tirupur. One move that can end this problem is to deposit salary in bank accounts. “Fake Aadhaar cards would be exposed as bank accounts have to be linked with Aadhar number,” he said. Sampath pointed out that there are enough checks and balances provided by the InterState Migrant Workmen (Regulation of Employment and Conditions of Service) Act to prevent such issues. One of the key clauses in the act mandates that the home state of the workers as well as the receiving state should have data of migrants. But the law is seldom followed. The government and the garment units should take up the responsibility to prevent Tirupur from becoming a haven for crossborder illegal entrants, he said.

Source: Times of India

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Grasim Industries lays the foundation stone for Aditya Birla Public School at Pallipalayam, Tamil Nadu, a major weaving and spinning hub

Grasim Industries Limited, a flagship company of the global conglomerate Aditya Birla Group held a foundation stone ceremony today for the upcoming English-medium Aditya Birla Public School at Pallipalayam - a central weaving and spinning hub near Erode, Tamil Nadu. On the occasion, Dilip Gaur (/topic/dilip-gaur), Managing Director, Grasim Industries Ltd., said, "At Aditya Birla Group (/topic/aditya-birla-group), we have always believed in transforming lives through all our business and social endeavours. Education is one such touchpoint by which we are impacting the lives of our children and the community at large. This school is a humble contribution by Grasim Industries Ltd. for the well-being of thousands of kids of the Pallipalayam - Erode region." Aditya Birla Group (/topic/aditya-birla-group) operates 56 schools, imparting quality education to more than 46,500 students. The Aditya Birla Public School, Pallipalayam, will be affiliated to the Central Board of Secondary Education and initially have classes up to Class 7 with two sections. Subsequently, every year, one class will be added up to Class 12. Gaur informed, "We plan to admit 700 students in the first year, and overall expect 1400 students to benefit with the introduction of senior secondary grades." He added, "We believe that quality education encourages people to think clearly and independently. It can liberate and empower communities to create their future. This school will not only empower the children of Erode and Palliapalayam but also contribute towards the socioeconomic development of communities residing in Erode." Renowned textile industrialists attended the bhoomi poojan from Erode along with senior members from Grasim Industries Ltd. Recently, as part of its multi-pronged efforts to support communities affected by COVID-19, the Group has pledged support to three prominent government hospitals in Tamil Nadu's Erode and Pallipalayam, to provide medical equipment and upgrade medical infrastructure such as oxygen support, digitalisation of X-ray units, blood bag refrigerator, defreezer and ECG machine (/topic/ecg-machine) which will go a long way in supporting underprivileged sections of workers in the textile industry.

Source: ANI News

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China applies to join Pacific trade pact to boost economic clout

China has filed an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the commerce ministry said, as the world's secondbiggest economy looks to bolster its clout in trade. Commerce Minister Wang Wentao submitted China's application to join the free trade agreement in a letter to New Zealand's trade minister, Damien O'Connor, the Chinese ministry said in a statement late on Thursday. The CPTPP was signed by 11 countries including Australia, Canada, Chile, Japan and New Zealand in 2018. Before that, it was known as the Trans-Pacific Partnership (TPP) and seen as an important economic counterweight to China's regional influence. Japan, the CPTPP's chair this year, said it will consult with member countries to respond to China's request, but stopped short of signalling a timeline for doing so. "Japan believes that it's necessary to determine whether China, which submitted a request to join the TPP-11, is ready to meet its extremely high standards," Japanese Economy Minister Yasutoshi Nishimura told reporters on Friday. The TPP was central to former U.S. President Barack Obama's strategic pivot to Asia but his successor, Donald Trump, withdrew the United States from the pact in 2017. Accession to the CPTPP would be a major boost for China following the signing of the 15- nation Regional Comprehensive Economic Partnership (RCEP) free trade agreement last year. Beijing has lobbied for its inclusion in the pact, including by highlighting that the Chinese and Australian economies have enormous potential for cooperation. However, relations between the two countries have soured. Britain in June began negotiations to enter the trade pact, while Thailand has also signalled interest in joining it. read more Wang and O'Connor held a telephone conference to discuss the next steps following China's application, the Chinese Ministry of Commerce said. Reporting by Colin Qian, Twinnie Siu and Tom Daly in BEIJING, Daniel Leussink in TOKYO; Editing by Edmund Blair, Jonathan Oatis and Himani Sarkar.

Source: Reuters

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Cambodia and Turkey promote cooperation among businesses

Cambodia and Turkey held yesterday afternoon via videoconference a business forum to enhance and promote cooperation among businesses from both countries. According to a news release from the Cambodian Ministry of Foreign Affairs and International Cooperation (MFAIC), the “Cambodia-Turkey Business Forum” was organised by the Royal Embassy of Cambodia to Turkey and the MFAIC’s Economic Diplomacy Coordinating Group (EDCG), through collaboration with Cambodia Chamber of Commerce and the Confederation of Industrialist Businesswoman and Businessman (SANKON) of the Republic of Turkey. Dr. Nhim Khemara, Secretary of State and the Head of EDCG, presided over this forum attended by over 350 participants, it pointed out. This Forum focused on key sectors including trade, agro-industry, textile, construction, tourism, education and ICT, the same source underlined. It will also serve as a crucial platform for businesses from both sides to be exposed to new economic opportunities and explore new potentials in pursuit of mutual benefits and prosperity, it concluded.

Source: Khmer Times

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IMF chief lobbied to improve China's biz ranking, says World Bank

To discontinue 'Doing Business' reports after ethics review International Monetary Fund Managing Director Kristalina Georgieva was called out Thursday by the World Bank, her previous employer, for applying pressure to boost China’s position in a ranking of economies. Georgieva said she disagreed with the findings. The World Bank, in a probe of its “Doing Business” report, found such serious ethics issues that it decided to abandon the series entirely, a statement released in Washington showed. China’s position in the 2018 report, released in October 2017, should have been seven places lower — at No. 85 rather than remaining at 78 -- the World Bank said in a review released in December. “The changes to China’s data in Doing Business 2018 appear to be the product of two distinct types of pressure applied by bank leadership on the Doing Business team,” the World Bank said in a report Thursday. The bank cited Georgieva, along with an adviser, for “pressure” to “make specific changes to China’s data points in an effort to increase its ranking at precisely the same time the country was expected to play a key role in the bank’s capital-increase campaign.” According to a reports, the irregularities had affected four countries: China; Saudi Arabia; United Arab Emirates; and Azerbaijan

‘Disagree Fundamentally’ The probe was produced by the law firm WilmerHale, which was retained by the World Bank executive board’s ethics committee, the body responsible for ethical matters involving Board officials. The findings were shared with the World Bank’s executive directors on Wednesday, and the board authorised their release.Georgieva served as chief executive officer of the World Bank prior to being chosen to succeed Christine Lagarde as head of the IMF, the development lender’s partner in the Bretton Woods system. “I disagree fundamentally with the findings and interpretations of the Investigation of Data Irregularities as it relates to my role in the World Bank’s Doing Business report of 2018,” Georgieva said in a statement. “I have already had an initial briefing with the IMF’s Executive Board on this matter.” The US Treasury, which manages the country’s engagement with the IMF and World Bank, said it was reviewing the report. The US has an outsize role in decisions at the Washington-based lenders because of the weight of its voting power. “These are serious findings and Treasury is analysing the report,” Treasury spokesperson Alexandra LaManna said. “Our primary responsibility is to uphold the integrity of international financial institutions.”

Troubled Report

Many Republican lawmakers have opposed expanding support for the World Bank and IMF, and Thursday’s news could renew GOP criticism. The Doing Business report plays a notable role in emerging markets, with governments often showcasing moves up in ranking in appeals for foreign investment. But the integrity of the ratings has been the source of heated debate in recent years. Paul Romer quit in 2018 as the World Bank’s chief economist after questioning changes to Chile’s order in the report. The IMF and World Bank have confronted a number of ethics issues over the years. Former French Finance Minister Dominique Strauss-Kahn resigned as head of the fund in 2011 after charges of sexual assault in a New York hotel room, which were eventually dropped. In 2007, Paul Wolfowitz, a top Pentagon official in the Bush administration, stepped down as head of the World Bank over his involvement in arranging a pay increase and promotion for his companion. Economies like India, Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, and Nigeria made notable improvements in the Doing Business 2020 report after they, according to the World Bank, implemented one-fifth of all the reforms in 2018-19 recorded worldwide.

Source: Bloomberg/ Business Standard

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Bar on back-to-back LC for non-bonded exporters likely to go

 The meeting led by Commerce Minister Tipu Munshi also decided to form a review committee to settle the stalemate between the apparel-makers and revenue board officials A commerce ministry meeting on Thursday decided to continue allowing the back-to-back letter of credit (LC) facility to non-bonded apparel exporters. The meeting led by Commerce Minister Tipu Munshi also decided to form a review committee to settle the stalemate between the apparel-makers and revenue board officials. The committee comprising the stakeholders will scrutinise the legal issues and take measures for amendment. Sources who were at the meeting said business leaders and revenue board officials presented their arguments on non-bonded exports through the back-to-back letter LC facility. Then the meeting talked about postponing the revenue board's request it sent to the central bank. The revenue board in a letter on 31 August requested the Bangladesh Bank not to allow non-bonded apparel factories to enjoy back-to-back LC as "it contradicts the central bank's guidelines". The revenue board move put knitwear and home textile exporters without a bond licence in a limbo. Industry people say if the back-to-back LC benefit goes, more than 500 RMG and home textile factories will no longer be able to procure raw materials and accessories from local and foreign sources on credit. At the ministry meeting, top revenue board officials said they would inform the revenue board chairman about the issue. Besides, commerce ministry officials would contact the revenue board chairman too. "I hope the revenue board letter to the central bank on back-to-back LC facility to nonbonded export would be withdrawn," Mohammad Hatem, senior vice-president of the Bangladesh Knitwear Manufacturer and Exporters Association (BKMEA), told The Business Standard. Siddiqur Rahman, former president at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "The letter must be withdrawn for the sake of export. There are more than 1,000 non-bonded readymade garments and textile manufacturers who account for $5 billion annual export." Salman F Rahman, adviser to the prime minister on private industries and investment, Shafiul Islam Mohiuddun, business leader and a Member of Parliament, Siddiqur Rahman, industries and trade affairs secretary of the central Awami League, business leader Mohammad Hatem and top revenue board officials were present at Thursday's meeting.

Source: TBS News

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Fashion, Textile Industries To Join Researchers In World Cotton Day Celebrations On Oct 7

Research bodies functioning under the umbrella of Pakistan Central Cotton Committee (PCCC) invited different cotton stakeholders including fashion and textile industries to be part of world cotton day celebrations scheduled early next month in Pakistan, like elsewhere in the world. Federal minister for national food security and research Syed Fakhar Imam would preside over the events to be held on Oct 7 for observance of workd cotton day. Vice President PCCC Dr. Muhammad Ali Talpur said that PCCC would celebrate the world cotton day in a befitting manner the way it did last year. Director, Central Cotton Research Institute (CCRI) Multan Dr. Zahid Mahmood Thursday chaired a meeting and formed a committee comprising scientists to make arrangements for the event. Senior government officers, businessmen and industrialists from textile and other cotton related industries would hold ceremonies in their respective organizations. Representatives from textile, fashion industries, ginning, seed, fertilizers, agriculture universities, and other stakeholders would join celebrations and companies would erect stalls to display products and convey information to cotton farmers. Experts would also deliver lectures to cotton farmers on how to make cotton cultivation cost effective and profitable besides latest and emerging cotton related technologies. World Cotton Day is being celebrated on Oct 7 across the world since its launch in 2019 after United Nations General Assembly adopted a majority resolution moved by four African countries Burkina Faso, Chad, Mali and Benin.

Source: Urdu Point

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