The Federation of Surat Textile Traders Association (FOSTTA) and the Surat Textile Tempo Goods transport association have unanimously taken decision to ease traffic chaos on Ring Road textile market area that has increasing during the peak hours by stopping the delivery of unfinished fabrics to textile markets after 2 pm from March 10. FOSTTA office-bearers said that they had to take a decision although, the Surat Municipal Corporation (SMC) and the city police department have been working in coordination to find out solutions to ease traffic chaos on Ring Road. Last month, the civic body had demarcated the yellow parking lines for the tempo drivers coming for delivery and pick-up of the finished and unfinished fabrics from the markets. The tempo drivers have been following the parking rule, but there are many traders who are still parking their vehicles in the parking area dedicated for the tempos. A meeting in this connection was held between the joint commissioner of police (crime and traffic) Khursheed Ahmed, where the FOSTTA office-bearers and the tempo association members unanimously agreed to enter the market areas for the pick-up and delivery of finished and unfinished fabrics between 10 am and 2 pm. FOSTTA president, Manoj Agarwal said that they have decided to implement the new arrangement starting from March 10. All the tempowallahs will deliver and pick up the fabrics before 2 pm. Hence, there will be no congestion on the road during the peak hours in the evening. Over 4,000 tempos are used for delivery and pick up of finished and unfinished fabrics every day. An estimated 2.5 crore metre of fabric is brought by the tempowallahs into the market on daily basis.
Source: Yarn and fibre
The Tirupur Exporters Association (TEA) has thanked Textiles minister Santosh Gangwar for issuing the guidelines of the Amended Technology Upgradation Fund Scheme's (ATUFS) financial and operational parameters and implementation mechanism for implementation period from January 13, 2016 to December 31, 2022. Under ATUFS, the rate of capital investment subsidy is 15 per cent on eligible machines for garment segment and the Capital Investment Subsidy (CIS) per individual entity is Rs. 30 crores. In the ATUFS, only new machinery are permitted and accessories/ attachments/sample machines/spares received along with the machinery up to a value of 20 per cent of the machinery cost eligible under ATUFS will also be eligible. In a press release, TEA President Dr. A. Sakthivel said that with ATUFS being available for five years, the exporting units can plan accordingly and make their decision in their proposed investment for modernization/ capacity expansion. Dr. Sakthivel said he has also sent letters of thanks individually to Textiles Secretary, Rashmi Verma, Additional Textiles Secretary Pushpa Subrahmanyam, and Textiles.
Source: Fibre2fashion
The Union Budget 2016-17 is aimed to bring the huge chunks of industry including area-based exemptions together with SSI, edible oil, textile sectors and others into the tax net in a most easy manner, a top Finance Ministry official said at an Assocham event in New Delhi. “Out of the GDP Rs 110 lakh crores and manufacturing sector contributing about 17 per cent to it, we have huge chunks of industry which is out of the net,” said Najeeb Shah, Chairman, Central Board of Excise and Customs (CBEC) while inaugurating a post-budget seminar organised by Assocham. “Area-based exemptions, it is one lakh plus crore which is out of the net, SSI, edible oil, textile sector, these are huge chunks of industry,” said Shah. “If we are talking of GST, we are now talking of all these sectors having in to move towards the tax net, how else are we going to have a GST?” he asked. He expressed surprise at tax exemption demands by the industry even with the GST on the anvil. “The industry supports GST but very, very surprisingly, keeps expecting and wanting exemptions, the two do not go together, every time there is a break in the CENVAT chain, you have a problem, you have tax sticking on to some products, which the next man has to bear and there is no reason why you should bear it,” added Shah. The CBEC boss said such a line of thinking was behind decision to slowly bring these sectors into tax net and the government believes these are essential steps to move towards GST. Talking about the CENVAT credit rules, he said that more than 10-12 per cent of the litigations were because of two specific rules in the CENVAT i.e. Rule 6 and Rule 7, that have now been completely revamped. “We have tried to simplify them to the extent possible.” “We are expecting a hit of more than Rs 1,000 crores only because of the CENVAT credit rule changes, in terms of simplification, we thought it is something essential, because the cost of litigation was much more than the revenue which we are otherwise getting,” he said. According to Shah, the simplified processes will add to ease of doing business and reduce transaction costs. “The focus right through the budget has been on simplification, on ensuring that the taxpayer gets better value for money, gets better services from us and has lesser interaction with us,” said Shah. He also said that his department has now taken the move to withdraw all old pending prosecutions. On the customs side, Shah said that deferment of payment of duty had been permitted. “These are sections which have been amended in the Customs Act which permits removal of goods without payment of duty, the rules and details will be finalised in the course of next few weeks, basically we want to club this along with a concept of an accredited client, a scheme which we already have.”
Source: Fibre2fashion
The government has set up a special cell to compile information on subsidies given by other countries to their industry, official sources told The Hindu. The constitution of the special cell — as well as proposed measures including changes in laws such as Customs Act —is also aimed at indirectly helping India Inc file applications before the government seeking imposition of anti-subsidy duties on subsidised imports of items, such as steel, harming local industries. The development comes in the backdrop of slowdown in global trade and measures taken (including against merchandise exports from India) by several countries such as the U.S. to protect their domestic industries from unfairly low-priced imports. Under the WTO norms, subsidies refer to financial contribution (loan, loan guarantee, grant, import duty exemption, equity infusion, fiscal incentives and purchase of goods) by the government or state agencies resulting in advantages to those players availing it. Action against subsidies is meant to level the playing field.
Digital India
The move to create a special cell — with representatives from several ministries including commerce and finance — also comes at a time when the government is keen to boost local manufacturing through initiatives such as Make In India, Start-up India and Digital India.
Source: The Hindu Business Line
India’s central bank will wait a month to cut interest rates again, according to economists in a Reuters poll who mostly said New Delhi’s latest fiscal deficit target looked optimistic. Finance Minister Arun Jaitley committed to fiscal discipline in his Feb 29 budget, lowering the deficit target further for the fiscal year that starts next month, but offered little in the way of reforms investors have been waiting for. Investors and traders in financial markets have been hoping Reserve Bank of India Governor Raghuram Rajan will follow soon with a rate cut, like he did last year. But the majority of economists polled said he would not repeat the surprise cut of 25 basis points he delivered just a few days after last year’s budget, with 20 of 28 saying a cut was unlikely before next month’s policy review on April 5. “Although we doubt the fiscal math, the fact that the government has been sticking to the stated math, in whatever way they are doing it, creates room for Rajan to cut rates soon,” said Kunal Kundu, India economist at Societe Generale. “They will probably bring the fiscal deficit down in a way that is not desirable, by cutting public capex, but Rajan has indicated that even if fiscal consolidation leads to lower growth he would still be OK with it,” he said. Asked what they thought about the fiscal deficit target for the next fiscal year, nearly two-thirds of the economists said Jaitley was being optimistic. The rest felt it was about right. About two-thirds, 17 of 25, also predict the RBI will cut its benchmark repo rate by 25 basis points to 6.50 percent next month. Two predicted a deeper 50 basis point cut to 6.25 percent, while six saw no change. After an April cut, the RBI is set to ease policy again in the last quarter of the year, according to the consensus view. That is a very different outlook from what happened last year, when the RBI sliced 125 basis points off rates, twice unexpectedly and in-between meetings. Last year’s rate cuts came as inflation cooled rapidly around the world, triggering a wave of similar easier policy from major central banks. Consumer price inflation in India was 5.7 percent in January. That exceeds Rajan’s inflation target of 5 percent set for March 2017. Coupled with a weakening Indian rupee, predicted to fall to record lows in the coming 12 months, rising inflation could stall the RBI’s easing cycle. There is a roughly one-in-three chance of the rupee falling to 70 per dollar, a Reuters poll of currency strategists showed on Thursday. India is set to raise wages by almost 25 percent for its millions of public sector employees, a once-in-a-decade bonanza that will cost roughly $16.6 billion dollars, something that economists widely agree is inflationary. Despite that extra expenditure, as well as planned outlays on farming and schemes to guarantee minimum employment for people in rural areas, Jaitley surprised investors by pledging to cut the fiscal deficit to 3.5 percent of gross domestic product in the 2016-17 fiscal year.
The RBI, however, is not yet convinced.
A possible source of revenue next fiscal year is sales of government stakes in public sector companies, the budget says. But successive governments have had a poor track record selling off companies and it could be especially hard amid global stock market turmoil. Three policymakers aware of the RBI’s budget deliberations said they were combing the numbers to test how Jaitley struck a balance and whether the impact of the public pay rise had been fully accounted for.
Source: Financial Express
The Finance Minister was addressing industrial chambers during his post-Budget interaction on Wednesday. The government has taken “one step forward” to resolve the retrospective tax cases by putting in place a statutory mechanism for ending such disputes, Finance Minister Arun Jaitley said on Wednesday. In the Union Budget presented on Monday, he has made a one-time offer to firms facing tax liability on the retrospective tax front by way of waiver of interest and penalty if they pay up principal tax. Addressing industrial chambers during his post-Budget interaction on Wednesday, Mr. Jaitley said he had inherited retrospective tax cases, but has now taken “one step forward” towards resolving them. “I had hoped it (cases) would be resolved by courts or tribunal (where) issues are pending. But now, I have a statutory mechanism of resolving it and therefore, again we have taken the first significant step forward in order to be in a position to resolve this,” he said. UK oil explorer Cairn Energy is facing a tax demand of Rs 10,247 crore on a 2006 business reorganisation it carried out in its India unit before getting it listed. The company says it has paid all taxes due and there was no unpaid liability. It invoked India-UK BIPA to take the government to arbitration over the issue. British telecom giant Vodafone is also facing tax liability over its USD 11-illion acquisition of a 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007. While the UK telecom group says it does not owe any tax as the transaction was conducted offshore, the Income Tax Department is seeking taxes on the deal because it involved assets in the country. Arbitration has been initiated on this issue as well. “I think what is most important is our desire to resolve all pending disputes,” Mr. Jaitley said. On other tax disputes, he said that at the first appellate stage, both direct and indirect tax issues can be resolved by paying tax and interest in some cases and penalty as well in some exceptional high-value cases.
Source: The Hindu Business Line
The Reserve Bank of India (RBI) on Friday announced open market operation (OMO) purchases of government securities worth Rs 15,000 crore on March 10. The RBI conducts OMO purchases in order to infuse liquidity into the system whenever there is a deficiency, while it conducts OMO sales to suck excess liquidity from the system. OMOs are also intended to keep the short-term interest rates close to the policy rate. The central bank has notified six different securities for the OMO purchase — 7.83% GS 2018, 8.12% GS 2020, 8.83% GS 2023, 7.72% GS 2025, 8.28% GS 2027 and 7.88% GS 2030. The liquidity deficit in the banking system has been around Rs.1.5 trillion over the past two months, mainly because of the build-up of the government’s cash balance with RBI. The central bank’s foreign exchange interventions in the recent past have also increased the deficit.
Source: Financial Express
The negotiations for the Regional Comprehensive Economic Partnership (RCEP) involving 16 countries could slow down in the coming months due to a lack of consensus over services. Some members are unwilling to show flexibility in discussing liberalisation of the services sector, and are instead seeking more relaxation in goods, while India wants a greater commitment from them on services, as it has shown in offering to remove barriers in goods trade, sources told FE. India will likely step up its demand for a deal on services in Perth in Australia where the 12th round of RCEP negotiations are scheduled to take place from April 22. The absence of a consensus on services may further delay the negotiations, which have already missed the 2015 deadline for conclusion, even as pressure piles up on the bloc to clinch a deal following the Trans-Pacific Partnership between the US and 11 other countries. India is of the opinion that a liberalisation of services, such as further relaxation in visa regime for a freer movement of professionals, should be addressed along with that of goods, while some other members seem to be interested only in goods, they added. The country is keen on services, as they account for over a half of its GDP. Some of these members want that a clear-cut ministerial mandate has to be reached first on services at the RCEP before such issues can be taken up, while India argues that even the current mandate doesn’t prevent any discussion on them, said the sources.
India is also miffed that while it has taken its initial offer of removing import duties on 42.5% of tariff lines on goods seriously, many Asean nations that are part of the negotiations haven’t progressed much on their offers. The movement of natural persons is one of the four ways through which services can be supplied internationally. Also known as “Mode 4”, it covers natural persons who are either service suppliers (such as independent professionals) or who work for a service supplier and who are present in another member to supply a service. India has a vast pool of skilled workers, especially in the IT sector. RCEP is a proposed free trade agreement between the 10 Asean members and the six countries with which Asean has existing FTAs. These negotiations were formally started in November 2012. It is essentially a mega trade deal that aims at covering goods, services, investments, economic and technical cooperation, competition and intellectual property rights, and is viewed as an alternative to the TPP, which excludes China and India.
Earlier, RCEP members had said a successful trade deal would lead to the creation of the largest free trade bloc, making up for 45% of the global population and a third of the world’s gross domestic product.
Source: Financial Express
The International Monetary Fund (IMF) has cautioned that global financial market volatility, a potential further deterioration in exports, and strains in bank and corporate balance sheets could weigh on India's growth prospects. High fiscal deficits and upside risks to inflation constrain the scope for countercyclical policies. It also said India's potential is enormous but it needs to continue with reforms to remain in the economic 'sweet spot' while reiterating its forecast that the country's growth will pick up marginally next year. In its annual Article IV consultation report, the IMF underscored the need for continued vigilance, growth-friendly fiscal consolidation, and sustained reforms to enhance the resilience of the economy and bolster potential growth. IMF Executive Directors who held consultation with Indian authorities said addressing supply constraints and further improving the business environment remain important priorities. Progress in these areas would have a positive impact on poverty reduction. The Directors stressed the importance of preserving external stability. They noted that India's international reserves are assessed to be adequate. They agreed that, in the event of a surge in global financial market volatility, exchange rate flexibility remains a key shock absorber, complemented by judicious foreign exchange intervention. They encouraged the authorities to sustain the reform momentum to further enhance investor confidence and attract foreign direct investment, while cautiously liberalizing external commercial borrowings by the private sector. The Directors welcomed the adoption of flexible inflation targeting and progress in enhancing monetary policy transmission. Given upside risks to inflation and still high household inflation expectations, they agreed that the monetary policy stance should remain appropriately targeted at ensuring durable reduction in inflation toward the medium-term target, supported by clear policy communication, continued fiscal consolidation, and measures to boost food supply. They encouraged the monetary authorities to stand ready to tighten the stance if warranted. The IMF Directors welcomed the recent improvements in the quality and efficiency of public expenditure, as well as revenue-enhancing measures. They called on the authorities to articulate and implement credible measures that would underpin the achievement of the medium-term fiscal deficit targets and increase fiscal space for priority capital spending and social expenditures. Crucial in this regard are further reforms of fertilizer and food subsidies, a well-designed goods and services tax, and improved tax administration. While acknowledging that India's financial system is generally sound, the Directors noted potential risks from weak corporate and bank balance sheets. They supported ongoing efforts to further enhance bank supervision, and encouraged the authorities to continue to strengthen prudential regulation for bank asset quality recognition, augment capital buffers and improve corporate governance at public sector banks, as well as enhance the bankruptcy and insolvency framework. (SH)
Source: Fibre2fashion
The US trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter. The Commerce Department said on Friday the trade gap increased 2.2% to $45.7 billion. December's trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months. Economists polled by Reuters had forecast the trade deficit widening to $44.0 billion in January. When adjusted for inflation, the deficit increased to $61.97 billion from $60.09 billion in December. Trade subtracted a quarter of a percentage point from gross domestic product in the fourth quarter, helping to hold down growth to a tepid 1.0% annual rate. In January, exports of goods fell 3.3% to $116.9 billion, the lowest level since November 2010. Overall exports of goods and services dropped 2.1% to their lowest level since June 2011. There were declines in food exports, which were the weakest since September 2010. Industrial supplies and materials exports fell to their lowest level since March 2010. Petroleum exports also fell, touching their lowest level since September 2010. Exports of non-petroleum products were the weakest since February 2011. Exports to the United States' main trading partners fell broadly in January. Imports of goods fell 1.6% to $180.6 billion, the lowest level since February 2011. Import growth is being constrained by ongoing efforts by businesses to reduce a stockpile of unsold merchandise. Lower oil prices as well as increased domestic energy production are also helping to curb the import bill. There were declines in imports of industrial supplies and materials. Automobile imports were, however, the highest on record. The politically sensitive US-China trade deficit rose 3.7% to $28.9 billion in January.
Source: Business Standard
Foreign investors have started showing interest on Tanzania’s textile subsector, which is a good indication of prospects for the country’s industrialisation drive. According to the Textile Development Unit’s (TDU) Investment Promotion Director, Mr Tim Armstrong, there is a significant potential for flourishing textile and garment industry in the country, thanks to the country’s cotton production capacity. Mr.Armstrong said that there had been an influx of foreign investors and retailers in the country to explore investment opportunities and more potential investors are expected in the country soon.
The Tanzania Gatsby Trust funded TDU, which was formed in 2012 is a specialist unit within the Ministry of Industry, Trade and Investment whose objective is to support development of a large and internationally competitive textile and garment sub-sector
TDU has already facilitated the formation of the Textile and Garment Manufacturers Association of Tanzania (TEGAMAT) to represent the interests of the industry with expertise in technology, management and marketing, the unit is designed to facilitate supplier relationships, build training capabilities and coordinate friendly policies for investors. TDU is striving to help new investors to locate empty factory space in identified regions and link investors to joint ventures. The government, TEGAMAT and the TDU are working closely to improve the regulatory environment, incentives for investors, the quality of inputs and the upgrading of the industry. Tanzania boasts of bumper cotton harvests, with expertise and infrastructure to sustain the spinning, weaving and manufacturing elements of the value chain. Cotton is mostly grown in the Western Cotton Growing Area -- Mwanza, Mara, Chato, Simiyu and Geita regions.
Source: Yarn and fibre
Nigerian textile and apparel industry currently under performing amid the influx of cheaper fabrics from China and India with about 30 operational textile mills running at an average of 40 percent of installed capacity, according to Nigeria financial think-tank, relations between Nigeria and Turkey could help revive the Nigerian textile and apparel industry. Most manufacturers within the industry have cited the high cost of financing as a major hindrance. According to National Bureau of Statistics, Nigeria spent N24,7 billion (US$130 million) on textile imports in the third quarter of last year, representing a 17 percent decline. The observation was made to coincide with Turkey President, Tayyip Erdogan, led a delegation from his country on a state visit to Nigeria. First Bank of Nigeria (FBN) Capital said on Thursday the textile industry is presently struggling but measures have been put in place to revive it. They understand that government officials from Turkey are currently visiting Nigeria. Turkey is an important cotton producer and has a well-developed domestic textiles industry. Textiles feature in the Central Bank of Nigeria’s circular of June 2015, specifying 41 import items for which foreign currency from official sources is not available. In 2010 in order to encourage domestic production, government placed a ban on textile importation. However, this led to increased smuggling, FBN Capital noted. Smuggled imported textiles are said to account for over 85 percent of fabrics sold locally.
Source: Yarn and fibre
China is trying to replace a worn-out model based on trade and investment with self-sustaining growth driven by domestic consumption. China’s leadership cut this year’s growth target for its slowing economy to 6.5-7 per cent and promised Saturday to open its oil and telecoms industries to private competitors as part of sweeping reforms aimed at boosting productivity and incomes. The growth target, down from last year’s “about 7 percent” and less than half of 2007’s peak of 14.2 per cent, was included in a work report delivered by Premier Li Keqiang to China’s national legislature in front of nearly 3,000 delegates gathered in the cavernous Great Hall of the People. “We must deepen reform across the board,” he said in a nationally televised speech. He said the market “must play a decisive role.” The world’s second-largest economy has cooled steadily over the past five years as the ruling Communist Party tries to replace a worn-out model based on trade and investment with self-sustaining growth driven by domestic consumption. The growth in 2015 declined to a 25-year low of 6.9 per cent and is forecast to drift lower this year. The plans call for transforming China into a middle-income economy with self-sustaining growth driven by consumer spending instead of investment, trade and heavy industry. That requires the ruling party to cut the dominance of State companies that dominate industries from banking and telecoms to oil and steel and give entrepreneurs a bigger role. Mr. Li promised to open service and manufacturing industries wider to foreign investors, though he gave no details. He promised regulations would be made “more fair, transparent and predictable” to attract investment. Business groups have complained Chinese regulators are hampering access to promising sectors in violation of its free-trading pledges. Much of China’s slowdown has been self-imposed as regulators clamped down on a building boom and nurtured retailing, tourism and other service industries. An unexpectedly sharp downturn over the past two years has raised the risk of politically dangerous job losses and prompted Beijing to shore up growth with mini-stimulus efforts. The latest growth target would be the minimum Chinese leaders have said is required to achieve the official goal of doubling incomes per person from 2010 levels by 2020. The country needs to create more than 50 million new urban jobs during the five years through 2020, Mr. Li said. The Premier pledged to accelerate “supply-side reform,” or the painful process of shrinking bloated industries from steel to cement to aluminium in which supply exceeds demand. That glut has led to price-cutting wars that are driving companies into bankruptcy. Steel producers have responded by exporting their surplus, prompting complaints by China’s trading partners. Mr. Li said Beijing will promote mergers and shut down “zombie enterprises”, the Chinese term for companies that are kept afloat by cheap loans from State banks. He said targets will include the coal and steel industries, for which plans already were announced in February, but didn’t give details of other sectors that will be affected. The government said this week it expects to eliminate 1.8 million coal mining jobs about 17 per cent of the industry’s workforce.
Source: The Hindu Business Line
Following the release of a new draft standard for wool production created by not-for-profit organisation Textiles Exchange, Australian growers warned that failing to changes its approach to animal welfare would fall further behind their competitors said Italian wool buyer Modiano. Responsible Wool Standard (RWS) sets out guidelines for growers to meet around animal welfare and sustainability and prohibits museling, the practice of surgically removing skin surrounding a sheep's tail to prevent fly-strike. If the RWS is accepted by retailers next month, major brands like Target and H&M will be encouraged to exclusively buy non-mulesed or cease-mulesed wool. Modiano's Australian managing director Stuart Clayton said that this renewed push to stamp out surgical mulesing could affect demand for Australian wool. Countries like New Zealand and South Africa, their markets would probably continue to be strong as they are at the moment and Australia would probably be the only country that would largely suffer. Modiano has led a sustained campaign to phase out surgical mulesing and make the use of pain relief mandatory in instances where it’s not possible for producers to stop.
Mr Clayton said that European buyers were refusing to use Australian wool because of the use of growers using mulesing, despite Australia's reputation as a world leader in animal welfare. According to Modiano, non-mulesed wool was attracting a up to $1 more than mulesed products, and said this figure could increase if demand for non-mulesed wool continued. Australian Wool Innovation seems to take the approach of putting their head in the sand on this issue and they need to be proactive and get the message out that woolgrowers are doing the right thing, Mr Clayton said. However, Australian Wool Innovation defended its record, saying it regularly holds briefings with large retail associations in key markets. The industry body also said that woolgrowers had invested $33 million on flystrike prevention since 2005, and was a world leader in the development of pre and post mulesing pain relief for sheep. Australia is by far the biggest producer of non-mulesed apparel wool in the world and the National Wool Declaration offers buyers the opportunity to reward woolgrowers' practices, an AWI spokesperson said. Every AWI marketing program both domestically and globally champions the sustainable, ethical and versatile aspects of Australian wool. WoolProducers Australia chief executive officer Jo Hall said that not all growers would be able to phase out mulesing completely. Hoewever, she said that higher premiums for non-museled wool might encourage more growers to find alternative ways to control fly strike. The fact is Australian wool is produced across a large range of geographic and climatic conditions and the industry is working towards finding a suitable alternative to mulesing.
Source: Yarn and fibre
