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MARKET WATCH 18 OCT, 2021

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INTERNATIONAL

Textile sector: Govt mulls major overhaul of ATUFS to spur investment

The TUFS, the earliest version of the ATUFS, was introduced in 1999 to make available funds to the textile industry for upgrading technology at existing units as well as for setting up new ones with state-of-the-art facilities. The government is planning a major revamp of its flagship incentive scheme for capital investments in the textile and garment sector to improve its performance and align its objectives with other recently-launched programmes, including the production-linked incentive (PLI) scheme and mega parks, official sources told FE. While notifying the Amended Technology Upgradation Fund Scheme (ATUFS) in January 2016, the government had set aside an outlay of Rs 17,822 crore (Rs 12,671 crore for clearing pending claims under the scheme’s earlier avatars and Rs 5,151 crore for implementing the ATUFS) until FY22. The scheme is supposed to mobilise fresh investments of about Rs 95,000 crore in the textile and apparel sector by FY22 and create 3.5 million new jobs. However, until FY21, it could incentivise projects worth only Rs 46,861 crore, while the subsidy disbursement stood at Rs 3,378 crore. “So, instead of merely extending the ATUFS with the same structure, the government has decided to revamp it,” said a source. The new scheme that is being worked out will focus on expeditious subsidy disbursement for large investments and better incentivise segments that have high employment potential, said one of the sources. The thrust on technical textiles and man-made fibre products could be raised, in sync with the recently-launched Rs 10,683-crore PLI scheme for these segments, he added. Similarly, while subsidy up to Rs 5 crore is currently cleared within a short period (a week, in most cases), dole-out above this amount for big-ticket investments typically takes much longer. This process is expected to be expedited. Industry sources said the ATUFS is set to miss the investment target by a wide margin, as cash-strapped, highly-leveraged companies in the labour-intensive sector had cut down on both technology upgrade and capacity expansion, even before the pandemic struck. However, given the current economic resurgence in key export markets like the US and the EU, large investments could flow in if the government plans meaningful interventions, they added. The new scheme will likely be designed to help the fragmented textile and garment industry acquire scale and boost exports, and complement the PLI and the mega textile park schemes. It would also facilitate the upgrade of existing looms to better-technology ones, ensure quality in processing and curb fabrics imports by garment firms. The TUFS, the earliest version of the ATUFS, was introduced in 1999 to make available funds to the textile industry for upgrading technology at existing units as well as for setting up new ones with state-of-the-art facilities. The idea was to improve their viability and competitiveness in both the domestic and export markets. Under the extant scheme (ATUFS), garments and technical textiles firms are provided a 15% subsidy on capital investments, subject to a ceiling of Rs 30 crore for each investor. Remaining segments, such as weaving, processing, jute, silk and handlooms, get 10%, with a cap of Rs 20 crore. Before the ATUFS was introduced, the various versions of the TUFS had attracted investments of more than Rs 2.71 lakh crore in about 16 years through FY15, according to an earlier official estimate. Subsidies of Rs 21,347 crore were disbursed under the scheme during this period and a lot of pending claims were settled later. The capital-intensive spinning industry has been the largest beneficiary of the TUFS, as most of the investments have taken place in this segment. Of course, with the change in the incentive structure under the ATUFS, spinning mills haven’t quite reaped the benefits in recent years. Largescale capacity addition in spinning in earlier years also discouraged them from undertaking fresh expansion.

Source: Financial Express

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Opportunities galore in India amid current reset in global supply chain: FM

 India has fully leveraged the potential of digitisation even during the most challenging times, the finance minister said Opportunities are galore in India for all investors and industry stakeholders with the current reset in the global supply chain and clear headed and committed leadership in the country, Finance Minister Nirmala Sitharaman has said. Sitharaman arrived here late Friday after her visit to Washington DC where she participated in the annual meetings of the World Bank and the International Monetary Fund. "With the current reset in the global supply chain and clear headed and committed leadership in India, I see opportunities galore in India for all investors and industry stakeholders, Sitharaman said during her address to global business leaders and investors at a roundtable organised here by industry chamber FICCI and the US-India Strategic Partnership Forum here on Saturday. Startups in India have grown tremendously and many are now raising money through capital markets. This year itself, more than 16 of them will qualify as unicorns, she said. India has fully leveraged the potential of digitisation even during the most challenging times, the finance minister said. The role of technology in the financial sector is enabling pushing the frontier of financial inclusion and fintechs are playing a key role in this area, she said at the roundtable, the Finance Ministry tweeted. Sitharaman also met Mastercard Executive Chairman Ajay Banga and Mastercard CEO Michael Miebach, FedEx Corporation President and Chief Operating Officer Raj Subramaniam, Citi CEO Jane Fraser and IBM Chairman and Chief Executive Officer Arvind Krishna, Executive vice president and head of Prudential Financial, Inc's International Businesses Scott Sleyster and Legatum Chief Investment Officer Philip Vassiliou. Following his meeting with Sitharaman, Banga said India is on a great pathway and trajectory with its continuing reforms and he can see great momentum. "I'm particularly impressed by the production linked incentives that have been put into place, he said, adding that they can make a big difference to the way that labour intensive industries in India can develop. I'm very hopeful that it's not just one reform but the series of reforms that are continuing can keep guiding India on the trajectory. I believe that there is a lot of opportunity for India to participate in supply chains and this can be very helpful over the next period of years to bring good jobs into India, Banga said, asserting that he is constructively optimistic about what India is doing. Miebach said he shares Banga's optimism. Describing his discussion with Sitharaman as very constructive, he said it further raises the optimism and said MasterCard will continue to invest in India. Subramaniam said FedEx business in India is growing strong. We are very bullish on India. The very fact that we have a global air network puts us in a considerable position to be able to help move COVID-19 related material into India when it was needed. We are looking forward, we are very bullish on where potential for India is, the fastest growing large economy and growing trade environment. Fraser said Citi has a "very proud and very long history in India. We are delighted to see the strength of the recovery that's happening on the ground there. Obviously there's a lot of concerns around supply chain disruption at the moment but it's around the world. We are very positive about the opportunities for the country. We're seeing a real pickup in cross border flows. India is going to be a beneficiary, not just from supply chain movement around the world and it can be an important destination for many multinationals that will be looking to grow their operations globally. She said the digitisation that India has done is truly impressive and "it will be one of the major hubs of digital trade and digital services in the world and a standard-bearer going forward.

Source: Business Standard

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Mauritius may be out of FATF Grey List this month

Mauritius, which was traditionally preferred by many international investors due to its tax advantage and low operational cost, was put in the grey list by FATF in February 2020 - a decision that led to deeper scrutiny, black-listing by European Union and investment restrictions imposed by Reserve Bank of India. Global investors and offshore funds entering India through Mauritius are betting that in a few weeks the tax haven will shed some of its stigma and come out of the 'grey list' of the Financial Action Task Force (FATF) - an intergovernmental policy body that monitors the colour of money by setting anti-money laundering standards. Mauritius, which was traditionally preferred by many international investors due to its tax advantage and low operational cost, was put in the grey list by FATF in February 2020 - a decision that led to deeper scrutiny, black-listing by European Union and investment restrictions imposed by Reserve Bank of India (RBI). FATF is now considering a re-rating of Mauritius following certain legal, regulatory and operational changes implemented in the past 20 months to combat money-laundering and terror funding, three persons familiar with the discussions told ET. There is a distinct possibility that at the end of the week-long FATF plenary session, which began on October 17, Mauritius will be out of the grey list. Bank of Mauritius governor Harvesh Kumar Seegolam, who has led several negotiations with FATF teams, did not respond to queries from ET. 'Inclusion of Mauritius a Big Plus for India-dedicated Funds' However, according to senior bankers, lawyers and officials of market intermediaries and service providers who are in touch with authorities there said that 'whitelisting of Mauritius' is expected this month. This would have dual impact: First, it could pave the way for RBI lifting the curbs on ownership and control by entities in Mauritius investing in Indian non-banking finance companies (NBFCs) and other payment service operators; second, there would be lesser scrutiny on the 'beneficial ownership' (BO) of Mauritius vehicles coming in as foreign portfolio investor (FPI) and foreign direct investor (FDI). "The inclusion of Mauritius would be a big plus for India-dedicated funds, especially those investing in Indian NBFCs...It would also help a number of investors who aren't allowed to invest in a fund domiciled in a 'FATF Grey List' country," said Anand Singh, co-founder of Wilson Financial Services. Singh, who is also a member of a task force of Financial Services Commission, Mauritius said that ever since its inclusion in the FATF's Grey list, Mauritius has made progress in addressing strategic deficiencies in AML CFT (counter financing of terrorism) policies and has implemented a "riskbased" supervision for licensed funds and holding companies. According to Richie Sancheti, partner, Algo Legal, once out of the grey list, the credibility of Mauritius would improve in the eyes of institutional investors. From an India perspective, RBI had conveyed a general lack of confidence in the disclosure of ultimate beneficial owners (UBOs) in investments originating from FATF non-compliant jurisdictions. "RBI restricts investors from such jurisdictions from acquiring 'significant influence' (voting power at 20% plus and assessed on an aggregate basis) in NBFCs, ARCs, Housing Finance Companies and India-based Payment System Operators (PSOs). From a SEBI perspective, the custodians and other intermediaries should take into account a possible re-rating in their risk analysis while scrutinising or seeking KYC details from Mauritius-based entities," said Sancheti.

CUSTODIAN BANKS MAY REVIEW STATUS

According to an October 16 note from a senior compliance official of a bank in Mauritius, the country is only a few steps away from being delisted from the 'FATF list of jurisdictions under increased monitoring, which is commonly known as grey list'. Even as RBI took a stern view on Mauritius post its grey-listing, Sebi had allowed category-1 FPIs from Mauritius to trade on Indian stock exchanges. Besides pooling in institutional money, Cat-1 funds can issue and subscribe to participatory notes - offshore derivatives with Indian stocks as underlier - and are spared of tax on indirect transfers. But despite Sebi's stand - which may be driven by diplomatic relations Mauritius shares with India - MNC banks which act as custodians to FPIs and FDIs have internally tagged the tax haven as a 'high-risk jurisdiction'. Funds from such jurisdictions have to disclose greater details about their investors having beneficial ownership (BO). Typically, an investor which contributes 25% or more in a fund or exercises a control through the board of the asset manager is considered to have a BO in an FPI. This threshold for determining BO is lowered to 10% for investors from high-risk jurisdictions like Mauritius. So, once Mauritius is white-listed, the threshold for BO would be revised to 25% for investors from the tax haven.

Source: Economic Times

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IIT Delhi Establishes SMITA Research Lab Centre Of Excellence In Smart Textiles

 IIT Delhi has converted its state-of-the-art SMITA (Smart Materials and Innovative Textile Applications) Research Lab to a Centre of Excellence (CoE) in Smart Textiles. The SMITA Research Lab CoE in Smart Textiles has been established to work in the area of Smart and Functional Textiles using emerging materials and process technologies, which can directly benefit the country’s textile industry. Major thrust areas of this CoE would be: (a) Development of highly functional and high-performance textile materials using nanomaterials, nanofibres, and nano engineered materials. (b) Development of wearable textiles, also known as Electronic-Textiles. (c) Development of functional textiles for healthcare applications. Textiles is an important area for India as it is the second largest employer after the agriculture. Textiles contribute significantly to our economy through both domestic consumption and exports. However, apparel sector is facing stiff competition from other low cost producing countries. On the other hand, Technical Textiles, which are technology driven, are widely used in multiple sectors ranging from healthcare to aerospace and can fetch good returns for the Indian textile industry. Keeping this in mind, the Ministry of Textiles, Government of India, has recently launched a National Technical Textile Mission (NTTM) and laid special emphasis on the development of Technical Textiles in the country. SMITA Research Lab at IIT Delhi has been actively engaged in this area for the last several years and has contributed immensely through research and development. It has been instrumental in developing several novel technologies for the first time in the country, such as nanomaterial based antibacterial, antiviral and self cleaning finishes, nanofibre based nostril filters (also known as Nasofilters) and automobile filters, continuous electrospinning machine, textile based sensors and energy harvesting devices, high performance fibres to name a few. SMITA Research Lab has been partnering with Indian Industry and startup companies and has taken several of these technologies from lab-scale to commercial domain. “IIT Delhi has converted its “Smart Materials and Innovative Textile Applications (SMITA) Research Lab” to a Centre of Excellence (CoE) in Smart Textiles to further enhance the impact that IIT Delhi can make in the technical textile domain and to expedite the developments in this crucial area. Creation of the CoE has brought together researchers from different disciplines to develop futuristic smart textiles”, said Prof. V Ramgopal Rao, Director, IIT Delhi. Dr. Ashwini Agrawal, Professor in the Department of Textile and Fibre Engineering, IIT Delhi and the CoE’s Coordinator said, “Smart Textiles and Wearable Electronics are being researched worldover and it is predicted that this will bring unprecedented changes in elderly care, health care, communications, and sports, etc. The CoE will work towards development, design and integration of smart functionalities into textile substrates.” SMITA Research Lab, with the generous funding from the Ministry of Textiles, Ministry  of Education, Department of Science and Technology, and the Industry partners under various research projects, has been able to establish state-of-the-art research facilities, which are unique in the country and can be used for expeditious development of new smart technologies. Prof. Manjeet Jassal, CoE’s Co-coordinator said the CoE will help enhance the visibility of the work being carried out by the Institute in the area of Smart and Technical Textiles and encourage faculty members from other disciplines and institutions to explore their interest in Smart Textile Materials.

Source: India Education Diary

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India's e-commerce industry set to grow 84% by 2024, says report

In India, daily active user (DAU) growth in top shopping apps accelerated in the past three quarters Affle’s MAAS, a unified mobile advertising platform, and Sensor Tower (a US-based mobile app store marketing intelligence company) have jointly studied the key factors that accelerated e-commerce adoption in India and Southeast Asia in the recent past, and how Covid-19 has shaped shopping behaviour. Their findings are summarised in the report, The Dawn of the New-Age Shopper in the New Normal. Daily active users for shopping apps In India, daily active user (DAU) growth in top shopping apps accelerated in the past three quarters, after Club Factory’s removal from app stores dampened growth in mid2020. The top 10 apps averaged more than 7 million DAUs apiece in Q2 2021, up 18 per cent year-on-year. Covid boost Accelerated by the pandemic, the Indian e-commerce industry is set to grow by 84% to $111 billion by 2024. Similarly, Southeast Asia is on its way to record an annual growth rate of 22%, reaching $146 billion by 2025. Avg downloads for top 5 shopping apps Shopping app installs in India showed strong y-o-y growth in July and August 2020, and remained above 2019 levels into 2021. Shopping app installs surged again in July 2021, surpassing 80 million that month, up more than 15 million month-on-month. Meesho alone contributed more than 12 million downloads, up 3.7 million month-on-month. Avg retention among top 10 shopping apps Day 1 and day 7 retention for the top shopping apps in India reached their highest average since 2020 in Q2 2021. Longer-term retention for the top shopping apps in India peaked in Q3 2020. While retention decreased in the following quarters, it still showed positive growth year-on-year.

Source: Business Standard

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States to end FY22 on a slightly better note

States must spend on capex so that the quality of the deficit improves; so far, this has been modest Despite a quicker-than-expected recovery and better collections from levies on auto fuels, the financial position of states as a whole is unlikely to improve meaningfully in the current year. While the second wave was undoubtedly much less damaging than the first one, the localised lockdowns did hit business; moreover, much of the pent-up demand seen in Q2 and Q3FY21, could be missing or be of a much smaller magnitude this time around. While, for a group of 20 states, tax receipts are up a smart 34%—at Rs 6.86 lakh crore for the April-August period—there has been some help from a low base although that’s beginning to fade. While states have used the money to spend a fair bit on capital expenditure, the combined amount spent, of Rs 1.21 lakh crore, is at best modest. It might seem like a big jump of 70% year-on-year and 10% higher than the corresponding period of FY20, but that is on a weak base. It is not bad given the second wave did hamper activity, but states might still miss the year’s target of Rs 5.84 lakh crore, which would translate into a 9% rise. What is encouraging is that the revenue expenditure has been a lot more muted, having risen 10% on year. In general, the states could end FY22 on a slightly better note. ICRA Research estimates the fiscal deficit, for a sample of 12 key states, would improve to Rs 6.22 lakh crore or 3.4% of the gross state domestic product (GSDP) in FY22, similar to the budgeted levels of Rs 6.28 lakh crore. In FY21, the combined deficit was 3.9%. However, it is important, states spend large sums on capex; that would boost the quality of the deficit. As of now, the capex trends are nothing to write home about and one would need to see a smart pick up in the second half of the year for the targets to be surpassed. To be sure, some aggregate numbers often mask the real picture. As such, while some states will tide over the crisis, several others are short of resources and seem to have overestimated revenues. Consequently, the overall quality of the financials is unlikely to match that in their Budget Estimates. Should the Centre stop compensating states for a shortfall in revenue growth of below 14%, as seems likely, a few states would be woefully strapped for funds post June 22. Among these are Punjab, Karnataka and Gujarat. The state GST (or SGST) collections accounted for around two-fifths of the aggregate own tax revenues (SOTR) and around a fifth of the states’ total revenue receipts in the last three years. So, while it may not account for the bulk of revenues, the compensation is nonetheless sizeable. It is true states tend to get complacent when they are being compensated and the government is justified when it explains that collections from the cesses, until March 2026, would be needed to repay borrowings that are being made to compensate states for revenue shortfalls. In the current year, the cesses could yield a good Rs 1.59 lakh crore less than needed. Also, the recovery is reasonably strong and, barring a third wave, the economy should open up further over the next few months; that would yield the states more revenues from other sources. Again, the states should not object to changes in the GST structure with fewer but higher rates. It is in their interest the GST becomes a more effective levy.

Source: Financial Express

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Promoting traditional Banarsi fabric through technology

It is the perfect blend of tradition and modern. The traditional handloom Banarasi sari is being promoted with the help of technology by the younger generation of the traditional manufacturer families, thus not only creating a bigger market for them but also reviving traditional weaving techniques like Rangkat, Kadua Jangla and designs like Shikaargah etc Tehzeeb Anwar, who runs a traditional Banarasi textile and sari manufacturing business, says, “We run a family business from generations. Now with changed times we have resorted to electronic showcasing of our saris, that too globally with the help of technology. Primarily we started displaying saris produced by our grandfather on our Instagram page, which in turn resulted in a large number of queries from India and globally as well. We were amazed how an 80 years old masterpiece is still in demand. So we thought of putting a lot of traditional weaving techniques and patterned saris on digital display and the response has been good. He goes on to add, “Through E-marketing, weavers are able to explain clearly in detail to the consumers why these traditional handloom saris are expensive and also the entire composition of it. So we now have buyers of such kinds of stuff. The demands for such saris has gone up and people are also pre-booking their orders." Udit Khanna, founder of a luxury Banarasi textile brand and one of the pioneers in E-selling of Banarasi fabric and saris, says, “Makers really need to explain their craft, as the consumers need to know what they are buying in terms of the intricacy of the craft. When the craft is being written about by the sellers on the E-platform, it gets publicised so buyers are more aware and willing to pay for it." More and more traditional manufacturers of Banarasi fabrics are going for E-marketing. “Earlier selling to wholesaler and retailers of different regions of the country involved a lot of effort and cost to manufacturers but with the use of social media marketing they are able to reach a large number of consumers. Moreover, most of these traditional businesses are now being handled by the younger generation who are more technology savvy and are able to use it for their business as well,” says Tehzeeb Anwar. Further explaining is Rajat Pathak, a Banarasi textile manufacturer, "Education, exposure and understanding of social media as a tool by the millennial of the traditional manufactures/master weaver families has brought a marked change. One cannot expect a very huge volume of business through social media but for sure a new window has opened for heirloom weavers as well as elite boutiques across the world. There are highend consumers who wish to own not only a nine yards of sari but also a story , history and lineage associated with it.

Source: Times of India

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Gujarat’s indigenous craft to get fresh lease of life

The languishing craft of weaving mashru, an indigenous fabric of Gujarat having its roots in Patan and Kutch, will get a fresh lease of life. Researchers at M S University’s Department of Clothing and Textiles are trying to rejuvenate the craft with design and product diversification. “We all know about celebrated handloom fabrics like brocade and ikat. Mashru is a beautiful bliss of these two fabric techniques. This functional fabric is very suitable as per the climatic condition of hot regions,” said Priyanka Kumari, who took up the project as part of her PhD under guidance of professor Anjali Karolia. Kumari has developed multiple varieties of mashru including mulberry silk by cotton, tasar silk by cotton, korea silk by cotton along with existing varieties. At the same time, she has tried to reintroduce lost techniques of mashru. “Long back, ikat and brocade ‘buttis’ were the characterizing features of this craft. Unfortunately, at present use of these is not seen. It is commonly identified by its stripe pattern,” said Kumari, who with the help of Patan-based mashru weaver has even prepared men’s wear, kids wear, office wear, furnishings to provide a wider market to mashru. Weaving is usually considered as men’s task. “However, women mashru weavers of Patan have proved it as an obsolete notion. They had headed towards economic empowerment in their traditional setting. But with few mashru weavers left in Patan, it needs to be strengthened. The numbers of mashru weavers are very less in Kutch as well. Its strengthening can be done with active participation of weavers and its promotion among people,” she said.

Source: Times of India

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Bangladesh Trade and Investment Summit from October 26

 'Will be a great platform to connect the traders and investors from around the world' A weeklong "Bangladesh Trade and Investment Summit-2021" will begin on October 26, virtually bringing together policymakers, business leaders and investors from across the world. To celebrate the birth centenary of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman and the Golden Jubilee of Independence of Bangladesh, Ministry of Commerce and Dhaka Chamber of Commerce and Industry (DCCI) are going to host the international virtual summit, said a press release. Prime Minister Sheikh Hasina is expected to attend the inaugural ceremony of the summit as chief guest. In this connection, to share the preparation and objectives of the summit, the Ministry of Commerce and DCCI on Sunday jointly organized a press briefing at DCCI Auditorium, where Commerce Minister Tipu Munshi was present as the chief guest. Munshi said that this summit is a remarkable example of the PPP model which will help Bangladesh to showcase and take necessary measures in formulating news policies for a developed economy. He added that in recent years Bangladesh made remarkable progress especially in electricity generation and infrastructure development which is an added advantage to attract foreign trade and investment. The commerce minister also said that his ministry was working tirelessly to sign FTAs and PTAs with potential countries to tackle the challenges after the LDC graduation of Bangladesh. He hoped that Bangladesh Trade and Investment Summit 2021 will be a great platform to connect the traders and investors from around the world. "Our export is mainly dependable on RMG and it is high time for us to work on other potential sectors to expand our export market and diversify our products as well," he added. DCCI President Rizwan Rahman gave a multimedia presentation on the summit and mentioned that this week-long investment summit includes nine sectors underscoring critical enablers and avenues of the economy, demanding massive investments especially in Infrastructure (Physical, logistics and Energy), IT/ITES & FINTECH, Leather goods, Pharmaceuticals, Automotive and Light Engineering, Plastic products, Agro and Food Processing, Jute and Textiles and FMCG (Fast-moving consumer goods) and retail business. He also said that 552 companies from 38 countries along with Bangladesh of five continents will participate in 450 business to business (B2B) match-making sessions, which will help to explore new business opportunities and attract FDI in Bangladesh. Moreover, he informed that six webinars on different trade and investment related issues will be organized, where representatives from the business community, experts from local and international and Policy makers will participate to put their insights on these issues. The DCCI president opined that this virtual summit will showcase Bangladesh's preparedness during the Covid-19 pandemic to the investors and entrepreneurs. DCCI Senior Vice President NKA Mobin, Vice President Monowar Hossain, members of the DCCI board of directors and high officials from the ministry of commerce were present during the event.

Source: Dhaka Tribune

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China economy set to slow after successive batterings: Report

Crackdown on property market, energy crunch to hamper growth China is counting the cost of a multiple whammy of hits to its economy, from a crackdown on the property market and an energy crunch to stringent virus controls and soaring commodity prices.The cumulative impact will show in gross domestic product for the third quarter due on Monday, with growth forecast to slow to 5 per cent from 7.9 per cent in the previous three months. Further illustrating that picture will be monthly industrial and investment data the same day, revealing the severity of electricity shortages last month.China’s slowdown will ripple across Asia and the rest of the world, knocking commodity markets like steel and iron ore that are reliant on the country’s construction activity. Beijing will likely still meet its modest full-year growth target of more than 6 per cent, meaning authorities may be in no rush to pump in stimulus. China internet sector scrutiny to continue China will continue its scrutiny of the internet sector, rooting out practices including the blocking of site links by rival platforms and ensuring smaller players have room to develop, its industry minister Xiao Yaqing said. (Reuters) ‘Coal crunch to ease in coming months’ China’s coal shortage may ease in coming months, with domestic output and imports already showing signs of picking up, the China Coal Transportation and Distribution said, amid government efforts to tackle tight supply. (Reuters) China could widen property tax trialChina could expand pilot testing of a property tax to Zhejiang province, a former government expert was quoted as saying on Sunday in the latest sign that the country is moving closer to adopting the long-discussed levy.

Source: Business Standard

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Will countries reach an agreement at COP26?

The Centre for Policy Dialogue (CPD) is following the developments of the 2021 United Nations Climate Change Conference, also known as COP26. Being one of the major climate-vulnerable countries, Bangladesh is a major party to this international conference. The CPD Power and Energy Study will publish a series of articles on key climate change-related issues highlighting the contexts, main debates and their impact and implications for Bangladesh. Articles will be published in The Daily Star every week till the middle of December 2021. The 26th UN Climate Change Conference of the Parties (COP26) is just 15 days away. The COP26 secretariat, the UK and Italian government and governments of the participating countries are finalising their last days of preparation before meeting in Glasgow, UK from October 31 to November 12. The major point of discussion now is: Will countries reach an agreement on three key issues? (a) phasing out of coal, (b) scaling up nationally determined contributions (NDCs); and (c) raising financing for adaptation. Different parties and bodies related to the United Nations Framework Convention on Climate Change and, more specifically with the COP26, such as supreme bodies, subsidiary bodies, constituted bodies, funds and financial entities, ad-hoc working groups and non-party stakeholders, are now busy with dealing with issues. Different party groups are taking preparation for the COP26, including developing country parties, the African Group, the Arab States, the Environmental Integrity Group, the European Union, the Least Developed Countries, the Small Island Developing States, the Umbrella Group, the OPEC countries, the CACAM, the Cartagena Dialogue, and the BASIC Group, which includes India and China. These groups have diverse offensive and defensive interests which need to be lessened to reach a consensus during the conference. Global climate debates around COP26 Reaching consensus in the three key debating issues is the most difficult and complex process. First, countries need to agree to phase out coal by 2030 (developed countries) and 2040 (developing countries), abandoning fossil-fueled internal combustion engines. There is a global call for saying no to any new coal-fired power plants and to join "Powering Past Coal Alliance". The global coal-based power generation was 2,044,831 MW in 2019, of which 405,205 MW (19.8 per cent) is generated in developed countries and 80.2 per cent in developing countries. Currently, many coal power plants are under construction, which adds up to a capacity of 184,503 MW. China, one of the biggest global investors of coal power plants, has recently announced that it would no longer invest in new coal power plants abroad. Such an announcement is highly appreciated. However, reaching the target of no-coal in developing countries by 2040, China needs a more aggressive commitment to its domestic use of coal. Similar commitment will be required from India, with 228,964 MW of coal-based power generation capacity in 2019, for domestic and foreign-based power plants. Developed countries such as the US (246,187 MW), the EU and Japan and developing countries such as Korea, Indonesia, Taiwan, the Philippines, Malaysia, and Vietnam need to commit to reducing coal-fired power plants. Second, an ambitious target setting is necessary with a view to keeping 1.5°C within reach by 2050. As of July 30, 2021, 113 out of 191 parties submitted updated NDCs. Based on the update, emissions are likely to decrease by 12 per cent by 2030, but the Intergovernmental Panel on Climate Change recently identified that we need about a 45 per cent net anthropogenic carbon dioxide emissions reduction from 2010 level by 2030 to keep 1.5°C within our reach. The current level of emissions will lead to an overall increase in the temperature of the planet by 2.7°C by the end of this century, which would be catastrophic. Will the heads of state of major developed and developing countries come forward with an ambitious commitment of targets for the reduction of carbon emission during the COP26? Third, in the "Copenhagen Accord" adopted at the COP15 in 2009, developed countries promised jointly to mobilise $100 billion to address the needs of the developing countries by 2020. According to the Organisation for Economic Co-operation and Development, the mobilised amount was $79.6bn in 2019. The richest countries are behind in their commitment that needs to be met before the COP26 takes place. The UK has doubled international climate finance commitments, and this kind of initiative may help reach the target of $100bn on climate finance. The commitment made by the private sector on adaptation is highly discouraging, according to the UN Secretary-General – only 0.1 per cent of the total funding for adaptation. While the Paris Agreement promised poorer countries technical and financial assistance in loss and damage, putting it in practice yet to be decided. The Santiago Network for Loss and Damage was established as part of the Warsaw International Mechanism in 2019. This COP can be the one where we operationalise the Santiago Network for Loss and Damage. Article 6 of the Paris Agreement provides a foundation for an international carbon market that presents the possibility of trading emission reductions between countries. The challenge is that it may offer a loophole for not investing in emission reduction strategies while meeting the country's target. The Paris Rulebook implementation guideline for the Paris Agreement, which was adopted during the COP24 in 2018, with few unresolved issues, need to be finalised and agreed upon by parties. The COP26 is expected to finalise the Paris Rulebook. Bangladesh in COP26 Bangladesh has a strong interest in the upcoming climate conference. First, climate vulnerable countries like Bangladesh are already in climate emergency, characterised by more frequent and severe heat waves, heavy rainfall, and droughts. As the current Climate Vulnerable Forum (CVF) presidency, Bangladesh released Climate Vulnerable Manifesto on September 7 following the CVF high-level exchange on the COP26. The manifesto calls for a "Climate Emergency Pact" in rebuilding the confidence in international climate cooperation. This pact asks every country to enhance its effort on emission reduction to keep 1.5°C goal alive and 50 per cent of the $100bn climate finance to go to adaptation actions in the most vulnerable developing countries. It is about time the global community acknowledges this by adopting a "Climate Emergency Pact". Although there was supposed to be a 50:50 balance between climate change mitigation and adaptation actions, only $20.1bn went to climate change adaptation actions from $79.6bn in 2019. Bangladesh has asked to include a delivery plan for a 50:50 balance between mitigation and adaptation in the pact. In the pre-COP closing plenary statement, Bangladesh emphasised the importance of the "Climate Emergency Pact" and is also looking for a much stronger role for loss and damages at Glasgow. Second, it is expected that Bangladesh would make a forward-looking commitment to its nationally determined contributions. The Prime Minister of Bangladesh, who is going to head the delegate in the COP26, would consider delivering Bangladesh's energy transition plan, particularly in case of phasing out of remaining coal-based power plants – those which are in operation, under construction and under planning. In this connection, Bangladesh may seek financial and technical support for the early retirement of coalbased power plants through the energy transition council.

Source: The Daily Star

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Bangladesh RMG must be more resilient after Covid-19

The world might look a very different place 10 years from now. If the Covid-19 pandemic has taught us anything, it is that nothing can be taken for granted—in life or in business. Bangladesh's RMG industry entered 2020 primed for further growth. Our main concern as an industry at that time was the unrest around the new minimum wage and workers' rights. While such issues can never be ignored and we must take them seriously, they look like nothing at all compared to the tsunami we as an industry have undergone these past 18 months. I won't lie, the first year of the pandemic was extremely tough—as RMG factories and many of our major export markets were in lockdown. It was difficult to get raw materials. Brands and retailers were cancelling orders left, right and centre. And there was a general level of uncertainty and chaos in the air, the likes of which I have not experienced in more than two decades as a business owner. R It is only as we have gotten further into 2021 that our industry has begun to find some breathing space. Several things have been in our favour. The first is the global vaccine rollout, which has led to the opening up of major markets and the removal of lockdowns across the US and Europe. The second is the "bounce" we have seen as shoppers return to shops and make up for lost time in purchasing clothing. Many are calling this "revenge" spending. The last issue is that our rivals in Vietnam and China have had harsher lockdowns of their textile industries than Bangladesh. This, combined with the fact that Myanmar—another competitor—has had a military coup has led to brands and retailers placing more orders with us. In a world of uncertainty, Bangladesh is seen as a "safe bet" right now for fashion retailers. We cannot, however, rest on our laurels. Throughout this past 18 months, Bangladesh's RMG industry has shown strength in adversity. The relative stability of our political environment coupled with our pragmatic management of the pandemic—allowing factories to remain largely open was a smart move by our industry leaders—means we are well placed to capitalise on future opportunities. But we must use this time to build resilience in our RMG sector and not let our hard-won gains go to waste. To return to the point made at the beginning of this article, none of us can be sure of what is around the corner. A recession in 2022, which some forecasters are predicting, could quickly derail things. So how can we build this resilience in the months ahead? How can we ensure we are prepared for the next crisis or to ride out any future recession? I can think of three ways. The first refers to the current situation we find ourselves in. We are picking up extra orders due to complications in the supply chains of some of our competitors. We need to make these orders stick and turn them into long-term business opportunities. We must see it as an important feather in our cap that buyers have turned to us in their hour of need, at a time when all retailers are struggling to secure product in the run up to the festive season. All of us need to go above and beyond to illustrate that Bangladesh is a safe pair of hands— a true thoroughbred when it comes to textile and garment sourcing. The second issue relates to logistics. One thing we have seen in the past few months is how a few small issues in terms of moving cargo about can soon mushroom into much larger ones. A problem in one part of the world can spread like a virus, and supply chains can quickly become unstuck. More than ever, we need to invest in our logistics infrastructure—our roads, our ports, our rail network—to make moving product about slick and seamless. There is talk of a 10- fold increase in the global cost to move a container from one part of the world to another this past 12-months. Nobody can live with this kind of uncertainty long-term. China has been particularly hard hit, but these problems can strike anywhere. All options must be on the table. I was delighted to see the major projects being undertaken by our government recently for upgrading airports, including the construction of a third terminal at the Hazrat Shahjalal International Airport. This will help to meet future demand of air cargo transportation and contribute to further economic growth in Bangladesh. More of this please. Finally, we must continue to lead on sustainability in line with the demands of buyers. The presence of Bangladeshi representation at the 26th UN Climate Change Conference of the Parties (COP26) is critical for our industry. Our buyers, more than ever, are turning to us for solutions to their emission challenges. The environmental crisis will not be solved in the shiny stores of our buyers—for instance, the products in the stores need to be manufactured back in Bangladesh using renewable energy.

Source: The Daily Star

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