The Tamil Nadu Chamber of Commerce and Industry has said that the GST council should drop its proposal to increase the base rate of GST on textiles and clothing from 5% to 12% from January 1, 2022. President of the chamber, Dr N Jegatheesan, has said that the traders and industrialists engaged in the textiles and clothing business are perturbed and shocked due to the GST council’s proposal to increase the GST base rate on textiles and clothing. He said that at present, 12% GST is levied on garments above Rs1,000 and 5% GST on garments below Rs1,000. If the GST rate is increased, less expensive clothes will also have to be charged 12% GST. In our country, textile readymade garments and knitting units are mostly cotton based industries, and they are producing a large portion of traditional garments such as dhoties and sarees. They are mainly used by people in the ‘middle income’ group and those below the poverty line. If an additional tax burden is imposed on them, it will only lead to consumer negativity. The GST council’s proposal for a tax base rate hike on textiles and clothing will greatly cripple the textile sector as the costs of raw materials such as yarn, fuel, packaging products and transport continue to rise day by day and they have already been struggling hard to bring their business back on track, which was badly hit by the Covid-19 lockdown. MSME units engaged in the textile sector are slightly recovering by availing additional loans under the emergency credit assistance scheme of banks. The 7% tax increase will adversely affect the textile industry, especially the MSME units. Nearly 11 million workers are employed in knitting, including readymade garments units in our country. Of these, eight million are in the domestic sector and three million in the export sector. A considerable number of workers are also engaged in embroidery and packing units indirectly. There has already been a 15-20% price increase in the final price of production in the textile sector. While consumers have already been reeling under job losses, wage cuts and rising prices of essential commodities, the 7% tax hike on clothing and apparel will lead to a sharp decline in the consumption and their livelihood will be severely affected.
Source: Times of India
Negotiations over a proposed India-UK Free Trade Agreement (FTA) will begin today. Negotiations will be led by Indian Minister of Commerce and Industry Piyush Goyal and the British Secretary of State for Foreign, Commonwealth and Development Affairs Liz Truss. Initially affirmed in July of 2020, the Agreement seeks to strengthen the two nations’ already robust economic ties. The negotiations are set to last until early 2022 with an interim ‘early harvest’ agreement to be announced in March. The initial pact will likely include tariff reductions and market access concessions for both parties in key industries including textile and pharmaceutical manufacturing. In the wake of Brexit, the UK has sought to expand its international trade with a series of FTAs and India is a key target of these efforts. So, expect the UK to be eager to reach an agreement quickly, potentially offering additional concessions to do so. Despite eagerness to reach a deal, negotiations may stall on the issue of agricultural exports. Shares of UK agricultural exports have fallen dramatically in the last 20 years, and the government has expressed hesitance regarding any reduction in tariffs or barriers on agricultural products. As such, expect the majority of contention to be focused on this area.
Source: Foreign Brief
Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal, today said that India will continue to be a voice for the common citizen of developing countries and emerging market economies in the G20. He was briefing the media on the outcomes of Prime Minister, Shri Narendra Modi’s participation in the recently concluded 16th G20 Summit, in Italy today. This was the Prime Minister’s 8th G20 Summit since 2014 and 1st in-person Summit since the Osaka Summit in 2019. The theme of Summit under Italian Presidency was ‘People, Planet, Prosperity’, with an overarching theme of recovery from the pandemic across pillars of health, economy, employment & education & tourism, and climate action. The Prime Minister participated in all 3 Summit Sessions- on Global Economy and Global Health; Climate Change and Environment and Sustainable Development. The Leaders adopted the Rome Declaration at the Summit. Shri Piyush Goyal expressed his satisfaction at the recognition of COVID-19 immunization as a global public good by the G20, and at the extension of G20 Debt Suspension Service Initiative (DSSI) till the end of this year, which would result in debt deferment of $ 12.7 bn between May 2020 and Dec 2021, benefitting 50 countries. Speaking of Agriculture, Shri Goyal said that India had pushed and obtained consensus on improving the livelihoods of small and marginal farmers. On energy and climate, instead of only focusing on the climate goals, India along with other developing countries was able to introduce language on what actions need to be taken including by developed countries to achieve these goals. For the 1st time, the G20 identified sustainable & responsible consumption & production, along with provision of finance & tech as “critical enablers” for achieving climate goals of keeping 1.5 degrees within reach This is line with PM’s vision of promoting the mantra of sustainable lifestyles all over the world. Sustainable consumption and responsible production patterns is coming from SDG 12, and is aimed at encouraging developed countries to reduce their luxurious energy intensive lifestyles Shri Goyal said that India has pushed for the inclusion of the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), enshrined in the UNFCCC and its Paris Agreement, as the basis for climate action. “India pushed for an explicit recognition that the goal of developed countries making available $100 Bn per annum through 2020 has not been achieved, is expected to be met no later than 2023”, he added. Shri Goyal also spoke of the G20’s commitment to mobilise international public and private finance to support green, inclusive sustainable development and the commitment to put an end to the provision of international public finance for new unabated coal finance abroad by end of 2021 He said that the G20 also emphasized the importance of maintaining undisrupted flows of energy from various sources, suppliers and routes. He spoke of the need for exploring paths to energy security and stability of energy markets. The Minister said that language on recognizing the role of Coalition for disaster resilient infrastructure (CDRI) in accelerating the agenda of sustainable urban planning was also introduced. Underscoring the achievement of the G20 framework on base erosion and profit sharing, Shri Goyal said that it was a historic accomplishment for a more stable and fairer international tax system The Minister said that the G20 had acknowledged the importance of shared standards for seamless travel including testing requirements & results, vaccination certificates & mutual recognition of digital applications. “G20 reaffirms the role of data for development”, he added. Shri Goyal said that India also pushed for language on ending gender-based violence and increasing women’s participation in the workforce; also language denouncing uneven distribution of unpaid care and domestic work.
Source: PIB
The PM, according to the foreign secretary, stressed the need for resilient global supply chains, "one health, one earth" and collaboration for research and development in the health sector. The PM also referred to the global corporate tax--an idea he had presented at the 2014 G20 summit. Prime Minister Narendra Modi said India would be a reliable partner for G20 states as they look to revive their economies, citing reforms undertaken by his government and the country's resilient supply chains in the IT and BPO sectors. The pitch was made by the PM during his intervention at the opening session of the Rome G20 summit on Global Economy and Global Health on Saturday, according to foreign secretary Harsh V Shringla. Briefing reporters following the session on day one of the summit, Shringla said Modi underlined India's reforms as well as ease of doing business. The PM, according to the foreign secretary, stressed the need for resilient global supply chains, "one health, one earth" and collaboration for research and development in the health sector. The PM also referred to the global corporate tax--an idea he had presented at the 2014 G20 summit. On the sidelines of the summit, Modi met the presidents of the US and France as well as the Singapore premier. It is understood that, during a brief exchange with Joe Biden, the two leaders focused on taking forward their conversation during the PM's September US visit, Shringla said. Modi also accepted Biden's invite to be part of the supply chain initiative meeting in Rome on Sunday evening. Earlier, the G20 finance and health ministers could not reach agreement on a separate financing facility proposed by the US and Indonesia, but said a task force on future pandemics among other matters would explore options for mobilising funds to boost preparedness, prevention and response. Mutual Recognition of Travel Docs The ModiBiden chat on the sidelines of the summit carries on the momentum from their earlier meeting in Washington in September. The meeting with French president Emmanuel Macron will serve to reinforce the strategic partnership between the two countries, especially in the backdrop of the founding of AUKUS. With the Singapore PM, Modi discussed international travel, among other issues. the grouping has endorsed India's position that extensive Covid-19 immunisation is a global public good. India was happy to get the support of the other G20 members for its suggestion on mutual recognition of travel documents, including testing and vaccine certificates, he said. On the issue of sustainable development goals (SDGs) and food security, Goyal said India has emphasised that policies must protect the interests of small and marginal farmers, and conserve local food cultures. This in turn will significantly contribute to food security. Goyal said on climate change and environment, India stressed the need for critical enablers to galvanise global climate action that includes commensurate, long-term, concessional climate finance, access to affordable and sustainable technology and a commitment to adopt sustainable lifestyles, responsible consumption and production patterns, besides the importance of meeting SDG-12 targets, especially by the developed countries. On the issue of the post-Covid economic recovery, he said, as co-chairs of the G20 Framework Working Group, India will ensure that there is no premature withdrawal of support to the most vulnerable sections. The G20 has agreed to extend the Debt Service Suspension Initiative until the end of 2021, thereby giving some breathing space to those in need around the world. Goyal added that on the issue of tax reforms, India has pushed the G20 to address the mismatch between the source of generation of profits and the jurisdiction where they are taxed. This will ensure that large MNCs pay a minimum effective corporate tax in the country of their operation. The Italian G20 presidency has focused on the three broad pillars of "people, planet and prosperity." Pressing issues such as health, food security, agriculture, climate change, social protection, gender equality, the digital economy and post Covid travel have been deliberated upon ahead of the summit.
Source: Economic Times
The textile industry needs to find ways to thrive without environmental damage Thanks to e-commerce and the ease of business it facilitates, the textile industry has grown remarkably. Fast fashion that captures popular imagination dictates that new trends must hit the market virtually every day. But the glitter and glam come with a heavy toll on the environment. Historically, apparel brands and textile manufacturers have been guilty of using large volumes of water for dyeing, washing, and printing. Add to that the post-consumer waste choking landfills, waterbod A circular economy has emerged to help the textile and garment industry prosper without excessive environmental damage. The Circular Apparel Policy Innovation Lab, a project of the Delhi-based think tank Centre for Responsible Business (CRB), stresses on a circular economy in which materials and energy circulate in loops within the value chain. It is opposed to the take-make-dispose linear system. Over the last decade the water used for dyeing has been cut by 40-50 per cent. And textile clusters are considering using treated municipal water to reduce the use of freshwater. But more needs to be done. Says Ramanuj Mitra, Senior Programme Officer at CRB: “Brands and manufacturers are taking cognisance of the problems, especially those created by fast fashion. Brands have skilling programmes for workers. R&D has yielded better technologies. There is now carbon dioxide-based dyeing, where water is not required.” But the word “sustainability” is often used as a greenwashing tool. Says Ananthoo, cofounder of Tula India, a sustainable brand: “There are brands which claim to be sustainable but only use 5 per cent organic cotton while the rest is BT cotton, harmful for the environment.” At the Tirupur textile and garment cluster, near Coimbatore, a zero liquid discharge regulation is in force — about 96 per cent of the process water, salts and dyes is recovered. Such innovations must be replicated. But, more importantly, customers must insist on sustainable clothing. They must also think twice before discarding clothes and going on a buying spree. Being eco-friendly must become trendy.
Source: The hindu Businessline
FDI in India in 2020-21 was $54,927 million compared $ 56,006 million in to 2019-20, as per the Reserve Bank of India (RBI) data. Earlier in October, finance minister Nirmala Sitharaman was in the US to attend the World Bank and International Monetary Fund (IMF) annual meet in Washington as well as a meeting of G20 finance ministers and Central Bank Governors (FMCBG). Sitharaman discussed investment opportunities, reforms in India and other related issues during her meeting with global corporate leaders. The meetings included discussions on foreign collaborations opportunities in India, as well as attracting foreign direct investment (FDI) in the next five years under National Monetisation Pipeline (NMP) through investment in strategic sectors, including telecom. The outbreak of the Covid-19 pandemic ravaged economic activities across the globe. Expectedly, foreign investments globally took a hit last year. According to United Nations Conference on Trade and Development’s (UNCTD’s) World Investment Report 2021, the pandemic caused a dramatic fall in foreign direct investment in 2020. The report found that global FDI flows dropped by 35 per cent to $1 trillion, from $1.5 trillion in 2019, almost 20 per cent below the 2009 trough after the global financial crisis. “FDI in developing economies decreased by a more moderate 8 per cent, mainly because of resilient flows in Asia. As a result, developing economies accounted for two thirds of global FDI, up from just under half in 2019,” the report found. FDI in India in 2020-21 was $ 54,927 million compared $ 56,006 million in to 2019-20, as per the Reserve Bank of India (RBI) data. Inflows to Asia in 2020 stood at US$ 535 billion in the same year, according to UNCTD’s data. FDI into China increased, by 6 per cent, to $149 billion. South-East Asia saw a 25 per cent decline, with its reliance on GVCintensive FDI an important factor, UNTCD data shows. “FDI flows to India increased, driven in part by M&A (mergers and acquisitions) activity,” the UNCTD report said. Experts echo the UNCTD finding that India managed to largely remain out of falling FDI trends witnessed globally. “India bucked the trend of slowing investments in 2020. FDI grew strongly even as growth in global FDI fell due to the pandemic. One of Deloitte India’s recent surveys suggests that many investors continue to find India as an attractive destination for FDI,” Rumki Majumdar, economist, Deloitte India said. In a recent report, Deloitte has found that that India remains an attractive destination for investments, scoring highly for its skilled workforce and prospects for economic growth. The survey for India’s FDI Opportunity report spoke to 1,200 business leaders of multinational corporations in the US, UK, Japan and Singapore. The report found that although there was significant crossover, more business leaders, especially in Japan, were making investments in India for access to the domestic market rather than using India as a springboard for exports. Business leaders rated India higher on economic growth and skilled workforce, the report found. While India is perceived as both politically and economically stable, it scored lower on institutional stability i.e., regulatory clarity and efficient judicial redress and mechanisms. “Inadequate infrastructure was another negative factor cited by existing and potential investors. The survey predated the government’s recent decision to rectify the long- running retrospective taxation issue with an amendment in the tax law, a significant boost for investor confidence,” the report found. Measures such as changing of FDI rules, income tax surcharges on foreign portfolio investors, and Supreme Court’s AGR ruling have helped improve investor sentiments, but there is low awareness amongst global investors about the recent reforms. According to Deloitte’s survey, the US business leaders are more likely to be aware of recent programmes but investors from other nations are not as informed. “Seven industries can attract FDI — electronic goods, pharmaceuticals, textile and apparel, food processing, automotive and auto parts, chemicals and APIs, and capital goods. These sectors have the potential to grow in size as well as cater to the export markets. India, according to our research, can target an additional US$1 trillion of merchandise exports in the next five years by attracting higher FDI into these sectors through concerted efforts,” Majumdar said.
Source: Outlook India
Duroflex, the second largest mattress brand with around 20 per cent market share, is on course to become a Rs 1,000-crore brand this fiscal, beating its own target of doing so next year, on the back of a better-than-expected economic recovery and the resultant demand boom in the first half of the year. Last November, the Alappuzha, Kerala-based company had told PTI that it was expecting to cross the Rs 1,000-crore topline milestone by FY23, as the economy was just stuttering out of the first wave of the pandemic. Even though the second wave was much more debilitating in terms of loss of lives and for the unorganised economy, discretionary spending has been growing as the economy wasn't totally shuttered during the second wave. "Our topline has already crossed Rs 450 crore in H1 of the current fiscal, as against Rs 600 crore in full FY22 and just about Rs 190 crore in H1FY22 which was ravaged by the pandemic. Going by the demand boom, I am confident that we'll be able to cross or touch the Rs 1,000-crore revenue milestone this fiscal itself because our volumes are already much more than the pre-pandemic level," Mathew Chandy, the managing director of Duroflex, told PTI on Sunday from his Bengaluru-headquarters. On sales in the first half of the fiscal, he said the company has already sold 10 lakh units worth over Rs 450 crore, (as there was unsold inventory last year), which is more than 50 per cent higher than the full fiscal last year. In FY20, its revenue stood at Rs 500 crore. The company, in which private equity firm Light House invested Rs 160 crore two years ago for a 24 per cent stake, has capacity to produce over 10 lakh mattresses annually, up from 7 lakh units earlier, with the Rs 50-crore plant in Indore last November, which is the largest mattress plant in the country producing 1,000 units a day. Earlier this month, Duroflex and its online-only subsidiary Sleepyhead had raised USD 60 million from Norwest Venture Partners for an undisclosed equity share. Chandy said the projected revenue will include those from its fully-owned subsidiary Sleephead, which is its digitalonly sales brand launched four years ago, headed by his cousin Mathew Joseph. Chandy further said the larger-than-expected revenue forecast is also aided by better sales from the Central and Northern markets, which are primarily served by the new Indore plant now. Of the Rs 1,000-crore group topline, Sleepyhead, the direct to consumer brand targeted at younger generation, is expected to contribute Rs 180 crore this year, Joseph said. On profitability side, Chandy said the group makes around 10 per cent gross margin, with Sleepyhead fetching a bit more. Of total sales, as much as third comes online, led mostly by Sleepyhead, Joseph said, adding 10 per cent comes from exports, wherein the global furniture major Ikea is the biggest client chipping in with over 10 per cent of the export volume. Chandy said they intend to double the export component of the revenue next year. On capex, Chandy said they have Rs 100-crore capacity addition plan over the next 6-9 months. While the Indore expansion is underway as greenfield project, the new immediate capacities will come up as brownfield expansion at the Hosur plants where it has three plants and in Hyderabad. That apart it has an assembly centre in Mumbai. The Hyderabad plant is the main plant now where mattresses are made while in the plant in Devas near Indore foams and other inputs are made. The 36,000-metric tonne per annum Devas plant also supplies to materials to furniture makers like Ikea. The Alappuzha-based Chandy family, which owns 70 per cent in Duroflex, is also planning to take the company public over the next five years, the second generation Chandy said. He said Duroflex, which operates under the labels of Duroflex and Sleepyhead, is the second largest mattress brand in the country with a tad less than 20 per cent market share and have over 170 million customers, after Sleepwell which has around 25 per cent of the 5-million units per annum branded mattress market market pie. Of the total market share 25 per cent comes from the South. At the third slot is Culron. The company began operations in the early 1960s in Alappuzha and then moved the headquarters to Bengaluru. Currently Duroflex has 24 experience centres with the recent additions in Kolkata, Gurugram, and Mumbai and will soon be launching nine more experience centres this week. Duroflex uses German foaming technology and was the first to launch the first doctor-recommended orthopedic mattress under the brand name of Duropedic.
Source: Economic Times
Bilateral trade between Cambodia and South Korea in the first nine months of 2021 was worth $720.52 million, down by 18.6 per cent from $885.32 million in the same period in 2020, as the recently signed Cambodia-Korea Free Trade Agreement (CKFTA) raises fresh hopes for an uptick in trade between the two countries. In the January-September period, the Kingdom exported $259.08 million, dipping by 18.55 per cent year-on-year, and imported $461.43 million, falling by 18.64 per cent, data from the Korea International Trade Association (Kita) show. The CKFTA was signed on October 26 by Minister of Commerce Pan Sorasak and his South Korean counterpart Yeo Han-koo. The agreement is expected to boost exports and employment opportunities, and increase the gross domestic product (GDP) and aid a quick recovery as the two economies emerge from the Covid-19 crisis. Through the deal, Cambodia hopes to ship more merchandise to the Korean market, especially garments, footwear, bags and other textile-based products; electronics and spare parts; rubber and agricultural products. Cambodia Chamber of Commerce vice-president Lim Heng told The Post on October 31 that domestic productions chains would face lingering Covid-induced problems throughout this year, and that Korean imports would remain contained. Acknowledging that Cambodian exports often fall short of consumer demand, Heng believes that the CKFTA will make up a fair amount of that deficit. “The bilateral trade agreement will not only help attract Korean companies to invest in Cambodia, but some foreign companies that produce for export to the Korean market may open factories as well,” he said. Hong Vanak, director of International Economics at the Royal Academy of Cambodia, underlined that the Covid-19 crisis had slowed down some production chains and reduced demand for some products as people’s incomes fell. By the same vein, Korean investment in Cambodian production for export to the East Asian country remains limited, he said. Although he expects the CKFTA to buoy trade between the two countries, Vanak called on Cambodia to woo more Korean investors and explore how to produce goods that will command high demand in South Korea, noting that consumers there are exposed to a wide range of products. Cambodia mainly exported garments, footwear, travel products, beverages, spare parts, electronics, rubber, pharmaceutical and agricultural products, and imported vehicles, electronics, kitchen appliances, beverages, pharmaceuticals and plastics, Kita reported. Under the CKFTA, coupled with the Regional Comprehensive Economic Partnership (RCEP), the Kingdom will lift tariffs on 93.8 per cent of goods traded, with South Korea scrapping duties on 95.6 per cent, Yonhap News Agency reported on October 26 citing the South Korean trade ministry. And according to Ministry of Commerce spokesman Pen Sovicheat, the trade deal would provide more than 10,000 Cambodian goods duty-free access to South Korea. Kita figures show that Cambodia-South Korea trade amounted to $884.88 million in 2020, from $1.032 billion in 2019. Cambodia exported more than $317 million of goods to the South Korean market in 2020, down by 5.4 per cent year-on-year, and imported over $567 million, plunging by 18.6 per cent over 2019.
Source: Phnom penh Post
Pakistan Hosiery Manufacturers and Exporters Association (PHMA)'s Zonal Chairman, Mian Kashif Zia welcomed the decision of Advisor to the Prime Minister on Commerce, Textiles and Investment Abdul Razak Dawood to reduce the duty on yarn import in Sunday's zoom meeting for value added textile Sector. He said that this would not only reduce the price of yarn but also help in controlling the availability of yarn as well as speculation. He said that at present the prices of yarn are out of control, which is not only affecting our export orders but also creating a volatile situation in the market. He lauded the Prime Minister of Pakistan Imran Khan and Advisor to the Prime Minister on Commerce, Textiles and Investment Abdul Razak Dawood and said that they have always tried to solve the problems of value added textiles on priority basis.He hoped that a notification on reduction of duty on yarn import would be issued soon
Source: Business Recorder
Speakers at a webinar today said that the African continent has huge investment opportunities, but the trade share of Bangladesh with that continent is remarkably very low due to lack of PTA/FTA, tariff, non-tariff barriers and infrastructures. The speakers came up with the view at a webinar on "Trade & Investment Cooperation of Africa and Bangladesh: Towards a new Trajectory" held today on the 5th day of Bangladesh Trade & Investment Summit 2021 organized by the Dhaka Chamber of Commerce and Industry (DCCI), said a press release. Speaking on the occasion as the chief guest, Planning Minister MA Mannan said that opportunities for the Bangladeshis are also there as well since there is a win-win chance of trade. "The private sector needs to be aggressive to invest both at home and abroad. Food processing and agriculture have good prospects there. We have to grab the market," he added. Mentioning that the Bangladeshi entrepreneurs are now entering into the African market, Mannan suggested for investing more in that region. Special guest of the webinar AHM Ahsan, Vice Chairman and CEO, Export Promotion Bureau (EPB) said African trade with the rest of the world in 2020 was $888 billion accounting only three percent of total global trade. He said in the last year, the intra-African trade volume was $133 billion which is heavily influenced by African Growth and Opportunity Act (AGOA) and Common Market for Eastern and Southern Africa (COMESA). "Our trade with Africa is significantly low compared to other region. Bangladesh exports only to 5-6 countries of Africa. Their high import tariff is an obstacle to increase export. But, the services sector is a potential sector for investment," he said. DCCI President Rizwan Rahman in his presentation said that the bilateral trade is about $1.5 billion between Bangladesh and Africa having positive trade balance for Bangladesh while the export trade of Bangladesh to Africa accounts for 1.02 percent of the country's total export. "The African investment in Bangladesh was recorded only $306 million. Bangladesh may invest in manufacturing and agricultural sectors of some African countries. Bangladeshi investors can invest in African Growth and Opportunity Act (AGOA) and can expand export to the US market for strategic market sustenance." He added. Md. Tarikul Islam, DG Africa Wing, Ministry of Foreign Affairs said African investment to Bangladesh is not remarkable due to their restrictions over foreign investment. "But textiles, pharmaceuticals, footwear, RMG, leather, paper and pulp, ship breaking and agriculture are some of the sectors where they can invest. Visa process for African investors will be eased," he informed. Abdus Samad Al Azad, Joint Secretary, Ministry of Commerce said that there is a huge opportunity of outward investment from Africa. "We need to work more to sign FTA or PTA with the African countries," he added. -Muhammad Zahangir Alam, Director, Square Pharmaceuticals Ltd and M Mosaddek Hossain, Managing Director, UniMed UniHealth Pharmaceuticals Ltd also spoke at the webinar.
Source: The Independent
The government has rolled out the 10th round of economic relief measures to manage the impact on key sectors from Covid-19 and the ongoing recovery process, and bolster economic growth during and after the crisis. Economists, however, say the move does not do enough to stimulate domestic growth. The support measures centre on the severely-hit textiles, garments, footwear, travel goods and tourism sectors, aiming to keep businesses afloat in the fourth quarter of this year as the pandemic drags on, according to a government statement on October 28. The government in October-December will continue to provide $40 per month to suspended workers in these sectors as part of its cash handout programme amid the pandemic. The aid, however, will only be available to workers of businesses that meet the legal criteria to suspend employment contracts and have received the necessary permits from the Ministry of Labour and Vocational Training. Factory owners must add $30 to the handout, increasing the total disbursement to $70. Employers in the tourism sector, on the other hand, are encouraged to voluntarily provide as much money as possible. Additionally, hotels, guesthouses, restaurants and travel agents registered with the General Department of Taxation will be exempt from taxes for the fourth quarter. The obligation to pay monthly contributions into the National Social Security Fund (NSSF) for occupational risk and healthcare schemes will also be waived during any period of business suspension over October-December. The government has also extended the minimum tax exemption for domesticallyregistered airlines and allowed them to defer civil aviation fee payments, in the fourth quarter. The statement said the 10th round aims to further reduce the socio-economic impact of the Covid-19 crisis, and rehabilitate and prop up businesses in the context of the gradual reopening, which is engineered in line with the “new normal”. Royal Academy of Cambodia economics researcher Ky Sereyvath described the latest round of measures as part tax reduction policy, and part fiscal policy that is tailored to shift costs and help boost economic growth. However, the outlined spending measures would likely not stimulate economic growth as much as public expenditure, Sereyvath told The Post on October 31. On the other hand, the government could be looking to ensure adequate revenue generation that does not deviate too far from pre-Covid performance, he said. He lauded the fresh round of stimulus measures as “a right and equitable strategy” for the society, which he said shows that the government “still stands behind and supports the people no matter the situation”. The extended tax breaks for the tourism and aviation sectors promote employment in the country and the re-establishment of flights, he said, claiming that the waivers of NSSF payments would also encourage unemployed workers. "The Cambodian government does not have a policy on this subsidy, but they can set a separate budget," he said without elaborating. Pacific Asia Travel Association Cambodia chapter chairman Thourn Sinan welcomed the government's continued assistance to workers employed in the fields of tourism, as well as garments and textile-based products. He said the stimulus measures are focused on relieving some of the burden on workers and employees in these areas. Even as Cambodia reopens most domestic services and forges ahead with plans to welcome vaccinated international tourists in the near future, the aforementioned sectors are still reeling from Covid-19, he said. "What the government should consider doing is to provide financial assistance or low interest loans to business owners or tourism businesses to prepare for the return of tourists in the future,” Sinan said. “That would last longer."
Source: Phnom penh Post
ndonesia, there is a strong culture of respect and helping one another as neighbours. There is a proverb - "a good neighbour is a priceless treasure" - which I believe best describes the relationship between Indonesia and Singapore today. Being assigned in Singapore for nearly a year now, I have seen this proverb in action, with both countries supporting each other throughout the Covid-19 pandemic. Although 2020 proved to be a tough year, we are optimistic that Indonesia will bounce back stronger, with encouraging signs of economic recovery such as the 7 per cent yearon-year growth in Q2 2021. To boost economic recovery, the Indonesian government has provided assistance to businesses, such as extending tax incentives for qualifying entities and setting aside 699.4 trillion rupiah (S$63.5 billion) under the National Economic Recovery programme to roll out support packages for healthcare, social protection and businesses. There are some silver linings arising from Covid-19. One of the most significant developments has to be the rapid pace of digital transformation across all sectors. Since the start of the pandemic, years-long digital transformation road maps have been compressed into days and weeks as governments, businesses and individuals adapt to the new normal. During this period, Indonesia's digital economy expanded by 11 per cent to US$44 billion in 2020. Indonesians are also increasingly accustomed to conducting more day-to-day activities online, with the number of Internet users increasing by 16 per cent year-on-year to reach 202.6 million in the first quarter of 2021.
Build trust in digital systems
To support this growth, Indonesia continues to boost digital connectivity, improve telecoms infrastructure and build trust in digital systems. We are encouraged that Indonesia and Singapore have forged close and mutually beneficial collaborations in these areas, through the growing of tech talent and IT-related services in Nongsa Digital Park and data centre projects by SpaceDC, Keppel and ST Telemedia, and welcome more Singapore companies to collaborate with Indonesia to strengthen our digital ecosystem. Covid-19 has also caused disruptions to supply chains and manufacturing activity. This has prompted Indonesia to build resilience in its supply chains, and drive innovation and technological transformation to strengthen the manufacturing industry. Indonesia was the partner country spotlighted at this year's Hannover Messe, and we will continue to pursue the "Making Indonesia 4.0" strategy to revitalise our essential food and beverages, textiles and clothing, automotive, electronics, and chemical sectors. Indonesia is also participating in the Industrial Transformation Asia-Pacific event in Singapore this November, and we welcome more Singapore and Indonesia companies to explore cross-country collaborations in the manufacturing sector through this platform. In particular, we see good potential for such collaborations in the semiconductor industry. Indonesia has placed a stronger emphasis on building up semiconductor production capacity and capabilities, given the ubiquity of semiconductor chips in global supply chains. The recent global shortage of semiconductor chips also had ripple effects on many industries, such as automotive and electronics manufacturing, causing manufacturers to stall production. As companies strengthen the resilience of their supply chains, Indonesia hopes to attract more investments into semiconductor production. Covid-19 has not hindered our commitment to achieve a more sustainable energy mix. We have ambitious targets to have renewables meet 23 per cent of our energy needs by 2025, and to reduce emissions by 29 per cent by 2030. To ensure affordable and sustainable energy supply, we plan to convert fossil energy plants into renewable energy plants, increase use of biofuels and solar panels, and develop more hydropower and geothermal energy projects. We are also preparing a Presidential Regulation on renewables tariffs to encourage greater use of renewable energy. It will take close cooperation from all stakeholders, including the government at central and regional levels, businesses, academics and the community, to develop the renewable energy sector in Indonesia to meet our sustainability goals. To this end, we are encouraged to see Singapore companies such as Sunseap and Sembcorp Industries that are participating in Indonesia's green energy sector through plans to build solar farm projects. We welcome more Singapore companies into Indonesia.
Ease of doing business
As the largest economy in South-east Asia, with a relatively young population with strong buying power and abundant natural resources, Indonesia has many factors that make it an attractive market. The government recently enacted the Omnibus Law on Job Creation to streamline the process for foreign companies to set up their business in Indonesia. We also launched the Online Single Submission system in August 2021 to simplify business licensing in Indonesia. Through this online platform, the process to get a business license has been significantly reduced from several days to a few hours. Our government agencies continue to provide updates on policies and regulations on our online platforms, making it easier for investors to find information on business opportunities in Indonesia. The Indonesian Embassy has also established weekly Business Connect sessions in collaboration with the Singapore Business Federation (SBF) to help Singapore businesses better understand market opportunities and related regulations in Indonesia. In the last 5 years, Singapore has been one of Indonesia's top and major partners in investment, and we are pleased to note that even amid the pandemic, investments from Singapore continued to increase more than 30 per cent in 2020 from the year before. We work closely with Enterprise Singapore (ESG) to support Singapore companies' interests to trade and invest in Indonesia. Besides evergreen sectors such as infrastructure and manufacturing, we see rising interest in tech innovation, given Indonesia's flourishing digital economy. Through its Global Innovation Alliance in Jakarta, ESG supports various Singapore startups such as ACKTEC which are looking to enter Indonesia, and Indonesia startups that are keen to partner Singapore to grow globally. We invite more Singapore and Indonesia companies to leverage this network to deepen our collaboration in technology and innovation. Despite the pandemic, we continued to engage Singapore and Indonesia companies through regular virtual business events co-organised with ESG and SBF, such as the Indonesia Investment Webinar Series. Companies can look forward to more of such events in the coming months, including at the Singapore Week of Innovation andTechnology from Nov 8 to 12, which includes an Indonesia Market Access session to help companies understand market opportunities and engage Indonesian counterparts. Indonesia and Singapore share deep and long-standing ties, as well as mutual trust and respect. We look forward to strengthening this relationship, including among our businesses, as we move towards post-pandemic economic recovery.
Source: Business Times
