Even as the central government aims to correct the inverted duty structure to give relief to the textile industry, manufacturers -- especially those of textile and apparel (other than fibre and yarn) -- have raised red flags on the upcoming Goods and Services Tax (GST) rate hike, which will kick in from January 1, 2022. Officials in the loop tell CNBC-TV18 that the Union Ministry of Textiles -- after receiving inputs from industry associations -- has now decided to approach the GST secretariat seeking a restoration of the rate to 5%. “The industry is of the view that textile fabric manufacturers or fabric weavers will see a significant rise in their working capital requirements due to the disparity, as raw material will be taxed at 5% and the finished product will be taxed at 12%. So, they are seeking a restoration of the old rate of 5%,” the source said. The textiles ministry is opposed to the rate hike and feels that the industry needs relief. Any decision which adds to their troubles needs to be flagged. So, our communication to the GST secretariat is very clear -- maintain status quo on rates and make any change only after a detailed discussion with the ministry and the industry stakeholders,” the source added. Cotton fabric manufacturers too are opposed to a hike and want GST to remain at 5% The GST Council, in its last meeting, took the decision to correct the inverted tax structure by raising GST from 5% to 12% for several textiles and apparel (other than fibre and yarn) items from January 1, 2022. Currently, GST on manmade fibre (MMF) and MMF yarn is at 12%, and MMF fabrics is at 5%. The chemical inputs used to make yarn or fibre are taxed at 18%. So now, all interested parties have their eye on January 1, 2022, waiting to see whether the plea raise by the textile’s ministry gets a timely resolution.
Source: CNBCTV18
The financial assistance is being provided to the eligible handloom agencies/weavers for raw materials, purchase of upgraded looms & accessories, design innovation & product diversification, infrastructure development, marketing of handloom products in domestic as well as overseas markets. Further, 100% subsidy is given to women weavers for construction of individual workshed. Kamladevi Chattopadhyay Award has been instituted specifically for women weavers. Mudra loans at concessional rates, and other measures adopted under various schematic interventions for handloom workers including women throughout the country including Telangana. To overcome the present challenges being faced by handloom workers, the Government has taken following steps Weaver Women welfare and to promote handloom sector across the country: - i. Approximately, 1.50 Lakh weavers have been on-boarded on the GeM portal. Steps have been taken to on-board weavers on Government e-Market place to enable them to sell their products directly to various Government Departments and organizations. ii. 128 Handloom Producer companies have been formed in different States to enhance productivity, marketing capabilities and ensure better incomes, iii. Under Concessional Credit/ Weaver MUDRA Scheme, financial assistance is provided as follows : a. Margin money assistance • @ 20% of loan amount, subject to maximum of Rs.25,000/- per weaver’ • 20% of loan amount, subject to maximum of Rs.20.00 lakh (@ Rs.2.00 lakh for every 100 weaver/ worker) per handloom organisation. b. Interest subvention upto 7% for 3 years; and c. Credit Guarantee on loans for 3 years iv. Design Resource Centres have been set up in Weavers’ Service Centres at Delhi, Mumbai, Varanasi, Ahmedabad, Jaipur, Bhubaneswar, Guwahati and Kancheepuram, through NIFT with the objective to build and create designoriented excellence in the Handloom Sector and to facilitate weavers, exporters, manufacturers and designers access design repositories for sample/product improvisation and development. v. To promote marketing of handloom products, Handloom Export Promotion Council (HEPC) has been organizing International Fairs in virtual mode. During the year 2020-21, 12 handloom fairs were organized in virtual mode. Besides, domestic marketing events were also organized in different parts of the country for the weavers to market and sell their products. This information was given by the Minister of State for Textiles Smt. Darshana Jardosh in a written reply in the Lok Sabha today.
Source: PIB
The article published in the RBI Bulletin said India's apparel exports to the EU, which is the largest market for apparel exports, have stagnated in the last decade while other countries like Bangladesh, Vietnam and Cambodia have witnessed robust growth. India needs to actively pursue free-trade agreements (FTAs) with major export destinations like the EU and the US to push apparel shipments amid increasing competition from Bangladesh and Cambodia that enjoy tariff concessions, an RBI article said on Wednesday. India has traditionally enjoyed a comparative advantage in the textile sector, including apparels, and they constitute a major chunk of India's export basket. "However, over the past few years, near stagnation in India's textile exports, particularly in apparel exports, has been witnessed," said the article in its analysis of the role of tariff regimes of the destination country in directing the exports of apparels from major suppliers including India. The article published in the RBI Bulletin said India's apparel exports to the EU, which is the largest market for apparel exports, have stagnated in the last decade while other countries like Bangladesh, Vietnam and Cambodia have witnessed robust growth. Preferential tariff treatments in the form of EBA (Everything But Arms) have been a major contributory factor for the rapid growth of apparel exports from Bangladesh and Cambodia, especially after the relaxation of input sourcing norms in 2011. "Robust growth of apparel exports by Vietnam to EU despite facing similar tariff structure reflects some underlying issues being faced by the apparel exporters in India," said the article written by RBI officials. The RBI, however, added that the views expressed in the article are those of the authors and do not represent the views of the Reserve . The US, the EU, UAE, Canada and Saudi Arabia are among the major markets for Indian apparels. "India needs to actively pursue free-trade agreements with its major export destinations - EU, US - to prevent competitive disadvantage it currently faces due to tariff-free access to its competitors," the article said. With Vietnam having signed an FTA with the EU in 2019, the competition is only expected to intensify for India, it added. According to the authors, the recently introduced production-linked incentive (PLI) scheme for textiles, specifically aimed at boosting the production of man-made fibre (MMF) fabric, MMF apparel and technical textiles is a step in the right direction. High transportation cost owing to wider geographical spread, high inland transportation cost and major production areas situated inland also contribute to the higher cost of Indian apparel exports vis-a-vis competitors. The PM-MITRA (Mega Integrated Textile Region and Apparel) parks scheme, under which seven integrated textile parks are to be set up in the country, will help develop the integrated textile value chain, the article said.
Source: Economic Times
Government has been facilitating, monitoring, assisting and channelizing efforts to increase the exports and thereby its share in GDP through a target-driven approach by engaging all stakeholders, across states and districts. Despite the pandemic, the share of India’s total exports (Good & Services) to GDP was 18.7% in 2020-21, which is already above 15 percent. Exports have performed remarkably well in the current financial year with the share of exports to GDP at 21.7 percent in the first half (April to September) of 2021-22. The following are some of the steps taken by Department of Commerce to increase exports and thereby its share in GDP: 1. ‘Districts as Export Hubs’(DEH) Initiative under which products and services with export potential have been identified in all districts of the country. An institutional mechanism has been set up in each District in the form of District Export Promotion Committees (DEPCs). The primary function of the DEPC is to prepare and act on District Specific Export Action Plans in collaboration with all the relevant stakeholders from the Centre, State and District levels. 2. A Central Sector Scheme ‘Transport and Marketing Assistance (TMA) for Specified Agriculture Products’ for providing assistance for the international component of freight, to mitigate the freight disadvantage for the export of agriculture products, and marketing of agricultural products, is under implementation. 3. Market Access Initiative (MAI) Scheme is an Export Promotion Scheme envisaged to act as a catalyst to promote India’s exports on a sustained basis. The scheme is formulated on focus product-focus country approach to evolve specific market and specific product through market studies/survey. Assistance would be provided to Export Promotion Organizations/Trade Promotion Organizations/National Level Institutions/ Research Institutions/Universities/Laboratories, Exporters etc., for enhancement of exports through accessing new markets or through increasing the share in the existing markets. 4. In addition, assistance to the exporters of agricultural products is also available under the Export Promotion Schemes of Agricultural & Processed Food Products Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), Tobacco Board, Tea Board, Coffee Board, Rubber Board and Spices Board. Trade Infrastructure for Export Scheme (TIES) is operational from FY 2017-18 with the objective of assisting Central and State Government agencies for creation of appropriate infrastructure for growth of exports. 6. The Government has introduced the Remission of Duties and Taxes on Exported Products (RoDTEP). This scheme seeks remission of Central, State and Local duties/taxes/levies at different stages at the Central, State and local level, which are incurred in the process of manufacture and distribution of exported products, but are currently not being refunded under any other duty remission scheme. 7. Common Digital Platform for Certificate of Origin to facilitate trade and increase FTA utilization by exporters. 8. EPCs, Commodity Boards and India’s mission abroad are actively promoting India’s trade, tourism, technology and investment goals. This information was given by the Minister of State in the Ministry of Commerce and Industry, Smt. Anupriya Patel, in a written reply in the Lok Sabha today.
Source: PIB
Various initiatives/schemes have been launched by Government for promoting growth and attracting investment in India. The Make in India programme was launched on 25th September, 2014 with aim of facilitating enhanced investment, foster innovation, build best in class infrastructure, and make India a hub for manufacturing, design, and innovation. Continuous efforts are made under Investment Facilitation and Outreach for implementation of Make in India action plans to identify potential investors, support Indian Missions abroad and State Governments for organizing events, summits, roadshows and other promotional activities to attract investments in the country. Measures have been taken to improve the country’s investment climate, as a result of which India jumped to 63rd place in World Bank’s Ease of Doing Business [EODB] ranking as per World Bank’s Doing Business Report (DBR) 2020 from a rank of 142 in 2014. Department for Promotion of Industry and Internal Trade (DPIIT), in consultation with the State Governments, has also started a comprehensive reform exercise in States and UTs in December 2014. Under Business Reforms Action Plan (BRAP), all States/UTs in the country are ranked on the basis of reforms implemented by them on designated parameters. This exercise has helped in improving business environment across States. An Empowered Group of Secretaries has been constituted to fast track investments in the country. Similarly Project Development Cells (PDCs) have been set up across Central Government Ministries / Departments to handhold investors and spur sectoral and economic growth. Further, a GIS-enabled India Industrial Land Bank has been launched to help investors identify their preferred location for investment. National Single Widow System (NSWS) has also been soft launched in September, 2021 to facilitate clearances for investors. Keeping in view India’s vision of becoming ‘Atmanirbhar’ and to enhance India’s manufacturing capabilities and exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in Union Budget 2021-22 for Production Linked Incentives (PLI) schemes for 14 key sectors of manufacturing starting from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant creation of production, employment, and economic growth is expected over the next 5 years and more. Measures taken by the Government including on FDI Policy reforms have resulted in increased FDI inflows in the country year after year. India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional figures) in the financial year 2020-21 despite the COVID related disruptions. These trends in India's FDI are an endorsement of its status as a preferred investment destination amongst global investors. In the last seven financial years (2014-21), India has received FDI inflow worth US$ 440.27 billion which is nearly 58 percent of the FDI reported in the last 21 years (US$ 763.83 billion). This indicates increasing inclination of global companies to set up their business in India. Government has taken various other steps in addition to ongoing schemes to boost domestic and foreign investments in India. These include measures to reduce compliance burden for industry, National Infrastructure Pipeline, Reduction in Corporate Tax, Easing liquidity problems of NBFCs and Banks, Policy measures to boost domestic manufacturing through Public Procurement Orders, Phased Manufacturing Programme (PMP), and Schemes for Production Linked Incentives (PLI) of various Ministries, India Industrial Land Bank, Industrial Park Rating System etc. With the announcement of PLI Schemes, significant creation of production, employment, and economic growth is expected over the next 5 years and more. Besides the above, activities are also undertaken through schemes/ programmes, by several Central Government Ministries / Departments and various State Governments from time to time. The details of these measures are not centrally maintained by Department for Promotion of Industry and Internal Trade. This information was given by the Minister of State in the Ministry of Commerce and Industry, Shri Som Parkash, in a written reply in the Lok Sabha today.
Source: PIB
India’s merchandise exports in April-November 2021 was USD 263.78 billion which is 65.95% of export target of USD 400 billion for 2021-22, while till October 2021, merchandise exports was USD 233.90 billion. Government has increased the present period of realization and repatriation of the amount representing the full export value of goods or software or services exported from nine months to fifteen months from the date of export, for the exports made up to or on July 31, 2020. In addition, the Government has taken the following measures to boost exports throughout the country, including Gujarat: i. The mid-term review (2017) of the Foreign Trade Policy (2015-20) was carried out and corrective measures were undertaken. ii. Foreign Trade Policy (2015-20) extended by one year i.e. upto 31-3-2022 due to the COVID-19 pandemic situation. iii. Assistance provided through several schemes to promote exports, namely, Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme. iv. A Central Sector Scheme –‘Transport and Marketing Assistance for Specified Agriculture Products’–for providing assistance for the international component of freight to mitigate the freight disadvantage for the export of agriculture products. v. Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and Rebate of State and Central Levies and Taxes (RoSCTL) Scheme have been launched with effect from 01.01.2021. vi. Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters. vii. Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors. viii. Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district. ix. Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced. x. Package announced in light of the COVID pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports. This information was given by the Minister of State in the Ministry of Commerce and Industry, Smt. Anupriya Patel, in a written reply in the Lok Sabha today.
Source: PIB
RBI's recent surveys show for the year ahead, consumers are buoyed by sentiments on income and employment The Indian economy “continues to forge ahead, emerging out of shackles of pandemic,” but the rise of the Omicron variant has emerged as the biggest risk factor, said the state of the economy report released with the December bulletin of the Reserve Bank of India (RBI) on Wednesday. The Indian economy bounced back strongly in the second quarter, as the gross domestic product (GDP) surpassed its pre-pandemic levels, and inflation broadly remained under the 6 per cent range, the upper band of the tolerance range of the RBI. The RBI’s mediumterm target is to keep retail inflation at 4 per cent. In November, the retail inflation came at 4.91 per cent, but wholesale price index (WPI), which it no longer targets, came at a 12 year high of 14.23 per cent. “A host of incoming high frequency indicators are looking upbeat and consumer confidence is gradually returning. Aggregate demand conditions point to sustained recovery, albeit, with some signs of sequential moderation,” the report said. Farm sector is strong, while the “manufacturing and services record strong improvement on strengthening demand conditions and surge in new business,” the report said, adding high frequency indicators are also looking upbeat. The daily infections have tapered and the inoculation rate has gathered steam. Consumer confidence is gradually returning, and the “overall outlook remains optimistic on the general economic situation, the employment scenario and household income.” RBI’s recent surveys show for the year ahead, consumers are buoyed by sentiments on income and employment. Revenue collections under the goods and services tax (GST) in November was the second highest ever although e-way bill issuances moderated somewhat pointing to moderation in GST collections in the month ahead. On the other hand, toll collections remained resilient in November. Coal stock in power plants has risen to nine days, assuaging concerns on supply shortages. While both international and domestic cargo freight normalised in November, and passenger traffic has been gathering steam during the festive season, “new travel guidelines coming in the wake of Omicron might derail the nascent growth,” the report said. Expenditure by the centre and 18 states together during November-March 2021-22 is expected to grow by 27 per cent, assuming states meet their budgeted targets. Similarly, capital expenditure is expected to grow by 54 per cent in this period. “The higher revenue expenditure growth, a proxy of government final consumption expenditure, is expected to support economic recovery, while robust capex could crowd in private investment and improve medium-term growth prospects,” the RBI noted. “Going forward, the emergence of the Omicron strain has heightened the uncertainty in the global macroeconomic environment, accelerating risks to global trade with resumption of travel restrictions/ quarantine rules at major ports and airports,” the report said. This looming threat “calls for observing greater caution and readiness to respond swiftly.” According to the RBI, the ongoing supply-side constraints are likely to keep input prices and freight rates at elevated levels and could act as a “drag on overall exports.”
Source: Business Standard
The Odisha government on Wednesday accorded in-principle approval to seven industrial projects worth Rs 511.19 crore investment which would generate employment for 6,402 people in the state, official sources said. The approval was accorded at the State Level Single Window Clearance Authority (SLSWCA) meeting held under the chairmanship of Chief Secretary SC Mohapatra. The projects approved by the panel were from employment intensive sectors like textile and renewable energy, a senior industries department official said. A proposal of the Ambattur Fashions to set up a men’s and women’s apparel manufacturing unit at Chandaka in Khurda district at an investment of Rs 51 crore, which will generate employment opportunities for over 4,700 persons, got the approval. The committee has also approved another textile unit by the Wild Lotus Fashions to set up a garment manufacturing unit at the Chhatabar Industrial Estate in Khurda district at an investment of Rs 52.62 crore, which will generate employment opportunities for over 560 persons. The panel gave nod to set up a New Kraft Paper unit with a capacity of 300 tonne per day by the Shree Banshi Luxmi Private Limited (a subsidiary of Pioneer Packaging Private Limited) at Somanathpur in Balasore district at an investment of Rs 120 crore, which will generate employment opportunities for over 750 persons. Indian Oil Corporation Limited also got the approval to set up a 10 MW Solar Power Plant in Boudh at an investment of Rs 52.28 crore. The project will generate employment opportunities for over 65 persons. The panel also gave in principal approval to Prachi Resorts to set up a 4-star Hotel in Bhubaneswar at an investment of Rs 63.30 crore, which will generate employment opportunities for over 85 persons. Similarly, it gave nod to Sygma Tubes and Pipes to set up a 5,00,000 MT Tube & Pipe manufacturing unit at Rengali in Sambalpur district at an investment of Rs 51.99 crore. The proposed project will generate employment opportunities for over 60 persons. The iron ore beneficiation plant of PTCL Infrastructure Limited got the approval for the expansion of its iron ore beneficiation plant from 1.5 MTPA to 2.5 MTPA at Barbil in Keonjhar district at an investment of Rs 120 crore, which will generate employment opportunities for over 182 persons. “The government’s primary focus has been on the employment intensive sectors like textile and apparel industries which employ thousands of employees in a single unit. Considering the huge skill force in this domain, such apparel industries will minimize the outflow of migrant workers to other states and create massive employment i the state,” an official statement said.
Source: The Week
Imports too grew 42.57 per cent to $27.53 billion during the period under review, the data showed. India's exports rose 44.41 per cent to $16.46 billion year-on-year during December 1-14, 2021, according to preliminary data of the commerce ministry. Imports too grew 42.57 per cent to $27.53 billion during the period under review, the data showed. Imports, excluding petroleum, also increased 32.90 per cent last fortnight over the same period of 2020-21 and up 48.47 per cent as compared to same period of 2019-20
Source: Economic Times
India is actively negotiating Regional Trade Agreements (RTAs)/Free Trade Agreements (FTAs) with the following countries/regions :
|
Sl. |
Countries/Regions |
Name of the Agreement |
|---|---|---|
|
1 |
UAE |
India-UAE CEPA |
|
2 |
Australia |
India - Australia Comprehensive Economic Cooperation Agreement (CECA) |
|
3 |
Canada |
India – Canada Comprehensive Economic Partnership Agreement |
|
4 |
Israel |
India – Israel Free Trade Agreement (FTA) |
|
5 |
United Kingdom |
India-UK Enhanced Trade Partnership (ETP) |
|
6 |
Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia |
India-Eurasian Economic Union (EAEU) Free Trade Agreement (FTA) |
|
7 |
European Union |
India - EU Broad Based Trade and Investment Agreement (BTIA) |
|
8 |
South Africa, Botswana, Lesotho, Swaziland and Namibia |
India - SACU PTA |
India has signed 11 RTAs/FTAs with various countries/regions namely, Japan, South Korea, Mauritius, countries of ASEAN region and countries of South Asian Association for Regional Cooperation. India’s merchandise exports to these countries/regions have registered a growth of 20.75% in the last five years. As regards India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA), as this has been implemented w.e.f. 01-04-2021, it is too early to calculate quantifiable benefits. The following table gives country/region wise merchandise export details:
|
RTA partner countries/Region wise India’s exports Values in US$ billion |
|||
|
India RTA partner Countries/region |
Names of RTAs |
Export in FY 2016 |
Export in FY 2021 |
|
ASEAN |
India-ASEAN FTA India-Singapore CECA India-Malaysia CECA India-Thailand FTA - Early Harvest Scheme (EHS) |
25.13 |
31.49 |
|
Japan |
India-Japan CEPA |
4.66 |
4.43 |
|
South Korea |
India-South Korea CEPA |
3.52 |
4.68 |
|
SAFTA |
Agreement on SAFTA India-Sri Lanka FTA India-Nepal Treaty of Trade India-Bhutan Agreement on Trade, Commerce and Transit |
18.60 |
22.08 |
|
Mauritius |
India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) |
It is too early to calculate quantifiable benefits for this RTA, as it was implemented only w.e.f. 10.04.2021. |
|
|
Source: Directorate General of Commercial Intelligence and Statistics (DGCI&S) |
|||
As per the FDI data maintained by the Department for Promotion of Industry and Internal Trade (DPIIT), the cumulative investment received from the above countries/regions in the last 5 years (between October 2016 and September 2021) is to the tune of US$ 89.46 Billion. However, it is not possible to ascertain if investment from a country has taken place due to signing of an RTA or any other reason(s).
Review of RTAs/FTAs with South Korea, ASEAN and Singapore is under consideration.
This information was given by the Minister of State in the Ministry of Commerce and Industry, Smt. Anupriya Patel, in a written reply in the Lok Sabha today.
Source: PIB
Finance Minister adds that the government should encourage start-ups to develop solution Productivity improvement and higher per capita income can only happen in Tamil Nadu if the State moves up the value chain and for this, enhancing R&D capabilities is critical, said State Industry Minister Thangam Thennarasu. R&D will not only help in moving the existing base to the next level but also throw open newer and unique business ideas and provide opportunities for next generation entrepreneurs. R&D should be strengthened to open up another era of growth for the State, he said while addressing a virtual conference on ‘R&D as an Engine of Growth of Tamil Nadu’ organised by the Madras Chamber of Commerce and Industry on Wednesday. ‘Entrepreneurship culture’ Tamil Nadu has an entrepreneurship culture across the State and in cities like Chennai, Coimbatore, Tiruchi, Erode, Dharmapuri and Salem, and in diverse sectors like auto, auto components, textiles, apparels, electronics, IT, renewable, engineering and chemicals. The State has proven competency in engineering designs and product development. There are over 500 engineering colleges and polytechnics and technician institutes churn out over 2 lakh engineers, technicians and professionals every year. There are many researchers thanks to the presence of large companies like Caterpillar, Nissan and Ashok Leyland in the State, he said. “However, despite all the above, we are not where we have to be. If Tamil Nadu has to reach the target of a $1 trillion economy by 2030 and $100 billion exports, we cannot be complacent with the current level of R&D. The State has tremendous potential and aspiration levels are high. We are a mature economy and we have to move up further in our growth process. We need to create high value employment; export worthy and environmentally sustainable products. For this strengthening R&D is critical,” the Minister added. ‘Collaborate with start-ups’ Finance Minister Palanivel Thiaga Rajan said that the State government can support start-ups, but it is important that it promote start-ups as there are many problems that are unique to the State’s conditions. “We should be encouraging people by giving them more problem statements and giving instances where the government has intent but does not have the tools or technology to get it done, and encourage them to develop solutions,” he said. The government is the lead customer. There are many start-ups that have immediate applications for problems that the government is grappling with from land management to mining and urban development, he said. ‘Value-added jobs’ Industries Secretary S Krishnan said that R&D is imperative to the State’s growth. “Tamil Nadu has the highest gross enrolment ratio in excess of 50 per cent, twice that of the national average. We have a large number of qualified graduates coming out every year looking for jobs. While some find jobs outside the State or country, there are many who still need to be offered jobs within the State,” he said. There is a need to create more value-added jobs in the State in the years to come and one of the most potent areas where this can happen is the area of R&D,” he said. Tamil Nadu is one of the large economies and R&D will give the State an edge to grow even larger and be the number one economy in the county, he added.
Source: The Hindu Businessline
Tirupur Exporters and Manufacturers Association (Teama) has urged the Union government to drop the plans to hike Goods and Services Tax (GST) on garment products. While attending a GST meeting headed by Union finance minister Nirmala Sitharaman in New Delhi on Tuesday evening, Teama president M P Muthurathinam said the Centre’s move to increase the GST to 12% from 5% on textile apparels from January would have adverse impact on the industry, which is already reeling under input price rise. Stating that Tirupur was home to more than 12,500 knitwear, garment and allied units, which employ more than 10 lakh people, he said the pandemic and the lockdown had affected them, especially the Micro, Small and Medium Enterprises. He said the units in Tirupur accounted for exports to the tune of $4 billion . In the domestic market, he said, they do business worth about $2.80 billion. “The cost of raw materials for apparel manufacturing have increased over the past year. The price of raw cotton alone has shot up by Rs 130 per kg, compared to last year. Labour and container shortage add to their woes.” He said the textile units were facing extreme competition from countries such as China, Bangladesh and Vietnam in the export business front. “Amid these challenges, the entire textile industry is dependent on the domestic market for sustaining the business. If the GST were to be increased to 12%, it will add to the burden of the textile units, many of which may be forced to shut down.” While Sitharaman has promised to look into the issue, Teama members are planning to meet the state finance minister, P T R Palanivel Thiagarajan, and chief minister M K Stalin to put forth a request in this regard at the GST council meeting. They also sought ban or regulation on the export of raw cotton and yarn.
Source: Times of India
The Government had introduced Textile Workers Rehabilitation Fund Scheme (TWRFS) with effect from 15.09.1986 to provide relief to the workers rendered jobless due to permanent closure of Non-SSI Textile Mills in private sector. With effect from 01.04.2017, TWRFS has been merged with Rajiv Gandhi Shramik KalyanYojna (RGSKY) under Ministry of Labour and Employment and notified vide Notification No. S.O.1081 (E) dated 06.04.2017. Workers rendered jobless can avail benefits under the said scheme. With a view to address the skilled manpower requirement in textile sector, Ministry of Textiles is implementing Samarth (Scheme for Capacity Building in Textiles Sector), under the broad policy guidelines of “Skill India” initiative and in alignment with skilling programme of Ministry of Skill Development and Entrepreneurship. SAMARTH scheme supplements the efforts of creating jobs in the organized textile and related sectors of the entire value chain excluding Spinning and Weaving. SAMARTH scheme also supports skill upgradation in the traditional sectors of handlooms, handicrafts, sericulture and jute. This information was given by the Minister of State for Textiles Darshana Jardosh in a written reply in the Lok Sabha today.
Source: Orissa Diary,
Vice President of China Chamber of Commerce for Import and Export of Textiles (CCCT), Zhang Xi’an said on Wednesday that both China and Pakistan enjoy their own competitive edge in the textile and garment sector and Chinese businessmen are willing to strengthen trade and investment cooperation with Pakistan in the textile industry. Bilateral trade has been increased since the second phase of the China-Pakistan Free Trade Agreement came into effect in 2020, and more Pakistani products have been able to enter the Chinese market. Tariffs on some 75 percent of goods from both sides have been gradually reduced to zero since 2020, which has provided access to China for more high-quality products from Pakistan. “This agreement is not only a turning point for China-Pakistan trade and economic cooperation but also a new opportunity for China-Pakistan textile industry cooperation,” Zhang said in an interview with China Economic Net (CEN). “On the one hand, China’s textile industry has accelerated the pace of investment all over the world these years. On the other hand, Pakistan has also provided incentives for Chinese enterprises investing in Pakistan,” he explained. For example, in order to highlight to Chinese investors, the comparative advantage of Pakistan’s textile sector, CPEC Authority on December 1, organized a meeting with CCCT and leading Chinese textile companies and investors. Zhang Xi’an pinpointed the potential for China-Pakistan cooperation in textile. Take home textiles for instance. Pakistan is a major cotton producer in the world with a long history. In 2020, Pakistan exported home textiles worth $3.8 billion, accounting for 28pc of its total textile and garment exports. Pakistan is the third-largest supplier of home textile products to the United States and the second-largest supplier to the European Union. It occupies an important position in the supply chain of the international home textile industry and has a high share in the international home textile market with strong competitiveness. “China is willing to share advanced technology, and experience in research, design, manufacturing, management, marketing and brand building with our iron-clad brother Pakistan,” Zhang Xi’an informed, adding that Pakistan enjoys a cost-effective raw material supply and abundant human resources, therefore both sides can step up cooperation in trade, investment and resource integration, and jointly explore international markets. Established in October 1988, the China Chamber of Commerce for Import and Export of Textiles (CCCT), as part of the Ministry of Commerce, China, is the largest textile and apparel trade agency both in China and the world. Its member companies comprise the majority of Chinese textile and apparel enterprises incorporating domestic manufacturers, export and import enterprises as well as jointlyfunded operations, the trade volume of which accounts for 70pc of the total export and import volume of the Chinese textile and apparel industry as a whole.
Source: Orissa Diary
Eight export-oriented sectors including value-added textiles posted double-digit growth in November compared to the same month a year ago, data compiled by the Ministry of Commerce showed on Wednesday. Growth in the value-added sectors contributed to an increase in overall exports from the sectors. Highest-ever depreciation of the rupee against the dollar and greater demand from the international market are reasons behind the growth in these export-oriented sectors. The upward trend in exports of value-added sectors was seen for the past few consecutive months. In November, the total exports’ proceeds from the country reached $2.884 billion, up by 32.84 per cent from $2.171bn over the same period last year. Rupee depreciation, greater demand from international market helped bolster exports Exports of home textile products were up by 34pc to $465 million in November against $347m over the last year, followed by a 33pc increase in men’s garments to $446m against $335m last year. An increase of 68pc in jerseys and cardigans exports to $86m was noted against $52m over the corresponding month last year. Exports of women’s garments posted an increase of 34pc to $83m in November against $62m over the corresponding month of last year, followed by 24pc increase in export of leather apparel to $70m against $56m over the last year. An increase of 127pc was noted in the export of fruits and vegetables to $63m against $28m over the last year. Cement exports were up by 193pc to $53m in November against $18m last year. Exports of plastics posted a negative growth of 34pc to $46m against $69m from a year ago. A 5pc decline in exports of surgical instruments to $38m against $40m was observed over the corresponding month of last year. A decline of 7pc in meat exports to $30m from $32m a year ago was noted. A drop of 43pc in export of furniture to $2m from $4m was observed from a year ago. According to the data, the United States of America, China, United Arab Emirates and Netherlands remained the top destinations of Pakistan’s exports during the month of November from a year ago. Pakistan exports to the US posted growth of 48pc to $634m in November against $428m over the corresponding month of last year, followed by 30pc increase to China as it stood at $353m this year against $273m over the last year and 96pc increase to the UAE as it stood at $145m against $74m. The export value to the Bangladesh increased by 87pc to $90m this year against $48m over last year, followed by an increase of 30pc to Germany as it reached $166m against $128m over the last year. Exports to Sri Lanka increased 185pc to $52m against $18m last year. Exports to Belgium went up 68pc to reach $76m against $45m over last year. Exports to Malaysia increased 220pc to $39m against $12m while exports to Italy went up 40pc to $93m against $66m. In November, Pakistan’s exports declined 11pc to Afghanistan as it stood at $71m against $80m, 12pc to Indonesia to $17m from $19m, a decline of 65pc to Vietnam to $12m from $34m, and 24pc to Ukraine to $4m from $6m.
Source: The Dawn
A new Asia-Pacific free trade agreement set to enter into force on 1 January 2022 will create the world’s largest trading bloc by economic size and significantly impact the international trade, according to a UNCTAD study published today. The economic size of the emerging bloc and its trade dynamism will make it a centre of gravity for global trade. The Regional Comprehensive Economic Partnership (RCEP) includes 15 East Asian and Pacific nations of different economic sizes and stages of development. They are Australia, Brunei Darussalam, Cambodia, China, Indonesia, Japan, the Republic of Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Vietnam. The RCEP will become the largest trade agreement in the world as measured by the GDP of its members – almost of one third of the world’s GDP. By comparison, other major regional trade agreements by share of global GDP are the South American trade bloc Mercosur (2.4 per cent), Africa’s continental free trade area (2.9 per cent), the European Union (17.9 per cent) and the United States-Mexico-Canada agreement (28 per cent). Amid COVID-19, the entry into force of the RCEP can also promote trade resilience. Recent UNCTAD research shows that trade within such agreements has been relatively more resilient against the pandemic-induced global trade downturn. The agreement encompasses several areas of cooperation, with tariff concessions a central principle. It will eliminate 90 per cent of tariffs within the bloc, and these concessions are key in understanding the initial impacts of the RCEP on trade, both inside and outside the bloc. Under the RCEP framework, trade liberalisation will be achieved through gradual tariff reductions. While many tariffs will be abolished immediately, others will be reduced gradually during a 20-year period. Trade between the bloc’s 15 economies was already worth about $2.3 trillion in 2019, and UNCTAD’s analysis shows the agreement’s tariff concessions could further boost exports within the newly formed alliance by nearly 2 per cent, or approximately $42 billion. This would result from trade creation – as lower tariffs would stimulate trade between members by nearly $17 billion – and trade diversion – as lower tariffs within the RCEP would redirect trade valued at nearly $25 billion away from non-members to members. Tariff concessions are expected to produce higher trade effects for the largest economies of the bloc, not because of negotiations asymmetries, but largely due to the already low tariffs between many of the other RCEP members UNCTAD’s analysis shows Japan would benefit the most from RCEP tariff concessions, largely because of trade diversion effects. The country’s exports are expected to rise by about $20 billion, an increase equivalent to about 5.5 per cent relative to its exports to RCEP members in 2019. The report also finds substantial positive effects for the exports of most other economies, including Australia, China, the Republic of Korea and New Zealand. On the other hand, calculations show RCEP tariff concessions may end up lowering exports for Cambodia, Indonesia, the Philippines and Vietnam. This would stem primarily from the negative trade diversion effects as some exports of these economies are expected to be diverted to the advantage of other RCEP members because of differences in the magnitude of tariff concessions, according to the report. The report notes, however, that the overall negative effects for some of the RCEP members don’t imply that they would have been better off by remaining outside of the RCEP agreement. Trade diversion effects would have accrued, nonetheless.
Source: Fibre2 Fashion
