The ministry on Tuesday notified final guidelines for the PLI scheme, under which incentives will be extended for five years. The textile ministry has capped the annual turnover growth at 35% against which incentives under a Rs 10,683-crore production-linked incentive (PLI) scheme will be granted to eligible investors from the second year of operation.However, in the first year, the maximum incentive will be based on a turnover equivalent of 110% of investments made by a company. To get the benefits, eligible companies are mandated to record at least a 25% increase in their annual turnover. The ministry on Tuesday notified final guidelines for the PLI scheme, under which incentives will be extended for five years. The scheme will remain operational until 2029- 30. Interested companies are invited to apply for the scheme between January 1 and January 31, 2022. Manufacturers of select man-made fibre and technical textile products will be granted incentives up to 15%.Potential investors will have to set up new subsidiaries to get the benefits. The scheme is open to two categories of investors. Those who will invest at least Rs 300 crore will be eligible for a 15% incentive in the first year if they achieve a turnover of `600 crore or more.Similarly, those investing at least Rs 100 crore will get 11% in the first year if their turnover hits `200 crore or more. After the first year, both the categories of investors will have to show a 25% incremental turnover annually. But the benefits will drop by 100 basis points with each passing year in both the cases. Companies will get two years to set up the plants. But if they can establish the facilities earlier than that, they will get incentives early too. This is part of the 13 PLI schemes, announced by the government in the wake of the Covid-19 pandemic last year, to lure mainly large corporations to expand manufacturing, bolster supply chains and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma and chemical cells, were initially estimated at Rs 1.97 lakh crore over a five-year period. The schemes, put together, are expected to catalyse incremental manufacturing of as much as $520 billion over five years. Textile and garment exports shrank 8.6% on year to $33.7 billion in FY20 and saw a more dramatic, Covid-induced contraction of 10% last fiscal, worse than a 7% drop in overall merchandise exports. However, in the first seven months of this fiscal, such exports have grown at a phenomenal pace of about 60%, driven by an economic resurgence in advanced markets and a conducive base.
Source: Financial Express
Delivering the M V Kamath Centenary Memorial Lecture, Sitharaman said the PLI Scheme's very nature benefits those with scale and helps both domestic market and shipping the surplus to global market, boosting both manufacturing and exports. Observing that the approach to the economy is based on a consistent, both short term and medium term policy, which is set for a long term, she said that is why the Budget, which was presented on February 1, 2021, clearly showed the path that the government wants to take for the next 20-25 years. Terming the Production Linked Incentive (PLI) Scheme as a game changer, Finance Minister Nirmala Sitharaman on Tuesday said it has helped in drawing huge investment to the country and also in building manufacturing capabilities. The scheme, announced in the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore, covers 13 champion sectors like textile, steel, telecom, automobiles and pharmaceuticals. As part of the global reset post pandemic, the finance minister said India planned for schemes that can attract investors who were planning to move out of certain domains for other countries to keep their value chain intact without having to depend on one source. "Those schemes have had very positive outcome. The PLI Scheme... identified 13 champion sectors. Huge incentives have been announced as a result of which investments are happening in those sectors in a very big way," she said. Delivering the M V Kamath Centenary Memorial Lecture, Sitharaman said the PLI Scheme's very nature benefits those with scale and helps both domestic market and shipping the surplus to global market, boosting both manufacturing and "So the PLI scheme I think has been a game changer in drawing industries coming out of certain geographical territories to countries like India and being a part of the domestic and also the export market," she said. Observing that the approach to the economy is based on a consistent, both short term and medium term policy, which is set for a long term, she said that is why the Budget, which was presented on February 1, 2021, clearly showed the path that the government wants to take for the next 20-25 years. The government has identified six core and strategic sectors where it would be present, she said, adding that even there, the presence would be only a basic bare minimum. Talking about startups, the finance minister said new sunrise areas of activity are gaining a lot of momentum. "India concluded 2020 with about 38 unicorns, but in 2021, we added an equal number of unicorns... three unicorns minimum are being added every month in India and that is the nature of the reset. You find a lot of self-employed innovative, enthusiastic entrepreneurs who are coming out with innovative ways of doing business," she said. A unicorn is a company whose valuation is more than USD 1 billion. Pointing out that raising money has never been so "alluringly easy" in the country, Sitharaman said India witnessed 63 successful IPOs with the highest volume of money raised in one calendar year. "Reset is happening even in this. So people are now not just dependent on savings in bank or small fixed deposits in bank, you have even the middle class moving from the safe option of a bank or a post office to the slightly risky option of the stock markets," she said. She pointed out that the nature of savings is changing and the nature of investment is changing. "Economy is not just dependent on primary and secondary, you have the tertiary of a different nature. The tertiary sector which is a service sector of a different nature, which also brings in the primary and secondary sectors but leads from the front in the name of startups is a major shaping up and shaping differently of our Indian economy," she added.
Source: Economic Times
Companies have to inform the ministry of textiles about their annual investment plan. The Centre on Tuesday released the operational guidelines for the production-linked incentive (PLI) scheme for textiles. Under this, companies can begin the registration process from January 1-31, 2022, on the government’s online portal. In case of insufficient number of eligible applications, the application window for selecting new applicants will be reopened. In their application, companies will have to inform the ministry of textiles regarding their annual investment plan, expected sales, turnover, expected employment generation as well as exports during the tenure of the scheme, according to the guidelines. Incentives worth Rs 10,683 crore will be provided over five years for manufacturing manmade fabrics, garments — jerseys, overcoats, trousers, polyester suitings and shirtings, among others. It will also be provided for technical textiles, which is a new-age textile that can be used for the production of PPE kits, airbags and bulletproof vests. It can also be used in sectors such as aviation, defence and infrastructure. The scheme obtained Cabinet approval in September and is focused on expanding manmade fabrics and technical textiles value chain to help India regain its dominant status in the global textiles trade. This comes at a time when India’s share in global exports have gradually declined over the last few years. The scheme is operational from September 24, 2021 to March 31, 2030. It has been structured in a way so that the incentives will be paid for a period of five years only. Applicants will be finalised within 60 days from the date of closure of the application window. According to the guidelines, there are two types of investments possible with different sets of incentive structures. Under the first part, any company willing to invest a minimum Rs 300 crore in plant, machinery, equipment and civil works will be eligible. The company will be eligible to get incentives when it achieves at least Rs 600 crore turnover by manufacturing and selling products under the scheme. Under part 2, any company willing to invest a minimum Rs 100 crore in plant, machinery, equipment and civil works will be eligible. The company will be eligible to get incentives when it achieves at least Rs 200 crore turnover by manufacturing and selling. Under both parts, the required turnover will have to be achieved after a gestation period of two years. The gestation period will give the company participating in the scheme time to set up the manufacturing unit and begin production. Under the scheme, FY2022-23 to FY2023-24 will be the gestation period. While the performance years will be from FY25 to FY29, incentives can be claimed from FY26 to FY30. In order to avail incentives, minimum investment and minimum turnover criteria have to be met. “In case a participating company fails to achieve the prescribed turnover or 25 per cent increase in turnover over the preceding year’s turnover, it will not get any incentive under the scheme for that year. Such participants will get incentives only when they achieve both, that is, the prescribed turnover target for the year and 25 per cent increase in turnover over preceding year’s turnover, in subsequent years for a reduced number of years,” an official statement said. Investments in land and administrative buildings such as offices and guesthouses will not be covered under the scheme. Recovery mechanisms and penal provisions have also been included under the guidelines. In case an excess claim has been made to any participant, the ministry of textiles can raise demand for recovery.
Source: Business Standard
India has the unique advantage of the entire value chain for textile production present within the country vis-à-vis other competing nations which have to import fibre, yarn and fabric to meet their requirement for garment production. It has a large market, which is growing rapidly with affordable manpower. The domestic textile and apparel production is approx US$ 140 Bn including US$ 40 Bn of Textiles and Apparel export. The textile and apparel industry contributed 2% in the overall GDP of India in 2019 and 11% to total manufacturing in GVA. Availability of almost all types of raw materials, existence of total value chain, young demography of India, entrepreneurial mindset of industry leaders, continuous support of Government, technology up gradation, focus on innovation and strong presence of support industries will help this sector grow at a healthy pace in coming decade. Widely referred to as a change agent owing to its transformative powers, this industry alone has the capacity to generate around 70 jobs in garmenting and an average of 30 jobs overall for every INR 1 crore (USD 132,426) invested as compared to 12 jobs created on an average in other industries. With direct and indirect employment of close to 105 million people, this industry is the second largest employment generator in the country, next only to agriculture. More significantly, women constitute 70% of the workforce in garment manufacturing and about 73% in Handloom. The growth of India as a manufacturing hub for textiles will depend on the attractiveness of the domestic market and on investments in high-end textile machinery and products in emerging areas like technical textiles, Man Made Fiber (MMF). A hallmark achievement of the Ministry includes, India has establishing a Rs 7000 crores PPE industry in a short span of just three months in post-COVID situation and becoming the second largest producer of PPEs.
Recent key initiatives of the Ministry during the year are as under: PM MITRA PARKS: Government has approved Setting up of 7 Pradhan Mantri Mega Integrated Textile Region and Apparel (MITRA) Parks with a total outlay of Rs. 4445 Crores in a period of 5 years. World-class Industrial infrastructure would attract cutting age technology/scale and FDI / local investment in the sector. PM MITRA Park will encompass all ‘5F’ components: Farm to Fibre; Fibre to Factory; Factory to Fashion; Fashion to Foreign. PM MITRA Park is envisaged to be located at sites which have inherent strength for Textile Industry to flourish. PM MITRA Park will offer the opportunity to create an Integrated Textiles Value Chain right from spinning, weaving, processing/dyeing and printing to garment manufacturing etc. at one location and will reduce logistics cost of Industry. It is intended to generate around 1 Lakh direct and 2lakhindirect employment per park.
PRODUCTION LINKED INCENTIVE (PLI) SCHEME FOR TEXTILES: Production Linked Incentive (PLI) Scheme for Textiles is specially focused at high value and expanding MMF and Technical Textiles segments of Textiles Value Chain. Incentives worth Rs. 10,683crore will be provided over five years for manufacturing notified products of MMF Apparel, MMF Fabrics and segments/products of Technical Textiles in India. This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fiber-based textiles industry in generating new opportunities for employment and trade. It will help create 50-60 global champion of exports.
RoSCTL scheme and Duty Structure : Government has approved continuation of RoSCTL scheme up to March 2024 to boost export competitiveness of Indian apparel and made-ups. The Government has notified uniform goods and services tax rate at 12 % on MMF, MMF yarn, MMF fabrics and apparel that has addressed the inverted tax structure in the MMF textile value chain. The changed rates will come into effect from 1st January, 2022. This will help the MMF segment grow and emerge as a big job provider in the country.
AMENDED TECHNOLOGY UPGRADATION FUND SCHEME (ATUFS): Technology Upgradation Fund Scheme (TUFS) is a credit linked subsidy scheme intended for modernization and technology up-gradation of the Indian textile industry, promoting ease of doing business, generating employment and promoting exports. The ongoing ATUFS with an allocation of Rs 5151cr has been implemented with focus on facilitating and providing support to MSMEs.
TECHNICAL TEXTILES: The Technical Textiles segment is a new age textile, whose application in several sector of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation will improve the efficiencies in those sectors of economy. Government has also launched a National Technical Textiles Mission for promoting R&D efforts in that sector.
SAMARTH (SKILL DEVELOPMENT & CAPACITY BUILDING): Samarth is a placement oriented programme targeting skill development of unemployed youth in the value chain of textiles for gainful employment in organized sector and skill upgradation of weavers & artisans in traditional sector. So far, a total of 71 textile manufacturers, 10 industry associations, 13 state government agencies and 4 sectoral organizations have been on-boarded under the scheme with an allocated target of 3.45 lakh beneficiaries, after due process of empanelment.
NATURAL FIBERS: India enjoys a pre-dominant position in availability of natural fibers of textiles. Silk: India’s traditional and culture bound domestic market and an amazing diversity of silk garments help the country to achieve a leading position in silk industry. India is the second largest producer of silk next to China. It contributes about 32% of global silk production. Total size of the Indian silk industry is Rs.75000.00 crore(estimated). The Government has taken a number of steps for promotion of investment, production, exports and employment generation in the sericulture sector across the country. The central sector scheme “Silk Samagra” provides R & D/ Seed support, technical and financial assistance for enhancing the quality and production of silk. The main focus of the scheme is to make India Atma nirbhar in production of international grade bivoltine silk and scale up the Automatic Reeling Machine. Brand “Indian Silk” is promoted through Product Development & Diversification to address the global market need. Cotton: CCI could procure around 26 lakh bales under MSP Operations and about 6 lakh cotton farmers were benefitted by disbursement of Rs.7600 crores directly into their bank account. Jute: Jute-ICARE (Improved Cultivation and Advanced Retting Exercise) scheme has been implemented for improvement of quality and yield of raw jute production. Jute Raw Material Bank (JRMB) Scheme is for supplying jute raw materials at Mill Gate Price to MSME JDP units for production of jute diversified products, Wool: Ministry of Textiles has approved rationalization and continuance of Integrated Wool Development Programme (IWDP) from 2021-22 to 2025-26 with total financial allocation of Rs. 126 Crore. ‘Wool Processing Scheme’ is for promotion of woolen industry.
TRADITIONAL LIVELIHOOD SECTOR OF TEXTILES - Handlooms and Handicrafts: Ministry of Textiles is implementing schemes for development of handlooms, welfare of weavers and for revival and promotion of handloom industry across the country. To promote marketing of handloom products, Handloom Export Promotion Council (HEPC) has been organizing International Fairs and domestic marketing events for the weavers. Linking Textiles with Tourism though Crafts Tourism Village is a modern-day concept wherein craft promotion and tourism are being taken up simultaneously. 13 crafts villages have already been identified.
Focusing on Direct market Access to Weavers/Artisans: To provide direct marketing platform to the handicraft artisans/weavers, Ministry of Textiles is developing an e-commerce platform through digital India Corporation, Ministry of Electronics and Information Technology. In the first phase, the artisans/weavers from 205 handicrafts/handlooms clusters are being selected throughout the country for uploading the handicrafts/handlooms products on portal. Further, the artisans/weavers are being registered on Government E-Market Portal (GeM) also to sell their products directly to the Government Ministries/Departments. So far about 1.50 Lakh weavers have been on-boarded on the GeM portal.
Promotion of Indian Toys: As emphasized by Hon’ble PM in his “Man ki Baat” programme that everyone should “team up for toys” with the focus on the theme of Atma Nirbhar Bharat to promote Indian Toy Industry including handicrafts and handmade toy products. A National Action Plan for Indian Toy Story has been made with collaboration of 14 Ministries/Departments of Government of India.
In the run-up to the Vibrant Gujarat Global Summit (VGGS) 2022, a summit on ‘Weaving Growth For Textiles’ will be organised in Surat on Wednesday. It will have deliberations on how to provide further impetus to the textiles and apparel sector. The sessions will cover policy initiatives to redefine the textile sector, the Indian textile industry as a global sourcing hub and the future of value additions in the textile sector. More than 1,000 delegates are expected to attend the summit that will be inaugurated by Chief Minister Bhupendra Patel. “Gujarat has a significant role in cotton production with 37 per cent of India’s total production coming from the state. Gujarat’s share in export of cotton is 16 per cent,” M Thennarasan, VC and MD of GIDC said. The seminar will provide a platform for textile manufacturers, suppliers and innovators to exchange ideas and identify global best practices, which will help to create better avenues for collaboration, he said.
Source: Ahmedabad Mirror
The government has notified uniform goods and services tax rate at 12% on MMF, MMF yarn, MMF fabrics and apparel that has addressed the inverted tax structure in the MMF textile value chain. The changed rates will come into effect from January 1, 2022,” the ministry said. Despite demands from traders and states, the government is sticking to its decision to implement uniform goods and services tax (GST) rate at 12% on manmade fibre (MMF), MMF yarn, MMF fabrics and apparel from January 1, 2022. In its year end statement on Monday, the textiles ministry said that this has addressed the inverted tax structure in the MMF textile value chain and will help the MMF segment grow and emerge as a big job provider in the country.
Source: Economic Times
“There was no tax on textile/fabrics for a number of years. Bringing the textile industry again under the tax net itself was a big blow to the entire textile Industry,” the letter to the FM said. The Confederation of All India Traders (CAIT) on Monday urged Finance Minister Nirmala Sitharaman for the deferment of the implementation of the government www.citiindia.org 11 CITI-NEWS LETTER notification that proposes increasing the GST rate from 5% to 12% on textiles and footwear. The domestic traders’ body in a letter said it is illogical and beyond the canon of GST tax structure “particularly at a time when domestic trade is on the verge of recovery from the colossal damage caused due to last two spells of the Covid”. “There was no tax on textile/fabrics for a number of years. Bringing the textile industry again under the tax net itself was a big blow to the entire textile Industry,” the letter to the FM said. The decision to hike GST was taken at the 45th meeting of the GST Council held in September. Voicing similar concerns, West Bengal’s former Finance Minister Amit Mitra on Friday called the decision to increase GST in the textile sector “very dangerous”. he said it would result in the closure of about one lakh textile units and result in 15 lakh job losses in the textile and ancillary sectors.
Source: New Indian Express
The comprehensive pact may be formalised during PM Modi’s proposed visit to Dubai around January 6 The final text of the proposed India-UAE free trade agreement is likely to be taken up by the Union Cabinet for approval soon as negotiations between the two sides have been successfully concluded, according to a source. “The Cabinet approval for the India-UAE Comprehensive Economic Partnership Agreement (CEPA) is expected to come in time for Prime Minister Narendra Modi’s visit to Dubai, scheduled around January 6, where the pact is likely to be formalised”, the source told BusinessLine. Exports from India that could benefit from the CEPA include textiles, gems & jewellery, petroleum products, engineering and machinery products and chemicals. Gains will, however, be limited as import duties on most goods are at 5 per cent in the UAE. Import duties on most agriculture products, such as meat, fruits & vegetables and tea, are already at zero per cent, so India is unlikely to make substantial gains in the area, the source pointed out. However, alcoholic, carbonated, and sweetened beverages products have a 50 per cent duty, and e-smoking devices and tobacco products attract a 100 per cent customs duty. “Market access in services, including mutual recognition agreements for various professions, is also an area of primary interest for India,” the source said. The CEPA will also cover other areas including investments and government procurement. Since India’s import duties, on both industrial and agricultural goods, are much higher, especially for sensitive sectors, it has greater responsibility of protecting its industry against import surges.“New Delhi’s key concern is that the UAE should not be used by third countries to ship their products to India at concessional import duties negotiated under the CEPA. While the Indian industry can face competition from the UAE, the situation can get serious if items from other countries also start getting in. It is, therefore, important to fix strong rules of origin,” the source said. The UAE was India’s third largest trading partner in 2020-21 with the country exporting goods worth $16.7 billion and importing items valued at $26.6 billion. India's major imports from the UAE include petroleum and petroleum products, precious metals, gems and jewellery, minerals, chemicals and wood products. UAE has also investments worth $11 billion into India since 2000 and is among the top 10 investors for the country. The proposed CEPA is also important because of its strategic interest to India since UAE is a top supplier of petroleum to the country and could play a major part in strengthening relations with the entire Gulf region. India’s goal is to become the ``No. 1 trading partner’’ of the UAE, Commerce & Industry Minister Piyush Goyal said at a recent interaction with the industry. “UAE is a gateway to Gulf Cooperation Council and all of Africa," he said. The negotiations for the pact, which started in September 23-24 this year, were fasttracked following an intensive round between officials from both sides earlier this month when demands and offers were finalised in all key areas including rules of origin. //The legal procedures and ratifications to implement the CEPA may take some more time. It is expected to cover a wide range of areas including goods (both industrial and agricultural), services, investments and government procurement.
Source: The Hindu Businessline
CAIT in a letter to Sitharaman said, "Increasing the rate of tax from 5 percent to 12 percent on textiles and footwear which is illogical and beyond the canon of GST tax structure particularly at a time when the domestic trade of the country is on the verge of recovery from the colossal damage caused due to the last two spells of the COVID-19." With just about a few days left for the new GST tax rates on textiles and footwear to kick in, the Confederation of All India Traders (CAIT) has approached union finance minister Nirmala Sitharaman, seeking a deferment of the new rates and chalking out a middle path. CAIT in a letter to Sitharaman said, "Increasing the rate of tax from 5 percent to 12 percent on textiles and footwear which is illogical and beyond the canon of GST tax structure particularly at a time when the domestic trade of the country is on the verge of recovery from the colossal damage caused due to the last two spells of the COVID-19." The association has also lauded the government on exemplary GST collection across the country, "increasing every month and as such, any increase in tax rates without consulting the stakeholders" will run contrary to the ease of doing business call of Prime Minister Narendra Modi. CAIT national secretary general Praveen Khandelwal told CNBC-TV18, that since stakeholder consultations have always been a fruitful way forward to iron out sticky issues, this time too CAIT has urged for the same. "We have requested the finance minister to defer the implementation of a tax rate hike for a certain period and meanwhile constitute a task force under the chairmanship of Chairman, Central Board of Indirect Taxes comprising of representatives of trade and senior officials of the government to discuss the issue at length and arrive at a consensus." Explaining the rationale, Khandelwal said, "There was no tax on textile/fabrics for a number of years. Bringing the textile Industry again under the tax net itself was a big blow to the entire textile Industry. The trade associations across India led by CAIT had made representations immediately after the last GST Council meeting wherein it was proposed to correct the inverted duty structure on textile. It was requested by the trade and industry that the Status quo be maintained @ 5 percent and the rate be reduced from 12 percent to 5 percent wherever applicable. This will not only add to the financial burden on enduser but will also affect small businessmen badly and will encourage evasion of tax and various malpractices." Other hardships that the industry will face also include -- the goods which are lying in stock of the businessmen and sold on MRP the additional burden of 7 percent will be on the businessmen. This increase in tax rate will not only hamper the domestic trade it will affect the exports adversely, noted CAIT. "Already, the textile industry is not at a competent status with countries like Vietnam, Indonesia, Bangladesh, and China. On the one hand, the government talks about Make In India and Atmanirbhar Bharat, on the other hand, levy such high taxes creating an atmosphere of uncertainty and gloom," Khandelwal added.
Source: CNBCTV18
The Indian economy grew at 8.4 per cent in the second quarter of the current fiscal, as against a growth of 20.1 per cent in the April-June quarter The country's real gross domestic product (GDP) is likely to maintain a 9 pc growth rate in fiscal 2022 and 2023, amid concerns over the Omicron variant of COVID-19, says a report. The Indian economy grew at 8.4 per cent in the second quarter of the current fiscal, as against a growth of 20.1 per cent in the April-June quarter. "We are maintaining our forecast of a 9 per cent GDP expansion in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy, and the large gaining at the cost of the small. "Looking ahead, we expect the economy to maintain a similar 9 per cent growth in FY2023," domestic rating agency Icra Ltd Chief Economist Aditi Nayar said in the report. She expects the percentage of double-vaccinated adults to rise to 85-90 per cent by March 2022. While the announcement of booster doses and vaccines for the 15-18 age group is welcome, it remains to be seen whether all the existing vaccines would offer adequate protection against the new Omicron variant to avert a third wave in India, Nayar said. In any case, fresh restrictions being introduced by several states to curb the spread of COVID-19 may temporarily interrupt the economic recovery, especially in the contactintensive sectors in Q4 FY2022, she added. Nayar, however, expects the expansion in FY2023 to be more meaningful and tangible than the base effect-led rise in FY2022. "Based on our assumptions of the GDP growth, if the COVID-19 pandemic had not emerged vs. the actual shrinkage that occurred in FY2021 and the expected recovery in the next two years, the net loss to the Indian economy from the pandemic during FY2021- 23 is estimated at Rs 39.3 lakh crore, in real terms," she said. The available data for Q3 FY2022 does not offer convincing evidence that the Monetary Policy Committee's (MPC's) criteria of a durable and sustainable growth recovery has been met, to confirm a change in the Monetary Policy stance to neutral in February 2022, the rating agency said. It believes that rising consumption will push capacity utilisation above the crucial threshold of 75 per cent by the end of 2022, which should then trigger a broad-based pickup in private sector investment activity in 2023. The agency also expects the visibility of tax revenue growth to spur faster government spending in 2022.
Source: Business Standard
Bangladesh's growth stems largely from its success as an exporter of garments, which account for around 80 per cent of its total exports may become India’s fourth largest export destination in FY22, jumping five places in two years. This comes as the economic boom of the eastern neighbour continues to fuel India’s exports growth. According to disaggregated data available till October, during the first seven months of FY22, exports to Bangladesh grew 81 per cent over the same period in the preceding year to $7.7 billion. This makes it India’s fourth largest export market behind the US, UAE and China. If the trend continues, Bangladesh will only better its rank in India’s export profile from last year’s 5th position when it surprised analysts by jumping from 9th rank in FY20. Bangladesh has been an economic miracle in South Asia with its unprecedented transformation over the past decade and may even surpass India in terms of per capita income. Bangladesh’s growth stems largely from its success as an exporter of garments, which account for around 80 per cent of its total exports. Remittances from overseas amount to over 6 per cent of GDP. The major items exported to Bangladesh by India during the April-October 2021 period include cotton ($2.1 billion), cereals ($1.3 billion), electricity and fuel ($0.6 billion), vehicle parts ($0.5 billion) and machinery and mechanical appliances ($0.4 billion). India and Bangladesh are currently undertaking a joint study on the prospects of entering into a bilateral comprehensive economic partnership agreement (CEPA). The India-Bangladesh CEO Forum, which was launched in December 2020 to provide policy-level inputs in various areas of trade and investment and facilitate exchanges among business communities, is expected to meet soon to further deepen trade and economic ties. In a joint statement after the virtual summit between Prime Minister Narendra Modi and his Bangladesh counterpart Sheikh Hasina, both sides emphasised the need to address issues of non-tariff barriers and trade facilitation. They include port restrictions, procedural bottlenecks and quarantine restrictions. “The Bangladesh side requested that as India’s export of essential commodities is an important factor influencing its domestic market, any amendments in the export-import policy of India should be conveyed in advance. The Indian side took note of this request,” the joint statement said. Bangladesh avoided a recession in FY21, growing at 3.5 per cent unlike India whose economy contracted 7.3 per cent during the period. The economy of Bangladesh is expected to grow at 5.5 per cent in FY22 and 6.8 per cent in FY23, according to the Asian Development Bank (ADB). ADB, in its Asian Development Outlook released in September, said excluding petroleum, imports (overall) by Bangladesh increased by 14.5 per cent in FY21. This reflects the solid economic advance. Intermediates for the garment industry rose by 8 per cent, while there were double-digit increases in import of other intermediates, consumer products and capital goods. “Imports are expected to grow by 5 per cent from a high base. As the readymade garments industry continues robust growth, its substantial input requirements will expand. An increase in the volume of import of petroleum and petroleum products is expected, but with a more moderate price adjustment than in FY21. Accelerated implementation of large infrastructure projects and robust real estate development are expected to boost import of construction, capital equipment and other materials. Meanwhile, foodgrain imports will fall,” it added.
Source: Business Standard
The growth rate of RMG exports of Bangladesh to United States of America has surpassed that of China, Vietnam and Indonesia in the first 10 months of 2021. According to US Department of Commerce, Bangladesh’s export earnings from the US increased by 27 percent during Jan-Oct period compared to last year’s corresponding period while the China’s export growth was 25 percent, Vietnam’s 14 percent and Indonesia’s 10 percent. In fact, the Office of Textiles and Apparel (OTEXA) of the Department of Commerce shows Bangladesh, the third largest exporter of garments to the United States, earned 5.7 billion dollars from apparel export to the US market in the Jan-Oct period. According to textile industry insiders, the Covid-19 pandemic led to a sharp decline in China’s production of readymade garments. Besides, the production has also been disrupted in Vietnam and Indonesia. As a result, garment manufacturers in Bangladesh have received additional work orders. BGMEA First Vice-President Syed Nazrul Islam said, “After struggling for a long time since the pandemic began, the readymade garment sector started to recover. We were getting good response from buyers. However, Omicron, the new variant of Covid-19, has posed a new threat to the sector.” “Lockdown has been imposed in many countries of Europe. As a result, outlets are now almost closed. Although we haven’t observed any effect of the new variant in export yet, we fear that a large number of orders might get cancelled if the situation gets worse.” he added.
Source: Fibre 2 Fashion
Australia’s investment, which is now modest in Vietnam, would grow further, thanks to free trade agreements (FTAs), a virtual workshop in Hanoi was told recently. By November this year, Australia had 545 projects worth $1.94 million in Vietnam, according to Nguyen Thi Thu Trang, director of the Vietnam Chamber of Commerce and Industry’s (VCCI) Centre for WTO and Economic Integration. Citing statistics by the ministry of planning and investment's foreign investment agency, Trang said the capital accounts for only 0.5 per cent of the total FDI poured into Vietnam, ranking Australia 19th among countries and territories investing in the country. However, Trang said, as the two countries share three FTAs, including two newgeneration ones—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP)-- the three together with 12 others to which Vietnam is a signatory, would help to unlock opportunities to attract more Australian investors. Australian ambassador to Vietnam Charles Thursby-Pelham said both sides have officially announced their enhanced economic engagement strategy, with the aim of doubling investment and becoming top ten trading partners, according to Vietnamese media reports. To make use of the opportunities, Vietnam should study and address problems hindering Australian businesses to land their investments in the country, he said. He also suggested Vietnam to comprehensively reform the public sector, regularly review local legal regulations, and fulfil international commitments to investment and creating a fair, transparent business environment for foreign investors, including those from Australia.
Source: Fibre 2 Fashion
UK gross domestic product (GDP) is estimated to have increased by 1.1 per cent in the third quarter (Q3) this year, revised from the first estimate of a 1.3 per cent rise. The level of GDP is now 1.5 per cent below where it was pre-COVID-19 in Q4 2019, revised from the previous estimate of 2.1 per cent below, because of upward revisions to growth in 2020. Annual UK GDP in 2020 is now estimated to have fallen by 9.4 per cent, revised from a first quarterly estimate of minus 9.7 per cent. In output terms, the largest contributors to the increase in Q3 2021 were hospitality and arts, entertainment and recreation following the further easing of restrictions and reopening of the economy during this period; production and construction both fell. Household consumption rose by an upwardly revised 2.7 per cent in Q3 2021 and made the largest contribution to expenditure; there was a fall in underlying inventories, likely reflecting some of the recent supply chain challenges; and a negative contribution from net trade, the Office of National Statistics said. The UK’s net borrowing position with the rest of the world increased to negative 4.3 per cent as a percentage of GDP in Q3 2021 compared with minus 2.4 per cent of GDP in Q2. UK GDP is estimated to have increased by 1.1 per cent in Q3 2021, revised down from the first quarterly estimate of a 1.3 per cent increase. This follows a revised increase of 5.4 per cent in Q2 2021 following the easing of COVID-19 restrictions. The level of real quarterly GDP in the UK is now 1.5 per cent below where it was prior to the pandemic at the end of 2019, revised from 2.1 per cent.
Source: Fibre 2 Fashion
South Korea will offer $100 million in concessional loan to Bangladesh from the Economic Development Cooperation Fund (EDCF) to help the latter recover from the pandemic. EDCF is a Korean development financing programme to assist the socioeconomic development of developing countries. The amount will be disbursed this month by the Korea Exim Bank. Mohammad Shahriar Kader Siddiky, additional secretary of Bangladesh’s economic relations division, and Kim Tae Soo, executive director of the South Korean bank, signed a deal in this regard recently. The loan’s maturity period is 40 years, including a grace period of 15 years, according to bangla media reports. South Korea has already provided $50 million of EDCF loan as budgetary support in December 2020 to help Bangladesh's efforts for fighting against the COVID-19 pandemic. It is the second provision of this type of concessional loan. Bangladesh is the second largest recipient of the EDCF loans worldwide in aggregate amount. So far, the Republic of Korea has funded 24 development projects of Bangladesh with total amount of $1.2 billion through the EDCF.
Source: Fibre 2 Fashion
Ethiopia says it is unhappy with the U.S. decision to revoke duty-free access for the East African country's exports. The statement by Ethiopia's trade ministry on Monday came after the Biden administration on Dec. 23 terminated Ethiopia’s eligibility for benefits under the African Growth and Opportunity Act. The U.S cited its disapproval of the war in the Tigray region for the action. “The Ethiopian government is saddened over the decision by the U.S. to remove it," from the preferential trade benefits, the ministry said. It asked the U.S. to reconsider its decision. “Ethiopia is carrying out various initiatives aimed at bringing peace and stability, political consensus and economic development in addition to conducting reforms in line with the longstanding relationship between the two countries,” the statement said. The U.S. stopped Ethiopia’s eligibility for the trade benefits despite pleas by a few U.S. legislators and Ethiopian lobby groups who asked the Biden administration to give the country more time to comply with U.S. demands. The decision against the African nation was made over its failure to end a nearly yearlong war in the Tigray region that has led to “gross violations” of human rights, said the Biden statement. The action also stops Guinea and Mali from receiving the trade benefits as of January 1. The Africa Growth and Opportunity Act provides sub-Saharan African nations duty-free access to the United States on the condition they meet certain requirements, including eliminating barriers to U.S. trade and investment and making progress toward political pluralism. The U.S. and the United Nations say Ethiopian authorities have prevented trucks from delivering desperately needed food and other aid into Tigray. Scores of people have starved to death, The Associated Press has reported. In September Biden warned that his administration would levy sanctions if Ethiopian Prime Minister Abiy Ahmed did not take steps to wind down the war in Tigray and other regions. On November 3, Ethiopia’s foreign ministry labeled the move as “misguided” and “unjustified intimidation” and said the decision could affect the livelihoods of more than 200,000 low-income Ethiopians who work for companies that benefit from the preferential trade access. Some Ethiopian companies are already showing signs of a downturn in their export business. “Several companies have already started leaving and we don’t know what is next,” a textile worker at the Hawassa Industrial Park, some 270 kilometers (168 miles) south of the capital, Addis Ababa, told the AP by phone on condition of anonymity fearing for his workplace safety. Ethiopia in recent years had one of Africa’s fastest-growing economies, but the war in Tigray has dampened that momentum.
Source: ABC News
