The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 30 SEPT, 2021

NATIONAL

INTERNATIONAL

Govt working to ensure balanced trade deals: Piyush Goyal

Goyal said the government will unveil robust e-commerce guidelines that will strike a fair balance in protecting small shopkeepers, internal trade, retailers, and ensure an orderly growth of the economy. The government is working to ensure balanced trade deals and is in talks with countries with which India has equitable trade interest, said commerce and industry minister Piyush Goyal. In an interview with ET's Deepshikha Sikarwar, Goyal - who also handles the Ministry of Consumer Affairs, Food and Public Distribution - said the government will unveil robust e-commerce guidelines that will strike a fair balance in protecting small shopkeepers, internal trade, retailers, and ensure an orderly growth of the economy. Edited excerpts: Have exports made a definitive recovery? It is a significant recovery. Up to September 21, $185 billion (in exports) is unheard of in India's history. So, we will close the first half of the year with more than $195 billion, which is a significant achievement for the first half. In terms oflogistics,the exporting community is stillfacing a lot of challenges. How far have we been able to address them? Challenges are a part of doing business. Our exporters have done some wonderful work in the last six months despite all the challenges of Covid-19, and shortages of shipping containers. In fact, shipping rates are extremely high right now. Despite all these constraints, I think they have done a fabulous job. On our side, we have tried to provide as much support as we can through a series of measures over the last year and a half. Prime Minister Narendra Modi has told exporters to look for new opportunities for exports... I think it's a holistic effort of the government, private sector, exporters, diplomats across the world... today, the world looks at India as a trusted partner, as a friend, as a country with high democratic values with a rule of law they can fall back upon. All of these things have helped India become a preferred trading destination. The exporting community is facing a challenge with regard to shipping containers.Is there a plan on long-term or medium-term solutions? It would certainly be good to have more ships with the Indian flag, but it is a privately driven and competitive business, and deep pockets are required to run it. For several years, the rates were below cost and many of them were running at huge losses. In that sense, it is easier said than done in terms of becoming a maritime nation. In terms of the age-old thinking that big superpowers are always maritime nations, I think the equation has changed. Shipping companies are largely now housed in a few European countries, maybe one or two are also from a neighbouring country. But, by and large, they are all working on the international framework based on market conditions. Currently, ships are taking very long in certain countries, containers are stuck at different places, and some countries have irrational rules around Covid19 testing. All of these have caused a shortage. I do hope it will be temporary. The speed at which vaccination is happening across the world, particularly in India, I think we should be able to overcome this in the near future. In the long run, it will be desirable to have more shipping companies and I would encourage businesspersons and corporates in India to consider getting into the shipping business. It's a great business in the long run. As far as containers are concerned, Concor has already issued some trial orders to Indian companies to start manufacturing in India. I'm told 34 companies had expressed interest in manufacturing containers. So, I am very confident, in the years to come, we will become atmanirbhar in container manufacturing. Does the current situation warrant a review ofthe sale ofthe Shipping Corporation ofIndia? That has no significant relationship to the current shipping situation. It is an international situation that we are all facing, and whether it remains a fully governmentowned company or managed company or works in the private sector, will certainly have no impact on its effectiveness or its ability to serve our international trade. How well placed are we to take advantage ofthe situation developing in China? India and our international trade will stand on its own legs. There may be problems in one country or another. I don't think we need to look at that aspect as much as we need to focus on strengthening our production capabilities in making ourselves recognised as a quality producer at competitive prices of goods and services, looking at productivity and quality as the way forward to expand our international trade. India imposed certain restrictions on investments from certain countries last year.Is there any re-think on the policy with regard to greenfield investments from them? Not yet. We have unveiled several PLI schemes under which we are encouraging investment... We have not yet applied our mind to it. Several government departments have expressed concern over the draft ecommerce guidelines... That's the purpose of the consultation. After all, had it been the final word, we would have issued them as the final rules. The very fact that they have been put in the public domain is to get feedback, which includes from all ministries, international and Indian players. We welcome feedback and that's how we will be able to do a better job of coming up with guidelines which are equitable and support all sections of industry and business. By when willthey be finalised? We are still consulting various stakeholders and in the process of assessing the international rules on similar matters. We will come up with very robust guidelines which will be a fair balance, protecting our small shopkeepers, internal trade, retailers, and ensuring an orderly growth of the economy. How are the trade talks with the UK, US progressing? Whatis our thinking on rules of origin which had a very negative impact on trade under other FTAs done in the past? Outstanding. I can assure you three things. One, we are dealing with countries where we have equitable trading interest. For example, the UAE - which is one of our largest trading partners - has huge potential in the future. Remember the large African market that gets services behind the UAE. Australia, territorially not as much expanded as we could have. UK - after Brexit, they are a big potential market for India. EU - where because of Bangladesh being an LDC or Vietnam having an FTA there, a sector like textiles, they have a huge edge over us in Europe. So, there are several areas where we can equitably work out a set of conditions in a comprehensive agreement or a free trade agreement by which we will both encourage investment and technology to come into India, expand our markets in those countries and in the overall context, give a big push to the Indian economy. Work with the UAE is in full swing. We hope to finish the early harvest part of it within the next 3-4 months. On the Australian side, Tony Abbott, the former prime minister, came as a special trade envoy, had extensive discussions, and met the PM. They are part of the Quad and very keen to have an FTA. The minister is here tomorrow to further our discussions and fast-tracking it. With the UK, we have been having a series of discussions, mostly through video conferencing. We are working on many areas and ensure that we have a balanced agreement in consultation with all our stakeholders and people affected by the FTA and promote investments in a big way.

Source: Economic Times

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Govt extends foreign trade policy till March next year

“The existing FTP 2015-2020, which is valid up to September 30, 2021 is extended up to March 31, 2022,” the directorate general of foreign trade (DGFT) said in a notification. The government has notified the extension of the Foreign Trade Policy 2015-20 by six months to March 31, 2022. Following the outbreak of Covid-19, the policy was first extended by a year to the end of March 2020 and then to September 30. “The existing FTP 2015-2020, which is valid up to September 30, 2021 is extended up to March 31, 2022,” the directorate general of foreign trade (DGFT) said in a notification. On March 31, 2020, the government had extended FTP (2015-20) for one year till March 31, 2021, amid the coronavirus outbreak and the lockdown. The policy provides guidelines for enhancing exports to push economic growth and create jobs and incentives under different schemes such as Duty Free Import Authorisation (DFIA) and Export Promotion Capital Goods (EPCG).

Source: Economic Times

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Cabinet approves ECGC IPO, Rs 4,400 crore capital infusion: Goyal

Out of the total amount, Rs 500 crore will be infused in current fiscal, another Rs 500 crore will be infused in FY23 and remaining amount will be infused as and when required The Union Cabinet, headed by Prime Minister Narendra Modi on Wednesday approved infusion of Rs 4,400 crore into state-owned credit insurance provider ECGC Ltd over a period of five years, starting FY22. It also approved listing of the company on the domestic bourses, which is likely to happen in the next fiscal. Out of the total amount, Rs 500 crore will be infused in the current fiscal. Another Rs 500 crore will be infused in FY23, commerce and industry minister Piyush Goyal said in a media briefing after the Cabinet meeting. The remaining amount is concerned, it will be infused as and when required. “As far as the quantum of listing is concerned....all of these will be decided by the alternative mechanism in the due course,” Goyal said. An official statement said that the proposed listing of ECGC will unlock the ‘true value of the company’, ‘promote people's ownership’ by encouraging public participation in the equity holding of the company. Listing on domestic bourses will result in more transparency as well as accountability, and enable the company to mobilize fresh capital from the market, either through the same IPO or subsequently through a follow-on public offer (FPO). This will also result in increasing its maximum liabilities to Rs 2.03 trillion from Rs 1 trillion by 2025-26. “The approved infusion along with efforts made to suitably synchronize with the listing process of ECGC through the Initial Public Offering will increase the underwriting capacity of ECGC to support more exports,” an official statement said. ECGC was set up more than five decades ago to promote exports by providing credit insurance services to exporters against non-payment risks by the overseas buyers due to commercial and political reasons. Currently, it is the largest player in the export credit insurance market in India. ECGC provides insurance covers to banks, thereby encouraging banks to lend to small exporters that have been hit by the pandemic. “When small exporters export, they want it to have insurance cover as well. If for some reason the payment does not come, in such a situation, the government company ECGC will provide the facility of insurance for the payment,” Goyal said. The announcement comes at a time when India is looking at achieving a $400 billion export target in the current fiscal, which will also aid economic recovery. Goyal said that as of 21 September, India has exported goods worth $185 and is expected to reach $195 mark during the first six months of the current fiscal. While the government is optimistic of meeting the $400 billion target, owing to challenges such as high shipping rates and container shortage it may be difficult to exceed the target, he added. “The approved amount will be infused in instalments thereby increasing the capacity to underwrite risks up to Rs 88,000 crore and this will enable ECGC to issue covers that can support additional exports of Rs 5.28 lakh crore over the five-year period in line with the existing pattern,” the statement said. The Cabinet also approved continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs 1,650 crore grant-in-aid over a period of five years, from FY22 to FY26. NEIA Trust set up to promote project exports from India that are of strategic and national importance. The capital infusion in NEIA Trust will help the Indian project exporters to tap the huge potential of project exports in the focus market. “Corpus contribution of Rs 1,650 crore will enhance the underwriting capacity of the Trust and will enable NEIA to support project exports worth Rs 33,000 crore at full capacity utilization that in turn will translate into an estimated output of domestically manufactured goods to the tune of Rs 25,000 crore approximately,” the commerce and industry ministry said in a separate statement. The fund infusion in NEIA will help create 2.6 lakh new jobs, including around 12,000 in the formal sector.

Source: Business Standard

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Extend benefits of tax schemes due to pandemicled disruption, exporters ask government

Exporters claim they have not been able to meet export obligations due to the pandemic. They say the government should either allow them to continue to avail the scheme by extending their time period or give them tax credit that they can adjust against future tax liabilities. Several exporters who had availed government schemes for lowering tax outgo against promised exports quantity have reached out to the government, seeking concessions citing continuing Covid-19 disruptions. Exporters claim they have not been able to meet export obligations due to the pandemic. They say the government should either allow them to continue to avail the scheme by extending their time period or give them.

Source: Economic Times

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Cabinet approves ECGC listing, ₹6,000 cr. capital for export cover

Decisions will push exports and create nearly 62 lakh more jobs, says Piyush Goyal The Cabinet on Wednesday approved an infusion of over ₹6,000 crore into entities providing export insurance cover to facilitate additional exports worth over ₹5.6 lakh crore over the next five years. It also approved the listing of state-run Export Credit Guarantee Corporation (ECGC) on the stock exchanges. Apart from pushing exports, these decisions will also create nearly 62 lakh more jobs, the Commerce Ministry said in a statement after the Cabinet meeting. “By September 21, India’s exports had touched $185 billion [in 2021-22]. This is the highest ever in India’s history in the first six months of a financial year and 10 days are still remaining,” said Commerce, Industry and Textiles Minister Piyush Goyal, before announcing fresh measures to spur exports. “The Cabinet has decided to give the Export Credit Guarantee Corporation (ECGC) ₹4,400 crore as capital, which will enable it to provide insurance policies worth ₹88,000 crore,” Mr. Goyal said, adding that 97% of ECGC beneficiaries are micro, small and medium enterprises (MSMEs). The Commerce Ministry said this will help ECGC issue covers to support additional exports of ₹5.28 lakh crore over five years, create jobs for 59 lakh workers and “lead to formalisation” of 2.6 lakh workers. The Minister said the capital infusion, which will be done in phases over five years, starting with ₹500 crore each to be released this year and next year, will improve ECGC’s solvency. “The process of listing ECGC on the stock market is also being initiated so that it can raise more funds. It has been delivering surpluses for 20 years, has been very profitable for the last three years and it has been a regular dividend payer,” Mr Goyal pointed out. The Cabinet Committee on Economic Affairs approved a contribution of ₹1,650 as grantin-aid to the National Export Insurance Account (NEIA), which provides cover for project exports, over five years. The Commerce Ministry estimated that this will create 2.6 lakh jobs and help move 12,000 workers into the formal sector. This can enable insurance cover for project exports for ₹33,000 crore and will enhance demand by ₹20,000-₹30,000 crore because project exports typically include 70-75% of Indian-made components, the Minister said. “These three decisions — ₹4,400 capital for ECGC, ₹1,650 crore for the NEIA trust and the listing of ECGC — will embolden our exporters to export more. The Modi government is continuously committed to increasing the pace of economic activity and exports,” Mr. Goyal said.

Rail line doubling  

Information and Broadcasting Minister Anurag Thakur said the Cabinet has approved the doubling of two railway lines in Madhya Pradesh and Gujarat at an outlay of over ₹2,100 crore. “The Neemuch-Ratlam rail line which has a lot of traffic and a lot of industry is still a single line. The doubling of this 133 km line at the cost of ₹1,096 crore has been approved,” he said. Similarly, the Rajkot-Kanalus railway line in Gujarat will be doubled at a cost of ₹1,080 crore for a 111-km stretch. This will link Dwarka and Porbandar better to the rest of the State, Mr. Thakur said. “These lines will benefit passengers, industrial belts around the lines and it has been decided that all efforts will be taken to complete these two lines within three years,” the Minister said.

Source: The Hindu

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Expanding scope of ECLGS to help MSMEs, address funds shortage: Industry

The government has decided to extend the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 31, 2022, or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier. The government's decision to expand the scope of the Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to support micro, small and medium enterprises would help deal with funds shortage and promote exports, industry bodies said on Wednesday. Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the decision will help achieve the USD 400 billion export target for this fiscal. "The second wave of the pandemic was much worse as there were global orders but we were not in a position to serve them due to the lockdown restrictions. The extension is a real shot in the arm as we are trying to honour export orders ahead of the festive season," he said. This is a very timely help as many apparel exporters are still facing acute funds shortage, he added. Sakthivel, who is also president of the Federation of Indian Export Organisations (FIEO), said the decision will help in easing the liquidity, which has also been augmented with the release of Rs 56,000 crore by the government earlier. Welcoming the decision of capital infusion of Rs 4,400 crore in ECGC over a period of five years, he said it is the most timely move as the growing uncertainties and liquidity in global trade are making exporters jittery as defaults are growing. The finance ministry on Wednesday expanded the scope of the Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to support micro, small and medium enterprises facing liquidity issues due to the COVID-19 pandemic. The validity of the scheme has been extended by another six months till March 31, 2022. Yogesh Pawar, chairman, Association of Inspiring Syndicate of Entrepreneurs, said the disbursement has been slow in the scheme at the end of banking institutions and the government has not been able to meet the targeted amount for MSMEs. "This is thought to be the primary reason for the extension in the scheme till March 2022. No doubt the scheme has been a boon for MSMEs during the post-COVID period, as they have been struggling with working capital requirement and the increase in raw material prices at the same time," Pawar said. He called for a tracking system for timely disbursement.

Source: Economic Times

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‘Equalisation’ levy: SEZs likely to get tax relief for domestic tariff area sales

SEZs sold manufactured goods worth Rs 50,033 crore in the domestic market last fiscal, down from Rs 53,831 crore in FY20. Their domestic sales would soar substantially if the tax incidence drops, industry executives reckon. Moreover, the corporation tax has been trimmed to as low as 15% for setting up new manufacturing units anywhere. So, without fresh incentives, SEZs won’t be able to draw many companies now, they say. The commerce ministry is exploring a proposal to impose an “equalisation” levy on firms in the special economic zones (SEZs) when they sell goods in the domestic market, a senior official told FE. The levy will likely be lower than the regular customs duties (BCD and CVD) that SEZ units are currently mandated to pay while supplying to the domestic tariff area (DTA). However, it is expected to neutralise the advantages that SEZs, being specifically delineated duty-free enclaves, enjoy vis-à-vis domestic manufacturers, said a source. “The commerce ministry will take a final call on the issue soon,” he added. Of course, this impost will be different from the equalisation levy — or the socalled Google tax — that is imposed on e-commerce entities. The plan, which requires the concurrence of the finance ministry, is aimed at helping Covid-hit SEZs better utilise their idle capacities and improve sales. SEZs sold manufactured goods worth Rs 50,033 crore in the domestic market last fiscal, down from Rs 53,831 crore in FY20. Their domestic sales would soar substantially if the tax incidence drops, industry executives reckon. Earlier, the commerce ministry had suggested that SEZ units be allowed to sell goods in the domestic market at the lowest tariffs (zero duty in most cases) at which India imports from its free-trade partners. “The revenue department was not keen on such a proposal on the ground that it puts domestic manufacturers at a disadvantage. So, the equalisation levy is being mooted,” said the source. It will ensure that both domestic manufacturers and the SEZs units are on a “level-playing field when it comes to selling goods in the local market,” he added. According to the extant norms, an SEZ is a deemed foreign territory for the purpose of trade operations, duties and tariffs. Such units, therefore, have access to duty-free imports of goods, which manufacturers in the DTA are typically not entitled to. Calls for extending succour to the SEZs gained momentum after the pandemic hit their operations as well as cash flow hard. As such, SEZs in India have somewhat lost their appeal, especially after the government last year adopted a sunset clause for granting a phased income-tax holiday for 15 years, according to senior industry executives. So, only those SEZ units which started production on or before June 30, 2020, will now get a 100% income-tax exemption on export income for first five years, 50% for the next five years and 50% of the ploughedback export profit for five years thereafter. Moreover, the corporation tax has been trimmed to as low as 15% for setting up new manufacturing units anywhere. So, without fresh incentives, SEZs won’t be able to draw many companies now, they say. Data collated by the Export Promotion Council for EoUs and SEZs show, in rupee term, outbound shipments of manufactured products and trading services from SEZs crashed by 21% from a year before to Rs 2.46 lakh crore in FY21, while the country’s overall merchandise exports dropped by only 3% to Rs 21.54 lakh crore. Of course, services units, the dominant segment in SEZs, seemed to have coped with the pandemic impact better. Still, overall exports from SEZs recorded a 4% decline in FY21, against a 1.5% drop in the country’s total exports (in rupee term).

Source: Financial Express

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Government approves continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs. 1,650 crore Grant-in-Aid over 5 years

Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi has undertaken a series of measures to provide a boost to the exports sector. In line with this, the Government has today approved capital infusion of has approved contribution of Grant-in-aid (Corpus) of ₹1,650 Crore to National Export Insurance Account (NEIA) over a period of five years, i.e. from FY 2021-2022 to FY 2025-2026. NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance. The NEIA Trust promotes Medium and Long Term (MLT) /project exports by extending (partial/full) support to covers issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd.) to MLT/project export and to Exim Bank for Buyer’s Credit (BC-NEIA) tied to project exports from India. The capital infusion in NEIA Trust will help the Indian Project Exporters (IPE) to tap the huge potential of project exports in focus market. Support to project exports with Indian content sourced from across the country will enhance the manufacturing in India. Corpus contribution of ₹1,650 Crore will enhance the underwriting capacity of the Trust and will enable NEIA to support project exports worth ₹33,000 Crore at full capacity utilization that in turn will translate into an estimated output of domestically manufactured goods to the tune of ₹25,000 Crore approximately. In addition, assuming an average 75% Indian content in the projects, in terms of the report ‘Export to Jobs’ by World Bank and International Labour Organisation, it is estimated that around 12000 workers will move into formal sector. Further, the total workers (number of both formal and informal) will increase by 2.6 lakh in the relevant sectors as per estimates based on the report.

NEIA- Performance highlights

1. The NEIA Trust was set up in 2006 to promote Medium and Long-Term (MLT)/ project exports by enabling credit and political insurance

2. NEIA supports projects which are commercially viable and are strategically important

3. The corpus commitment of GOI is Rs.4000 crore and Maximum Liability Permissible is 20 times of the actual corpus 4. The contribution received from the Government of India over the years, as of March 31,2021 was Rs.3,091 crore

5. Since inception, NEIA has extended 213 covers, with a consolidated project value of Rs. 53,000 crores, to 52 countries as of 31st August 2021 6. Its impact in enabling project exports has been most significant in Africa and South Asia.

Various Export Related Schemes and Initiatives taken by Govt. in last few years

1. Foreign Trade Policy (2015-20) extended upto 30-09-2021 due to the COVID-19 pandemic situation

2. Rs 56,027 crore released in September 2021 to liquidate all pending arrears under all script base Schemes to provide liquidity in the COVID-19 times

3. Roll out of a new Scheme - Remission of Duties and Taxes and Exported Products (RoDTEP). Rs 12,454 crore sanctioned for the Scheme in the FY 2021-22. It is a WTO compatible mechanism for reimbursement of taxes/ duties/ levies, which are currently not being refunded under any other mechanism, at the central, state and local level

4. Support to textiles sector was increased by the remission of Central/ State taxes through the ROSCTL scheme, which has now been extended till March 2024

5. Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase FTA utilization by exporters

6. A comprehensive “Agriculture Export Policy” to provide an impetus to agricultural exports related to agriculture, horticulture, animal husbandry, fisheries and food processing sectors, is under implementation

7. Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors

8. Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district

9. Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced

10. Package announced in light of the covid pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports

11. Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme and Transport and Marketing Assistance (TMA) schemes to promote trade infrastructure and marketing.

Source: PIB

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Scope for better trade relations between Indonesia and India, says envoy

The Indonesian officials stated that its GDP is expected to grow 5 per cent by 2022 and it could become 4th largest economy by 205. Agus P Saptono, Consul General of the Republic of Indonesia, stated on Tuesday that India is the biggest exporter of sugar to Indonesia and it also exports rice, meat, onion, red chillies to his country. He stressed that the scope for increase in bilateral trade between the two nations is high. The volume of exports between the two countries has been steadily increasing in the last few years, he said. The observation was made at a virtual interaction session held on Tuesday by the Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) in association with the Consulate General of the Republic of Indonesia, Mumbai, its embassy in New Delhi and the Indonesian Trade Promotion Centre (ITPC) based in Chennai. Agus Saptono addressed the AP Chamber members and explained the opportunities for enhancing bilateral trade between Indonesia and India. The Indonesian officials stated that its GDP is expected to grow 5 per cent by 2022 and the country could become the 4th largest economy by 2050. A total of 57 Indian companies have their presence in Indonesia, they said. The potential sectors for investment in Indonesia are textiles, textiles machinery, pharmaceuticals, tourism, transportation, salt technology industry, oil and gas, electrical and renewal energy. They invited members of the AP chambers and businesses to register and participate in the trade expo there to explore trade opportunities and establish business partnerships. AP Chambers president, Pydah Krishna Prasad, president-elect Bhaskara Rao, general secretary Rajasekhar and AP chambers members participated in the virtual meeting and interacted with Indonesian officials. They said that as Andhra Pradesh is the major exporter of rice, sugar, chillies and cotton yarn, has major ports and four international airports, and three major industrial corridors under development, the Government of India has recognised this state as the Gateway for South East Asia. As such, the bilateral trade between Andhra Pradesh and Indonesia is poised for tremendous growth. Bona Kusuma, trade attache, embassy of the Indonesia, New Delhi, and Kumarajati, director of the Indonesian Trade Promotion Centre (ITPC), Chennai, also addressed the meeting.

Source: Deccan Chronicle

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Indian Textile and Apparel Market to Grow at CAGR of 13.80% During 2021- 2026

According to the latest report by IMARC Group, titled “Indian Textile and Apparel Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021-2026,” the textile and apparel market size in India reached a value of US$ 133 Billion in 2020. Textile refers to the materials composed of woven plant- or animal-based materials, such as linen, cotton, silk and wool. Apparel, on the other hand, comprises outerwear and innerwear that are worn by users to wrap and protect their bodies. These materials are made from comfortable and breathable yarn, fabric and fibers that can be derived from natural and synthetic sources. Widely available in a vast array of colors and materials, they are further utilized for manufacturing clothing, fashion and household applications. We are regularly tracking the direct effect of COVID-19 on the market, along with the indirect influence of associated industries. These observations will be integrated into the report. Indian Textile and Apparel Market Trends: The market is primarily driven by the well-established textile and apparel industry in India, the largest producer of jute and cotton and the second-largest producer of silk globally. This can be attributed to the abundant availability of raw materials, such as silk, jute and cotton, coupled with cheap labor costs in the country. Moreover, the increasing penetration of high-speed internet has contributed to the rapid expansion of online retailing in the country. Supported by changing lifestyle patterns, favorable demographics and inflating disposable incomes, in confluence with the enhanced convenience offered by online portals, such as a vast array of options and flexible payment modes, are creating a positive outlook for the market. The market is being further driven by shifting purchasing patterns in the country. A large pool of young population is now adopting the trend of fast fashion instead of need-based clothing as a status symbol and fashion statement. The shifting preference for aspiration-based clothing has significantly provided an impetus to the market growth. Favorable government initiatives, such as the introduction of schemes that encourage private investments in the sector, such as the Technology Up-gradation Fund Scheme (TUFS) by the Ministry of Textiles, are acting as other major growth-inducing factors. The growing utilization of environment-friendly enzyme-based treatment processes in textile manufacturing represents some of the other factors creating a positive outlook for the market. Looking forward, IMARC Group expects the Indian textile and apparel market to grow at a CAGR of 13.80% during 2021-2026.

Key Market Segmentation:

  • On the basis of the application, the market has been divided into clothing, technical, household and fashion, wherein clothing represents the biggest market segment.
  •  Based on the raw material, the market has been bifurcated into natural and man-made fibers. Among these, natural fibers exhibit a clear dominance in the market.
  • On the basis of the product type, the market has been classified into yarn, fabric and fiber. At present, yarn accounts for the majority of the total market share
  • On the geographical front, Maharashtra holds the leading position in the market. Some of the other major markets include Uttar Pradesh, Tamil Nadu, Gujarat and Karnataka.
  • The competitive landscape of the market has been examined in the report with the detailed profiles of the key players operating in the market.

Note- If you want to need latest primary and secondary data (2021-2026) with Cost Module, Business Strategy, Distribution Channel, etc. Click request free sample report. We deliver report with-in 24 hours. About Us: IMARC Group is a leading market research company that offers management strategy and market research worldwide. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. IMARC’s information products include major market, scientific, economic and technological developments for business leaders in pharmaceutical, industrial, and high technology organizations. Market forecasts and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverage, travel and tourism, nanotechnology and novel processing methods are at the top of the company’s expertise.

Source: Bulk Solids Handling

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ECLGS: Govt extends emergency credit scheme till March 31 next year; here’s what MSMEs want

Credit and Finance for MSMEs: As of September 24, 2021, over Rs. 2.86 lakh crore worth of loans were sanctioned under the scheme while out of total guarantees issued, around 95 per cent were for loans sanctioned to MSMEs, the government said on Wednesday. Credit and Finance for MSMEs: The Modi government’s flagship credit scheme for Covid-hit MSMEs and others Emergency Credit Line Guarantee Scheme (ECLGS) has been given its fifth extension since its launch last year. The Finance Ministry on Wednesday extended the scheme by six more months till March 31, 2022, or till guarantees for the overall ceiling of Rs 4.5 lakh crore are issued, whichever is earlier. The scheme launched in May last year was extended from October last year to November and then to March 2021 followed by June and then September along with subsequent expansion in scope as well to include more sectors and markets. As of September 24, 2021, loans sanctioned had crossed Rs 2.86 lakh crore under the ECLGS scheme, and out of total guarantees issued, about 95 per cent were for loans sanctioned to MSMEs, the ministry said in its statement. The last date of disbursement under the scheme has also been extended to June 30, 2022. The ministry added that adding that since its launch, ECLGS has extended relief to over 1.15 crore MSMEs and businesses. However, the MSME ecosystem this time with the extension had sought more focus on sectors that are witnessing slower recovery and/or those with high potential. “I would suggest the extension should be till the time the amount is finished. 52 sectors have been identified that are almost wiped off with the second Covid attack and are predominantly run by micro and small entrepreneurs. These sectors include salons, gyms, cinema theatres, construction contractors, sheet metal manufacturers, paper manufacturers, street vendors, auto ancillaries, freight forwarding, exhibition and event management firms, and more. In spite of our several requests for relaxation of eligibility instead of just special mention accounts (SMA) 0 accounts, the amount paid to be 20 per cent of loan sanctioned instead of loan outstanding, etc., the government has never considered them. There has been an utter failure of the very objective of the scheme to save MSME from Covid impact,” KE Raghunathan, Convenor, Consortium of Indian Associations told Financial Express Online. On Wednesday, the government also announced modifications to the scheme. First, existing borrowers under ECLGS 1.0 and 2.0 would be eligible for additional credit support of up to 10 per cent of total credit outstanding as of February 29, 2020, or March 31, 2021, whichever is higher. Second, businesses who have not availed assistance under ECLGS can avail credit support of up to 30 per cent of their credit outstanding as of March 31, 2021. Third, Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40 per cent of their credit outstanding as of March 31 to the maximum of Rs 200 crore per borrower. Importantly, the government also said that the incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of change in cut-off date to March 31, 2021, from February 29, 2020. Accordingly, borrowers who have availed assistance under ECLGS and whose credit outstanding as of March 31, 2021 (excluding support under ECLGS) is higher than that on February 29, 2020, will be eligible for incremental support within the cap stipulated under ECLGS 1.0, 2.0 or 3.0. “Mainly the focus should have been on businesses involved in travel and tourism including tour operators. Restaurants should particularly have been given importance because while the recovery is there but they generate an enormous amount of business and employment. In its entire supply chain, a lot of people are involved apart from a very large number of delivery boys in the last mile network. There are many that are still closed and haven’t been able to pay rent or clear loans. So something for them should have been there for increasing their speed of revival,” Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME) told Financial Express Online. All India Association of Industries, which as per its website has over 1,500 members and through its affiliates represents over 50,000 SMEs across India, was among the MSME bodies that had earlier requested the government recently for further extension of ECLGS till at least March next year to help revive some key sectors. “Looking at the present situation in China wherein some steel, textiles, and aluminum industries have been closing there, the continuation of ECLGS scheme is very important. There is hope among MSMEs for demand recovery in the market and hence they were looking for an extension of the scheme while earlier there was perhaps a lack of interest among them due to lack of demand. Engineering, pharma, textiles, and auto components should have been in more focus. The engineering industry has suffered because of poor demand while the auto sector needs more focus to enhance production. Small textile units, which are complementary to larger units, must be supported while some pharma units have been struggling to recover even as healthcare has been one of the top sectors benefitting from the pandemic,” Vijay Kalantri, President, AIAI told Financial Express Online. “If there was a lack of interest among MSMEs for this scheme or there were no takers, then the realisation among the government would have been that even if we extend the scheme, nothing would happen. However, the government extended the scheme with emphasis on different areas and sectors as the demand was there,” a banker told Financial Express Online requesting anonymity.

Source: Financial Express

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Expect more than 7% growth for India this decade: CEA Subramanian

Chief Economic Adviser K V Subramanian on Wednesday said India will clock over 7 per cent annual growth during this decade on the back of strong economic fundamentals Chief Economic Adviser (CEA) K V Subramanian on Wednesday said India will clock over 7 per cent annual growth during this decade on the back of strong economic fundamentals. During the current fiscal, he said, growth would be in double-digits and it could moderate to 6.5 - 7 per cent in the next financial year. The Economic Survey 2020-21, released in January this year, had projected GDP growth of 11 per cent during the current financial year ending March 2022. The Survey had said growth will be supported by supply-side push from reforms and easing of regulations, infrastructural investments, boost to manufacturing sector through the Production-Linked Incentive (PLI) schemes, recovery of pent-up demand, increase in discretionary consumption subsequent to rollout of vaccines and pick up in credit. "When you look at the data itself actually, the V shaped recovery and quarterly growth patterns actually established that the fundamentals of the economy are strong...the kind of reforms that we've done on it, and the supply side measures that we've taken will enable strong growth not only this year but going forward as well," he said. Growth will be aided by various structural reforms, including labour and farm laws, undertaken by the government, he said while addressing a virtual event organised by the US-India Strategic Partnership Forum (USISPF) "This decade will be India's decade of inclusive growth. In FY'23, we expect growth to be between 6.5 to 7 per cent, and then accelerating further as the impact of these reforms are seen. On average, I expect growth to be greater than 7 per cent in this decade for India," he said. He also pointed out that the government is putting a lot of emphasis on capital expenditure as it has a multiplier effect. The Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 per cent over the Budget Estimate of 2020-21. The Budget estimate of capital expenditure for FY2020-21 was Rs 4.12 lakh crore. Home Video: Is India ready to benefit from China's slowdown? Here's what Swaminathan Aiyar has to say (Source: Economic Times, September 29, 2021) Is India ready to benefit from China's slowdown? Swaminathan Aiyar, Consulting Editor, ET NOW says that while China will undoubtedly continue to grow, the biggest advantage for India is the size of the domestic market. It is not going to become an export-oriented powerhouse the way China and Vietnam is, he believes.

Source: Business Standard

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How govt can counter India's illicit trade menace

Today, there are five million retailers in the country with most of them selling illicit products (due to high margin) and are at the risk of losing their savings due to anti-illicit seizures As the world grapples with the changing environment, India too is doing everything within its might to adapt to the changing need of the hour. Over the recent months, the government has taken significant steps to improve economic recovery as well as augment consumer sentiment. Despite progressive measures, India continues to battle countless roadblocks, standing in its way to revive and strengthen the economy. During the peak of the pandemic, we saw an unprecedented health and humanitarian crisis, which also contributed to heightening of socio-economic evils like counterfeit, smuggling and other illicit trade activities. According to the latest "State of Counterfeiting in India - 2021" report by Authentication Solution Providers' Association ("ASPA"), there has been an upward trend in counterfeiting incidents between January 2018 to December 2020. During this period, counterfeit incidents in India increased on an average of 20% year to year growth and at an astonishing 17% between 2019 to 2020, significantly damaging the economy and health and safety of people. For years, Illicit and counterfeit has hampered economic growth, eroded brand reputation and impacted consumer trust. Sectors like the apparel industry, beauty industry and consumer products have faced the brunt of this from close quarters. As an outcome of the pandemic and subsequent lockdowns, the situation has exacerbated the menace with sectors such as pharmaceuticals, tobacco, FMCG packaged goods, currency and alcohol also coming within its fold. Today, these sectors constitute over 84% of total counterfeit incidents. A report named 'Invisible Enemy' published by FICCI, brought to the fore the deliberating impact of smuggling and counterfeit on the Indian economy with losses of Rs 5,726 crore in the textiles industry, Rs 5,509 crore in the readymade garments industry, Rs 8,750 crore in the cigarettes industry, Rs 18,425 in the capital goods industry, and Rs 9,059 crore in the consumer durables industry in the year 2017-18. Of the affected sectors, cigarettes have emerged as the most lucrative sin product, often more profitable than drugs and gold, witnessing the highest jump in 2020 over 2019 and 2018. Due to low production cost and very high rate of taxes, cigarettes in India are one of the most expensive in the world. According to the US Department of State, illicit trade in cigarettes has resulted in a loss of over $50 billion annually with India becoming a major hub for these illegal activities. A Euromonitor research (2019) stated that India has become the fourth largest and fastest growing illegal cigarette capital in the world with smuggled cigarettes accounting for a quarter of the domestic cigarette industry. In recent months, owing to the concerted efforts of DRI/enforcement authorities have successfully seized illegally imported cigarettes worth Rs 1,772 crore between April 2020 and February 2021. That marks a significant increase compared with seizures worth Rs 187.6 crore in the previous financial year. This illegal trade has impacted even the biggest tobacco giants as well. Today, there are 5 million retailers in the country with most of them selling illicit products (due to high margin) and are at the risk of losing their savings due to anti-illicit seizures. This is unfortunately a harsh reality of the on-ground situation and its debilitating impact on these smaller players. Over the years, government and enforcement agencies have recognised the danger of counterfeiting and have put in place systems, stronger enforcement and advanced technologies to combat this menace working closely with wholesalers, retailers and ecommerce players who are most at risk. Yet, however, as India readies to rebuild its economy as an aftermath of the pandemic, we need more stringent yet progressive tax policies to mitigate illicit trade. There is a need for regulation through controlled channels to prevent the growth of black market. Apart from revisiting India's taxation policies and levies like National Calamity Contingent Duty (NCCD) imposed on cigarettes, we need the Centre as well as state governments to also put in place stricter measures e.g. the proposed regulations by Madhya Pradesh assembly evaluating higher fines, life imprisonment and serious punitive measures like death penalty owing to deaths caused by spurious liquor is an example of how seriously states are committed to addressing this issue. Additionally, we need to better leverage the new age technologies like AI and blockchain to identifying the loopholes, building safer supply chains and tracking mechanisms. As India progresses on its path to build a self-reliant ecosystem, there needs to be a stronger collaboration with multiple stakeholders like the state governments, industry associations, enforcement agencies and local authorities to eradicate this threat and build a safer tomorrow.

Source: Business Today

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CMAI 'disappointed' with proposed change in GST rate structure in textiles

 The Clothing Manufacturers Association of India (CMAI), one of the largest and oldest Association representing the interests of the Domestic Garment Industry, expressed its deep sense of disappointment and anguish at the recent announcements from the GST Council indicating that with a view to address the issue of Inverted Duty Structure in the Textile Industry, it has been decided to change the GST rates applicable on fabrics and garments with effect from 1st January. Although no formal communication has been received, reports indicate that the current applicable rate of 5% on all fabrics and garments up to the price of Rs.1,000, will be increased to 12%. It is indeed disturbing that to correct an issue faced by a small section of the entire Industry, the Council is considering increasing the prices of nearly 85% of the final products to the Consumers. Rajesh Masand, President - CMAI urges the Government and the GST Council to consider these crucial points: 1. The Domestic Garment Industry is still struggling to revive post the Covid pandemic - with most of the industry still at 60 - 65% of pre-covid levels (Retail, which is the lifeline of Apparel Manufacturing, was one of the first sectors to shut down and one of the last to re-open). Most indicators point to end 2022 as the earliest that the Industry can hope to achieve its pre-covid levels. CMAI strongly believes that this, or even january 2022, is not the right time to increase taxes. 2. The massive price increase of Raw Materials such as Yarn, fabric, fuel, packaging materials, transportation, etc. is already seeing a 15-20% price increase in the final price of the product. The Consumer is already reeling with job losses, wage cuts, and social and personal traumas. To add another 7% taxes to the price of an essential item of consumption such as garments is uncalled for. 3. The Covid-19 pandemic has already seen 15-20% of Garments units across the country shutting or scaling down their operations. The Garment Industry is the highest employer in the Country after Agriculture. It is estimated that the industry is currently seeing a drop of not less than 20% employment in the Sector. The move contemplated by the Council is likely to risk an even higher level of unemployment. 4. Admittedly, there exists the problem of Inverted Duty Structure in a small segment of the total Textile Value Chain - not exceeding 15% of the total Industry. The proposed move will impact 85% of the industry to ease the problem faced by 15% of the industry. 5. The Government has come out with excellent schemes such as PLI and Mega Parks, primarily with a view to promoting Exports of MMF based products. The Industry, including CMAI has wholeheartedly welcomed these schemes. This move will hurt the cotton sector far more than promote the mmf sector. 6. Indian Garment Industry is still largely a Cotton based Industry. Cotton garments, including traditional wear categories such as Dhotis, Sarees, etc. form the bulk of clothing used by the poorer sections of the Society. This section of population will be hit by another price increase. 7. In any country where there are differential rates of GST, essential commodities, especially those consumed by the poorer section of Society, would be levied at the lowest slab. We will be removing an essential commodity item, used by the common man, from the lowest slab to a higher slab. 8. As is well known, the excellent support provided by the Government to the MSMEs through Emergency Credit lines from Banks is getting over now, and Banks have started recalling these loans. In addition to the stress of repayment of these loans, MSMEs will now need additional Working Capital, with the GST refunds now going to 12%. MEMEs will find it impossible to get the additional working capital required. 9. India being still a largely Cotton based economy, an increase of Cotton based products will lead to a price increase across the Cotton value chain. With increased prices will come reduced consumption. This reduction of demand for cotton will also impact the farmer. Rahul Mehta, Chief Mentor of CMAI, strongly urges the Central and State Governments and GST Council to review their decision and find alternate solutions to address the Inverted Duty Structure problem. CMAI has in the past recommended a flat 5% GST across the entire Value Chain - which will resolve the Inverted Duty Structure, will boost consumption and hence production and & Employment, and will cost the Government a negligible amount on revenue. In the absence of such a solution, CMAI urges the authorities to maintain the current status quo.

Source: Free Press Journal

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Thai ambassador calls for signing FTA with Bangladesh

Newly appointed Thai ambassador to Bangladesh Makawadee Sumitmore recently called for signing a free trade agreement with Bangladesh to create more trade and investment opportunities between the two countries. He made the call when the board of directors of the Bangladesh Thai Chamber of Commerce and Industry (BTCCI) paid her a courtesy visit in Dhaka. The chamber also placed some proposals for enhancing bilateral trade and investment relationship between Bangladesh and Thailand, according to Bangla media reports. BTCCI discussed some important issues, including making easier business policy between the business community, working jointly for Thai Special Economic Zone in Bangladesh, inclusion of more duty free Bangladeshi products, relocating labour intensive industry in Bangladesh like woven and textile Industry and some potential industry like power and energy, light engineering, electric, food, handicrafts and other effective bilateral activities. The Thai envoy assured the business leaders of working on all proposals of BTCCI and augment business between the two countries.

Source: Fibre2 Fashion

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US, EU to discuss global trade, tech cooperation at TTC

Top US and European Union (EU) officials will meet today to discuss economic and technological challenges facing the trans-Atlantic alliance. US secretary of state Antony Blinken, secretary of commerce Gina Raimondo and US trade representative Katherine Tai will represent their country at the inaugural US-EU Trade and Technology Council (TTC) in Pittsburgh, Pennsylvania. President Joe Biden’s team will meet European Commission executive vice presidents Margrethe Vestager and Valdis Dombrovski. The group aims to address trade disputes, streamline regulatory procedures and develop ‘rules of the road’ for emerging technologies on both sides of the Atlantic. The TTC will reportedly focus on cooperation in technology standards, supply chain security, climate and green energy, information technology security and competitiveness, data governance, export controls, investment screening and global trade challenges. Biden and Prime Ministers Scott Morrison of Australia and Boris Johnson of the United Kingdom announced a new trilateral security partnership aimed at strengthening and stabilising the South Pacific-Indian Ocean region. As part of the deal, the US and the UK will assist Canberra in acquiring nuclear-powered submarines, which will allow Australia’s navy to help counter Chinese nuclear-powered vessels in the region.

Source: Fibre2 Fashion

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China's economic strength significantly rises: official white paper

China's economic strength has significantly increased, with its gross domestic product (GDP) soaring to 101.6 trillion yuan ($15.7 trillion) last year from 67.9 billion yuan in 1952, according to a recent official white paper. China has transformed from a low-income country to an upper-middle-income country, with per capita GDP rising from less than $100 in 1952 to over $10,000 in 2020. Recently released by the State Council information office, the white paper titled ‘China's Epic Journey from Poverty to Prosperity’ says China has been the world's largest manufacturing country for the past 11 years. For years, the country has ranked the world's first in terms of added-value in the manufacturing sector and the output of over 220 major industrial products, it says. In addition, China ranks first in terms of trade in goods and foreign exchange reserves, and ranks second in terms of its trade in services and consumer market. In 2020, China was the largest recipient of foreign direct investment. It was the first country to bring COVID-19 under control and reopen its economy, an official news outlet cited the white paper as saying. The fact that China was the first country to shift from negative to positive growth reflected the resilience of its economy, the white paper said.

Source: Fibre2 Fashion

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