The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 04 OCT, 2021

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INTERNATIONAL

Goods, services exports from India should touch $1 trillion each: Piyush Goyal

“We would like both services and goods exports to compete with each other and together reach the $2 trillion mark. The gap is narrowing between both, thanks to the fact that the government is not involved in services exports.” Addressing NRIs and chartered accountants on Sunday, Goyal said last year services export was $194 billion and goods were $290 billion. Commerce and industry minister Piyush Goyal said he wants both goods and services exports from India to touch $1 trillion each and the government is working on a specific plan of action where it will soon announce a deadline to achieve these targets. Addressing NRIs and chartered accountants on Sunday, Goyal said last year services export was $194 billion and goods was $290 billion “We would like both services and goods exports.

Source: Economic Times

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FTA between India and UAE holds huge potential for both countries: Piyush Goyal

Piyush Goyal inaugurated the India Pavilion at Expo 2020 Dubai, which showcases India's vibrant culture, along with the diverse partnership opportunities that the country is capable of offering. He said the entire world is looking towards India as a trusted partner. The proposed free trade agreement between India and the United Arab Emirates (UAE) holds huge potential for both the countries to boost trade, investment and the investors here are extremely keen to invest in the country, union minister of commerce and industry Piyush Goyal said in Dubai on Friday. Addressing a press meet during the occasion of the Dubai Expo 2020, Goyal said the FTA will be a win-win for both the countries.

Source: Economic Times

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Use e-commerce sites to promote indigenous items: MoS Textiles

As part of the Central Government’s Public Outreach Programme for the Union Territory of Jammu and Kashmir, Union Minister of State (MoS) for Textiles and Railways, Darshana V. Jardosh today conducted a whirlwind tour of district Srinagar. During the tour the MoS visited Govt. Arts Emporium Raj Bagh, Silk Factory and Bemina Woolen Mills. While visiting the Govt. Arts Emporium, Srinagar, the MoS asked the officers to create awareness across the country about the products being sold at the centre. She added that the products of Kashmir are known worldwide and they need proper publicity and marketing. The MoS directed the officers to tie-up with e-commerce sites for marketing and selling of products and make provision for online selling through websites. She also asked them to devise a mechanism for checking the authenticity and originality of silk. During the visit to Silk Factory Rajbagh, the MoS interacted with various artisans of papier machie clusters, willow wicker clusters and crewel crafting clusters. She also distributed certificates among the artisans for participating in Color and Design Trends workshop and Market Research and Buyer Trends Workshop. Speaking on the occasion, the MoS said that the artisans here are unique and their uniqueness is reflected in the showcased products of the factory. She asked the officers to establish a Common Facility Centre for artisans so that required training as well as marketing techniques can be provided to them. Speaking on the occasion, the Minister said that Jammu and Kashmir has vast potential in terms of textile industry as world renowned silk having GI mark is being produced here. She stressed upon the officers to tap this potential of J&K and make it hub of textile manufacturing industry. Meanwhile, the MoS also paid a visit to the Directorate of Sericulture here and participated in Cocoon Auction Market 2021-22 and also interacted with cocoon weavers. Speaking on the occasion, the Minister highlighted that the purpose of this visit is to ascertain the development of the textile sector in the UT of J&K. She added that the government has launched several schemes for the development of this sector and the people associated with it should take due benefits of these schemes.

Source: Greater Kashmir

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India's manufacturing activities improve in September on strong demand conditions: PMI

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) improved from 52.3 in August to 53.7 in September, indicating a stronger expansion in overall business conditions across the sector. The September PMI data pointed to an improvement in overall operating conditions for the third straight month. India's manufacturing sector activities improved in September as companies benefited from strengthening demand conditions amid the easing of COVID-19 restrictions, a monthly survey said on Friday. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) improved from 52.3 in August to 53.7 in September, indicating a stronger expansion in overall business conditions across the sector. The September PMI data pointed to an improvement in overall operating conditions for the third straight month. In PMI parlance, a print above 50 means expansion while a score below 50 denotes contraction. "Indian manufacturers lifted production to a greater extent in September as they geared up for improvements in demand and the replenishment of stocks," Pollyanna De Lima, Economics Associate Director at IHS Markit, said, adding that there was a substantial pick-up in intakes of new work, with some contribution from international markets. With sales rising at a stronger rate, firms scaled up production and purchased additional inputs. There was also a faster upturn in international sales and an improvement in business confidence, the survey said. To accommodate for rising sales and progress with production schedules, companies purchased additional raw materials and semi-finished items. Another factor that supported the uptick in input buying was a common view that production would increase in the year ahead. "Companies forecast further growth of sales as pandemic-related restrictions continue to ease," the survey noted. September data highlighted little change to manufacturing sector employment during September. "In some instances, survey participants indicated that the government guidelines surrounding shift work prevented hiring," Lima said. On the prices front, rising fuel, raw material and transportation prices pushed the overall rate of input cost inflation to a five-month high. Output prices, however, increased at a slower and only moderate rate. "After subsiding in each of the previous two months, cost inflationary pressures intensified in September. Strong demand for scarce products contributed to the increase in input costs, as did rising fuel and transportation rates," Lima said. Economists believe the Reserve Bank of India is expected to continue with the accommodative policy stance in its October 6-8 monetary policy discussions. On the macro-economic front, subdued prices of food items like vegetables pulled down retail inflation for the third month in a row to 5.3 per cent in August, within the RBI's comfort zone. Retail inflation, which rose sharply to 6.3 per cent in May from 4.23 per cent in April, has been on a downward trajectory since then. It was 6.26 per cent in June and 5.59 per cent in July this year.

Source: Economic Times

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India, Australia to include e-commerce in final free trade pact: Australian minister

 The two countries have agreed to have an interim or early harvest trade agreement by Christmas and final free trade agreement or Comprehensive Economic Cooperation Agreement (CECA) by the end of 2022. India and Australia have agreed to include e-commerce in the final free trade agreement which is likely to be put in place by the end of next year, according to the visiting Australian Minister for Trade, Tourism and Investment, Dan Tehan. "E-commerce was something that we discussed yesterday. And what minister (Piyush) Goyal and myself agreed was that there would be an e-commerce chapter in the final agreement," he said while addressing a press conference here. The two countries have agreed to have an interim or early harvest trade agreement by Christmas and final free trade agreement or Comprehensive Economic Cooperation Agreement (CECA) by the end of 2022. The two sides also decided to have an exchange of offers regarding the proposed CECA agreement by October. The decision to expedite negotiations for India-Australia CECA between the two countries was taken at a meeting between Commerce Minister Piyush Goyal and Tehan on Thursday. To a query related to agriculture, the visiting minister said there are certain sectors that Australia want to improve its access into the Indian market "but also we understand" that there are sensitivities in India that have to be taken into account. "So it might be that there are some areas where we can use investment, there might be some areas where we can use technology... where we can use services to help in terms of growing the partnership when it comes to agriculture," he said, and added "in the end we want to make this (CECA) a win win for for both countries". The proposed trade agreement would cover trade in goods and services, and investment, among others. India-Australia bilateral trade has exceeded AUD 24 billion last year. Major Indian exports to Australia are petroleum products, medicines, polished diamonds, gold jewellery, apparels etc, while key Australian exports to India include coal, LNG, alumina and non-monetary gold. In services, major Indian exports relate to travel, telecom and computer, government and financial services, while Australian services exports were principally in education and personal related travel. In 2020, India was Australia's seventh-largest trading partner and sixth largest export destination, driven by coal and international education.

Source: Economic Times

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Proposed e-commerce policy to be robust, balanced, says Piyush Goyal

Goyal, who heads commerce and industry as well as consumer affairs ministries, also said that he welcomes all the feedback on the draft ecommerce rules but comments about interdepartmental issues on the draft rules are totally unwarranted. Union minister Piyush Goyal on Sunday assured that every stakeholder's interest will be taken into consideration while framing the e-commerce policy which would be robust and in the interest of every Indian. Goyal, who heads commerce and industry as well as consumer affairs ministries, also said that he welcomes all the feedback on the draft ecommerce rules but comments about inter-departmental issues on the draft rules are totally unwarranted. The minister's comments has come following reports that the Department for Promotion of Internal Industry and Trade (DPIIT), the Corporate Affairs Ministry and the Niti Aayog have objected to some provisions of the draft e-commerce rules. The report citing an RTI reply has claimed that Niti Aayog has expressed apprehensions that the draft rules may harm ease of doing business. Goyal said that the whole purpose of an inter-ministerial consultation was to get views and comments from different quarters. "I do believe that I welcome all the feedback and look forward to a very robust and healthy consultations with all the stakeholders...We are trying to balance everybody's interest and come up with a robust framework in which this (policy) can be implemented in the interest of all Indians," Goyal told PTI. The very purpose of releasing draft rules is to elicit public opinion, ideas from other departments, from stakeholders, encourage feedback, he said, adding the government has always believed in engaging with all the stakeholders before taking a final decision on any policy. Citing example of data privacy law, national education policy and jewellery hallmarking norms, he said the government conducts stakeholders consultation to arrive at a good decision. Domestic jewellers are now appreciating the hallmarking norms, which they were opposing earlier tooth and nail, he said. "The consumer rules around the e-commerce are under public consultation. I warmly welcome feedback from various stakeholders but I have to protect everybody's interest and balance consumers interest, ecommerce interests, retailers interests," he said, adding that "everybody's interest will be taken into consideration and a balanced and a very robust policy will be finalized. When asked if there is any move to link all the policies together, he said every department has to protect its own stakeholders. The DPIIT under the commerce and industry ministry is also framing a national e-commerce policy. "Consumer department has to protect the interest of consumers. Ecommerce policy is a matter for industry department to focus on, because they have to protect the interest of industry and internal trade  so we have an orderly behaviour in the industry and at the same time ensure that internal trade is also protected," he said. He said that they are trying to balance everybody's interest and come up with a robust framework in which this policy can be implemented in the interest of all Indians. On June 21, the consumer affairs ministry released draft e-commerce rules under which it banned fraudulent flash sale and mis-selling of goods and services on ecommerce platforms. Appointment of chief compliance officer/grievance redressal officer is among other key amendments proposed to the Consumer Protection (E-Commerce) Rules, 2020. The government also proposed registration of every e-commerce entity which intends to operate in India with the DPIIT. The proposed amendments also included e-commerce entities requiring to provide information not later than 72 hours of the receipt of an order from a government agency for prevention, detection, investigation and prosecution of offences under any law. According to research firm CUTS International, many consumer organizations have felt that draft e-commerce rules should stick to only consumer-facing issues. The Consumer Protection (E-Commerce) Rules, 2020 were first notified in July last year. Their violation attracts penal action under the Consumer Protection Act, 2019.

Source: Economic Times

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Centre seeks inputs on IPR from industry for India-UAE free trade pact

 Move will make it easier for Indians to do business in the UAE On a tight time schedule for the proposed India-UAE free trade pact, which is to be signed by early next year, the Department of Policy for Investment and Internal Trade (DPIIT) has called for suggestions from industry bodies and other stakeholders on intellectual property rights issues that could make it easier for Indians to do business in the UAE. “In this agreement, IPR plays a critical role as it would be of significant importance to IPintensive industries, both creative and technology driven,” the DPIIT said in a communication to stakeholders. Commerce and Industry Minister Piyush Goyal and UAE Foreign Minister Thani bin Ahmed Al Zeyoudi, in a recent meeting in New Delhi, decided on an ambitious timeline of concluding the negotiations for the India-UAE free trade agreement, officially known as the Comprehensive Economic Partnership Agreement, by the end of December and signing it by March 2022. Negotiations for the early harvest component of the FTA have already started. Apart from opening up markets for goods and services, the two Ministers also discussed an investment promotion agreement and there are on-going meetings involving big sovereign wealth funds from the UAE. The DPIIT, in its communication to Indian businesses, has sought to know the areas of IPR of primary consideration including patents, trademark, copyright, design,  geographical indications enforcement, regulatory approval and commercialisation of technology transfer. Specific areas of concern are to be mentioned such as filing, registration, enforcement or commercialisation of IP rights in the UAE. The industry has also been asked to point out the level at which the challenges are observed such as IP offices, enforcement agencies or any other government agency. India-UAE trade was at $59 billion in 2019-20, making UAE, India’s third largest trading partner for the year after China and the US, per government figures. UAE is India’s second largest export destination,after the US, with nearly $29 billion. For UAE, India is the second largest trading partner for 2019. India’s major export items to the UAE are petroleum products, precious metals, stones, gems & jewellery, minerals, food items, textiles, engineering goods and chemicals. India’s major imports from the UAE include petroleum and petroleum products, precious metals, stones, gems & jewellery, minerals, chemicals, wood & wood products.

Source: The Hindu Business line

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Exports jump over 21% to $33.44 billion in September

 India's merchandise exports jumped 21.35 per cent to $33.44 billion in September on a year-on-year basis, mainly due to better performance by key sectors like engineering goods and petroleum products, according to preliminary data released by the government on Friday. In September, merchandise imports stood at $56.38 billion, an increase of 84.75 per cent compared to the year-ago period. The same was at more than $30.52 billion in the same period a year ago. It is also up 49.58 per cent over September 2019 when it had totalled $37.69 billion. The trade deficit in September was at $22.94 billion as gold imports jumped nearly 750 per cent to $5.11 billion. As per the preliminary data released by the Ministry of Commerce and Industry, the trade deficit, which is the gap between imports and exports, works out to be $78.81 billion during April-September period. "India's merchandise exports in September 2021 was $33.44 billion, an increase of 21.35 per cent over $27.56 billion in September 2020 and an increase of 28.51 per cent over $26.02 billion in September 2019," it said. Exports of engineering goods stood at $9.42 billion, up 36.7 per cent over September 2020. The outward shipments of petroleum is estimated at $4.91 billion in September 2021, an increase of 39.32 per cent over the year-ago month. Outward shipments of 'gems and jewellery' were 19.71 per cent higher at $3.23 billon. However, exports of 'drugs and pharmaceuticals' registered a decline of 8.47 per cent. The imports of 'petroleum, crude and products' soared nearly 200 per cent to $17.436 billion in September on an annual basis. The data also showed that imports of 'coal, coke and briquettes' were up 82.89 per cent at $2.18 billion in September 2021 over the same month last year. The ministry said value of non-petroleum exports in September was $28.53 billion, a growth of 18.72 per cent over the year-ago period and 26.32 per cent higher compared to September 2019. Value of non-petroleum imports was at $38.95 billion in September, an increase of 57.73 per cent compared to the same period a year ago, and 36.14 per cent over September 2019. As per the data, value of non-petroleum and non-gems and jewellery exports in September was at $25.29 billion, registering a growth of 18.59 per cent year-on-year. The exports in the first half of the fiscal (April-September 2021) stood at $197.11 billion. This is an increase of 56.92 per cent over $125.61 billion in the year-ago period and 23.84 per cent compared to April-September 2019.

Source: Economic Times

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Data monitor: Major ports traffic up 5% m-o-m in August

 POL volumes fell at a 5% CAGR vs Aug-19, and iron ore volumes fell at a 6.3% CAGR. This was offset by a 6.1% CAGR in coal and 4.5% CAGR (tonnage) in container volumes. Major ports’ volumes grew 5% m-m to ~57.6mnt in Aug 2021, and were flat vs Aug-19 (compared with a 3.7% CAGR decline in July-21 vs July-19). POL volumes fell at a 5% CAGR vs Aug-19, and iron ore volumes fell at a 6.3% CAGR. This was offset by a 6.1% CAGR in coal and 4.5% CAGR (tonnage) in container volumes. Container volumes at 923kTEUs recorded a 2.3% CAGR vs Aug-19 and 4% growth m-m

Source: Financial Express

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India looks to lend a helping hand to Sri Lanka

 Assessing possible ways to help Sri Lanka in its post covid-19 economic recovery and taking stock of the status of Indian development projects are two of the main issues on the agenda of foreign secretary Harsh Vardhan Shringla who began his visit to the island nation of Sunday. This is Shringla’s first visit to Sri Lanka—seen as a key neighbor of India—though ties have been buffeted by irritants in recent months on the back of Sri Lanka being seen as growing closer to India’s strategic rival China. In the face of this, Shringla’s visit is seen as a signal of India’s willingness to reach out to Sri Lanka and put ties back on an even keel. On Sunday, Shringla began his visit with a trip to the central district of Kandy. He then toured the eastern port district of Trincomalee and the northern city of Jaffna. Northern and eastern Sri Lanka are places where the country’s Tamil minority mainly lives. On Monday, he will return to Colombo for meetings with Sri Lankan President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, foreign minister Prof. GL Peiris and other key leaders. Given that Sri Lanka has been one countries whose economy has taken a major hit due to the covid-19 pandemic, Shringla’s visit is aimed at gaining a firsthand assessment of the needs of the country and how India could help, a person familiar with the matter said. “Sri Lanka’s economy contracted by 3.6 percent in 2020, the worst growth performance on record, as is the case in many countries fighting the pandemic," a World Bank report in June 2021 said. “Swift measures enacted by the government in the second quarter (of 2020) helped contain the first wave of Coronavirus (covid-19) successfully, but these measures hit sectors like tourism, construction, and transport especially hard, while collapsing global demand impacted the textile industry. Job and earning losses disrupted private consumption and uncertainty impeded investment," the World Bank report said. Prior to the pandemic, the Sri Lankan economy had borne the brunt of the Easter Sunday terror attacks of 2019, “which also had significant effects on economic growth, especially on tourism," an Asian Development Bank report said earlier this year predicting that the “path to recovery will be challenging, given uncertainties in the global economic outlook and the fiscal constraints that Sri Lanka faces." During a visit to Sri Lanka in January, Indian foreign minister S Jaishankar and his counterpart had held talks on cooperation in reviving economic activity in areas such as energy, infrastructure and connectivity, besides pharmaceutical manufacturing and tourism. New Delhi had also sent in vaccines for Sri Lanka but with the second wave of the pandemic hitting India in April-May, New Delhi turned its focus on domestic requirements of vaccines and Colombo turned to China for vaccine doses. Ties were also hit by Sri Lanka going back on an agreement earlier this year to allow India and Japan to build and operate the East Container Terminal at the Colombo Port – seen as having occurred due to protests from Sri Lankan workers’ trade unions with tacit Chinese support. This month, India’s Adani group signed a pact with Sri Lanka Ports Authority (SLPA) to build a brand-new terminal next to the $500-million Chinese-run jetty at the Colombo port. Under the terms of the pact, Adani is to form a partnership with a local conglomerate, John Keells, and the Sri Lankan government-owned SLPA. According to an Indian foreign ministry statement, Shringla’s visit “will contribute towards the long-standing multi-faceted relations and enhance bilateral partnership between the two countries." Almost coinciding with Shringla’s visit, New Delhi announced that India and Sri Lanka would carry out a 12-day military exercise from Monday with a focus on enhancing counter-terrorism cooperation. Codenamed “Mitra Shakti" the exercise will be conducted at the Combat Training School in Sri Lanka's Ampara district from Monday, the Indian defence ministry said on Saturday.

Source:  Live Mint

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Insolvency Code: Govt mulls next set of changes to insolvency and bankruptcy code

While the average recovery from toxic assets was to the tune of 39% of creditors’ claims until March 2021, in some cases, the haircuts were as high as 95%. While the average recovery from toxic assets was to the tune of 39% of creditors’ claims until March 2021, in some cases, the haircuts were as high as 95%. Of course, the recovery through the IBC is still way above that through other extant mechanisms, including Lok Adalats, DRTs and Sarfaesi Act. Top officials of the finance and corporate affairs ministry and regulator IBBI are working out the next set of amendments to the insolvency and bankruptcy code (IBC) with a view to bolstering the resolution of toxic assets and plugging any loopholes in the system. Secretaries in the ministry and other senior officials held two important meetings on September 21 and September 28 to explore the “next frontier” of the five-year-old IBC, official sources told FE The hectic parleys followed a directive by finance and corporate affairs minister Nirmala Sitharaman to the officials at a meeting of the Financial Stability and Development Council (FSDC) last month to finalise details of the changes that would be required to further strengthen the IBC regime, one of the sources said. The Reserve Bank of India and stock market regulator Sebi, too, wanted certain IBC issues to be settled fast. The move comes weeks after the parliamentary standing committee on finance cautioned that the IBC may have strayed from its original objectives, thanks to inordinate delay in resolution and large haircuts for lenders. While the average recovery from toxic assets was to the tune of 39% of creditors’ claims until March 2021, in some cases, the haircuts were as high as 95%. This asymmetry has to be reduced, critics say. Of course, the recovery through the IBC is still way above that through other extant mechanisms, including Lok Adalats, DRTs and Sarfaesi Act. To realise the original goals of the IBC, Jayant Sinha, chairman of the parliamentary standing committee on finance, has suggested that rules and regulations be streamlined, possibly though another amendment to the IBC, and the NCLT (National Company Law Tribunal) apparatus be bolstered. The most crucial reasons for the delay in resolution and asset value erosion are the bottlenecks in the NCLT system, Sinha had told FE in August. As many as 13,170 insolvency cases involving claims of Rs 9.2 lakh crore are awaiting resolution before the NCLT. About 71% of the cases have been pending beyond 180 days. The House panel had also flagged risks of procedural uncertainties from unsolicited and late bids. Analysts say often late bids are submitted by either ineligible promoters or their proxies to delay the resolution process. The panel also suggested that a professional code of conduct be firmed up for the powerful committee of creditors, which decides on all important matters in a resolution process. To fix these issues, the Insolvency and Bankruptcy Board of India (IBBI) has now stipulated that bidders be allowed to modify the resolution plans only once. Similarly, it says CoC members will have to comply with a code of conduct, aimed at preserving the integrity of the resolution process. They will also come under the regulatory purview of the IBBI (and not sectoral watchdogs like RBI), which will initiate action if they don’t abide by the code, to be implemented soon. The regulator’s action came after few cases in recent months tested the spirit of the IBC. For instance, in the case of Siva Industries Holding, the lenders accepted a one-time settlement by its former promoter, who had offered just 6.5% of the total debt, and filed a withdrawal application before the NCLT. In the case of Videocon, the NCLT had highlighted that the lenders were taking an almost 96% haircut and exclaimed that Twin Star Technologies’ offer was very close to the stressed firm’s liquidation value, which was meant to be confidential.

Source: Financial Express

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Indian economy's fundamentals strong; private investment picking up: Arvind Panagariya

 The Indian economy grew by a record 20.1 per cent in the April-June quarter this fiscal, helped by a very weak base of last year and a sharp rebound in the manufacturing and services sectors in spite of a devastating second wave of Covid-19. India is now on track to achieving the world's fastest growth this year, as per various estimates by experts. The fundamentals of the Indian economy are sound as the real GDP in Q3 and Q4 of FY'21 already crossed the pre-pandemic level, former Niti Aayog vice-chairman Arvind Panagariya said on Sunday. Panagariya, in an interview to PTI, however also emphasised that the country needs to conquer Covid-19 as quickly and decisively as possible. "Here the news on vaccination front is excellent. I only wish that we as citizens do our bit and religiously wear masks when coming in contact with others," he said "In the third as well as fourth quarter of 2020-21, real GDP had already crossed preCovid-19 level... these facts tell me that the fundamentals of the economy are sound," he said. Meanwhile, the Indian economy grew by a record 20.1 per cent in the April-June quarter this fiscal, helped by a very weak base of last year and a sharp rebound in the manufacturing and services sectors in spite of a devastating second wave of Covid-19. India is now on track to achieving the world's fastest growth this year, as per various estimates by experts. The Reserve Bank of India (RBI) has lowered the country's growth projection for the current financial year to 9.5 per cent from 10.5 per cent estimated earlier, while the World Bank has projected India's economy to grow at 8.3 per cent in 2021. Panagariya, a professor of economics at Columbia University pointed out that contrary to the general impression, private investment in India has certainly already picked up. "In both Q3 and Q4 of FY21, Gross Fixed Capital Formation (GFCF) at 33 per cent and 34.3 per cent of GDP, respectively, was higher than in the corresponding (pre-Covid-19) quarters a year earlier," he said. Replying to a question on foreign capital inflows, the eminent economist said that let us be clear that they have not "True, QE encourages capital to move out of the advanced economies but that does not guarantee that it will come to India and not go to other emerging market economies," he said adding that it chooses India because of the high returns that the Indian economy promises. As tapering happens in the advanced economies, Panagariya said the threat of some reversal naturally remains though the final outcome will depend on how much higher the returns in India remain relative to those in the advanced economies. On the stock market boom at a time when economic growth has slowed down, he said there may be a disconnect but not necessarily. Noting that stock market prices are driven by the expectations of future returns, he said, "Given the high potential of the Indian economy, what we see in terms of high stock prices may well be a rational response by equity investors." On recent calls for using the huge forex reserves for infrastructure development or recapitalisation of public sector banks, the eminent economist said he generally does not  approve of mixing up monetary policy and RBI FX operations with fiscal policy. According to Panagariya, whatever funds that flow from the RBI to the government should be done transparently in terms of the usual annual transfers out of RBI earnings. Noting that the ability of the RBI to defend the exchange rate in the presence of large capital flows depends on its FX reserves, he said, "As a rule, we should restrain from undermining this ability by raiding the FX reserves for fiscal purposes." Asked if high CPI and WPI inflation is a matter of concern, Panagariya said indeed, at a time when the economy is still in the recovery phase, inflation in the range of 6 per cent is a good thing. "Profits of firms and expenditures and revenues of the government are measured in nominal terms and slightly higher inflation helps healthy growth in them at a time when the economy is operating at less than full capacity," he said. Panagariya observed that the 4 per cent target with a 2 per cent band around it should not be seen as a mandate to hold inflation always below 4 per cent. Asked what fiscal measures are necessary to support households in distress, he said India's social safety nets have expanded significantly in the last one and a half decades. "I do not see how we can borrow more even when the goal is as noble as helping the poor without putting the burden on the future generations through increased debt," he said. Panagariya suggested, "If we must expand social safety nets further at current levels of income, I would favour further rejigging of the existing subsidies from richer recipients to the poor." India has recently rejigged existing subsidies from richer recipients to the poor, for example, diverting LPG subsidy from urban households to rural BPL households. On the periodic labour force survey (PLFS) data, both annual and quarterly showing a marked deterioration in the quality of jobs, Panagariya said, "We certainly need to move workers out of agriculture into industry and services. From this perspective, the reverse movement is disturbing." He, however, added that though, he would not read too much in the 2019-20 PLFS survey without a closer examination of what role in these estimates has played by the worker movement during March-June 2020.

Source: Economic Times

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Covid-19: Kerala textile industry facing losses even as markets reopen

Kerala (/topic/kerala)'s textile industry (/topic/textile-industry) is still enduring heavy losses even after the reopening of businesses after almost a year of complete shutdown due to subsequent waves of Covid-19. Shop owners in Kottayam are facing difficulties to even bear the basic expenditures like salaries, electricity bills, and rent. "Because of Covid we are in trouble, It is difficult to pay salary to the staff, electricity bill and rent. The absence of customers has led to stocks being damaged and it is also difficult to take new stocks," said Saleela Rajan, a shop owner. Local business owners also complained that buyers are preferring to buy things online and are not ready to visit shops physically due to Covid-19 fear. The industry which is already facing a financial crunch is further apprehensive of the proposed GST increase from January in the readymade garments and fabrics from 5 per cent to 12 per cent. "Comparing from last year, we can't get any money transfer from the government or any financial institution Further, GST council is increasing the tax from 5 per cent to 12 per cent along with the increase in the cost of production. Production cost will increase somewhat from 10 to 30 per cent. Therefore, textile is in a very critical situation," said  John Thomas Mundacal, state vice-president, Kerala (/topic/kerala)'s textile and garment's welfare association. Merchants urged the central and state governments to come forward and help the industry to survive.

Source: Ani News

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‘Increased RMG exports by neighbouring countries will not affect Bangladesh’

Apparel manufacturers said that the largest trade volume in all these destinations is still exported from Bangladesh Increasing apparel exports by India and Pakistan to the US and European markets will not affect the export earnings of Bangladesh, apparel manufacturers said. Both India and Pakistan are neighbouring competitors of Bangladesh when it comes to apparel export. They also said that the largest trade volume in all these destinations is still exported from Bangladesh. Moreover, the exports to Europe and the US from India and Pakistan have increased as per their own statistics, and Bangladesh has nothing to worry about. According to Eurostat Trade, the export of apparel products from Bangladesh recorded a growth of 18.3% year-on-year in the first seven months (January-July) of 2021 than the same time of 2020 in the European market from $7,756 million to $9,176 million. In the meantime, two neighbouring countries — India and Pakistan — marked a rise of 22.23% and 27.89% respectively, by exporting apparel products worth from $2,032 million to $2,483 million, and from $1,304 million to $1,661 million respectively, according to Eurostat. The Office of Textiles and Apparel (Otexa) of the US has also published the data of sourcing of the apparel products from South Asian countries in the same timeframe. According to the Otexa data, Bangladesh exported apparel worth $3,701 million in the first seven months of 2021, fetching a rise of 28%, from $2,891 million in the same period of 2020. Meanwhile, India exported apparel worth $2,318 million, which was $1,742 million in 2020, and Pakistan exported worth $1,163 million, which was $688 million in 2020, securing the growth of 33.1% and 69.1% respectively, Otexa data shows. But apparel manufacturers of Bangladesh said that it is a temporary scenario and the country should not worry about it since it is a matter of their own export statistics.   In this regard, Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told Dhaka Tribune that Europe and the US are the main export destinations of Bangladesh. “The large volume of apparel products that are exported to these two destinations from Bangladesh every year is much higher than India and Pakistan,” he added. He also said that the exports from India and Pakistan have increased in these destinations compared to the exports of previous years. “It is not related to Bangladesh's exports. They are increasing sourcing from those countries, and also increasing sourcing from Bangladesh significantly.” Moreover, he called it a temporary issue, adding that there are a lot of purchase orders from these two destinations in Bangladesh. “So, I hope that our exports will increase further to the EU and the US in the next few months,” he added. Some apparel manufacturers also said that the recent visit by BGMEA leaders to the US and some successful discussions with European buyers will further boost exports to these destinations. They are also hopeful that Bangladesh may attract more purchase orders from the US and the EU if the apparel diplomacy works effectively. However, apparel makers also said that exports of India and Pakistan may have increased due to the differences in the yarn prices. The price of yarn in these two countries is comparatively lower than what it is in Bangladesh, they said. According to industry insiders, the current price of cotton in the global market is around 95 cents per pound. Bangladesh is the second highest importer of cotton to produce 30-count yarn, the main raw materials of knitwear garment items. The price of per kilogram (kg) 30-count yarn in the local market is $4.10-$4.15, which is higher than most of the other apparel producing countries, they said. They also said that the price of yarn in India is $3.60 per kg, which is much lower than what it is in Bangladesh. A general manager of Savar based AKH Fashions Limited said that India and Pakistan might get the advantages due to the difference between the price of raw materials.   “But we are confident that the export of Bangladesh to the prime destinations will increase soon,” he added. He also said they should have proper strategies to attract more buyers from the destination countries. “In this regard, Bangladesh needs to develop its own fashion designing studios, diversify products basket and to emphasize synthetic or man-made fibre to execute a sustainable apparel industry,” he added. Bangladesh is the second-largest exporter of the apparel items in the global market after China. The apparel sector earns more than 83% of the country’s export earnings. Bangladesh exported apparel items worth $31.45 billion in the last fiscal year. According to the BGMEA, there are more than 4,000 garment factories which employ nearly 4 million workers. The number will be higher if the backwards-linkage industries and their workers are included.

Source: Dhaka Tribune

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Indonesia to highlight trade, investment, tourism potential at Expo 2020 Dubai

Signaling its readiness to compete on a global scale, Indonesia will be highlighting its role in trade, investment and tourism at the Expo 2020 Dubai, from 1st October to 31st March, 2022, marking its eighth World Expo appearance to date. Didi Sumedi, Director-General of National Export Development at the Trade Ministry of Indonesia, said that Indonesia’s participation at the event is a golden opportunity to showcase the country’s trade potentials, investment opportunities and tourist destinations on a global stage. "Indonesia’s participation in Expo 2020 Dubai is a golden opportunity as it will benefit us immensely, including strengthening the growth of the Indonesian economy," he said in a statement. The pavilion will feature a miniature version of the archipelago, occupying a 1,860- square-metre space at the Dubai Exhibition Centre. The pavilion is supported by sponsorships from its partners, which include Astra, the Oil Palm Plantation Fund Management Agency (BPDPKS), Gajah Tunggal, April, Wijaya Karya and Indofood. Didi, who also serves as the Commissioner-General of the Indonesian Pavilion, said the opportunity would also strengthen Indonesia’s vision of being the 10th largest economy by 2045, with a market share of 2 percent. "The Indonesian Pavilion is a miniature country that will serve as a gate to introduce Indonesia to the world. Every week, the Indonesian Pavilion will highlight various ministries, institutions, provincial governments, established brands, as well as up-andcoming MSMEs [micro, small and medium enterprises] that will strengthen Indonesian exports," he added. The Indonesian Pavilion will exhibit more than 300 export-ready products from local MSMEs, including commodities, handicrafts, interior products, textiles and fashion items. Throughout the six-month event, the Indonesian Pavilion will present 26 weekly themes and more than 75 business forums in a hybrid format, which are supported by 22 ministries and institutions, as well as eight provincial governments. Indonesia’s participation in Expo aims to attract investments, which will benefit from infrastructure readiness, regulation and bureaucracy reform, as well as improving the quality of human resources. This will, in turn, highlight the investment opportunities of Indonesia, ranging from Industry 1.0 realisation and national strategic projects to industry and tourism-based special economic zones (KEK).

Source: WAM

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China’s energy crisis may lead to a better grid

 Thermal generators have switched off leading to production halts at aluminium smelters, textile plants and soybean processors NEVER let a good energy crisis go to waste. That’s been the maxim of lobbies on each side of the climate debate as power prices have spiked and blackouts spread from Australia, to Texas, and the UK in recent years. Those who rightly wish to speed the transition away from fossil fuels see the failure of largely thermal-powered electricity networks as a spur to remake an energy system that’s already failing. Those who want to impede that progress see it as an opportunity to smother renewable power before it grows any bigger. That battle is now playing out in China, where a swath of provinces are contending with power rationing after the price of coal spiked. Thermal generators have switched off rather than lose money selling power at regulated tariffs, leading to production halts at aluminium smelters, textile plants and soybean processors. In Liaoning Province, a traditional industrial powerhouse east of Beijing, even traffic lights and homes have lost power for brief periods. It’s likely that the coal faction will win the first round of this fight. At bottom, the current crisis is a fuel shortage. China still has ample generation on tap, at least on paper. Its mostly coal-fired thermal power plants have been running at barely more than half capacity all year, a mild improvement on recent history but still far short of levels they’d need to make a decent return. The problem is that with strong power demand, hydroelectric dams underperforming, and the first cold snap of winter coming early, there’s simply not enough black rocks around to power their turbines. At China Shenhua Energy Co’s Huanghua port, volumes in August were down two million metric tonnes from the same period a year earlier, a 10% decline. China Coal Energy Co’s production was also 10% lower from a year earlier, representing a one million tonne drop. Loadings of coal onto rail carriages, after starting the year strongly, plummeted as the summer wore on, and in July hit their seasonally lowest levels since 2017. All this at a time when electricity demand has been growing at its fastest pace in a decade.   Still, the fact that an energy crisis is happening in China at all is, in its way, a positive sign. In the past, the first instinct of government would be to bail out the state-owned generators who are losing money on 1,377 yuan (RM892) a tonne coal and keep prices to industrial users artificially low, according to David Fishman, a manager with Lantau Group, a Hong Kong-based energy consultancy. With the travails of China Evergrande Group indicating that Beijing is turning off the money tap, that tendency is receding. Electricity price suppression is a reason that China is one of the world’s least energyefficient major economies. Allowing costs to rise should help factories be more thrifty in their power usage. “End users have to get used to the idea that they have to pay more for power,” says Fishman. For now, the quickest way to prevent the current situation escalating any further as the temperatures plummet in northern China will be to do what the price signal of that US$213 (RM890) coal is indicating — dig up and burn more fossil fuels. The governor of Jilin Province, one of those hit by the cuts, made exactly that appeal on Monday. That will have knock-on effects around a globe that’s fighting for every scrap of hydrocarbons right now, with Brent crude above US$80 a barrel and UK natural gas above £2 a therm. Given how rapidly the world needs to be reducing carbon-intensive energy over the coming decade, that likely shift is grim news. Yet there’s a silver lining that will be easy to overlook in the coming months: What the world is short of is ultimately not coal and gas, but energy. In the short term, fossil fuels are likely to be the quickest ways to bridge the power gap — but in the long term, the market is going to seek the cheapest alternative. Almost everywhere in China and around the world, that is now renewable. The most striking sign of where this is heading can be seen in the way that the economic planners at the National Development and Reform Commission are rethinking their rules on the power industry. For the past five years, this has been guided by the so-called “dual control” system — hard targets issued to provinces to limit energy consumption and increase energy efficiency. Despite good intentions, those controls have failed to incentivise sufficient renewable generation. That may be changing. In revised guidance on the rules issued earlier this month, renewable power will be exempt from the consumption caps, while major energy-hungry projects must receive approval from Beijing before going ahead. That will make it far more attractive for provinces to build extra wind and solar parks, where they’ve hitherto been held back for fear of breaking their energy consumption limits. “China is transiting from an energy intensity target to a carbon intensity target,” says Yan Qin, an energy analyst with Refinitiv, a financial data business. Energy modelers have long complained that the recent pace of renewable build-out, while astonishingly rapid, is woefully insufficient to turn the corner on emissions. China’s next five-year plan envisages building barely half of what’s needed to halt the rise in power sector emissions. The current surge in thermal power prices may be precisely the catalyst to unlock those necessary investments. — Bloomberg David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Source: Bloomberg

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