• Goyal says Inter-ministerial synergy is required for attracting mega research projects in the country
• Focus should be on the internationally high value-added products Ministry of Textiles cleared 20 strategic research projects worth Rs 30 cr in the areas of Specialty fibres and Geotextiles, Previously, 11 research projects worth Rs 78.60 cr were cleared by the Ministry. Ministry of Textiles cleared 20 strategic research projects worth Rs 30 crores in the areas of Specialty fibres and Geotextiles under the chairmanship of Minister of Textiles, Piyush Goyal. These strategic research projects fall under the Flagship Programme ‘National Technical Textiles Mission.’ Amongst the 20 Research projects, 16 projects of Specialty fibres were cleared including five projects in Healthcare, four projects in Industrial and Protective, three projects in Energy Storage, three projects in Textile waste recycling, & one in Agriculture and four projects in Geotextiles (Infrastructure) were cleared. Various leading Indian Institutes, Centres of Excellence and Government Organizations participated including IITs, DRDO, BTRA, among others in the session which cleared projects strategic for the development of Indian economy and a step in the direction of Atmanirbhar Bharat, especially in the Healthcare, Industrial and Protective, Energy Storage, Textile Waste Recycling, Agriculture and Infrastructure. While addressing group of Scientists and Technical Technologists, Piyush Goyal said, ‘Industry and Academia connect is essential for the growth of research and development in the application areas of Technical Textiles in India. Building convergence with Academicians, Scientists and Researchers is the need of the hour.’ The Textile Minister also highlighted that the focus should be on the internationally high value-added products and building a structure of brainstorming around problem statements. In addition, minister Goyal said that inter-ministerial synergy is required for attracting mega research projects in the country. Previously, 11 research projects worth Rs 78.60 cr were cleared by the Ministry of Textiles on March 26, 2021.
Source: Times Now News
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said the exports target of USD 650 Billion within the current financial year is achievable. Chairing a Review Meeting of all major Export Promotion Councils (EPCs), Shri Goyal said the $400 Bn target of Merchandise exports is within sight and the Services sector should strive for $250 Bn exports. Expressing his satisfaction that India achieved $300 Bn Merchandise exports in the first nine months of the current FY (April-Dec, 2022), Shri Goyal assured the EPCs that his Ministry will do whatever it takes in handholding the EPCs and resolving their issues to attain even higher export targets in the next FY. Shri Goyal said we can set a much higher goods exports target in the current last quarter of this FY. “In December alone we touched $37 Bn goods exports despite the Omicron fear factor weighing high. This month, in 15 days till January 15th, we have reached $16 Bn.” Shri Goyal said the Prime Minister Shri Narendra Modi has himself set the pace by setting “transformational results” and not “incremental growth”. The Commerce & Industry Minister urged the EPCs and entrepreneurs to avail of the Government’s initiatives towards Ease of Doing Business such as obtaining clearances through the National Single Window System. He assured the Industry representatives to pursue their demands during the various FTA negotiations. Speaking of the government’s efforts to improve the ease of living and the ease of doing business, Shri Goyal said that more than 25,000 compliances have been reduced. The Minister assured that the government is willing to listen to new ideas, engage with industry at every level and work as an enabler, facilitator and partner.
Source: PIB
The rating agency said that India is currently on the cusp of a potential growth cycle in the global textile market. Besides the US-China trade war issues, the China Plus One sourcing policy being endorsed by several large consuming regions across the globe, to reduce risk in events like the Covid-19 pandemic, and increasing concerns on the use of Xinjiang cotton are fuelling this opportunity. NSE 0.83 % expects the government to maintain its focus on incentivising investments across the textile value chain in the upcoming Budget, to achieve its aspirational target of a 3x growth in India’s textile exports to USD 100 billion in five years. The rating agency said that India is currently on the cusp of a potential growth cycle in the global textile market. Besides the US-China trade war issues, the China Plus One sourcing policy being endorsed by several large consuming regions across the globe, to reduce risk in events like the Covid-19 pandemic, and increasing concerns on the use of Xinjiang cotton are fuelling this opportunity. As China is currently the leader in the global textile market and is likely to shed some share in the near to medium term, India remains one of the potential beneficiaries of this shift. Nevertheless, challenges remain intense in the form of competition from other lowcost/more efficient peer nations, the evolving free trade agreement landscape with some peers already enjoying duty-free access to some of the major markets, as well as domestic issues such as infrastructure bottlenecks. It added "Greater emphasis is likely on the man-made fibre (MMF) value chain, apparel and technical textile segments, which offer immense growth opportunities in the global trade, and where India has been lagging so far. In line with its thrust on Make in India for the world, the government has adopted several policy initiatives including the announcement of the PLI scheme, extension of the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme for apparel and made-ups for three years, announcement of the Remission of Duties and Taxes on Exported Products (RoDTEP) rates for the other textile segments and notification of seven textile parks under the PM-MITRA Scheme, during the past one year. While the policy initiatives are all steps in the right direction, effective implementation remains crucial, for which adequate provisioning in the Budget is necessary." Further, with the implementation period of the ATUFS getting over in March 2022, the extension of the same or the announcement of a new scheme, particularly for the downstream segments and/or for captive renewable power capacities, could encourage investments and enable the companies to reduce their carbon footprint while being more cost-efficient”
Source: Economic Times
After starting formal negotiations for a free trade agreement (FTA) last week, India and the UK hope to agree on a deal by the end of this year. The two sides are committed to concluding negotiations on a comprehensive and balanced FTA, with the ambition to close negotiations by the end of 2022, including consideration of an interim trade agreement to achieve early gains, according to a jointstatement on last week’s talks shared by the UK government. The statement said that the next meeting of India-UK Joint Economic and Trade Committee (JETCO) will take place in London to review the progress made in the talks and to celebrate achievements across the breadth of the trade, economic and investment relationship between the two nations. The two nations hope to double the current bilateral trade of $50 billion in ten years, aided by the proposed FTA. Last Thursday, commerce and industry minister Piyush Goyal had said at the launch of the negotiations that both sides were focused on capturing the immense possibilities of mutual benefit that the deal would offer and that he did not see any deal breaking issue. India hopes to gain greater market access for textiles, leather goods and marine products. UK, on the other hand, has strengths in areas like high-end machinery and technology and could gain more market access in India. “As two services-driven economies, we celebrated the continued close cooperation in the services sector including the upcoming session of the legal services committee, progress on the mutual recognition of higher education qualifications, and the agreement by the new taskforce on healthcare workforce of the key ambitions of a framework for cooperation," the statement said. The statement also highlighted that the UK welcomed India’s recent reforms, including changes to retrospective taxation, which sought to settle 17 tax disputes. Cairn Energy Plc and Vodafone Plc are among the beneficiaries.
Source: Live Mint
The government and many companies, mainly importers, are fighting a battle in the Supreme Court over the imposition of integrated GST (IGST) on ocean freight. Several companies have received notices in the last month or so in this regard. The issue of Goods and Services Tax (GST) on ocean freight has come to haunt many companies as the tax department has started raising fresh queries over tax applicability on transportation of imported goods through the sea route even as the matter is pending in various courts. In the last month or so, the department has started issuing fresh tax demands and notices to companies over GST on ocean freight, prompting some of the companies to file writ petitions against the decision. In one such writ petition filed by an importer, Deoleo India, in the Bombay High Court, concerns were also raised against "coercive action". "Recovery of GST on ocean freight by the authorities at this stage is not a good idea when the matter is at the final stage before the apex court and one of the high courts in the country has already held these provisions to be ultra vires,” said Abhishek A Rastogi, partner at Khaitan and Co. “Any payment at the audit stage or at the investigation stage can only be made voluntarily by the taxpayer, and any coercive measure to recover without a fair process of adjudication needs to be challenged before the writ court." The government and many companies, mainly importers, are fighting a battle in the Supreme Court over the imposition of integrated GST (IGST) on ocean freight. The government had approached the Supreme Court against an earlier Gujarat High Court judgement that said that IGST on ocean freight is unconstitutional. Several companies have received notices in the last month or so in this regard. "During the course of the audit, it is observed that you have been importing goods from your parent company... wherein ocean freight has been paid by foreign suppliers. In such conditions, the taxpayer is required to pay the GST at 5% on the ocean freight, " one such notice to a company read. The basic issue is that, in most cases, the ocean freight is paid by the seller or companies that are not based in India. So, for instance, if a company based in Europe is exporting goods to India, the company tends to enter into an agreement with shipping companies and pay ocean freight. In such cases, the tax department is unable to recover GST from the European company. The tax department hopes to recover the IGST from importers or companies that are based in India through a "reverse charge mechanism".
Source: Financial Express
Industrialists in the ‘Textile City’ are facing problems in completing their export orders due to the two-month old instructions of the Commission of Air Quality Management (CAQM). As per the export association, the industry has been forced to bear a loss Rs100 crore in a week. Exporters say due to improper functioning of industries they failed to dispatch time-bound orders to their overseas buyers. Notably, the CAQM has passed orders to shut industries for two days in a week and banned running of diesel generator (DG) sets in the National Capital Region (NCR). Operating only for five days Export orders are seasonal. These orders have to be completed and dispatched within the agreed delivery time. And for this, industries have to operate full time. With reduced days of operation, export orders, already in production, can’t be completed and are not dispatched on time. —Lalit Goyal, President, Panipat exporters’ association Members of the Panipat Exporters’ Association said, “The AQI level is far better in Panipat. We demand that industries be allowed to run in full swing for all seven days of the week.” Panipat is a manufacturing hub of textile products and has an annual turnover of Rs15,000 crore in exports and over Rs35,000 crore in the domestic market. But, industries here have to close for two days in a week. The CAQM had banned the operation of DG sets and also ordered industries to function for eight hours a day in October last year. Various associations of industrialists’ protested against these orders after which the CAQM allowed to run industries full swing for five days a week. Lalit Goyal, president, the Panipat Exporters’ Association, said, “Export orders are seasonal. These orders have to be completed and dispatched within the agreed delivery time. And for this, industries have to operate full time.” “With reduced days of operation, export orders, already in production, can’t be completed and are not dispatched on time,” Goyal added. “There is delay in dispatch of time-bound export orders. So, overseas buyers have started threatening to cancel these orders. This will result in huge financial loss and damage our goodwill in the international market,” Goyal maintained. “Even after rain, the air quality index level in the NCR region has also improved to a good extent. Hence, the association is demanding removal of ban on operation of industries,” Goyal said. Vibhu Paliwal, general secretary of the association, said this is the peak season for shipment of overseas orders, which got delayed due as industries were shut for two days every week. Export industries here were forced to bear a loss of Rs100 crore per week as these were shut for two days every week, Paliwal added. Besides, overseas buyers were not ready to hear about any problems faced by industries in Panipat regions, Paliwal said. They even imposed a penalty on exporters, Paliwal added. “We exporters have got a good opportunity to take on the Chinese business due to the ongoing Covid pandemic, but due to ban imposed on industries we will not be able to take benefit of the situation,” Paliwal said. S Narayanan, member secretary, Haryana State Pollution Control Board (HSPCB), said, “The representation of the Panipat Exporters’ Association has been sent to the Chairman, CAQM, with our recommendations. The final decision will be of the CAQM on the matter.”
Source: Tribune India
A SRO can help set and monitor quality and production standards while safeguarding the consumer’s interest India has 6.33 crore MSMEs that employ 40% of the country’s non-farm workforce, contributing nearly 25% of services output and 33% of manufacturing output. The lowerend of the sector has single-person operators like grocers, commercial vehicle-owners, village craftsmen and such. Almost 99% of the MSME firms in India are in the ‘micro’ segment.Prior to Independence, the landscape was different, with composite groups of village and small industries, such as beekeeping, ivory-carving, locks, iron-safes, textile works, leather goods, processing of food, forest industries, dairy farming, toy-making, perfumery and other miscellaneous groups. It is this historical experience of “traditional trade guilds” that still works well for India. Post Independence, these trade guilds expanded and now provide employment to over 11 crore Indians and contribute over 29% to the GDP. The micro segment with 6.30 crore entities (accounting for 99.4% of the MSME pool), the small segment with 3.31 lakh (0.52%) and the medium segment with 0.05 lakh (0.01%) make up the estimated strength of the sector; 3.24 crore (51%) are based in the rural area and 3.09 crore in the urban areas.A quick comparison: China developed its (M)SMEs very strategically, for growth and employment generation. As a result, these contribute to over 60% of its GDP and account for 80% of the jobs in the country. China used the strategy of “SME clustering” which used the “one village, one product” and “one town, one industry” concept of development, with full policy impetus, including SME financing and skills development, to access global markets.In India, as the MSME sector expanded, small industry associations started playing an important role in bringing together the fragmented and geographically-spread business units into a common thematic fold. They have been functioning for the cause of the sector, despite not having the ability to raise large sums of funding that the other larger industrial associations have been able to. Currently, as industry associations, they do not have any official standing; this hinders them from self-regulating the space, its behaviour and norms. However, as the inclusive development of MSME is imperative, it is crucial now for select MSME associations to be designated as Self Regulatory Organisations (SROs). SROs are non-governmental organisations that set and enforce rules and standards relating to the conduct of entities in their respective segments. An SRO’s primary objectives would include protecting the customer and promoting ethics, equality, and professionalism. SROs typically collaborate with all stakeholders in framing rules and regulations. It is an entity with the power to develop and enforce standalone industry & professional regulations and standards on its own. It works with sectoral regulators if any, and the government policies. With adequate thought given to this idea, an SRO can be formed by an industry or professional group to oversee activities within that industry or profession. SROs would help the MSME sector come together strongly to set higher quality parameters and monitor the industry performance, improve reliability and productivity parameters, bring in consumer oriented, value-added product design of global standards, make innovation a driving force and, most important, build capacity through peer-enabled-learning, constant training, mentorship, etc. This, in turn, would help Indian MSMEs upgrade their export-competitiveness, which is the very basis for increased trade volumes and improved business margins.SROs can take the lead in shaping their sector and pitch ideas to the government for developmentoriented policies. These SROs could also be tasked with actually tracking efficiency and productivity of policies that impact the sector. These SROs could work with the line ministries in understanding various FTAs that India signs and translating those into executable output ideas for industry players. Having SROs in place would bring in higher governance standards and, consequently, trust in the industry players. It would also create a process of resolving industry value chain disputes in a time-bound, transparent and fair way. Hopefully, with the digitisation acceleration that we have in the country, we will soon have better and granular data on MSMEs. Detailed, structured data can help lenders look at the MSME sector for better financing. Last year, the official definition of MSME/SME changed, and we are in the midst of a FY in which many companies are in transition, in terms of how they will end up getting defined! Having MSME SROs would also bolster the confidence of the lending institutions on giving better access to credit to MSMEs and enable the former to be policy-participants in improving the acknowledgment (of stakeholders), branding, competencies, digital-interventions, e-marketplace, finance, governance framework and human capital development. This can bolster MSMEs’ contribution to our GDP, as well as generate entrepreneurship and employment opportunities across India, instead of creating only few dense and choked cities.To translate the atmanirbharta values, we need to empower and trust our local entrepreneurs. With SROs, MSMEs will have power that would rightfully come with accountability. With this, it is indeed possible to make our MSME the ‘Main-Stay Major Economy’!
Source: Financial Express
The textile hub of Tirupur incurred a production loss of more than Rs 200 on Monday, the first day of a two-day strike called by textile firms against steep increase in yarn prices. Yarn prices have increased abnormally over the last one year causing disastrous impact on the knitwear units in the district. Its price rose by Rs 30 per kg with the start of this year. Lakhs of workers are likely to go jobless if yarn prices are not stabilised. “The knitwear sector fears losing global competitiveness and job loss of employees,” said Raja M Shanmugham, president of Tirupur Exporters Association (TEA). In order to check the increasing prices of yarn, the industry representatives urged the Centre to scrap import duty on cotton, ban its export and prevent hoarding of yarn to create an artificial price rise. The knitwear units are working on completing orders received already, but an increase in yarn rates had resulted in export units not being able to get orders, added Shanmugham.
Source: DT Next
The imports and exports of textiles between the EU and UK have witnessed major drop, with significant losses on both sides. The situation is likely to worsen, as the full customs regime between UK and EU has entered into force on January 1. EURATEX has called for cooperation to remove the issues in the EU-UK Trade agreement that prevents smooth trade. All the sectors have been already suffering a significant loss in the past year and textile has been no exception. Compared to the same period in 2020, between January and September the EU recorded dramatic fall in imports, the survey by EURATEX has revealed. Further, the data has shown that the most impacted EU countries on the export side are Italy, Netherlands, Belgium and Germany while on the import side the most impacted countries are Germany, Ireland and France. Among the T&C sectors, clothing articles are facing the most severe drop in both imports and exports, corresponding to a total trade loss of more than €3.4 billion over the 9 months period. Despite these alarming figures, the UK continues to be the most important export market for EU textiles and clothing. Concerning the impact on the UK textiles sector, in May 2021 the UK Fashion and Textile Association’s (UKFT) surveyed 138 businesses, including leading UK fashion brands, UK textile manufacturers, wholesalers, fashion agencies, garment manufacturers and retailers. The results of the survey have shown that 71 per cent currently rely on imports from the EU, 92 per cent are experiencing increased freight costs, 83 per cent are experiencing increased costs and bureaucracy for customs clearance, 53 per cent are experiencing cancelled orders as a result of how the EU-UK agreement is being implemented and 41 per cent had been hit by double duties. The vast majority of the surveyed companies declared they are looking to pass the increased costs on to consumer in the next 6-12 months. Since 1 January, full customs controls are being implemented. It means that export and import rules have become stricter: products should already have a valid declaration in place and have received customs clearance. Export from Britain to the EU must now have supplier declarations and the commodities codes changed. EURATEX has called on the European Union and the United Kingdom to effectively cooperate to address, solve and remove the issues in the EU-UK Trade agreement that currently prevent smooth trade flows between the two sides of the channel. It is causing considerable losses for textile companies both in the EU as well as in the UK.
Source: Fibre 2 Fashion
UK spinners, weavers, knitters, dyers, printers or finishers or those making other textile products including nonwovens are now eligible to join the government’s Climate Change Levy (CCL) rebate scheme. The scheme can save textile companies an average of £30,000 a year. This rebate scheme is now open to new entrants and will close in March 2022. It will run until March 2025. Though those who are into garment and knitwear manufacturing are not eligible for the rebate scheme. The CCL rebate scheme for the textile industry has been running very successfully since 2002. In that time, the industry has saved over £90 million in the Levy and energy saving measures have seen the sector reduce its emissions by over 600,000 tonnes of CO2, UKFT said in a press release. The Climate Change Levy was introduced as an energy tax payable by all businesses in 2001. However, some industrial sectors were offered a rebate in the Levy in return for agreeing to specific energy reduction targets. For the textile industry, there are two separate schemes one covering the wet processing sector (dyeing, printing coating and associated drying and finishing activities) and the other covering spinning, weaving and knitting (and other similar processes). “Companies joining the UKFT CCL scheme will be eligible for a rebate of some 92 per cent on the CCL on electricity and 81 per cent on the levy on electricity. On average companies are currently saving over £30,000 a year, but for large companies the savings can be over £100,000 a year. In order to maintain the discount companies must meet set energy reduction targets. New entrants to the scheme will need to demonstrate that by the end of 2022 they will have reduced the amount of energy used by 6.7 per cent compared to 2018,” the release added. The CCL rebate scheme for the textile industry is administered by UKFT. UKFT will help companies complete all the necessary paperwork and submit all necessary registration details to the environment agency. UKFT collects and monitors company’s performance every three months and helps companies develop strategies to meet their energy reduction targets. There are costs involved in taking part in the scheme. There is a fee of £185 that is payable to the environment agency, a UKFT joining fee of £250 and then an administration fee payable to UKFT of an annual 5 per cent of the savings achieved through the scheme. This figure drops to 3 per cent for those companies that are a member of an organisation that is in turn a member of UKFT.
Source: Fibre 2 Fashion
Pakistan’s textiles exports surged by 26.05 percent to $9.381 billion during the first half of the current fiscal year 2021-22, as compared to $7.442 billion in the corresponding half last year, Pakistan Bureau of Statistics (PBS) reported. Commodities that contributed in trade growth included cotton yarn, the exports of which increased by 52.33 percent to $610.427 million during the half, from $400.733 million last year. Likewise, raw cotton exports went up 197.30 percent to $1.763 million from $0.593 million, cotton cloth went up 21.35 percent to $1.134 billion from $935.009 million, cotton (carded or combed) increased 100 percent to $1.605 million from zero exports last year, yarn (other than cotton yarn) increased 110.07 percent to $28.279 million from $13.462 million, whereas exports of knitwear increased by 35.21 percent to $2.5 billion from $1.849 billion last year. In addition, half-year exports of bed wear increased 19 percent to $1.659 billion from $1.394 billion, towels climbed up 17.54 percent to $523.686 million from $445.697 million, readymade garments went up 22.93 percent to $1.831 billion from $1.490 billion; art, silk and synthetic textile increased 34.24 percent to $224.847 million from $167.500 million, madeup articles (excluding bed wear and towels) grew 11.36 percent to $422.254 million from 379.187 million, whereas the exports of all other textile materials increased by 26.59 percent to $384.601 million from $303.822 million. The textile commodities that witnessed negative growth in trade were tents, canvas, and tarpaulin, the exports of which decreased by 9.18 percent, from $62.477 million to $56.742 million. Meanwhile, on year-on-year basis, the textile exports increased by 15.89 percent during the month of December 2021 as compared to the same month of last year. The exports during December 2021 were recorded at $1.623 billion against the exports of $1.400 billion during December 2020. On month-on-month basis, the textile exports from the country witnessed a decrease of 6.47 percent during December 2021 when compared to the exports of $1.735 billion in November 2021. It is pertinent to mention here that the country’s total merchandise exports surged by 24.91 percent during the first five months of the current fiscal year compared to the corresponding period of last year. The exports during July-December 2021-22 were recorded at $15.127 billion against the exports of $12.110 billion during July-December 2020-21. On the other hand, the imports into the country also surged by 66.23 percent by growing from $24.454 billion last year to $40.649 billion during the current fiscal year, the PBS data added.
Source: The News
Several foreign financial organisations have issued relatively positive predictions for Vietnam’s economy in 2022, with growth expected at 6.5-6.7 per cent. Foreseeing a positive medium-term outlook for the country, Standards Chartered recently forecast that the gross domestic product (GDP) growth will be 6.7 per cent this year and 7 per cent in 2023. “The economy should continue to bounce back in 2022 as the pandemic improves. Income growth has outpaced spending growth in recent years; this provides a decent savings buffer against the pandemic.” said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered. “COVID-19 remains a key risk, at least in the short term. The first quarter could see a full resumption of factory operations, after closures in Q3/2021, and government stimulus; clearer recovery is expected in March,” he noted. Economists at Standard Chartered said a continued improvement in the global trade environment will support exports in 2022 although import growth is likely to remain high. In its recent ‘Vietnam at a glance’ report, HSBC said after two years of growth slowdown, the country’s economic growth will accelerate to reach 6.5 per cent in 2022. The government also targeted this year’s GDP expansion at 6.5-7 per cent, equivalent to prepandemic levels, it said. It noted Vietnam has recovered steadily after hitting bottom in 2021 and that it will regain growth momentum in all aspects soon, according to Vietnamese media reports. HSBC noted the biggest obstacle needing attention now is the ongoing COVID-19 outbreak, but it is encouraging that vaccination has been much improved, enough for avoiding another period of widespread social distancing.
Source: Fibre 2 Fashion
Sri Lanka has piled up $11.8 billion worth of debt through sovereign bonds (ISB) which makes up the largest part - or 36.4% - of its external debt Hit hard by the Covid-19 pandemic, Sri Lanka is facing its most serious financial crisis in years, raising doubts about its ability to pay its creditors. On Tuesday, the island nation will repay $500 million towards an international sovereign bond, the first tranche of a total of $4.5 billion that it needs to pay back this year, to avoid the first default in its history. Here are the key details about Sri Lanka’s mounting debt problems: Debt profile Sri Lanka, through repeated cycles of borrowing since 2007, has piled up $11.8 billion worth of debt through sovereign bonds (ISB), which makes up the largest part — or 36.4 per cent — of its external debt. The Asian Development Bank (ADB) is in second place with a 14.3 per cent share, having lent $4.6 billion. Japan is at 10.9 per cent and China at 10.8 per cent, with each having lent about $3.5 billion each. The rest of the debt is owned by countries, such as India and international agencies, including the World Bank and the United Nations. Chinese loans China has lent billions of dollars to Sri Lanka, partly under its Belt and Road Initiative (BRI), over the past decade for infrastructure projects including highways, ports, an airport and a coal power plant. Critics say the funds have been used for white elephant projects with low returns. China rejects that criticism. Sri Lanka has asked China to restructure its debt repayments to help navigate the financial crisis. Government faces multiple challenges The government is struggling to tame retail inflation, which is running at a decade-high, amid surging commodity prices. It is also struggling to meet a fiscal deficit target of 8.9 per cent of gross domestic product. Since November, Moody’s, Fitch and Standard & Poor's ratings agencies have all downgraded Sri Lanka on debt default worries. Central bank Governor Ajith Nivard Cabraal has said the country will meet all its debt repayments in 2022. Some say restructure Some experts believe Sri Lanka should restructure its debt and establish a three-year repayment structure. Doing so would save precious dollars and lessen the burden on Sri Lankan citizens who are facing shortages of imported goods such as milk powder, gas and fuel. Lanka to hold talks with IOC Sri Lanka will hold talks with the Indian Oil Corporation on Tuesday as part of a desperate measure to tide over the current fuel and energy crisis faced by the island nation, Power Minister Gamini Lokuge said on Monday. The Lanka IOC has been in operation in Sri Lanka since 2002. Sri Lanka is currently facing a severe foreign exchange crisis with falling reserves.
Source: Business Standard
