The minister also emphasised that she expects the economic growth next year to be in the range of 7.5-8.5 per cent, which will be sustained for the next decade. India is looking at near close to double-digit growth this year and the country will be one of the fastest-growing economies, Finance Minister Nirmala Sitharaman has said. The minister also emphasised that she expects the economic growth next year to be in the range of 7.5-8.5 per cent, which will be sustained for the next decade. “As regards the growth of India, we are looking at near close to double-digit growth this year and this would be the highest in the world. And for the next year, on the basis of this year, (the) growth would definitely be somewhere in the range of eight (per cent),” Sitharaman said here on Tuesday during a conversation at Harvard Kennedy School. She noted that while the Ministry of Finance has not done any assessment as yet about the growth number, but the World Bank, IMF and rating agencies have all come nearer to this kind of growth number for India. “So, the next year would also be somewhere in the range of eight to nine (per cent), 7.5 to 8.5 (per cent) would be the growth. And I expect that to be sustained for the next decade because of the rate at which expansion in core industries is happening, the rate at which services are growing, I don't see a reason for India to be any way lesser than” in the next coming decades, she said. During the conversation with Professor at Harvard University Lawrence Summers during the talk organised by the Mossavar-Rahmani Center for Business and Government, Sitharaman, when asked about the state of the global economy, said: “I don't think you can have one picture for the entire globe. The emerging market economies are likely to recover speedily and are likely to have a growth trajectory, which will probably be even the title of engine for growth. They are the ones who are going to be pulling forward the global economy”. “And in that, at least from the data which has been released yesterday and the week before, I can say that India's growth this year will be the highest in the world, of course, based on a lower base of last year, but that will continue into the next year. And even there, we will be one of the fastest-growing economies,” she noted. She added that some other countries in the emerging market areas will also record high growth rates. “The developed world will also catch up… because their base is very high. So, the growth that they can show off will not be closer to double-digit but certainly will be also adding to the global growth,” she said, adding that she sees "different picture in different regions”. When asked about the sustained growth of 8 per cent, a historical rarity, her medium and long term vision of where that growth is going to come from, Sitharaman underlined that the growths post-pandemic of any country can be compared with what had happened earlier, prior to the pandemic. “The reset which the globe has seen itself tells you a narrative that the way in which countries are going to plan their growth is going to be very different from what it was earlier,” she said. She noted that the COVID-19 pandemic itself is one of the reasons for the reset, which is “happening from certain geographical territories where people are coming out of it, looking for other places where they can run their businesses from because no longer you have the transparency and rule of law in certain geographical territories”. “Therefore, the industry is the first one to get out. Investments are the first ones to get out and they are looking for destinations where certain assumptions can be taken up - rule of law, democracy, transparent policies and assurance that you're with a broad global frame of things and that you are not an outlier, that you will not have anything to do with the global scheme of things, and it's no good for us.” The minister said all these are extraneous factors that helped India to attract industries to set businesses there. She also pointed out that India itself is a huge market. “Today, our demographic dividend is not a dividend without reason. It's a dividend, which has great purchasing power ability. The middle class in India has the money to buy things,” she said, adding that the people who are moving from other destinations to invest in India and to produce in India will have a captive market. “The same demographic dividend also gives us another advantage - the youth population of India today is a skilled set of youngsters skilled in various different areas, most of them in STEM,” the minister noted. Sitharaman said India will attract investments and have the purchasing power to demand the best of things from whoever produces it. India is even today best in agriculture. “The food security of many countries depend on imported food. Many in the Middle East depend on India for their basic food materials. We will be one of the largest exporters of food and food processed materials,” she added. Similarly, labour intensive units, partly-skilled labour-intensive sectors such as textile, footwear, leather, and certain parts and components for the industry are all manufactured in India. “So, I see every reason to believe that this 7.5 to 8.5 (per cent) growth is absolutely sustainable for the next decade. These are features that don't exist in any one country all put together. You may have one in one country and the other in a different country. But India has it all,” the minister said.
Source: Money Control
Projects will be designed and executed with a common vision across various ministries Prime Minister (PM) Narendra Modi on Wednesday launched the Rs 100-trillion Gati Shakti or the national master plan for multimodal connectivity to expedite infrastructure (infra) project implementation, thereby accelerating economic growth. The PM Gati Shakti National Master Plan will provide accurate information and guidance for the completion of the government's projects within a stipulated time frame, making policymaking effective and eliminate unnecessary government expenditure, he said at the launch of the master plan in the national Capital on Wednesday. “Just as we have been successful in taking the government facilities in the country to the right beneficiary faster with the power of the JAM trinity - Jan Dhan-Aadhaar-Mobile - Gati Shakti will do the same work in the field of infra. It will provide a holistic vision - from infra planning to execution,” said Modi. Gati Shakti, spearheaded by the Department for Promotion of Industry and Internal Trade, is a digital platform bringing 16 ministries, including rail and roadways, together for integrated planning and coordinated implementation of infra connectivity projects. Until now, infrastructural development in various sectors was not working concurrently, thereby hurting decision-making and the pace of economic development. With the launch of the master plan, planning and designing separately, projects will be designed and executed with a common vision, breaking inter-ministerial silos. “Those who are our private players do not know whether the road is going to pass through here, or a canal is going to be built there, or a power station will come up somewhere. The solution to all these problems lies in Gati Shakti,” said Modi. The master plan has been prepared depicting economic zones and infra linkages required to support them with the objective to holistically integrate all multimodal connectivity projects and remove missing gaps for seamless movement of people, goods, and services. The comprehensive map provides a bird’s eye view of infra development with key layers, based on completion timelines of various economic zones, infra, and utilities across the country. A senior government official said the master plan aims to achieve a network of 200,000 km national highways, increase cargo capacity of ports to augment power transmission capacity, as well as enhance renewable energy capacity. It aims to set up mega food parks, agro-processing centres, defence corridors, electronics manufacturing and textile clusters, and pharmaceutical and medical devices clusters. Arindam Guha, partner and leader (government and public services), Deloitte India, said if the multiplier effect of infra investments on gross domestic product is to be maximised within a shorter time frame, it is critical that specific infra projects - which form a part of critical trade routes (both internal and external) - be prioritised. “For example, specific road and rail connectivity linkages or evacuation points like ports and airports, which form a part of designated industrial corridors like Delhi-Mumbai Industrial Corridor, East Coast Economic Corridor or Amritsar-Kolkata Freight Corridor, are likely to have a disproportionate positive impact on trade flows of multiple products manufactured in the corridor. Same is the case with last-mile connectivity infra to large operational and upcoming industrial parks on the brink of completion. The Gati Shakti initiative, with its technology platform for real-time monitoring of projects and supporting coordination mechanisms between ministries and government agencies, is expected to provide a major boost in the prioritisation of such projects,” said Guha. The plan is built on a single platform ranging between three time periods - status as on 2014-15, achievements made by 2020-21, and planned interventions up to 2024-25 for providing visibility on the completion of projects and consequently, helping different ministries plan their activities better. An empowered group of secretaries under the chairmanship of the Cabinet secretary is proposed to be constituted for approving changes, if any, to the master plan to meet emerging requirements. The industry welcomed the initiative. “Coming close on the heels of the National Infrastructure Pipeline and the National Monetisation Plan, the Gati Shakti vision will underscore the primacy of place accorded by the PM to develop world-class infra facilities crucial to improving business sentiment and speeding up the country’s vision to emerge a $5-trillion economy in the near future,” said T V Narendran, president, Confederation of Indian Industry.
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• PM Gati Shakti is a digital platform that will bring 16 ministries together for coordinated implementation of infra projects • Will provide convenience through multimodal connectivity • Master plan to provide analytical decision-making tool to investors, policymakers • Movement of goods and people to become seamless, create possibilities for development of more economic zones • Projects will be designed and executed with a common vision across various ministries • An integrated multimodal network planning group will be responsible for unified planning and integration of proposals.
Source: Business Standard
PM Modi launched PM GatiShakti-National Master Plan for multi-modal connectivity at Pragati Maidan in the national capital. Union Minister Piyush Goyal on Wednesday said that the new Pragati Maidan will host the G-20 summit in 2023. Speaking at the launch of the new exhibition complex (Exhibition Halls 2 to 5) at Pragati Maidan, the Union Minister said, "PM GatiShakti-National Master Plan will give a push and direction to various development plans and will also encourage investments. Under the leadership of Prime Minister Narendra Modi, the G20 summit will be held here in 2023 for the first time." PM Modi launched PM GatiShakti-National Master Plan for multi-modal connectivity at Pragati Maidan in the national capital. PM GatiShakti is the result of the Prime Minister's constant endeavour to build Next Generation Infrastructure which improves Ease of Living as well as Ease of Doing Business. The multi-modal connectivity will provide integrated and seamless connectivity for the movement of people, goods, and services from one mode of transport to another. It will facilitate the last mile connectivity of infrastructure and also reduce travel time for people. PM GatiShakti will provide the public and business community information regarding the upcoming connectivity projects, other business hubs, industrial areas, and the surrounding environment. It will incorporate the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports and UDAN. Economic Zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones will be covered to improve connectivity and make Indian businesses more competitive. It will also leverage technology extensively including spatial planning tools with ISRO imagery developed by BiSAG-N (Bhaskaracharya National Institute for Space Applications and Geoinformatics).
Source: Business Standard
Truss is expected to review bilateral ties with her Indian counterpart S Jaishankar and meet top business leaders in New Delhi and Mumbai during her three-day visit. Boosting trade and investment, including negotiations for an interim early harvest deal, and security cooperation across the Indo-Pacific are expected to top the agenda during UK foreign secretary Liz Truss’ maiden visit to India next week. This will be the first visit to Asia by Truss since she replaced Dominic Raab as foreign secretary in mid-September, and only her second trip abroad following a visit to the US and Mexico. She is expected to review bilateral ties with her Indian counterpart S Jaishankar and meet top business leaders in New Delhi and Mumbai during her threeday visit. With India and the UK recently sorting out a row over vaccine certification for travellers, both sides are looking forward to meaningful engagement on key issues, especially trade and investment and closer cooperation across the Indo-Pacific. With the two sides set to launch negotiations for a free trade agreement on November 1, the UK is especially keen on finalising an interim early harvest deal by March 2022. People familiar with developments said on condition of anonymity that Truss is expected to make a strong pitch for closer economic ties as part of the UK’s efforts to forge new trade partnerships around the world in the wake of its exit from the European Union. Among the top business leaders, Truss is expected to meet during her visit is Ratan Tata, the people said. In a reflection of the UK’s focus on the Indo-Pacific, Truss’ trip to Mumbai will be timed to coincide with the arrival of a carrier strike group led by HMS Queen Elizabeth, Britain’s largest warship, in the waters off India’s financial hub on October 21. The aircraft carrier is transiting the Indian Ocean on her maiden deployment and conducted exercises with the Indian Navy in May. The UK carrier strike group will carry out further exercises with the Indian Navy and air force this month. Two executives working in separate industry associations said, requesting anonymity, said the Indian government has been in constant touch with the domestic industry to obtain its views for trade negotiations with the UK. To address concerns of all stakeholders, the commerce ministry sought comments from industry representatives in June, an official of an economic ministry said on condition of anonymity. “FTAs cannot be one-sided. It is about give and take. Hence, the industry should be prepared for opening up in certain areas and competing with foreign entities. But the gains are immense for both India and the UK, and both partners are taking the views of industry leaders of the two sides for better understanding,” the official said. Confederation of Indian Industry (CII) director general Chandrajit Banerjee said: “We understand the UK government had done initial consultations with its industry. In India, industry too was consulted on issues that are part of the early harvest deal as well as for the future comprehensive FTA. These include goods, services, investment and procurement.” He added, “Our trade negotiating team is having regular consultations with industry. Since the target is to complete the early harvest deal by December end, senior officials have already engaged in negotiations. At the political level, the leaders are likely to meet on the sidelines of the G20 Summit and the WTO ministerial conference later this year. “India is hoping to get preferential access for those products where we lost GSP. That includes textiles, apparel and other labour-intensive export-oriented products. Besides, in-services, we expect further easing of work visas for Indian professionals, both for intracorporate transfers and contractual service providers.” PhD Chambers of Commerce and Industry (PHDCCI) president Pradeep Multani said possible opportunities existed in negotiating higher thresholds to “reserve some sectors temporarily and to exclude some permanently”. India should take an aggressive approach instead of a defensive one, as Indian businesses would have easier access to the UK market, he said. “It is fair to assume that ICT, financial services, food and beverages and pharmaceuticals will benefit the most from the trade and investment agreement, but this will only become evident as discussions proceed,” he said. According to a spokesperson of FICCI, the two governments have been consulting industry associations in India and the UK. “These meetings have been ongoing since the announcement of the Enhanced Trade Partnership. Once negotiations start between the two countries, more meetings will be scheduled,” the spokesperson said, referring to the partnership launched by the Indian and UK prime ministers during a virtual summit in May. “FICCI has submitted its recommendations to the commerce ministry covering industry expectations on goods and services,” the spokesperson added. The British side is expected to demand the removal of tariffs of up to 150% on spirits, which will require more consultations with the industry before offering any concession as this could impact India’s trade negotiations with the European Union, an industry executive said, requesting anonymity. In the field of services, the UK is expected to demand market access for its legal and auditing firms. This too requires more informed consultations with professional bodies before arriving at any decision, the executive added. As part of the Enhanced Trade Partnership, Britain will open up its fisheries sector to more Indian players, facilitate opportunities for nurses, recognise Indian seafarers’ certificates and enter into a dialogue on a social security agreement.
Source: Hindustan Times
After Goyal raised concerns on lack of balance in bilateral trade between the two countries in his meeting with South Korean counterpart, officials to follow up the matter India has called for fast-tracking the review of the India-South Korea Comprehensive Economic Partnership Agreement (CEPA) to bridge the high trade deficit with the country. New Delhi wants the review to focus on increasing market access for Indian businesses in both goods and services.
Source: The Hindu Business line
A revision of slab rates may create some disquiet, but, if cleverly crafted, it could be a game-changer for manufacturing The goods and services tax (GST) journey like the Sagar Manthan has seen the toxins of transitions yielding to the nectar of higher revenues, demonstrating that there is nothing wrong with the design of this transformational tax regime. The recent buoyancy of GST revenues has been aided by better compliance and a rapid recovery of the formal manufacturing sectors. With the GST revenue settling down, the creation of the group of ministers (GoM) by the GST Council for rate rationalisation and correcting the inverted duty structure is both timely and appropriate.
Source: Business Standard
Indian economy is set to grow at near double digit in the current financial year and then will go on to sustain growth in the range of 7.5-8.5% for the next decade given India’s investment attractiveness and demographic dividend, finance minister Nirmala Sitharaman said in Boston on late Tuesday. “We are looking at close to double digit growth this year and this would be the highest in the world. For the next year, on the basis of this year, growth would definitely be somewhere in the range of 7.5-8.5%. I expect that to be sustained for next decade because the rate at which action in core industries are happening, rate at which services are growing, I don’t see a reason for India to be anywhere lesser than that in the next coming decade," Sitharaman who is currently in the US to attend the IMF World Bank annual meeting and the G20 finance ministers meet said. She was participating in a conversation with former US treasury secretary Larry Summers at the Harvard Kennedy School. Sitharaman said post pandemic has reset the global economy and the way in which countries are going to plan their growth is going to be very different than prior to the pandemic. Referring to China without naming it, Sitharaman said investors are exiting from “certain geographical territories" and looking for opportunities elsewhere as they don’t anymore find transparency and rule of law in these geographical territories. “Therefore, industry and investment are the first ones to get out. They are looking for destinations where certain assumptions can be taken up such as rule of law, democracy, transparent policies, and assurance that you are in broad global frame of things and that you are not an outlier. All these are extraneous factors which help India. To attract industry to come to India, to set up businesses there, produce in India and export from India," she added. Sitharaman said, the huge domestic market potential of India will also push growth into a higher trajectory. “You would have people tell us that its population is big but you don’t have purchasing power capacity and therefore nothing can be sold to you all. Today our demographic dividend is not a dividend without a reason. It has great purchasing power ability. The middle class in India has money to buy things. So people who are moving from other destinations to invest in India, to produce in India will have a captive market," she added. Finance minister said the highly skilled manpower will also attract investors into India. “The same demographic dividend also gives us another advantage of skilled manpower in various areas. You find most of them in STEM as a result of which many of the areas where we have opened up investment possibilities such as space, atomic sciences, financial sector--Indians are contributing not only in India but also outside India in technology infused businesses. That is also one of the reasons India will attract investment," she said. Sitharaman said irrespective of the fact that globally today people have learnt to be more supportive of the local, India today is still best in agriculture. “Food security of many countries depend on imported food. Many in the Middle East depend on India for their basic food material. We will be among the largest exporters of food and food processed materials. We have also partly skilled labour intensive sectors such as textiles, footwear, leather, and component industries, all manufactured in India. So I see every reason to believe that 7.5-8.5% growth is absolutely sustainable for the next decade. These are features which don’t exist in any one country all put together," she said. Ahead of the G20 meeting of finance ministers which will discuss the global minimum corporate tax, Sitharaman said the large multinationals not paying taxes may be good for the company but “absolutely of no use" for countries where the business is generated. “Today more than 134 countries have come together to have a global tax on all those companies which are operating and making profit across nations but end up paying no tax in both the jurisdictions. I will be looking forward to having greater conversation on that in this G20 meeting," she added.
During the conversation with Professor at Harvard University Lawrence Summers at the talk organized by the Mossavar-Rahmani Center for Business and Government, Sitharaman said “while reforms in countries are happening in different stages, these global institutions have remained the way they have been for the last several decades”. Institutions such as United Nations, World Bank and International Monetary Fund need to be urgently reformed as they no longer speak for countries whose issues have remained unattended to for decades, Finance Minister Nirmala Sitharaman said. All these organizations will have to look at reforming themselves, she said here at Harvard Kennedy School on Tuesday. During the conversation with Professor at Harvard University Lawrence Summers at the talk organized by the Mossavar-Rahmani Center for Business and Government, Sitharaman said “while reforms in countries are happening in different stages, these global institutions have remained the way they have been for the last several decades”. Many of them now no longer speak for countries whose issues have remained unattended to for decades together, whether it is on trade, security, monetary framework and on funding development, she stated. “There is a desperate need for all these institutions to be more transparent, represent and speak for countries which don't When these institutions become more representative, she said there would be more equitable distribution of resources, more concern for equitable development for growth. “This whole dialogue which used to happen - north-south - looked as if it's moving towards irrelevance. “But the issues of north-south still remain. Development has not reached many parts of Africa, many parts of the small Pacific islands. Many parts of those countries, even within countries, where there is differentiated development. So I think that's what would have happened if only this reform agenda had been taken up by these institutions,” she said. Sitharaman arrived in the US Monday for a week-long trip to attend the annual meet of the World Bank and IMF in Washingon as well as G20 Finance Ministers and Central Bank Governors (FMCBG) meeting. During the official visit to the US, Sitharaman is expected to meet US Treasury Secretary Janet Yellen. She said that participating in the G-20 now for India has got its own importance. India has joined the trio, which refers to the Chair of the G-20, and the one before and the Chair after the current President. India will hold the G20 presidency from December 1, 2022, and Sitharaman said that whole year, “India will work to take the G-20s agenda forward.” She said the G20 meeting for her will be also a process of learning how the current presidency is taking the agenda forward. “More importantly, the OECD has been working in the much discussed global tax or tax on these huge big multinationals so that this practice which is now prevalent that they end up paying tax nowhere. “They're neither paying the country where they're doing business and earning the profit, nor are they paying tax in the country where they are located,” she said, adding that the current ‘each country for itself' taxation regime has given them an opportunity to end up paying nowhere, which is good for the company, but absolutely of no use for countries where the business is getting generated. “Today, more than 134 countries have come together to have a global tax on all those companies which are operating across nations, making the profit across nations… profits in so many geographical jurisdictions, but end up paying no tax in both jurisdictions.”
Source: Economic Times
Malpass said he went to India in late 2019 and saw the changes that were being made that were quite positive in terms of the banking system, the financial system, the civil service system, and ways that India was looking for ways to improve the clean water situation which is very important in India for child nutrition for improving nutrition. The Indian economy that was hit hard by the COVID-19 pandemic is now in recovery mode and the World Bank welcomes that, its president David Malpass said on Wednesday. Malpass also said that India, which faces huge challenges of integrating more people into the formal sector economy and raising the earnings of the people, has made some progress but that's not enough. “Indians were hard hit by the waves of COVID and that's unfortunate. They responded with the huge production of vaccines and there's been progress on the vaccination effort. But we have to recognise the hit that COVID caused on the Indian economy and especially on the informal sector of the Indian economy which is large,” Malpass told reporters here. Last week, the World Bank projected the Indian economy to grow at 8.3 per cent this year. He also said India, like other nations, is now facing a supply chain disruption due to the COVID-19. “The Indian economy is recovering, and we welcome that. It's going through to the other side of the COVID of …the, the latest wave. That's good. But India, like other countries, is hit hard now by the supply chain disruptions and by the inflation that's been rising in the world,” Malpass said in response to a question. “I'm giving the general mixed view that there's progress, but not enough. India faces huge challenges of integrating more people into their economy into the formal sector economy and raising the earnings of people,” he said. The Indian government, he said, is focused on that. Malpass said he went to India in late 2019 and saw the changes that were being made that were quite positive in terms of the banking system, the financial system, the civil service system, and ways that India was looking for ways to improve the clean water situation which is very important in India for child nutrition for improving nutrition. Clean water is one of the most important starting points for life, he said. “I've mentioned that this is a huge, giant challenge for the world's biggest democracy,” Malpass said.
Source: Economic Times
The Centre's debt was at 58.8 per cent of GDP in FY21. It fell slightly to 57.6 per cent in the first quarter of FY22 The International Monetary Fund (IMF) has projected the government debt, including that of the Centre and the states, to rise to a record 90.6 per cent of gross domestic product (GDP) during 2021-22 against 89.6 per cent in the previous year. It will then moderate to 88.8 per cent during FY23, but will remain over 85 per cent during the next five years — till 2026-27, the IMF said in its latest Fiscal Monitor. Before Covid-19 hit the country, the government debt remained less than 80 per cent in the recent past. For instance, it was 74.1 per cent during FY20, 70.4 per cent in the previous year, 69.7 per cent in FY18 and 68.9 per cent in the year before that. While upgrading the outlook on India’s sovereign rating to stable from negative, Moody’s Investors Service recently counted high general government debt, low debt affordability among other parameters as principal credit challenges for the economy. The Centre’s debt was at 58.8 per cent of GDP in FY21. It fell slightly to 57.6 per cent in the first quarter of FY22. One positive development is the Centre including GST compensation to states in its calendar for overall borrowing, which was kept unchanged at Rs 5.03 trillion in the second half of FY22 even after incorporating borrowings for GST compensation to the states. After its February Budget announcement of Rs 12.05 trillion of gross market borrowing, the government in May said it may have to borrow an additional Rs 1.58 trillion from the market to meet the GST compensation shortfall. However, market borrowings constitute a small fraction of the Centre’s total debt. For instance, it accounted for 6.1 per cent of total debt during Q1FY22. IMF also projected India’s fiscal deficit, of both the Centre and the states, to remain in double digits in FY22 even as it would moderate to 11.3 per cent of GDP, from 12.8 per cent in the previous year. According to the Fiscal Monitor, the deficit will remain above the pre-Covid levels in the next five years. It is likely to be at 7.8 per cent in 2026-27. The gap between the expenditure and revenues of the governments was at 7.4 per cent during FY20. It should be noted that the IMF’s methodology to calculate fiscal deficit is slightly different than India’s. For instance, it does not include disinvestment proceeds and licence-auction revenues in the government receipts.
Source: Business Standard
Home textiles major Welspun India on Wednesday launched its upgraded multi-level traceability solution Wel-Trak 2.0, enabled by blockchain, artificial intelligence and cloud technologies, with an aim to track millions of finished products across its value chain. Wel-Trak 2.0 is an upgrade to Wel-Trak, the company''s patented end-to-end traceability technology introduced in 2018. It is designed to help the stakeholders – from retailers to farmers and manufacturers to suppliers, traders, certifying bodies, and end consumers – to track raw materials throughout the supply chain back to its origin, the company said. "We are starting the Wel-Trak 2.0, which is going to be another level of transparency through blockchain," Welspun India Ltd CEO and Joint Managing Director Dipali Goenka told PTI. Explaining the rationale behind the initiative, she said, "Fundamentally, I think COVID19 has taught us that the world has changed for good, whether it is technology or digitisation. Consumers are working from home, they''re looking at whatever product they buy, what is the provenance of a product, what is the transparency and everything has become online and digital." Transparency and accountability are key factors in building the customer''s trust, she said adding that the company aims to accomplish it through the upgraded multi-level traceability solution Wel-Trak 2.0 which is enabled by blockchain, AI, and cloud technologies. Stating that textile has the most complex value chain, Goenka said the company aims to "make things more open and transparent" whether, it''s the cotton purchased from farmers, yarn, dyes and chemicals and all the certifications and make it "transparent and visible to the consumer, and to the world". On the usage of blockchain technology, Goenka said it is ideal for creating an immutable, tamper-proof system that is immune to data manipulation and fraudulent behavior by members across the textile value chain. "So, that''s where we are moving to... It is also an important and integral part of what we do in the value chain of ESG," she added. The company said its latest traceability platform will capture all its product lines, as well as major sustainability-related data points, including ESG (environmental, social, and governance) metrics such as water usage, fair pay, power consumption, gender equality, among others. With the Wel-Trak 2.0 Blockchain, Welspun India said it "aims to track millions of finished products across its value chain" and it is deploying the advanced cloud-based traceability technology across all its manufacturing units. The company further said it is aiming to optimise the fragmented global home textile value chain and plans to move all product categories and fibers to the tech-based platform, thereby becoming a pioneer in the next-gen ESG data visibility technology. The platform is developed by InfiniChains, a tech company headquartered in San Francisco, and the unified data platform of Wel-Trak 2.0 is hosted on the cloud and boasts 99.9 per cent availability, the company said.
Source: Outlook India
The Regional Comprehensive Economic Partnership (RCEP) has been signed into operation and is gaining traction owing to its magnitude and composition. As of 2020, the collective Gross Domestic Product (GDP) of all member states in the regional trade bloc amounted to 30% of global GDP ($ 38.81 trillion)1. This figure is larger than the GDP of both NAFTA 2.0 ($ 22.20 trillion) and the European Union ($ 15.17 trillion) combined2. Moreover, the 15 member states represent a cumulative population of 2.2 billion people, amounting to 30% of world population3. Thus, RCEP is currently the largest trade bloc to have existed in the history of multilateralism. At a time when the concept of multilateralism itself is brought into question, a regional trading bloc of such magnitude gives credence to the potential of RECP. Background Signed on 15 November 2020 when Vietnam hosted a virtual ASEAN summit4, RCEP represents three regions – Southeast Asia, Far East Asia, and Australia and Oceania. The Southeast Asian nation-states include all 10 ASEAN member countries namely, Indonesia, Thailand, Myanmar, Philippines, Singapore, Malaysia, Brunei, Cambodia, Laos and Vietnam. The Far East Asian countries include China, Japan and South Korea. The two countries from Australia and Oceania are Australia and New Zealand. RCEP is a key milestone for ASEAN since it was instrumental in its formation, and was able to bring China into the grouping without creating a fallout with Japan, South Korea and Australia, that experience tensed relations with Beijing. RCEP is geared towards creating a tight-knit market where member states can benefit from imports and exports with minimum trade barriers. In addition to trade in goods and services, other focus areas include investment, intellectual property, dispute settlement and e-commerce followed by small and medium enterprises5. The latter is a very important focus area since SMEs comprise over 90% of business establishments in the 15 member-countries6. Within the first 20 years of the trading bloc’s existence, RCEP wishes to eliminate 90% of tariff imports between signatories7 8. Furthermore, with the increasing traffic in the online market space and innovation that takes place in these regions, RCEP would establish common rules for e-commerce and intellectual property rights. The trade bloc has been criticised for not being explicit on labour laws, environmental protection and government subsidies9. Nevertheless, analysts argue that initiatives spearheaded by ASEAN begin with a broad vision and are gradually streamlined and achieved with necessary and timely amendments as time progresses. This strategy has contributed to the longevity and relevance of ASEAN and would hopefully do the same for RCEP.10 China’s prospects The advanced democratic economies in RCEP (Japan, South Korea and Australia) are close allies of the United States. The recently invigorated military alliance; Quadrilateral Security Dialogue (QUAD) results in US, Japan, India and Australia’s joint effort to curtail China’s growing military prowess in the Indian Ocean and Asia Pacific. Against these developments RCEP becomes more intriguing as the United States is not part of it. This creates an absence of a power balance with China the most influential country in the grouping in terms of its economic and military might. If member countries work cohesively, RCEP would pull the economic centre of gravity closer to the East11 12. The possibility of such a favourable outcome has therefore aided in softening the relationship between these three countries and China for a much larger purpose of economic prosperity. The other trade bloc that would have rivalled RCEP was the Trans-Pacific Partnership (commonly referred to as TPP) which was signed by 14 countries in 2016. Yet President Donald Trump withdrew USA from the trade bloc in 2017. This paved the road for the creation of RCEP due to the lack of momentum and cohesiveness in TPP13. Today, nine countries have membership in both RCEP and TPP. In November 2019, New Delhi decided to stay out of RCEP, sending out mixed signals. Prime Minister Modi outlined that the trading bloc did not address India’s need to commit to such an agreement.14 Potential adverse effects to domestic industrial and agricultural sectors from Chinese-manufactured goods and dairy products from Australia and New Zealand were cited as reasons15 16. Yet experts predict Indian pharmaceuticals, cotton yarn and services industries would have benefitted enormously given the size of the market available17. If there was a vision for RCEP to become a mighty economic force from the East, this may have fallen short since India is the third largest economy in Asia after China and Japan. This may have been the reason why RCEP has provided flexibility to India to become a member-state in the future whenever New Delhi deems it fit18. However, Singapore’s former representative to the United Nations, Kishore Mahbuban, stated that the absence of both USA and India in this trace bloc has paved the way for China to proceed with its geopolitical ambitions and to create a unanimous economic ecosystem centred around RCEP where China would be its nucleus19. Prospects and concerns It is clear that China, Japan and South Korea will reap the most out of this trade bloc20. For China, RCEP leverages its position as a world power and invigorates her geopolitical ambitions for world ascendency through the Belt and Road Initiative. Moreover, it provides China with the opportunity to tighten her cultural affinity with a growing ethnic Chinese community across Southeast Asia. For Japan and South Korea, RCEP would be a new market to export their high-end industrial products as the quality of life in ASEAN and its share of billionaires is on the rise. It is an opportunity to enhance soft-power diplomacy in ASEAN, Australia and New Zealand through their respective entertainment industries. For Australia and New Zealand, RCEP is beneficial for an economic recovery strategy from COVID-19 as they access new export markets and explore investment in Southeast Asia21 22. RCEP would provide greater access to developed economies for Southeast Asian countries such as Indonesia, Thailand, Myanmar, Cambodia and Laos whose economies largely depend on exports of finished garments, agricultural produce and commodities23. Countries such as Vietnam, Philippines and Malaysia would benefit from further investments in the tech industry. RCEP would have a less impact on Singapore and Brunei since these countries have already established strong trade relations with the advanced economies of Far East Asia, and Australia and Oceania. If all member nation-states are equally optimistic in the success of this trade bloc, RCEP might gradually bring about a solution to the ongoing disputes in the South China Sea and East China Sea. This is too early to judge though. A major concern is that since signing the agreement in 2020, not all member states have ratified the treaty. Currently only four countries – China, Japan, Singapore and Thailand – have ratified the treaty. The latter was the first to ratify. This is a clear indication that there is opposition to this bloc domestically in these countries where ratification is pending. It must be taken into account that many countries in South Asia have a booming tech industry. RCEP might be a threat to this domestic industry due to flooding of low cost but equal/better quality Chinese imports. Further integration with the Chinese economy would mean Tokyo and Canberra being unable to fully commit themselves to supporting Washington’s geopolitical rivalries against Beijing. This would be detrimental to US influence over Southeast and Far East Asia. The gradual ratification and operationalisation of RCEP will undoubtedly lead to an economic revolution that has the potential to create a model for regional cohesiveness further into the 21st century.
Source: Financial Times
Apparel entrepreneurs needed to make the move immediately; otherwise Bangladesh would lose out on the technical market Bangladesh needs to develop strategies and sub-strategies to grab a significant portion of the North American and European market shares for technical textiles, said experts. They also said that apparel entrepreneurs needed to make the move immediately; otherwise Bangladesh would lose out on the technical market, estimated to be around $180 billion. Experts and insiders made these remarks at a discussion “Feasibility Study on Scaling up the Production of Technical Textiles (TT) including Personal Protective Equipment (PPE) in Bangladesh”, jointly commissioned by GIZ, GFA with the support of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). Technical textile (TT) is a product manufactured for non-aesthetic purposes, where functionality is the primary criterion. Currently, technical textile materials are most widely used in filter clothing, furniture, hygiene medicals, and construction materials. Masks and PPE are also technical textile products. A study published at the discussion stated that the current size of the global technical textile market was about $180 billion, projected to grow to $224.4billion by 2025 at an average annual growth rate of 4.2%. The global market for personal protective equipment (PPE), a crucial medical textile, is projected to pass $93bn by the end of 2025. Europe is the current leader in imports of medical textiles but demand from North America is also growing and expected to continue to grow. Although the Covid-19 pandemic jumpstarted interest in medical textile products, the world of technical textiles and their end-use products is endless. Once manufacturers have established reliable materials supply, upgraded their operations and learned the necessary testing and certification procedures, there are huge opportunities in product diversification, the study said. Although Bangladesh is the second largest exporter of the apparel products, it is yet to tap this huge market. Why Bangladesh lags behind According to the study, there are mainly five reasons behind this, which includes lack of awareness of market requirements, inadequate technical expertise, difficulty in sourcing high-performance raw materials, compliance and certification requirements and need for capital investment. To overcome these challenges, the study suggested 5 strategies, 21 sub-strategies, 94 key actions, and 142 outcomes. The strategies include extensive branding and marketing, as well as strong collaboration within the industry. It also suggested implementing compliance with national and international environmental standards, certifying TT/PPE products, creating an upskilled workforce, reducing supply chain costs, improving flexibility and response, and integrating communication systems. The study also suggested key sub-strategies like creating effective coordination and support policies, building collaborative infrastructure for the supply chain and building a compliant and trusted "Made in Bangladesh" brand. It also includes implementing lean manufacturing practices and ensuring transfer of management and technical skills. Werner Lange, textile cluster coordinator of GIZ Bangladesh, said that they were proud to share the results, particularly critical gaps, key actions and an overall strategy to support Bangladesh in entering into this new market and – most importantly – in succeeding there in a sustainable and compliant way. Faruque Hassan, president of the BGMEA, said that at this juncture they needed investment and technical knowhow from the developed nations. “Our industry is ready to cater the growing market of the TT and PPE and demand is also on the rise. We encourage joint ventures in technical textiles and PPE, and also need support from the brands, testing services companies and technology suppliers to join hands and take the potential to a reality,” he added. The study advocated for Bangladesh to capitalize on the country’s reputation as a compliant and certified trading partner to EU and US markets. Once Bangladesh builds a reputation, confidence and reliability in this new product sector, it can gradually introduce more technology and advance to more diversified and sophisticated products offering greater profit margins, said the study. Even starting with a limited number of products, if they are done well, it will open the door to a host of other niche categories and products. Encouraged by the success of the early manufacturers, more companies will take the leap and the sub-sector will grow. The GIZ textile cluster is capacitating local stakeholders to tackle some of these challenges. Outlining the successes of GIZ interventions in the textile and garment sector, the German ambassador Achim Tröster assured continued support. “We are glad to cooperate with Bangladesh in the textile sector and – through this study – to give strategic impulses for further development of the sub-sector of technical textiles,” he added. According to the study, TT/PPE production and product diversification in Bangladesh is in its earliest stages. According to the BGMEA, 155 of its members export masks and PPEs, masks to 19 countries and PPEs to six countries.
Source: Dhaka Tribune
Bangladesh commerce minister Tipu Munshi recently stressed on enhancing bilateral relations with China, especially boosting trade ties in future. “There’s no doubt that China is a great friend of Bangladesh and they play a big role in our development efforts,” he said while addressing a ceremony to honour reporting on Bangladesh-China ties. The Bangladesh China Chamber of Commerce and Industry (BCCCI) and the Economic Reporters’ Forum (ERF) jointly hosted the event. Chinese ambassador to Bangladesh Li Jiming addressed the event virtually. Munshi said China is the largest supplier of machinery and goods to Bangladesh while being the latter’s biggest trade partner, according to Bangla media reports. There could have been a difficult time for the country’s garments sector had there been no material coming from China during the pandemic, he added.
Source: Fibre2 Fashion
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday urged the EU to continue providing trade benefits to Bangladesh for 12 years after the country's graduation to a developing nation in 2026. The extension would help Bangladesh make a smooth transition from the UN's least developed category and prepare for all post-graduation challenges, said Faruque Hassan, president of the BGMEA. Hassan made this request during a meeting with Charles Whiteley, the EU's ambassador to Bangladesh, at the BGMEA office in Dhaka's Gulshan area. Hassan apprised the newly appointed EU ambassador about the present situation of Bangladesh's garment industry, its challenges, opportunities and future priorities, the BGMEA said in a statement. He also shared the industry's impressive achievements in regards to workplace safety, environmental sustainability and worker wellbeing. He thanked the EU for its move to remove the 7.4 per cent import threshold from its GSP+ vulnerability criteria as the step will pave the way for Bangladesh to apply for the benefit after graduation. He hoped Bangladesh would continue to get the friendly support and cooperation extended by the EU, especially for the apparel industry. The president of the apparel makers' platform also sought cooperation of the EU for capacity development of students of the BGMEA University of Fashion and Technology in textile, apparel, fashion and business through collaborations with leading EU universities. BGMEA Vice President Miran Ali also attended the meeting.
Source: The Daily Star
Sees risk of sizeable sell-off in stocks Because of Covid-19 and policies put in place to respond to it, the global debt has jumped to a new high of $226 trillion, the International Monetary Fund (IMF) said on Wednesday. Advanced economies and China contributed more than 90 per cent to the accumulation of worldwide debt in 2020. The remaining emerging economies and lowincome developing countries contributed only around seven per cent. “Because of Covid 19, and of policies put in place to respond to it, debt levels increased fast and reached high levels. High and rising levels of public and private debt are associated with risks to financial stability and public finances,” IMF Director of Fiscal Affairs Department Vitor Gaspar told reporters during a release of the 2021 Fiscal Monitor Report. “The debt of governments, households and non-financial corporations added up to $226 trillion in 2020 — $27 trillion above 2019. This increase is, by far, the largest on record,” he said. This figure includes both public and non-financial private sector debt. Constraints on financing are particularly severe for poorer countries, Gasper said. Noting that in 2020, fiscal policy proved its worth, he said the increase in public debt, in 2020, was fully justified by the need to respond to Covid-19 and its economic, social, and financial consequences. But the increase is expected to be one-off, he said. Gasper said debt is expected to decline this year and next — by about 1 percentage point of GDP per year. The IMF warned of the risk of sudden and steep declines in global equity prices and home values as the Federal Reserve and other central banks withdraw the support they’ve provided during the pandemic. ‘Great financing divide’ between rich, poor nations slows recovery Economic growth in poorer countries will likely lag pre-pandemic expectations for years, given gaps in vaccination rates, revenue growth and the ability to borrow, the IMF said.