INTERNATIONAL
Ahead of the Union Budget, the Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), Association of Synthetic Fibre Industries (ASFI) and Association of Manmade Fibre Industries (AMFI) has demanded reduction in excise duty on man-made fibres (MMF), according to an agency report. "We have urged the government to reduce excise duty on man-made fibres in line with growing neighbouring economies like China, Vietnam, Bangladesh and Thailand. "Backed by Ministry of Textiles and Department of Chemicals & Petrochemicals, all textile bodies in India have demanded reduction in the much needed relief to this industry," they said in a joint statement. SRTEPC welcomed the changes announced by the Centre in duty drawback scheme, which will help boost exports. The Centre has notified certain changes in all industry rates of duty drawback effective from today. New entries in the drawback schedule have been created for cotton yarns mixed with Man Made Fibre (MMF) - both grey and dyed. It has also increased the drawback caps in the case of certain MMF fabrics. "We highly appreciate the step taken by Ministry of Finance. However, India's exports of MMF textiles can increase to $10 billion from the present $6 billion if the excise duty on MMF, are reduced," SRTEPC chairman Anil Rajvanshi said. On the 3 per cent interest equalisation scheme, Rajvanshi lauded the Centre for initiating necessary steps to implement the scheme smoothly.
With regard to exports of man-made textiles, he said even though Indian man-made textiles products are preferred in international markets, these remain non-competitive in the world markets, owing to high burden of excise duty which has restricted the product development. Vietnam exports $27 billion worth of textiles, which are largely produced from man-made fibres. Despite having two of the world's largest producers of man-made fibres in India, India's exports of sportswear and leisurewear is not even 5 per cent of Vietnam's.
SOURCE: FIbre2fashion
In a boost for textile export, the government has included blended cotton yarn (both grey and dyed) for the benefit of duty drawback. In a notification early this week, the Directorate General of Foreign Trade under the ministry of commerce and industry said yarn (other than sewing thread) with less than 85 per cent of cotton and not for retail sale (grey and dyed) would attract duty drawback of three per cent (cap per unit of Rs 11.50) and 3.6 per cent (cap per unit of Rs 19.30), respectively, if the central value added tax (Cenvat) facility is not availed of by exporters.
Exports which have availed of the Cenvat facility on blended yarn (with less than 85 per cent cotton would get a duty drawback benefit of Rs 1.2 per cent (cap per unit of Rs 4.60) on grey and 1.2 per cent (cap per unit of Rs 6.40) on dyed. This means cotton yarn with up to 15 per cent man-made fibre (MMF) would get duty drawback. “This is a welcome move. Unlike earlier, synthetic yarn manufacturers would also get the benefit. The move would also help raise synthetic yarn production,” said R K Dalmia, Chairman of The Cotton Textiles Export Promotion Council.
The Council had urged the government to include synthetic yarn under the duty drawback scheme, to boost its export. The move would also address anomalies in the MMF segment. However, some clarity is needed in the product coverage with regard to the classification of some high- valued items like “boiler suits” and “protective wear made of blend containing cotton and manmade fibres”, technical textile products, for which the market is growing.
On the interest equalisation scheme of three per cent all across, the government has largely resolved the problems faced initially by some exporters in getting the benefit from their banks. However, some discrepancies continue with Indian cotton textile products in the world markets, with preferential treatment to competing nations like Bangladesh, Cambodia, Pakistan, South Korea, Turkey and Vietnam by major importers like the European Union. Beside discriminatory import duties on Indian textiles in important markets like China, Turkey and Canada. Due to this preferential access, Indian exporters do not get global market access. Representative bodies on synthetic textiles and raw materials, including the Synthetic & Rayon Textiles Export Promotion Council (SRTEPC), Association of Synthetic Fibre Industries and Association of Manmade Fibre Industries, have urged the government to reduce excise duty on MMF. Currently, six per cent excise duty is levied on MMF with Cenvat facility but none on producers that have not. SRTEPC chairman Anil Rajvanshi says he expects India’s MMF textile export to touch $10 billion (Rs 68,000 crore) in a couple of years, from the current $6 bn, if excise duty is exempted.
SOURCE: The Business Standard
100 per cent man-made fibre yarns export from India was at 6.1 million kg in December 2015, down 19.63 per cent as compared to December 2014 and the total comprised 2.90 million kg of polyester yarn, 2.53 million kg of viscose yarn and 0.68 million kg of acrylic yarn. Polyester yarn exports were down 23.1 per cent in value YoY while viscose yarn exports were up 6.3 per cent as compared to the same period last year. Acrylic yarn exports saw a drastic plunge of 57 per cent in December. Unit price realization was down US cents 39 a kg for polyester from a year ago and that of viscose yarn was down US cents 3 a kg. Acrylic yarn unit price realization was up US cents 56 a kg year on year basis. Polyester spun yarns were exported to 45 countries in December and a total of 2.9 million kg was exported, of which, 14.7 per cent was shipped by Turkey alone. Five new destinations were found for polyester yarn this December, of which, Nigeria, Peru, Spain and Mexico were the major ones. Pakistan, Italy and Germany were the fastest growing markets for polyester yarns while nine countries did not import any polyester yarns during the month. Viscose yarn export was at 2.53 million kg and they were exported to 19 countries with Bangladesh at the top and followed by Belgium. Both these markets accounted for 48 per cent of all viscose yarn exported in December 2015. Bangladesh, Italy, USA and Algeria were the fastest growing markets for viscose yarns while Portugal, Mauritius, China, Guatemala and South Korea were the new major markets. Spain, Brazil, Tunisia, Vietnam and Poland were the major ones among the 14 countries that did not import any viscose yarns during the month.
SOURCE: Yarns&Fibers
The Gram Panchayat of the Kozhikode District of Kerala, Kudumbasree, has launched a very innovative plan of boosting the textile sector in the district.This novel idea is Vastramandala. It is a syndicate of two apparel manufacturing units and one mother satellite unit in the constituency under Kudumbasree. The units have been named Calico Designs and Calico Fashions. The purpose of the conglomerate is to market the products of these apparel units under one brand, across the State. The products mainly include children’s apparel and other readymade clothes. The products will undergo strict quality check so as to compete with the top brands in the field. The project, formed by the State government, is to be implemented in select Assembly constituencies in the State after it is experimented in Kozhikode South. The Mission plans to purchase the clothes wholesale and implement a centralised storage facility in order to make the clothes available to the units at nominal rates. The Mission has plans to open similar units in the municipalities also.
Kudumbasree members who have experience in stitching, as well as their family members are part of the consortium. They have undergone training in apparel designing at the National Institute of Fashion Technology. Kudumbasree District Mission will provide them further training and acquaint them with modern technologies in the field. The products will be marketed under the Kudumbasree brand. Minister for Social Justice and Panchayats M. K. Muneer inaugurated Vastramandala, in Kozhikode on Saturday. The Minister said that the pilot project being implemented in Kozhikode South constituency will revive Kozhikode’s heritage as a textile hub.
SOURCE: Yarns&Fibers
According to Abdul Matlub Ahmad, President FBCCI, garment makers are no longer looking to set up warehouse in Gujarat but looking at West Bengal due to its proximity to Bangladesh. Abdul Matlub, who was lobbying the government for warehousing space in Gujarat, stated that facility in Gujarat will not be beneficial for Bangladesh due to the long distance. Further, the government is more interested in allocating land for setting up factories, rather than warehousing stated Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association. Setting up the warehouse in West Bengal would be commercially viable for Bangladeshi garment makers, said Ahmad. Subsequently, he proposed the idea of the warehouse in West Bengal in a business summit last month, and the state government of West Bengal also showed interest in allocating the land for the same. If West Bengal proposal goes ahead the exporters will also set up a garment park there, Ahmad said. During the Prime Minister Narendra Modi's visit to Dhaka in June last year, Bangladesh garment makers had demanded 50 acres of land in Gujarat to build a warehouse to supply apparel directly to retail shops across India. However, shift for warehousing came as Bangladesh sought to boost its annual garment exports to India to US$1 billion in three years from US$100 million now. India is a huge market for Bangladeshi apparels, as its annual retail market size is set to cross the US$40 billion-mark due to growing middle-class.
SOURCE: Yarns&Fibers
The rate of service tax could go up to a flat 16% from an effective 14.5% now in the coming Budget, but the government would try to soften the resultant blow to businesses and consumers with a broadening of the credit base and an increase in the turnover threshold for the tax net, from R10 lakh at present to Rs 25 lakh. The rate hike, in step with the need to align the service tax with the proposed GST rate of 18-20%, would still yield significant additional revenue to the government. If the tax is hiked to 16%, it would mean a rate rise of over 3.5 percentage points in a short span of nine months. Since the tax’s launch in 1994, at a rate of 5% on a small set of services, the steepest rate hike previously was in 2003-04. On June 1 last year, the rate went up from 12.36% to a flat 14% (in the process, eduction and higher-eduction cesses were subsumed in the rate) and 0.5% Swatch Bharat cess was levied on November 1.
Sources privy to the government’s thinking in the matter told FE that the practice of disallowing credit to a clutch of input services on the grounds that these inputs haven’t really been used for the relevant output services, would be discontinued. Spending on almost all intermediary services — those which are not consumed by end-consumers but by businesses for value addition — would be treated as legitimate business expenditure and allowed as credit, the sources added. The enhanced opportunities for availing credit for the taxes paid on input services would help a whole range of industries including construction and professional services firms and taxi operators, analysts said, as these businesses are now suffering from an accumulation of input tax expenses. The Budget would also take forward the policy of integrating the tax on goods and services and extending credit of service tax and excise duty across goods and services, outlined in Budget 2004 by then finance minister P Chidambaram.
Finance minister Arun Jaitley may also extend the facility of refunds on special additional duty — levied at 4% — paid on imports, which is currently being made to importer-traders to the manufacturing industry as well. A large segment of the manufacturing industry is now unable to get full credit for the SAD paid on inputs because their value addition levels are not high enough for such set-offs. The SAD — which is levied on imports in lieu of the state VAT on domestic goods — could also be reduced on number of intermediate goods, the sources said. The broadening of the credit system for taxes incurred on input services and the move to reduce the accumulation of CENVAT credit with manufacturing firms go in the direction of the proposed goods and services tax (GST). The Centre’s idea is to increase the pressure on states to embrace the GST by setting example. A seamless input tax credit system for the CENVAT chain would amount to go a long way to achieving the chief objective of the GST, that is, removing the cascading of taxes in business-to-business transactions. The raising of the turnover threshold for the levy of service tax to R25 lakh is also in line with the GST, which could also be levied on businesses above that level, bringing several thousands of small manufacturing units into the tax net (excise duty is currently levied on firms with annual turnover of R1.5 crore and above). The government had moved to the negative list approach for taxing services — which means all services except a select few are taxed — in July, 2012. With the tax being comprehensive and the rate hiked, it has budgeted for a 25% increase in service tax collections this fiscal to R2.1 lakh crore and this target seems about to be achieved.
SOURCE: The Financial Express
Confirming the Government’s initiative to boost the textile sector, Textile Commissioner Kavita Gupta, said that the government is planning to revive textile parks currently remained un-operational. The government is committed to extend all possible supports to the textile sector to exploit the potential lies in both domestic and international markets. She also confirmed that investment won’t be hindrance to the plan. With the prediction of India's textiles exports likely to decline marginally to $40 billion this year as against $41.4 billion last year, the government looks forward to revive defunct textiles parks for which it has started drawing up plans in consultation with respective state governments. She added that they have held meetings with the ministry (of Textiles) with brief discussion on the possibility of the revival of textiles parks. They think that the plan deserves a special attention which they are ready to extend. Some developments are to be expected very soon. The government has approved 72 textiles parks so far of which 40-45 are un-operational, spread across the country. Also, the government has initiated special focus on technical textiles that have immense potential too.
Interestingly, defunct textiles parks in many cotton growing states face basic infrastructure issues like uninterrupted electricity, sanitation, availability of water, proximity with consuming market etc because of which many investors abstain from investing in textile parks. Being a labour intensive industry, textile sector is the second largest employment provider only after agriculture. Also, India exports textiles worth $40 billion annually, largely to the United States and Europe. India's textiles exports are mainly summer-wear centric with over 60% of market share. Rahul Mehta, President, Clothing Manufacturers' Association of India (CMAI) said that they have already achieved a significant market share in summer wear and achieved saturation. Now, they need to expand their product portfolio through entering into new segments where immense potential lies such as winter wear and kids' wear. With the Prime Minister Narendra Modi's increased emphasis on "Make in India", sectors that generate employment along with potential of forex earnings are expected to get a boost.
SOURCE: Yarns&Fibers
The Haryana government is keen on promoting Gurgaon, which is already an e-commerce and IT hub, as the apparel export hub in the market. Textile, apparel and handloom industries will be under the spotlight in the forthcoming investor summit, 'Happening Haryana', that will be held in Gurgaon from March 7. The state government is looking forward to luring investors for these industries at the event. P K Das, additional chief secretary, said, "We have made a mark in the apparel sector in the market. Gurgaon is the seventh largest apparel exporter in the world with a growth rate of 3.5%. I would like the city to become a brand by itself like Surat and Varanasi." Das on Saturday was speaking during a discussion on the scope of investment in the apparel industry. T L Satyaprakash, deputy commissioner; Sanjeev Raheja from CII, Chandigarh; Ashwani Gupta, additional director (Tech); S N Singh, joint director, district industries centre, Gurgaon; Vijay Mathur, additional secretary general, AEPC; and other industry members were also present at the meet. The industrialists stressed that the apparel industry was hungry for investment and faced a shortage of skilled manpower. The government should be in constant touch with the industry for easier compliance of regulations. "We are happy that 'Happening Haryana' would see the apparel sector as an area of investment. I appreciate the initiative taken by the state in taking up the industry issues. The apparel sector has its share of problems. However, with increase in investments we hope that the conditions will improve," said Ashok G Rajani, chairman, apparel export promotion council. The members of meeting also discussed the lack of skill training institutes in the state for industries such as apparel. And the fact that there is an urgent need to open more ITIs, so that there is a sufficient number of employable people taking up entry level jobs in the industry.
SOURCE: The Times of India
The Maharashtra government, which has already announced 14 textile parks in the state, on Sunday invited businessmen to invest in the sector. "We seek investment in textile parks in a big way. We have already announced 14 textile parks and one mega textile cluster in major cotton growing region in the state," Maharashtra Chief Minister Devendra Fadnavis said on the sidelines of Make in India (MII) Week here. The state also plans to set up 10 new mega textile hubs and new garment park at Solapur and Nagpur. Fadnavis assured the industry with more policy support and ease of doing business. "Global economic slowdown has given us an opportunity to increase our market share in the world market at 5% as compared to over 30% of China. We need to do everything in coming years," Fadnavis added.
According to the CM, Maharashtra continued to remain an industrial powerhouse. "The state contributed 15% to the national GDP, has the highest exports, and highest FDI inflows. With Make in India, (the) Make in Maharashtra initiative has also started," he said. The state's textile industry is the largest employer and it has the largest area of around 41.92% under cultivation for cotton. Out of 18,709 industrial projects approved from August 1991 to October 2014, 10.6 per cent belongs to textile sector, only next to chemical and fertiliser sector. The state has 78 lakh bales cotton production capacity and 25 lakh bales are processed to manufacture yarn. Meanwhile, on ease of doing business, Fadnavis said Maharashtra has brought down the number of permissions required for setting up an industry drastically. To revive the textiles sector, the state government has introduced a scheme under which up to 30% of capital subsidy is granted for self financing. Capital subsidy was allowed only for those projects that were financed by banks.
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SOURCE: DNA
Government has identified as many as 150 critical projects to augment infrastructure in coastal areas under its ambitious Sagarmala project. "We have reviewed the National Perspective Plan (NPP) of Sagarmala and have identified over 150 critical infrastructure projects," Road Transport, Highways and Shipping Minister Nitin Gadkari said. The minister had recently said that about Rs 70,000 crore have been lined up for various projects under Sagarmala and would be spent on development of major ports which have received 104 suggestions from international consultants to increase efficiency. As many as 13 states and union territories are involved in Sagarmala initiative which will be implemented across India's 7,500 km coastline. Gadkari said the National Perspective Plan will be placed in front of the Sagarmala apex committee shortly for its approval.
The prime objective of the Sagarmala project is to promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively. The project aims at providing an institutional framework for ensuring integrated development, including modernisation and setting up of new ports, and efficient evacuation to and from hinterland. "Ports play a pivotal role in boosting the country's economic growth. Logistics cost has to be reduced. Our logistics cost is thrice than China's. We are not able to compete with global markets. "...ports will play huge role in double digit GDP target and port, shipping and highways sector will very soon add 2 per cent to the country's GDP," he had said chairing the Sagarmala apex committee meeting recently. The government has discussed potential for developing a world-class trans-shipment port in India and promoting the usage of coastal shipping and inland waterways for transporting key commodities like coal, iron ore, foodgrains and petroleum products recently. Last year the Cabinet had given 'in-principle' nod to the project, aimed at port-led development in coastal states.
SOURCE: The Economic Times
The government will help create an enabling environment and provide financial support to facilitate exports of telecom products, commerce secretary Rita Teaotia said. "I would like to assure the government is committed to facilitate exports to other parts of world," Teaotia said at a Telecom Equipment & Services Export Promotion Council event on Friday. Teaotia said the government will certainly engage in trade agreements with other countries to boost commerce. The government is focusing on boosting manufacturing, promoting research and development and setting high standards for products, she said.
According to analysts domestic manufacturers are not getting desirable market access in India despite the preferential market access policy that requires government departments to procure 30% locally. "Telecom sector is the second most fiercely competitive sector in India. Manufacturing is a huge segment which is growing and time is not far when Indian IP will play a role in the production of advanced telecom equipment locally," telecom secretary JS Deepak said. Telecom sector is expected to be the country's second fastest expanding sector with an annual growth rate of 15% and it will require an estimated four million skilled workers by 2022. "The ecosystem around telecom manufacturing is strengthening and multinational companies are increasingly establishing R&D centres in India," Deepak said. Indian manufacturers account for a small proportion of the market, which he said will change in future. Telecom sector, together with the government's Digital India programme, has a potential to contribute significantly to India's GDP, Deepak said. The New York-based research firm McKinsey in a recent study said that the adoption of key technologies across sectors spurred by the Digital India initiative could help boost India's GDP by $550 billion to $1trillion by 2025.
SOURCE: The Economic Times
India’s GDP numbers are very dependable and there is no “rigging” taking place with regards to data, World Bank’s Chief Economist Kaushik Basu said. Basu, former Chief Economic Advisor, also said a small slippage in the government’s fiscal deficit target would be fine in the current economic scenario. “…actually India’s GDP numbers are very dependable…You know, there are countries where it is possible to rig these numbers. First of all, that does not happen in India. The system is very open. I have seen this during my time period. “Even now, there are lots of people involved (in the process). There is no one at the top who can say that change this number or change that number. So that kind of rigging is not taking place,” he said, adding that the process is very transparent. “Given the transparency, you have reason to have enough confidence in the growth figures,” he said.
Basu was responding to questions surrounding the GDP numbers being put out by the Central Statistics Office (CSO). It has projected a growth rate of 7.6 per cent for the current fiscal, the highest in the last five years. There have been talks in certain quarters that the higher growth figures of CSO are not in tandem with what is visible on the ground. Some experts have attributed the higher numbers to change in methodology for calculating national income. “My view on Indian GDP is, given the difficulties of measurement in developing countries, (in India it is) actually being done very well,” he said in an interview to Karan Thapar on ‘To The Point’ programme on India Today TV.
To a question on deviating from the fiscal deficit target, Basu said in the backdrop global slowdown and the need to push growth, small fiscal slippages will be “fine”. “My view is in a situation like this, a small slippage is no huge fall and I think global observers will understand that it is coming from India’s urge to keep its growth rate up. “…much more is at stake on India meeting its growth rate targets than a small slippage and I am stressing, a big slippage is going to cause concern but a small slippage, I think, will be fine” Basu said. The comments are at variance with RBI Governor Raghuram Rajan’s views on the matter. Rajan had recently warned against generating economic growth through additional debt, saying that any deviation from the fiscal consolidation path will hurt stability of the economy. He had said that macroeconomic stability during global turmoil cannot be risked and the government and RBI should continue to bring down inflation. The government had last year postponed reduction in fiscal deficit target by a year. Government is targeting a fiscal deficit of 3.9 per cent of GDP in the current fiscal.
SOURCE: The Financial Express
Last Friday, the Central Statistics Office released two sets of monthly data - one for industrial output growth in December 2015, captured through movements in the Index of Industrial Production or IIP, and the other for retail inflation in January 2016, as reflected in changes in the Consumer Price Index or CPI. For December 2015, the IIP number showed a decline of 1.3 per cent over the same month of 2014 - the second consecutive monthly contraction in industrial output after the 3.4 per cent fall in November. The CPI number for January 2016 was less disturbing as retail inflation was 5.7 per cent, a tad higher than the 5.6 per cent rise in CPI seen in the previous month and 5.2 per cent in January 2015. Both the numbers have come barely a fortnight before the Union Budget for 2016-17 is due to be presented. Their sombre implications, therefore, should not go unnoticed by those deciding which policy measures would extricate the economy out of a continuing decline in industrial output, even as retail inflation has been rising - though at a mild rate, staying within the comfort zone outlined by the Reserve Bank of India (RBI).
A closer look at the data for industrial output reveals that the manufacturing sector continues to be in trouble, contracting by 2.4 per cent in December - maintaining the declining trend that was first seen this financial year in November, with a contraction of 4.66 per cent. The green shoots of recovery that many had witnessed in over five per cent growth in the manufacturing sector in the first seven months of 2015-16 seem to have disappeared, with the cumulative growth figure for this sector in the April-December period decelerating to 3.1 per cent. The contraction in December has been fairly widespread with as many as 10 out of the 22 industry groups within the manufacturing sector showing a decline in output, led by electrical machinery with a contraction of over 44 per cent. What is more worrying is that the capital goods sector, which indicates investment demand in the economy, saw a contraction of 19.7 per cent, bringing the sector's cumulative output growth to less than two per cent in the first three quarters. There was no significant respite from demand deficiency either, as the consumer non-durables sector contracted by over three per cent in December and by one per cent for the first nine months of 2015-16. Prime Minister Narendra Modi has promised more tax reforms and easier norms to attract more investments. The forthcoming Budget will have to take this agenda forward and look at more measures to revive demand and investments.
Retail inflation in January stayed within the band stipulated by the RBI, but food inflation within the overall basket maintained a rising trend; the overall trajectory needs to be kept under watch before the government can heave a sigh of relief on this front. The central bank's monetary policy stance will be influenced by any further upward movement in retail inflation, which could dampen the prospects of an interest rate cut in its policy review in the first week of April. The government's fiscal consolidation road map, to be revealed on February 29, will thus be even more critical, making continued adherence to targets of fiscal correction a bigger priority.
SOURCE: The Business Standard
Keen on an expeditious conclusion of the biggest trade accord in Asia, India has proposed the creation of a forum for in formal resolution of prickly issues under the planned Regional Comprehensive Economic Partnership (RCEP). The forum will seek to informally resolve issues other than those related to tariffs so as to reduce long-drawn regulatory and legal disputes as the RCEP talks go ahead. "It is an informal mechanism so that issues don't get escalated to legal levels. The inspiration was `ad hoc discussions' mentioned in the TPP," said an official aware of the matter. The non-tariff measures refer to prohibitions, conditions or specific market requirements that restrict trade between countries.The proposal will be discussed at a meeting of the RCEP in Brunei from February 15 to 19.
Under the proposed mechanism, which India floated a few weeks ago, any of the 16 RCEP countries can resolve issues with each other without legal hassles.In the first step, the aggrieved party raises a query on paper and the party being questioned has to give a written response. On `ad hoc discussions,' the TPP agreement says that "a party (the requesting party) may request ad hoc discussions on any matter arising...including a specific non-tariff measure that the requesting party believes may adversely affect its interests in trade in goods...by delivering a written request to another party (the requested party)." However, since the mechanism is sought to be voluntary and doesn't mandate the other country to resolve the issue, India has also mooted the idea of maintaining records so that all countries are aware of the non-responders. The proposal also talks of third-party facilitators in case there's no resolution. "The mechanism also helps because instead of direct bilaterals, it lets other countries with similar grievances to join in based on the consent of the party being questioned," the official said.
RCEP is envisaged as a comprehensive free-trade agreement subsuming goods, services, in vestment, competition, economic and technical cooperation, dispute settlement and intellectual property rights between 10 countries under the Association of Southeast Asian Nations umbrella and their six free-trade agreement partners - Australia, China, India, Japan, Korea and New Zealand.
SOURCE: The Economic Times
The Indian Texpreneurs Federation (ITF) has appealed to Union Minister Nirmala Seetharaman to give top priority to textile sector in the on-going study of India-EAEU Free Trade Agreement (FTA) and also thanks her for swift finalization of first draft of the Joint Study Group (JSG) report on the feasibility of FTA. In a letter to the Minister, ITF Secretary, Prabhu Dhamodaran said that there were tremendous opportunities awaiting the Indian textile products in this region. Prabhu said that ITF was willing to submit data and also take active part in this JSG process. Indian textile industry needed market diversification to untapped markets to overcome the challenges raised by the Trans Pacific Partnership, Prabhu said that ITF had already submitted the basic information regarding the scope for export of Indian textile products to Russia, the main country in EAEU. In the financial year 2014, Russia imported textile and apparel items worth 13.5 billion US Dollars, of which apparel items accounted for USD 7.5 billion USD and India's share was just 248 Million USD of this huge Russian market.
SOURCE: Yarns&Fibers
British Premier David Cameron's Infrastructure Envoy to India Alok Sharma is visiting India this week to discuss ways to build closer economic and financial ties between the two countries especially in capital markets and raising joint funds for infrastructure investment. The Indian-origin British MP is the key contact between the UK and Indian governments, Indian public and private sector infrastructure companies and British financial practitioners as part of his new role as the Infrastructure Envoy announced soon after Prime Minister Narendra Modi's UK visit last November. "I am absolutely delighted to have been appointed by Prime Minister David Cameron as his Infrastructure Envoy to India, this is an incredibly exciting role," Sharma said on the eve of his five-day visit starting tomorrow. Sharma is making his first visit to India since being appointed Cameron's Infrastructure Envoy. "Plans to launch a flagship rupee-denominated bond in London by the Indian Railway Finance Corporation was a key announcement by Prime Minister Narendra Modi during his recent visit to the UK and a strong endorsement of the UK's position as a leading international financial sector. The Indian government has a hugely ambitious programme of infrastructure projects and I look forward to working closely with colleagues in both governments to ensure that we develop rupee-linked debt markets and build closer ties between the UK and Indian capital markets," he said.
During the Economic and Finance Dialogue between the Chancellor of the Exchequer, George Osborne, and Finance Minister Arun Jaitley in London last month, both countries agreed to explore ways to encourage increased investment in infrastructure with the aim of developing an India-UK partnership fund under the umbrella of India's flagship infrastructure investment initiative, National Investment and Infrastructure Fund (NIIF). Sharma's visit will coincide with the maiden visit to India of Harriett Baldwin, Economic Secretary to the UK Treasury, also known as 'City minister' because of her responsibility for the City of London's financial centre. They will both discuss the prospects for this collaboration with key private and public sector leaders, with the expectation of signing terms of reference governing the partnership at the G20 finance ministers meeting in Beijing later this month.
With the recent upsurge in rupee denominated bonds listed in London's financial markets last year, Baldwin and Sharma will hold deliberations with Indian Ministers and Reserve Bank of India Governor to encourage listing of rupee bonds in London. They will discuss how the City of London can develop as a trading hub for the rupee, and the potential for cooperation on green financing that can help to fund India's renewable energy and clean transport plans. Baldwin said, "Developing closer economic and financial ties between India and Britain is key to boosting exports and investment, and creating growth in both of our economies. That's why I am delighted to visit India to bolster our cooperation across several key areas.
India is the fastest growing major economy in the world, and with a population of over a billion people, the opportunities for UK financial firms to partner with and export to India are unlimited." The two British government representatives will meet Railways Minister Suresh Prabhu, Minister of State for Finance Jayant Sinha, RBI Governor Raghuram Rajan, SBI Chairman Arundhati Bhattacharya, and other senior leaders from the banking and the financial services sector, via one to one meetings and roundtables. Both the leaders will discuss key areas of shared interest between the two countries including financial inclusion, regulatory reform, financial technology, and the raising of finance in the UK to fuel India's growth.
SOURCE: The Economic Times
Federation of Industries of India has asked the Central Board of Excise and Customs (CBEC) to follow Foreign Trade Policy 2015-20 relating to goods in transit in case of imposition of new or additional duties. "As per the Foreign Trade Policy 2015-20, regulation on goods in transit and on which letter of credit had been opened before any notification, gets exemption on those consignments. We want CBEC to follow the same," Federation of Industries of India, Secretary General H L Bhardwaj told PTI. The Ministry of Commerce, in a recent DGFT notification for minimum import price on iron and steel has clearly mentioned that shipments under letter of credit already entered into before the notification date shall be exempted, he noted. "But the same is not followed by CBEC in case of safeguard duty imposition. This is hurting certain industry like pipes,"said Bhardwaj. "There should be coordination between the ministries. Despite repeated representations there is no positive outcome in form of clarification on this issue," Nezone Tubes Ltd Chairman M L Beswal said.
CBEC had imposed 20 per cent safeguard duty on steel in October 2015. "It has affected the viability of 500 odd SMEs which import thin gauge (below 2 mm thickness) coils, which is not adequately supplied by the domestic steel makers," Bhardwaj said. "Our industry runs on wafer-thin margins and absorbing the 20 per cent duty shock is not possible," he said adding the Centre should at least exempt the duty for those import contracts in which Line of Credit had been issued or contract signed before the notification. The federation has also drawn the attention of Prime Minister Narendra Modi in the issue.
SOURCE: The Economic Times
India and Sweden today resolved to scale up bilateral relations and expressed their commitment to a transparent, fair and predictable global trade regime under the World Trade Organisation (WTO). "... India's economic development and rise as a global power have created new opportunities to further deepen and extend this partnership to foster economic growth and inclusive development in both countries as well as to meet global challenges," said the joint statement following talks between Prime Minister Narendra Modi and his Swedish counterpart, Stefan Lofven. The Prime Ministers of the two nations have "agreed to scale up bilateral relations and committed to a close bilateral dialogue at all levels", it said. The two leaders also underlined the need to tap full potential of the EU-India strategic partnership and welcomed the prospect of resumption of talks on the India-EU Broad-based Trade and Investment Agreement (BTIA). "Both the Indian and Swedish sides remain committed to the WTO and a transparent, fair and predictable global trade regime," the statement said. The two Prime Ministers committed to a continued dialogue within the framework of the joint commission to enhance the environment for doing business in their respective countries and further facilitate and promote bilateral economic cooperation.
On increasing cooperation on defence matters, it said both the leaders agreed that India and Sweden will enhance dialogue on defence in key areas. "The two Prime Ministers acknowledged the potential for successful collaboration and agreed that under the rubric of Make in India, co-operation possibilities between their respective defence industries could be identified and taken forward appropriately, including in the field of aviation," it added. Further, both the Prime Ministers agreed to a deeper bilateral dialogue on UN Issues at both capital and UN-Mission level. "They reiterated the need for urgent reforms of the UN Security Council through an expansion in both categories of membership, to make it more effective and representative of the contemporary geo-political realities," it said.
Lofven was of the view that it would be inconceivable that an important global actor such as India is not a permanent member of an enlarged Security Council and said he will seek parliamentary support for this view. "The two countries called for forward movement in the inter-governmental negotiations on UN Security Council reforms and stressed their commitment to initiate text-based negotiations within the 70th Session of the UN General Assembly," the joint statement said. Prime Minister Modi reaffirmed India's support for Sweden's candidature for a non-permanent seat in the UN Security Council for 2017-18.
SOURCE: The Economic Times
The government today invited South Korean investors to invest in India while citing before them the initiatives taken by the Centre to simplify procedures, bring in transparency and systemic improvements. Union Steel and Mines Minister Narendra Singh Tomar met a delegation from South Korea led by Mayor of Pohang Lee Kang-deok here today, according to an official statement. During the meeting, Tomar highlighted some of the government's initiatives such as 'Make in India' and 'Digital India' and "invited South Korea to invest in India and partner by knowledge exchange and technology transfer," it said. "The Minister explained in detail how government of India is improving ease of doing business in India by simplification of procedures, bringing transparency and systemic improvements like MMDR Amendment Act," it said. The amendment has made the auction process transparent, Tomar had said recently. The Mayor of Pohang expressed gratitude to the Indian government for continued support to Korean companies in India and sought same level of cooperation in future also. Other issues that came up for discussion included status of Finex-based integrated steel plant proposed to be set up by Posco and SAIL; collaboration in R&D and energy efficient, environment friendly green technologies and waste utilisation; supply of iron ore by NMDC from its mines to the steel mills in the Republic of Korea, the statement said. Discussions were also held on developing value added products/special steels with collaborative arrangements from steel majors in Korea and design of Slag Granulation Plant (SGP) to introduce the technology in existing steel plants in India, it said. Senior officials from the Ministry of Steel, Ministry of Mines and PSUs were present during the meeting.
SOURCE: The Economic Times
The oil and mineral rich Kazakhstan has invited Indian investors for investing in the eastern part of the Central Asian country. The East Kazakhstan Region in collaboration with Associated Chambers of Commerce and Industry of India (ASSOCHAM) and with support of the Embassy of Kazakhstan in India organized the Road Show on the investment climate and investment possibilities in that region. A delegation headed by First deputy Akim (Governor) of the East Kazakhstan Region Narymbet Saktaganov held a meeting this week with the representatives of more than 80 Indian companies on the prevailing investment climate in East Kazakhstan region. East Kazakhstan region and ASSOCHAM also signed a MoU to further business ties between the two entities. The Kazakh delegation also met with the Federation of Indian Chambers of Commerce and Industry ( FICCI) leadership to discuss the ways of cooperation between the major Indian and East Kazakhstan region companies Kazakhstan will host World exhibition EXPO-2017 "Future Energy" in capital Astana and wants to attract Indian participation for that.
SOURCE: The Economic Times
Finland’s push for green energy and the use of waste-to-energy technology are some of the areas that the Nordic country is looking to partner with India as part of the ‘Make in India’ initiative. In an interview with Business Line, Finnish Prime Minister Juha Sipilä said India shouldn’t lose sight of the environment as it embarks on becoming a large industrial nation. Excerpts:
What are your expectations from India in terms of protecting Finnish investments?
This has to be a part of ease of doing business. For companies it is easy to do business when they can plan for the long term and rules are not changing all the time. In Finland, if you have some difficulties, like taxation issues, they will be handled very fast and practically. Some people feel that rather than manufacturing, India should focus on software, its area of competence… I think India can do both at the same time. You also have some evidence, especially in the car industry. Someone asked me if India is too late because China was in the same position 10 years ago. It is never too late.
How do you see the start-up ecosystem in India?
There are many successful businesses in India and I think the people involved should start supporting start-ups as well. You cannot always depend on the government for support. Private companies need to come forward to support start-ups. We also offered our cooperation for Start-up India.
Finland’s trade with China is far higher than with India. Can the gap be bridged?
It is true that there is a difference between our bilateral trade with China and India. Our trade with China is $6 billion, while it is only $400 million with India. But India has a good vision and we are working with India to improve our trade relations.
Anything India can learn from Finland’s journey?
What we did in Finland was 30 years ago… we decided to make Finland clean. Today, our lakes and other water bodies are so clean that you can even drink from them. We need to use more of clean and renewable energy and some of the solutions that Finland has, such as waste-to-energy, can solve some of these problems.
SOURCE: The Hindu Business Line
With Malaysia signing the Trans Pacific Partnership Agreement (TPPA), the textile industry players can now collaborate with the Malaysia External Trade Development Corporation (Matrade) and Malaysian Investment Development Authority (Mida) to attract investments from TPPA countries to set up factories here, said Batik manufacturer Cliff Ink Sdn Bhd Managing Director Michelle Lau Sook Yee. TPPA will not only provide greater market access for exporters, but potentially create spin-off effects such as the creation of new industries. The investments will give the textile industry an advantage from the technological point of view because this industry is a very capital-intensive.
Malaysia currently does not have raw materials such as cotton and silk, with the signing of TPPA they can now start looking into cotton and silk farming, therefore creating an entirely new industry. They will also need high technology for weaving. Lau also believed that non-TPPA signatories, China and India, which are world leaders in garments exports, would take advantage of the mega trade pact by investing in Malaysia. She said that although Vietnam was strong in this industry with its own raw materials, Malaysia had the upper hand in terms of access to capital given Matrade and Mida's relentless effort to bring investments into the country. Cliff Ink's manufacturing base in Batu Caves can produce up to 2,000 meters of batik a month which it mainly exported to Europe. When asked whether small-and-medium enterprises can handle the heightened competition post-TPPA, Lau said that companies must identify their competitive strengths and know how to position themselves. If they cannot compete in the quantity front, they can compete in creating higher quality goods. She added saying that competition is not good for domestic markets, however, competition is important because it is the catalyst for innovation.
Echoing a similar sentiment, Matrade Lifestyle Director of Trade and Services Promotion Division Abu Bakar Yusof said that it was important for Malaysia to develop a complete ecosystem of the textile industry incorporating both the upstream and downstream segments. They hope the TPPA will be able to pull more investments into this industry and help local players.
SOURCE: Yarns&Fibers
In the last quarter of 2015, Italian textile machinery manufactures received a boost from their export markets, but in domestic markets, positive order trends received a setback. As per an Association of Italian Textile Machinery Manufacturers (ACIMIT) press release, the orders index for textile machinery grew during the fourth quarter of 2015, mainly due to a boost in exports. Based on the survey conducted by ACIMIT, during October-December 2015, the order intake for machinery manufacturers rose by 2 per cent compared to the same period of previous year. “The value of the index for October-December 2015 stood at 89.1 points as against a 2010 basis of 100 points,” ACIMIT said. However, growth was observed in foreign markets only, where the index registered an absolute value of 99.3 points or 3 per cent. “In Italy, the index had an absolute value of just 46.5 points, an 11 per cent drop over the same quarter for 2014, bucking the trend of the previous two quarters,” the trade body added.
Raffaella Carabelli, president of ACIMIT said, “2015 has closed well overall in terms of orders, with a growing sense of confidence for 2016.” “This is a positive result that may be further strengthened over the first half of 2016 if the numerous contacts made at ITMA 2015 materialise,” she added. “As for the domestic market, we weren't expecting this sort of setback after two positive quarters, however, ITMA has confirmed the many signs of recovery, even for Italy,” Carabelli stated. “We witnessed a recovery in the Chinese market for the second half of 2015 and generally speaking, Asian markets like India, Bangladesh, Pakistan and Vietnam account for growth in our sales,” Carabelli noted. Meanwhile, ACIMIT informed that, Italian export figures, updated to the first ten months of 2015, confirm the current positive trend in orders.
In 2016, with the support of the Ministry of Economic Development and Italian Trade Agency, ACIMIT aims to further push its internationalisation efforts. Around twenty countries or markets will be touched by promotional initiatives favouring the penetration of Italy's textile machinery sector. Among these are projects in Sub-Saharan Africa and Iran, areas which, Italian businesses are approaching for the first time or after years of partial closure.
SOURCE: FIbre2fashion
Japan’s economy shrank more than expected in the final quarter of last year as consumer spending and exports slumped, adding to headaches for policymakers already wary of damage the financial market rout could inflict on a fragile recovery. Gross domestic product contracted by an annualised 1.4 per cent in October-December, bigger than a market forecast for a 1.2 per cent decline and matching a fall marked in the second quarter of last year, Cabinet Office data showed on Monday. It followed a revised 1.3 per cent increase in the previous quarter. The data underscores the challenges premier Shinzo Abe faces in dragging the world’s third-largest economy out of stagnation, as exports to emerging markets fail to gain enough momentum to make up for soft domestic demand.
Market speculation of additional monetary easing simmers, although the Bank of Japan’s policy ammunition appears to be dwindling, analysts say, after it deployed negative interest rates last month. “Private consumption is especially weak. The economy is at a standstill,” said Junko Nishioka, chief economist at Sumitomo Mitsui Banking. “It’s a matter of time before the BOJ and the government will take additional stimulus measures,” she said, predicting the central bank will ease policy again as early as next month. With his stimulus policies that gave big manufacturers windfall profits, Abe had hoped to generate a positive cycle in which companies raise wages and help boost household spending. Instead the data showed that private consumption, which makes up 60 percent of GDP, fell 0.8 percent, exceeding market forecasts of a 0.6 percent decline. Economy Minister Nobuteru Ishihara told reporters after the data was issued that the economy would head for a moderate recovery as its fundamentals remained strong. Offering some hope for policymakers, capital expenditure rose 1.4 percent, confounding market expectations for a 0.2 per cent decrease. But analysts doubt whether the economy will gain momentum in coming months, with the recent market turbulence and slowing Chinese growth clouding the outlook for corporate profits.
Exports fell 0.9 per cent in October-December after rising 2.6 per cent in the previous quarter, underscoring the pinch companies are already feeling from soft emerging market demand. Domestic demand shaved 0.5 percentage point off GDP growth, while external demand – or net exports – added just 0.1 point. Last month the BOJ unexpectedly cut a benchmark interest rate below zero, stunning investors with another bold move to stimulate the economy as volatile markets threatened its efforts to overcome deflation. But the shock move has failed to boost Tokyo stock prices or weaken the yen as Japanese markets remained at the mercy of a global equity sell-off, bolstering a view among investors that the BOJ is running out of policy options.
SOURCE: The Financial Express
China's central bank governor, Zhou Xiaochuan, said there's no basis for continued depreciation of the yuan because the balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies, according to an interview published on Saturday in Caixin magazine. Zhou dismissed speculation that China plans to tighten capital controls and said there's no need to worry about a short-term decline in foreign-exchange reserves, adding that the country has ample holdings for payments and to defend stability. The comments come as Chinese financial markets prepare to reopen on Monday after the week-long Lunar New Year holiday. The country's foreign-exchange reserves shrank in January to their lowest level since 2012, signaling that the central bank sold dollars to prop up the yuan as it fell to a five-year low. The weakening exchange rate and declining share markets in China have fuelled global turmoil and helped send world stocks to their lowest level in more than two years. "Zhou's remarks are timely, filling a void in the market's understanding of China's strategy on the exchange rate at a critical moment," said Tom Orlik, Bloomberg Intelligence's Chief Asia Economist. "Zhou appears to signal that a shift to a more flexible exchange rate may go on hold through the current period of market stress."
China is committed to making progress with exchange-rate reform during its 13th Five-Year Plan, relying more on the market to determine prices, Zhou said in the interview. The draw-down of China's reserves has continued since the devaluation of the currency in August, with holdings falling by $99.5 billion in January to $3.23 trillion, the central bank said February 7. The stockpile slumped by more than a half-trillion dollars in 2015. "Zhou has effectively ruled out any devaluation," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong. "If they do, it's effectively acceding to speculators who want the yuan to weaken further." Shen said Zhou's reference to the 13th Five-Year plan, which starts this year and ends in 2020, points to the time horizon for China to move toward exchange-rate policy reforms.
China has no incentive to depreciate the currency to boost net exports, and there's no direct link between the nation's gross domestic product and its exchange rate, Zhou said in the interview. Capital outflows need not be capital flight, and tighter controls would be hard to implement because of the size of global trade, the movement of people and the number of Chinese living abroad, Caixin quoted him as saying. Capital outflows from China are estimated to have hit $133 billion in January, the 22nd consecutive month of outflows from the world's second-largest economy, the Institute of International Finance said in an e-mailed note February 10. Capital outflows increased to $158.7 billion in December - the most since September - and were $1 trillion last year, according to estimates from Bloomberg Intelligence. That's more than seven times the amount of cash that left the country in 2014. The PBOC has stepped up efforts to stem the exodus, warning speculators they'l be punished. It intervened in the Hong Kong market last month after the yuan's offshore exchange rate sank to a record 2.9 per cent discount to the onshore rate. Apart from selling dollars, the monetary authority also gave guidance to some Chinese lenders in the city to suspend yuan lending to curb short selling, a move that contributed to the surge in the overnight interbank lending rate to 66.8 per cent on January 12, an all-time high. The bank will not let "speculative forces dominate market sentiment," Zhou told Caixin.The country will not peg the yuan to a basket of currencies but will seek to rely more on a basket for reference, while managing daily volatility versus the dollar, Zhou said in the interview. The bank will use a wider range of macro-economic data to determine the exchange rate, Caixin quoted him as saying. "The central bank remains unwilling to give up its space for discretion in management of the exchange rate," Orlik said. "The critical tension is between allowing the market to play a greater role, and maintaining basic stability in the exchange rate. As long as it's unclear which of those the central bank gives priority to, the market may continue to challenge its control."
SOURCE: The Business Standard
