Come March 5-6 and Greater Noida will host a textile exhibition where about 2500 domestic buyers and nearly 500 international buyers are expected to attend the exhibition. Organised by Surat Dreams the 2nd edition (first held in Goa) of the textile exhibition titled International Ethnic Week 2016 will be held at Expo Mart, Greater Noida and is touted to bring in varied business interests to the city. The event also showcases a high profile fashion show where top models from the fashion fraternity will adorn latest ensembles from the ethnic couture.
SOURCE: The Times of India
When a well-known international sports brand approached Nagesh Sharma, who runs an apparel sourcing company from Gurgaon, with a huge order for tracksuit pants, Mr Sharma tried to source the product from India. He found only one apparel factory could match the buyer's specifications. The primary problem, Mr Sharma says, is that India's garment factories are too small; they typically have 150 people and about 80 machines. The average factory in Bangladesh has 600 people. Mr Sharma eventually sourced the order from a Taiwanese-owned factory in the Kenyan city of Mombasa, which produces nine million garments annually. Mr Sharma's recent sourcing experience is an emblematic tale of missed opportunities for India's apparel industry, throttled by the country's labour laws, tedious customs clearance routines and other government-made "Only in India" regulations. For calendar year 2015, garment exports from Bangladesh to the US grew 12 per cent to $5.4 billion. Vietnam did even better, growing 14 per cent to $10.6 bn. In 2015, India's apparel exports to the US grew just eight per cent to $3.4 bn. Much has already been said about this week's over-praised Budget. The assumptions of a hefty jump in government receipts from taxes and disinvestment may well prove optimistic, but that is a time-proven tenet of what might be called Indian government accepted accounting principles. What can be said with certainty is that the government's claim that farmer's incomes will double, ie, grow at close to 15 per cent annually, is a cruel joke. Given that agriculture has inched ahead at about 1.5 per cent annually for the past couple of years and two-thirds of farmers hold less than a hectare, one can expect millions more to leave farming in search of genuinely remunerative work. The question remains: will there be factory jobs for them?
The likely place to find them would be labour-intensive industries such as apparel. But, for the garment manufacturers in Gurgaon and Tirupur, the echo chamber of Lutyen's Delhi is another world. The tiny cut in duty on imported fabric for garments destined for exports in the budget, says Milton John, managing director of Cotton Blossom, a company based in Tirupur in Tamil Nadu that supplies to Marks & Spencer, Next and Mothercare, is little more than "a conversation point." He describes the Budget as "very disappointing… after agriculture, the maximum people could be employed in the textile industry." Mr John praises the government's initiatives to push skilling down to the factory level instead of relying on non-governmental organisations, but worries that the government is doing too little to address a global trend in garment buying that is going against India. As the popularity of garments made from man-made fibres rises exponentially, especially in stores like Uniqlo and H&M, India's comparative advantage as a cotton producer has less relevance. China dominates the manufacture of man-made fibre, but hefty duties on such imports leaves producers such as Cotton Blossom heavily reliant for poly cottons on the high priced products of Reliance Industries. Since fabric usually accounts for 60 per cent of the garment's cost, this is a deal-breaker for companies pitching for the business of European and US retailers.
Mr Sharma blames India's tardy customs clearance at its ports and a banking system geared for the big guys (and big defaulters), which is unable to compute that a large order from Macy's, for instance, means a small business owner is credit-worthy. In Bangladesh, he says, deferred payments from retailers are taken into account when giving loans. The industry in Sri Lanka and Bangladesh has thus been a foundation for many people of modest means to make good. Though efficiency at Indian ports has improved, it massively lags behind those in China, which accounts for seven of the world's largest ports. Mumbai comes in the thirties, with little more than a tenth of shipments of 37 million TEUs (twenty-foot equivalent) from the port in Shanghai, China's commercial capital. Mr Sharma, whose sourcing business from all over the developing world gives him a good vantage point, says the high volumes passing through Chinese ports have resulted in a speedy, laissez faire approach. "The volumes are so high they do not start out thinking you are a crook," he says. "Here, it is exactly the opposite." This leads to companies like his padding delivery times to allow for delays at customs and clearance at ports - and an Indian supplier often losing an order. "You can price yourself out or you can time yourself out," Mr Sharma says.
If the end of the advantages for Indian textiles that accrued with the phasing out of multi-fibre agreement quotas in 2005 were a heavy blow, the inclusion of countries such as Vietnam in the Trans Pacific Partnership promises to make India's attempts to benefit from the rise in China's labour costs an uphill battle. The silks and cottons of Murshidabad may have attracted the attention of Robert Clive and other rapacious traders in the 18th century, but today Mr Sharma says the world would scarcely notice if India stopped exporting apparel. Two years ago, Ranjan Mahtani, whose company, Epic Group, is the largest exporter of cotton casual trousers to the US, was musing about opening his first factory in India - but the company, which employs more than 20,000 workers in Bangladesh and Vietnam, opted for another new factory near Ho Chi Minh City instead. In an ironic twist, Mr Sharma is now planning to take advantage of free trade agreements India is part of to source apparel from Bangladesh and Vietnam for Indian retailers.
SOURCE: The Business Standard
Of the total notified area of 45,883 hectares covering 347 special economic zones (SEZ), only 18,913 hectares has been utilised for their development, Parliament was informed today. "The reasons for delay in operationalisation of SEZs may, inter alia, be attributed to downward trend in the industries during the recent past, imposition of MAT and DDT by the government etc," Commerce and Industry Minister said in a written reply to the Rajya Sabha. Out of the total notified area of 45,883.58 hectares in respect of 347 notified SEZs - including 7 central government SEZs and 11 state/private sector SEZs set up prior to the enactment of the SEZ Act, 2005 - 18,913.21 hectares of land has been utilised for the development of SEZs, she said.
In a separate reply on India-EU free trade agreement, the minister said two stocktaking meetings have been held recently and both the sides have re-engaged in discussion to address the key outstanding issues. Top officials of India and the European Union (EU) have met on February 22 in Brussels to review the stalled negotiations for the proposed free trade agreement. On January 18 also, chief negotiators of both the regions took stock of the outstanding issues, including duty cut on automobiles and movement of professionals. The purpose of the meeting was to assess where both sides stand and how India and the EU should go forward with the proposed pact, officially dubbed as Bilateral Trade and Investment agreement. In a separate reply, she said 133 license for manufacturing various items were issued during the last 2 years under defence and chemical sectors. "The employment expected to be generated in these projects is 35,169 mandays," she said.
SOURCE: The Economic Times
India plans to resume settling trade with Iran under a regional clearing house system after a gap of five years, the government said on Wednesday, as New Delhi seeks to promote trade ties with Tehran following the lifting of international sanctions. The Asian Clearing Union (ACU), including India, Bangladesh, Maldives, Myanmar, Pakistan, Bhutan, Nepal and Sri Lanka, facilitates payments among members, economising on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among participants. The Reserve Bank of India decided in December 2010 not to facilitate oil trades through the ACU system. That left India and Iran, the only oil producer in the union, scouting for a stable payment mechanism to settle trade. But a permanent banking channel could not be established due to pressure from Western nations, leading to a drastic reduction in India's oil imports from Tehran. The Indian central bank has sought the consent of the finance ministry to get Iran back into the fold of ACU, junior foreign affairs minister V.K. Singh told parliament. He said the government is also considering a request from Iranian banks to open branches in India and reactivate their accounts.
Despite Western sanctions India continued with its engagement with Iran and was among a handful of countries that were sourcing oil from Tehran. As ties deepen further, India has extended a $150 million credit line to Iran to help develop its Chabahar port. The port in southeast Iran is central to New Delhi's efforts to circumvent arch-rival Pakistan and open up a route to Central Asia as well as Afghanistan where it has developed close security ties and economic interests. "A contract between Indian Special Purpose Vehicle and Arya Bander of Iran for development of Chahbahar Port has been finalised," Singh said. He also said in January India decided to extend the credit for the start of a contract to supply 250,000 tonnes of steel rails to Iran through State Trading Corp.
SOURCE: The Economic Times
The US health regulator has refused entry of 11,664 Indian products, including drugs, into the American market between January 2011 and February 2016, Parliament was informed today. "According to refusal report data available on the US Food and Drug Administration ( USFDA) website, 11,664 refusals of Indian products were recorded from January 2011 to February 2016," Minister of State for Commerce and Industry Nirmala Sitharaman today said in written reply to the Rajya Sabha. The products from India that were denied entry into the US included medicine, bakery products, fried snacks, spices, basmati rice, fisheries and herbals, she added. Dietary supplements, hair dyes and colours were also part of the no-entry list. "The reason given for the refusal varies from problems in branding to packaging, labelling and adulteration," the minister said.
Elaborating on the steps taken by the government to improve standards and quality to international levels, the minister said: "The steps taken by the government include tightening labelling rules and making it mandatory for companies to clearly mention the dates of manufacturing." Other steps include improving pre-export inspection, greater emphasis on standards through sensitisation of exporters for compliance of regulatory issues through export promotion agencies and also taking up the issue at bilateral trade forums wherever possible, Sitharaman said.
SOURCE: The Economic Times
Trade deficit between India and China has increased to USD 44.7 billion during April-January period of 2015-16, Parliament was informed today. India's exports to China stood at USD 7.56 billion during the period whereas the imports has jumped to USD 52.26 billion in April-January. In 2014-15, the deficit was aggregated at USD 48.48 billion. The Commerce Ministry's of both the countries have signed a Five-year Development Programme for Economic and Trade Cooperation in September 2014 to lay down a medium-term roadmap for promoting balanced and sustainable development of economic and trade relations, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha. The programme recognises "that the trade deficit with China is a matter of high concern for India", she said. "Against this backdrop and in the spirit of mutual benefit, India and China shall endeavour to strengthen cooperation and gradually achieve bilateral trade balance over the next 5 years," she said.
In a separate reply she said that, India has so far initiated 322 anti-dumping cases out of which 177 cases involve China. "In order to boost exports and to maintain balance of trade with China, India has impressed upon China to recognise the need for reduction in trade imbalance for along term, sustainable and harmonious development of economic cooperation between the two countries," she added.
SOURCE: The Economic Times
With India becoming the fastest growing economy among emerging markets and China showing signs of a slowdown, conditions for India's membership of APEC are more favourable than in the past, former Australian Prime Minister Kevin Rudd has said. "Within APEC, the conditions for Indian membership are more favourable than they have been in many years," Rudd said in his address to an audience here on the release of a report 'India's Future in Asia: The APEC Opportunity' by the Asia Policy Institute which he now heads.
Noting that Asia Pacific Economic Cooperation's (APEC) official moratorium on membership is no longer in force, and each year offers the opportunity to admit new members, he said several Latin American and Southeast Asian economies are candidates for admission. At Peru later this year during the 2016 APEC meeting, the Obama administration can open this up and support India's candidature, he said adding that key APEC members, including the US, Japan, China, and Russia, have all welcomed India's interest in joining APEC, he noted. Rudd said that China, the engine of the global economy for the past decade, has entered a period of slower growth and some uncertainty as it transitions to a new domestic consumption-based economy.
While China's growth will continue to set an enviable standard for Western economies, the Asia-Pacific region, long centered on a fast-growing China, is in search of new markets for trade and investment, access to new consumers and workers, and new sources of innovation. "India holds the promise of offering these opportunities but must be afforded greater access to the region's diverse economies to deliver on that promise," Rudd said. APEC has been at the forefront of integrating the Asia-Pacific region by facilitating trade, reducing non-tariff barriers, and expanding global value chains, he said adding it has helped create habits of economic dialogue and cooperation among its 21 member economies and fostered enormous regional trade expansion and market integration.
In his address Indian Ambassador to the US, Arun K Singh, argued that the admission of India is the single greatest opportunity that APEC has to expand regional integration and counter the trend of slowing economic growth in Asia. "For the APEC to fully realise its potential in the Asia-Pacific and the world at large, it needs to reflect 21st century realities. This would entail inclusion of economies such as India, given their economic size and potential," the Indian envoy said adding APEC appears to be the only forum pertaining to the region of which India is not a member. India's 'Act East' policy envisions increased cooperation in trade, investment, infrastructure development, connectivity, capacity building and strengthening people-to- people contacts in the region, which can reinforce goals shared by APEC, Singh said.
SOURCE: The Economic Times
The collapse in global oil prices is a large windfall gain for India and it has made room for more spending on goods and services, the IMF has said. “The collapse in global oil prices is a large windfall gain for India. The windfall has made room for more spending on goods and services, helped improve the external and fiscal positions, and allowed a sharp decline in inflation,” Paul Cashin, head of the International Monetary Fund (IMF) team for India, said yesterday In its latest report, the IMF projected India’s GDP growth from 7.3 per cent in this fiscal year to 7.5 per cent next year, even as the economic recovery has been uneven. The pick-up in the investment cycle is yet to gain strength, the banking system is weighed down by bad loans, and the weaker global economy has hit India’s exports, it said. IMF said as private investment continues to show only a few signs of revival, the challenge for India is to sustain its growth momentum.
An increase in public infrastructure investment and government initiatives to unclog stalled investment projects are helping bolster investor sentiment and having a positive impact on private investment, it said. “Nonetheless, project implementation and supply-side challenges have been a drag on corporate investment for several years and they have chipped away at the financial strength of core industrial sectors, so the investment recovery is likely to be sluggish,” Cashin said. “Weakened bank asset quality and profitability means that banks are also becoming more cautious in their lending, which could hobble economic growth,” he said. He welcomed the Reserve Bank of India’s recent steps toward more stringent recognition and more effective resolution of distressed bank loans as well as raising of banks’ loan loss provisions. According to IMF, with global growth weaker, India will have to continue to rely mainly on domestic demand as a key source of growth. “Increasing capital buffers in public banks, which in our assessment is manageable even in a severe stress scenario, and implementing governance reforms in public sector banks along with the new bankruptcy law, are of key importance to ensure the durability of the Indian growth recovery,” Cashin said. He said the adoption of the flexible inflation-targeting framework in early 2015 is a very positive development. “The new framework is simple, has clear objectives and provides operational autonomy for the RBI in setting monetary policy,” Cashin said. The report notes that household inflation expectations remain high, and breaking away from this pattern will likely require a prolonged period of low inflation. In the near-term, inflation risks stem from an unfavourable monsoon and expected wage increases of government employees as a result of a once-a-decade wage adjustment, IMF said.
SOURCE: The Financial Express
India’s economy will likely grow 7.5% in the next fiscal, compared with 7.3% in 2015-16, helped by a plunge in oil prices and relatively low exposure to the global slowdown, the International Monetary Fund (IMF) said on Wednesday. Nevertheless, the multilateral body has advised Indian authorities to effect reforms, including implementing a well-designated goods and services tax regime, strengthening prudential regulation for bank asset quality recognition, rationalising food and fertiliser subsidies and facilitating land acquisition. “With the revival of sentiment and picking up of industrial activity, an incipient upturn in private investment is expected to help broaden the recovery,” the IMF said. Higher public infrastructure investment and government initiatives to tackle supply-side bottlenecks and repair corporate and public bank balance sheets should also help crowd-in private investment, it added.
Inflation was on track and monetary conditions remained consistent with the Reserve Bank of India’s target for consumer price inflation of 5% by March 2017, it said. However, the multilateral body has flagged concerns, including persistently high household inflation expectations, large fiscal deficits (which could limit policy space to support growth through demand management measures), anaemic exports and weaknesses in India’s corporate financial positions and public bank balance sheets, weighing on the economy. Finance minister Arun Jaitley on Monday committed R25,000 crore to recapitalise state-run banks, although some bankers have said the recapitalisation requirements are almost 10 times more than the funds budgeted. “On the external side, despite the reduction in imbalances and strengthening of buffers, the impact from intensified global financial market volatility could be disruptive, including from unexpected developments in the course of US monetary policy normalization or China’s growth slowdown,” the IMF said. However, absent disruptive global financial market volatility, slower Chinese growth would have only modest adverse spillovers to India, given weak trade linkages, it said. While the IMF hailed the recent improvements in the quality and efficiency of public expenditure, as well as revenue-enhancing measures, it called on the authorities to implement measures that would underpin the achievement of the medium-term fiscal deficit targets and increase fiscal space for priority capital spending and social expenditures.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 33.52 per barrel (bbl) on 02.03.2016. This was higher than the price of US$ 33.22 per bbl on previous publishing day of 01.03.2016.
In rupee terms, the price of Indian Basket increased to Rs 2269.60 per bbl on 02.03.2016 as compared to Rs 2264.23 per bbl on 01.03.2016. Rupee closed stronger at Rs 67.70 per US$ on 02.03.2016 as against Rs 68.16 per US$ on 01.03.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on March 02, 2016 (Previous trading day i.e. 01.03.2016) |
Pricing Fortnight for 01.03.2016 (12 Feb to 25 Feb, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
33.52 (33.22) |
30.61 |
|
(Rs/bbl |
2269.60 (2264.23) |
2096.17 |
|
|
Exchange Rate |
(Rs/$) |
67.70 (68.16) |
68.48 |
SOURCE: PIB
Russia and Turkmenistan have discussed the possibilities of selling Turkmenistan’s textile and cotton products on the Russian market, said the website of Russian Chamber of Commerce and Industry. During the discussions, the Russian side was represented by the vice-president of the Chamber of Commerce and Industry Alexander Rybakov, while from the Turkmen side, the meeting was attended by the country’s ambassador to Russia Berdymurad Redzhepov, as well as representatives of the Cabinet of Ministers and the Ministry of Textile industry. Moreover, the meeting was attended by heads of various textile enterprises from the two countries. Russian side is interested in purchasing textile products from Turkmenistan, but due to a large number of barriers and requirements to buyers, it is more beneficial to purchase these products through European dealers, said the message from Russian Chamber of Commerce and Industry. In this regard, the meeting participants discussed the steps which could improve the situation by benefiting both sides. “It was decided to discuss this issue in the near future,” said the message. Further, Turkmenistan’s representatives talked about the development of textile industry and its prospects. Turkmenistan traditionally grows cotton, which serves as the basis for developing the country's textile industry. The major part of products is exported to the US, Canada, Germany, UK, Russia, Italy, Turkey, China and Ukraine.
SOURCE: The Trend
Japanese garment-textile companies began expanding their production in Vietnam after the Trans-Pacific Partnership (TPP) was approved. According to Nikkei Asian Review, Vietnam’s competitive advantage has been strengthened to become the world’s export center, attracting foreign investment flows, including those from Japan. Many manufacturers hope to have stronger motivation after the TPP, of which Vietnam is a member. Experts said that the TPP will help boost production and exports in Vietnam and enhance its maritime trade with the US. For textile companies, Vietnam’s skilled workers are a plus even when the labor costs are higher than that of Bangladesh and Myanmar.
Speaking at the Vietnam-Japan Investment and Trade Promotion Forum held last year, Mukuta Satoshi, senior managing director of Keidanren (Japan Business Federation), said Japanese firms had invested a total of US$37.3 billion in Vietnam as of the end of 2014, the second highest among all countries and territories investing in the country. HCM City is the most important investment destination in Vietnam for Japanese companies, with as many as 765 operating here. "Vietnam is considered a gateway for Japan to ASEAN markets," he said, adding that the establishment of the ASEAN Economic Community by the end of 2015 would enhance the role of Vietnam as a business base in the global supply chain strategy.
According to Nikkei Asian Review, Kuraray Trading, an Osaka-based trading house under synthetic fiber maker Kuraray, will spend 300 million yen ($2.51 million) to install a production line for sportswear at an affiliate in Da Nang, the largest city in central Vietnam this year. This company will produce sportswear using fabric imported from Japan and export the finished products to the U.S. Its factory in Vietnam will account for over 60% of the total sewing work, up from the current 55%. Kuraray Trading is also considering investing billions of yen in textile operations, such as weaving and dyeing, in Vietnam’s largest city Ho Chi Minh City. Another Japanese firm - Itochu - has been building its presence in Vietnam since well before the TPP began gathering steam. In 2014, the company established a weaving mill in Vietnam with a monthly capacity of 500,000 meters of fabric.
Japanese Fiber maker Toray Industries has recently been increasing production at a local sewing unit established in Ho Chi Minh City by its trading arm, Chori. The company plans to make the plant a key group production site. Chori ships the finished goods to the U.S. and other markets. Japanese cotton spinner Shikibo will lower output at its Chinese sewing factory and increase production at a partner plant in Vietnam. The company will soon start producing bedding fabrics at the latter site. In 2015, many big foreign-invested projects in the field of textile-garments were licensed and implemented. Binh Duong Province awarded an investment certificate to Polytex Far Eastern Co. Ltd. under Taiwan’s Far Eastern Group to develop a US$274-million clothing project. This project covers 99 hectares at Bau Bang Industrial Zone and produces supporting items for the apparel sector. It is designed to have an annual capacity of 43,200 tons of polyester, 127 million square meters of knitted fabric and 96 million square meters of cotton fabric. The group plans to invest an additional US$700 million to US$1 billion in the second phase of the project. Dong Nai Province has approved a US$660-million project of Hyosung Istanbul Tekstil Ltd, which will make industrial fiber at Nhon Trach 5 Industrial Zone. This is a Turkish-registered project but the actual investor is South Korea’s Hyosung Group. Hyosung Vietnam Co. Ltd. has been a familiar face in the textile and garment sector in the province with total registered capital of over US$995 million.
Hong Kong’s Worldon Vietnam Co. Ltd. also got approval to carry out a US$300-million project in the apparel sector in HCM City. The project covers over 50 hectares at Dong Nam Industrial Zone in Cu Chi District. With huge textile and garment projects, the nation’s manufacturing and processing sector received the highest new FDI commitment of US$4.18 billion in the first half of 2015, making up 76.2% of the total FDI approvals in the period. Mergers, acquisitions increase in textiles, garments market Mergers and acquisitions in Vietnam's textile and garment industry have increased in a bid to take advantage of free trade agreements, especially the Trans Pacific Partnership (TPP), experts have said.
According to the Ho Chi Minh City Association of Garment - Textile - Embroidery - Knitting (AGTEK), there was a wave of mergers and acquisitions in the domestic garment and textile sector as local enterprises found they could not fulfill requested orders due to their limitations in capital. Pham Xuan Hong, Vice Chairman of the Vietnam Textile and Apparel Association (Vitas), said medium- and large-sized enterprises have maintained stable production and business, but small-sized firms have faced many difficulties in their business. Therefore, recently, many small textile and garment companies have sold their workshops and machines and entered other sectors.
In addition, some local enterprises have sold part of their factories to foreign investors, including Chinese firms who have developed a system of processing and production for export products in Vietnam to take advantage of the TPP deal. Nguyen Van Hoan, former head of the Hanoi Industrial, Textile, Garment and Fashion College, said foreign investors had met difficulties in expanding their production in Vietnam because some provinces and cities have limited foreign investment in the garment and textile sector due to concerns about environmental pollution. This has prompted foreign investors to purchase local textile and garment companies that already have production lines and employees.
Further, the Ministry of Planning and Investment said management offices carefully weighed requests before issuing investment licences for large textile and garment projects, since textile, fiber production and dyeing projects often cause environmental problems, reported vnexpress.net. So, some investors have bought factories from local partners. In 2015, Vietnam has issued investment licences for 30 textile and garment projects while foreign investment in the industry is expected to continue increasing in the near future. In 2016, part of the 300 million USD provided by the Indian government will include investments in projects to manufacture textile and garment materials in Vietnam, as part of the cooperation between the governments of Vietnam and India.
Opportunities and challenges for Vietnam in the post-TPP period
The garment and textile sector is viewed as one of the industries which will benefit the most from TPP. According to the industry’s insiders, Vietnam’s garment and textile export turnover to countries joining the TPP agreement was expected to double in the time to come. By participating in TPP’s negotiations, Vietnam hopes to gain many benefits thanks to growing demand for apparel and footwear in the agreement’s member countries. The US market, the largest importer of Vietnam’s garment products, is a good example. When the TPP came into effect, the tariffs on Vietnamese garment products could be lowered to nearly zero from the current 17.5%.
Experts also predicted that the TPP would likely raise Vietnam’s garment and textile exports to the US to US$55 billion by 2025. According to Hai Quan (Customs) newspaper, US Fashion Industry Association President Julia K Hughes said many US companies were willing to seek supply sources from nations joining the TPP agreement once it took effect. Vietnam was ranked highest in terms of its ability to draw new businesses, Hughes said, so she advised Vietnam utilize its new opportunities. However, experts said that it was not easy for local enterprises to effectively utilize opportunities to be brought by the TPP. One of the provisions in the TPP, known as the “yarn forward” rule, would require a member country that exports apparel to other TPP markets to use textile that was either made locally or imported from other TPP member countries.
Signing on to the TPP meant that Vietnamese garment exporters would technically no longer be able to import their materials if they hoped to benefit from lower tariffs under the TPP. According to experts, Vietnam’s apparel industry has for some time been concerned that it would face difficulties in complying with the rules of origin in the TPP, given that this would require the industry to make significant capital and technological investments up front.
SOURCE: The Vietnam Net
Free trade agreements (FTAs) to create many opportunities and conditions in developing markets to garment, textile, leather and footwear industries as well as challenges due to origin rules for textiles and garments, said Ho Thi Kim Thoa, deputy minister of industry and trade. Meanwhile, Phan Chi Dung, deputy head of the light industry department, said the textile, garment, leather, footwear, milk and paper industries have seen large billings for their exports, but materials for their production have been mainly imported. According to the Ministry of Industry and Trade, Vietnam's manufacturers need 8 million sq.m of cloth, but local producers can only provide 1.8 million sq.m, while the remaining cloth must be imported,. The local market supplies only 1 percent of the domestic demand for cotton, while 99 percent of cotton used in homes is imported. Accoring to Le Phu Cuong, a Vietnamese trade counselor in Turkey, Vietnam and Turkey has great potential for cooperation in the textile, garment, leather and footwear industries.
Large industrial companies in Turkey have promoted investment in the garment and textile industry in foreign countries. Further, Turkish enterprises have planned to move their production from China to Vietnam due to high production costs in China and available materials in Vietnam, according to Cuong. But they have not had many projects in Vietnam, due to difficulties in getting Vietnam visas and the lack of information about local markets, the investment environment, incentives and commercial mechanisms for Turkish enterprises. They have also been worried about competition with Korean, Japanese and Taiwanese enterprises in Vietnam. Therefore, Vietnam's trade office and industries should promote information about projects, the investment environment and industrial zones for Turkish enterprises through exhibitions and seminars.
Nguyen Duy Phu, Vietnam's trade counselor in Taiwan, said that Taiwanese enterprises would promote investment in the textile and garment industries in Vietnam to take advantage of FTAs, and especially the Trans Pacific Partnership (TPP). But there were difficulties in obtaining locations for new projects because provinces are worried about environmental pollution. He said that Vietnam needs special regions for investment to develop parts suppliers for the textile and garment industry, so the nation can control environmental pollution from such projects. Meanwhile, deputy minister of industry and trade Ho Thi Kim Thoa said that to attract foreign investors, the ministry had built the Pho Noi Industrial Zone in Hung Yen Province and Rang Dong Textile and Garment Industrial Zone in Nam Dinh Province. The ministry also plans to establish two other industrial zones in Dong Nai and Binh Duong provinces. Those industrial zones will offer incentives for foreign parts suppliers in the textile, garment, leather and footwear industries. Vietnamese enterprises lack investment and technology to develop the textile industry, so they need foreign investment. To deal with these challenges, industries should seek foreign investment to develop domestic suppliers of parts or material for manufacturing, to take advantage of the FTAs.
SOURCE: Yarns&Fibers
The Turkish Mavi Jeans textile company has postponed the store opening in Russia, Cuneyt Yavuz, head of the company, said. Yavuz said that the company would like to open more than 20 stores in various cities of Russia, the Turkish Postmedia newspaper wrote March 2. He said that the company has postponed the store network opening in Russia due to the crisis in the Ankara-Moscow relations. Mavi Jeans is one of the largest textile companies in Turkey. The company was established in 1991. Some 18 percent of jeans production in the world accounts for the company. The company’s revenues amounted to 1.2 billion Turkish liras in 2015. As of March 2, the Turkish central bank’s official exchange rate is 2.9504 TRY/EURO. The Russia-Turkey diplomatic relations soured after a Russian Su-24 was shot down by the Turkish Air Forces Nov. 24, 2015. Following the incident, Russian President Vladimir Putin signed a decree on measures to ensure national security and economic measures against Turkey.
SOURCE: The Trend
The Korea Trade-Investment Promotion Agency (KOTRA) inaugurated the Viet Nam-Korea Free Trade Agreement (VKFTA) Support Centre in Ha Noi yesterday. The centre aims at disseminating areas related to the FTA as well as supporting businesses of the two countries to make use of the FTA, which came into effect on December 20, 2015, to boost commercial transaction and investment. The VKFTA covers many areas including certificate of origin, trade protection, hygiene and food safety, and plant quarantine, apart from technical barriers to trade and service, investment, intellectual property, competition and other legal issues. The centre will consult and provide accurate and detailed information on FTA for businesses and help them solve difficulties related to non-tariff barrier and granting of certificate of origin.
Speaking at the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai said VKFTA had opened opportunities to embrace economic co-operation and investment in the two countries. In the last 10 years, trade turnover between Viet Nam and South Korea reached an average growth rate of 23 per cent per year. In 2015, South Korea continued to be one of the three biggest trade partners of Viet Nam with a bilateral trade turnover of US$34.3 billion, more than 29 per cent higher than that of 2014. The South Korea mostly shipped to Viet Nam computers, electronic products and accessories, equipment and machines, and various kinds of fabric. Meanwhile, Viet Nam's main export products to South Korea are garment and textile products, crude oil, and seafood, and wood and wooden furniture. Kim Jae Hong, KOTRA president said the centre would help companies from the two nations apply the VKFTA with flexibility and bolster their exports to China, the United States and the European Union. Vice Chairman of the Viet Nam Chamber of Commerce and Industry (VCCI) Hoang Quang Phong said South Korea had advantage in technology, investment capital, production process and modern management experience. He said the centre would be a reliable and useful address for businesses of the two countries during the co-operation and business development process. The centre can co-ordinate with the VCCI's WTO and Integration Centre to build programmes and solutions to give best support to businesses of the two countries, Hai said. At the ceremony, KOTRA and the Viet Nam Directorate for Standards, Metrology and Quality inked a Memorandum of Understanding to simplify administration procedures that Korean companies have to go through when exporting to Viet Nam. The Korean side also agreed to transfer technology in safety evaluation to Viet Nam
SOURCE: The Vietnam News
Minister of Industry and Trade Vu Huy Hoang was speaking at a ceremony to publish the White Book on trade and investment in Vietnam in 2016. The event was held in Hanoi on March 2 by the European Chamber of Commerce (EuroCharm) and the Vietnam Chamber of Commerce and Industry (VCCI). He raised the fact that two-way trade increased tenfold from 4.1 billion USD in 2000 to 41.4 billion USD in 2015, making the EU one of the top trade partners of Vietnam. The union is also a big foreign direct investor in Vietnam with 2,162 valid projects worth 38.4 billion USD, he said, adding that the mutual support in Vietnam-EU trade and investment ties will help further bilateral cooperation after the signing of the EVFTA.
Ambassador and Head of the EU delegation to Vietnam Bruno Angelet said the EVFTA will activate a new wave of better-quality investment from the EU into Vietnam, which, he said, must be supported by Vietnamese private businesses to boost the country’s deep integration. EuroCharm Chairwoman Nicola Connolly said the attractiveness of Vietnam to foreign investors is undeniable as the Southeast Asian country is incessantly improving its business climate. However, more reforms are needed to maintain the country’s development, she added. EU representatives suggested Vietnam develop human resources via vocational training as well as increase productivity and improve capital distribution.
SOURCE: The Vietnam Net
Alexey Y Dedov, Ambassador of the Russian Federation while addressing a function organized by Faisalabad Chamber of Commerce and Industry (FCCI), which was also attended by leading industrialists, traders and exporters of the city said that the trade relations between Pakistan and Russia are growing satisfactorily at the government level. However, the private sector of two countries need to come forward to play role in giving a quantum jump to the bilateral trade. He said that Russia started a number of energy projects in Pakistan while an agreement was also signed to lay gas pipeline from Karachi to Lahore and now the balance of trade is in favor of Russia. However, the trade volume is still low and therefore the business communities of the two countries should take necessary measures to exploit the available potential. A ministerial level meeting will also be held in Islamabad later this year (Nov or Dec) to remove the bottlenecks hampering bilateral trade. Many Russian companies are already working in Pakistan while more are willing to invest in Pakistan as the situation in this country was improving considerably.
Quoting the hurdles in bilateral trade between Pakistan and Russia, Alexey Y Dedov said that one of the major causes was unrest in Afghanistan. Russia could import more commodities from Pakistan provided the roads passing through Afghanistan are made safe and secure. Regarding possibilities of MoUs, Preferential Trade Agreements (PTA) and Free Trade Agreements (FTA), negotiations at the official level are required. However, as regards cooperation between the private sectors of the two countries, it needs reliable and credible banking system. The government of Pakistan was ready to open a branch of National Bank of Pakistan in Moscow which will have salutary impact on the promotion of bilateral trade between the two countries.
Regarding sanctions clamped on Turkey by Russia, Alexey Y Dedov said that it provides a unique opportunity to Pakistani exporters to fill up this gap by making arrangements with their Russian counterparts particularly for the export of textile products. There are vast prospects of expansion of bilateral trade including joint ventures in textiles. The Russian ambassador also assured to provide a list of Turkish companies which have been banned for exports to Russia. He also assured cooperation for the exchange of trade delegations and organization of exhibitions in both countries. Chaudhary Muhammad Nawaz , President Faisalabad Chamber of Commerce and Industry (FCCI) that has more than 5,000 members within the fold of this chamber that includes textile said that the textile sector is the mainstary of its economy and out of total textile exports of 13 billion dollars Faisalabad is contributing 6 billion dollars. Similarly, Faisalabad is also ranked second in revenue generation after Karachi, he added.
FCCI has been trying its optimum best to develop direct business links with trade as well as business communities of the other countries and in this connection as many as 6 trade delegations have been sent to various international destinations during last few years. The trade volume between two countries in 2014 was $412.5 million. It shows that Pakistani exports were US$ 187.6 million against Russian imports of $224.9 million.
SOURCE: Yarns&Fibers
Moody's downgraded its outlook on Chinese government debt to "negative" from "stable" yesterday, citing uncertainty over the authorities' capacity to implement economic reforms, rising debt and falling reserves. "Without credible and efficient reforms, China's GDP growth would slow more markedly as a high debt burden dampens business investment and demographics turn increasingly unfavourable. Government debt would increase more sharply than we currently expect," the ratings agency said. It said the downgrade was driven by expectations that China's fiscal strength will continue to decline, and the fall in its foreign exchange reserves which have shrunk by US$762 billion (S$1.1 trillion) over the past 18 months. It also said policymakers' credibility was at risk of being undermined by incomplete implementation or partial reversals of some reforms. "Interventions in the equity and foreign exchange markets over the past year suggest that ensuring financial and economic stability is also an objective, but there is considerably uncertainty about policy priorities."
Moody's kept China's Aa3 rating, noting the country's sizeable reserves gave it time to implement reforms and gradually address economic imbalances. But it warned it could further downgrade China's rating if it saw slowing down of reforms needed to support sustainable growth and to protect the government's balance sheet. "It's not a worrying sign yet, but rather a negative direction. That's what Moody's is flagging," said senior economist Trinh Nguyen at global asset manager Nataxis. "But they have room to do this. They have one of the lowest government debt as a share of GDP in comparison to other emerging nations. And most importantly, as China has a current account surplus it can fund its own fiscal expansion."
A major rationale for the falling outlook, Moody's said, was the large stock of contingent sovereign liabilities such as state-owned corporations' debt, local government debt as well as the debt of big "policy" banks - the Agricultural Development Bank of China, China Development Bank and the Export-Import Bank of China. High and rising levels of debt at state-owned firms raised the risk of either a sharp slowdown in economic growth, as debt servicing curbed other spending, or a marked deterioration of bank asset quality, Moody's said.
SOURCE: The Strait Times
