The garment and textile industries have huge potential to contribute towards the vision of ‘Atmanirbhar Bharat’ and expect to look forward to a favourable consideration in the upcoming budget 2022. The Union Budget 2022-23 is expected to be presented by the Union Minister of Finance Nirmala Sitharaman on February 1, 2022. In the previous budget, the main focus of the government was on health and rural infrastructure development. However, this year, it is expected that the government can make many important announcements to strengthen the economy and empower the common man. The garment and textile industries have huge potential to contribute towards the vision of ‘Atmanirbhar Bharat’ and expect to look forward to a favourable consideration in the upcoming budget 2022. Speaking on the expectations from Budget 2022 on the garment and textile sectors, Ranjana Rani, co-founder, Draax Fashions said: “The garment and textile sectors are labour-intensive, and both the sectors need to be looked different than other industries. There are certain issues, which have been specific to this sector, and addressing them in a timely manner will help the entrepreneurs unlock their true potential. The garment industry is facing inflationary pressure with increase in prices of raw materials, packing, and freight.” Simultaneously, other initiatives like providing soft loans for the initial couple of years for buying raw materials and the introduction of a bill discounting mechanism through government implementing agencies would go a long way to help the sector. In short, access to affordable funds at minimal collateral would be the key for the industry to flourish, she added. At the same time, bringing drawback in exports to 18 per cent instead of 4 per cent will encourage exports from India and help the sector immensely, added Ruchi Jain, cofounder, Draax Fashions. “The government also needs to encourage women entrepreneurs, particularly belonging to the MSME segment. Reducing income tax rate for at least 5 years would incentivise the creation of more manufacturing facilities and help generate employment,” Jain further added. A one-time subsidy on capital expenditure, especially the purchase of machinery, would reduce the setup cost. A large part of the industry is still using traditional tools and technology, which needs upgradation. “We expect a specific fund allocation for skill development, automation and replacement of old machinery to new efficient machines,” Rani mentioned. “We need to encourage more domestic production of fabrics/yarn and reduce dependency on imports. Further, measures need to be taken to increase the export competitiveness of the sector, which is losing to countries like Bangladesh and Sri Lanka in recent years. An increase in RoDTEP rates is urgently needed,” Jain said.
Source: Zeebiz
To mark the final stage of Union Budget making process, sweets were provided to core staff due to "lock-in" at their workplace instead of Halwa ceremony due to ongoing pandemic and health safety concerns. To maintain the secrecy of the Budget, there is a "lock-in" of the officials involved in making the Budget. The Union Budget 2022-23 will be presented by Union Finance and Corporate Affairs Minister Nirmala Sitharaman on February 1, 2022, in paperless form. To mark the final stage of Union Budget making process, sweets were provided to core staff due to "lock-in" at their workplace instead of Halwa ceremony due to ongoing pandemic and health safety concerns. To maintain the secrecy of the Budget, there is a "lock-in" of the officials involved in making the Budget. Budget Press, situated inside North Block, houses all officials in the period leading up to the presentation of the Union Budget. These officers and staff will come in contact with their near and dear ones only after the Budget is presented by the Union Finance Minister in the Parliament. The Union Budget 2022-23 will be available on the mobile App after it is presented in Parliament. The App will provide easy and quick access to Union Budget information to all stakeholders. It is a bilingual App (English and Hindi) and is available on both Android and iOS platforms.
Source: Economic Times
India and Uzbekistan had signed a joint statement in September 2019 to carry out a joint feasibility study for entering into negotiations for a preferential trade agreement (PTA). Ahead of the India-Central Asia summit on Thursday, India and Uzbekistan have fasttracked talks for a bilateral trade pact, the first for India in that region. The first round of joint working group meetings with Uzbekistan was held in the first week of January and the inter-governmental commission on trade is also scheduled this month. “A trade pact with Uzbekistan is of strategic importance, especially after the political changes in Afghanistan,” said an official, who did not wish to be identified. India and Uzbekistan had signed a joint statement in September 2019 to carry out a joint feasibility study for entering into negotiations for a preferential trade agreement (PTA). The proposed PTA will contribute to fast-tracking India’s connectivity to the landlocked region and vice versa. Smoother connectivity will also enable India to boost PTA, said an expert on Central Asia. The PTA with Uzbekistan will also enable India to tap into the markets of Tajikistan and Kyrgyzstan. The Indo-Uzbek PTA is also expected to contribute to the proposed free trade agreement (FTA) between India and the Eurasian Economic Union. Talks between India-Eurasian Economic Union have gained momentum and negotiations are expected to be held in the near future. The proposed India-Uzbek PTA and FTA between India and Eurasian Economic Union is politically significant, raising India’s stakes in the region. Russia has thrown its weight behind India’s moves to increase presence in Central Asia and Eurasia. In April-November 2021, India’s exports to Uzbekistan amounted to $176.22 million, led by pharmaceuticals, mechanical equipment, vehicle parts, services, optical instruments and equipment. India’s imports from Uzbekistan, at $14.58 million during the period, consisted largely of fruit and vegetable products, services, fertilisers, juice products and extracts, and lubricants. The official said India is keen to export goods worth $500 billion next year, which is why it is scouting for new markets through trade agreements. Notable Indian investments in Uzbekistan by Indian companies include those in the field of pharmaceuticals, amusement parks, automobile components and hospitality industry. Indian firms like GMR have expressed interest in investment in airports, development of the air corridor and Navoi cargo complex in Uzbekistan. Mumbai’s Kokilaben Dhirubhai Ambani Hospital has expressed interest in setting up a specialty hospital, according to a note of the external affairs ministry. In October 2019, Amity University and Sharda University opened campuses in Tashkent and Andijan respectively. Indian institutions like iCreate are actively cooperating with Uzbek counterparts for promoting the startup ecosystem in Uzbekistan and training entrepreneurs in setting up incubators. Dev IT has entered into bilateral cooperation in field research, technologies, startups and innovations with budding Uzbek partners. NTPC is also participating in various tenders, including solar PV power plants and consultancy assignments for gas projects in Uzbekistan. Meanwhile, India and Uzbekistan are in talks for a bilateral investment treaty.
Source: Economic Times
The Centre estimates cotton production in 2021-22 at 36.25 million bales, while traders said it was around 33-34 million bales Textile industry stakeholders, in a meeting with Union Finance Minister Nirmala Sitharaman on Thursday, pressed for removing import duty on all varieties of cotton or at least on extra-long staple (ELS) cotton to curb the rise in prices, and highlighted the issue of alleged hoarding by cotton players. The price of one cotton candy (one candy = 356 kg) increased from around Rs 37,000 in 2020 to Rs 80,000 now. Normally, any increase in the price by Rs 1,000 per candy would lead to an increase of Rs 4 per kg of yarn. Domestic raw cotton prices have moved up by almost 69 per cent.
Source: Business Standard
Exports have always been a key economic driver of India’s economy. Thanks to the pandemic, the country’s outward shipment had to bear a heavy blow in the last 2 years. But exports are on a solid footing now. In fact, the numbers have lately soared. In December 2021, India’s merchandise exports rose to a record high of $37.8 billion — the highest for any month. Compared with December 2019, exports in December 2021 grew 39.47%, the Commerce and Industry Ministry said recently. With Budget 2022 around the corner, the country’s exporting community has laid out specific demands before Finance Minister Nirmala Sitharaman. One of the primary demands of exporters is for fiscal and tax support to address logistics challenges that have severely dented their profitability throughout a major part of the last year. Of late, the logistic cost in India has gone up manifold due to a variety of reasons. Besides the global supply chain disruptions, structural bottlenecks need redressal via policy interventions in the Budget. The Federation of Indian Export Organisations (FIEO) says the export sector is facing an acute shortage of containers as domestic players remain dependent on imported containers. FIEO President A Sakthivel says container manufacturing requires a special kind of steel, and China makes over 80% of global containers as it has easy access to the raw material. “We need to encourage domestic manufacturing of containers by providing fiscal benefits to container manufacturing if we are looking to reach $1 trillion in exports in the next 5 years,” Sakthivel says. costs have highlighted domestic firms’ dependence on global shipping companies. It exacerbated the supply chain crisis in the country because Indian shipping lines have a minor share in global trade, says FIEO. India’s outward remittance on account of transport services is increasing every year. We remitted around $65 billion as transport services in 2020. Now with Shipping Corporation ofIndia being disinvested, the Budget should announce something that encourages Indian entities to build a world-class shipping line, says the industry body. “Such shipping lines, even if it gets 25% of the total business, can help India save $30-40 billion annually and will significantly reduce our dependence on foreign shipping lines and their dictates,” says Sakthivel. He suggests that the country give tax advantages for registration of ships in India. MSMEs that export goods also emphasise on the need for the country to have its own shipping line. Spiralling freight costs have eroded these entities’ hopes of making profits from overseas shipments. Vikas Singh Chauhan, Director at MSME-dominated Home Textile Exporters Welfare Association (HEWA), cautions that after two weeks, there is going to be an “October-like situation” — when freight and container costs were very high. “Budget should take a cue from the global supply chain crisis. It’s unfortunate that India doesn’t have a global shipping line and large-cap container manufacturing unit. It’s time India makes a firm move to have a global shipping line. The Budget also needs to declare some mechanism to stop lines from overcharging on account of rollover, exchange rate, spot booking, booking cancellation, weight variation, etc. Almost all exporters are forced to pay a hefty amount to meet such expenses,” he says. FIEO says exporters find it difficult to market themselves overseas. “We need to bring a Double Tax Deduction Scheme for Internationalisation (DTDi) to allow exporters to deduct from their taxable income twice the qualifying expenses incurred for approved overseas activities, including market preparation, market exploration, market promotion and market presence. A ceiling of $500,000 may be put under the scheme,” says Sakthivel, citing Singapore provides such a facility to its SME units.
SEZs and MSMEs seek FM’s attention The country’s special economic zones (SEZs) have also been a key driver of growth. In 2019-20, SEZs handled about 36% of the exports. Rakesh Nangia, Chairman, Nangia Andersen India, points out that ever since the sunset clause on SEZ units kicked in, there is very little incentive for companies to set up SEZ units. Based on recent data, several SEZs have applied for denotification because of the fundamental lacuna in law of treating SEZ-to-domestic tariff area (DTA) transfers on a par with imports and levying import tariffs on these. “Given that several ministries are moving towards a phased manufacturing programme (PMP) of steadily increasing custom tariffs on inputs used in manufacturing several items — from electronics to automotive — SEZ units are at an inherent disadvantage when supplying such goods to DTA units. The issue has been raised at multiple forums but has not been addressed yet,” he says. Further, bringing back incentives for SEZ units on their export sales will broad-base incentives and cover all units in an SEZ, rather than just “winners”, as is being proposed in the PLI scheme, Nangia adds. In encouraging exports, the government can also restore certain schemes that have been particularly beneficial to MSMEs firms — which handle 50% of the country's exports. The Federation of Indian Micro and Small & Medium Enterprises (FISME) says the interest subvention scheme for exporters supported MSMEs. “The scheme was withdrawn from September 21, 2021. Unfortunately, as a country, we have to compete with LDC countries like Bangladesh that have preferential access in most western markets, whereas India does not. FISME wants the interest subvention scheme restored with retrospective effect. The federation also claims that the prices of building blocks of industrialisation — steel, copper, aluminium and polymers — on which downstream industries & MSMEs are dependent, remain 25~50% higher than what they are for their international counterparts. It suggests the removal of import duties on these items and the suspension of antidumping duty or safeguard duty (ADD/SD) on these four. The government should take steps to ensure competitive functioning of factor markets by ensuring that stakeholders have a say in the ADD/SD proceedings or during the imposition of non-tariff barriers (NTBs). PHDCCI’s President Pradeep Multani says as raw material prices have increased significantly in the past year, the basic custom duty (BCD) on manufacturers should be reduced by 50%. To give momentum to exports, he adds that export income be made tax free for MSMEs for three years, and the income of large enterprises from yearon-year incremental exports be also made tax free. Lauding the PLI Scheme, HEWA’s Chauhan says a similar scheme should be started for MSMEs with an investment ambit of around Rs 10 crore. “Increasing the RoDTEP budget is required, especially for handicraft, handloom and other labour-intensive sectors. Because of the pandemic and the increase in shipping cost, a minimum 25% write-off in yearly turnover should be allowed in 2020-2023 on pending export payments from overseas bank realisation certificates (BRCs) without returning any tax refund, including RoDTEP/DBK/GST. We also request the removal of import duty on cotton yarn to ease the pressure on the supplydemand imbalance.” Chauhan also wants the Budget to remove export incentives on raw materials for a certain period to promote exports of finished goods. Services sector wants to push on R&D, ease on compliances Most stakeholders agree that a limitation for manufacturers is research and development. Inadequate or the absence of R&D has made Indian companies laggards in the tech sector. The Budget should give a push in this direction, says Sandeep Narula, Chairman, Electronics and Computer Software Export Promotion Council (ESC). “Look at the companies and countries that have made the grade in software, hardware and telecommunications. They are there because of their heavy investments in R&D, innovation, creating intellectual property, including patents and incubation centres. India invests a meagre 0.6% of its GDP on R&D, whereas China spends almost 2.2% and Israel spends something between 5% of its GDP on R&D. Large global ICT companies invest a double-digit percentage of their business turnover in R&D and innovation,” says Narula. Of the meagre 0.6% of the GDP on R&D in India, most of it comes from public sector undertakings and government-run laboratories. This means private sector involvement is largely absent here. “For India to truly emerge as a global technological powerhouse, investments in R&D need to be increased at least fourfold,” says Narula. “It’s important to amend Section 35 of the Income Tax Act to enhance benefits under the weighted tax scheme to motivate Indian private sector ICT companies to invest in R&D. The government should also consider more benefits in the form of research tax credits, which can be used to offset future tax liability. These types of benefits are given in developed economies.” The ESC — the apex body to promote exports of electronics, telecom and computer software — says the Indian software industry is being threatened by countries in East Europe, the Balkans and North Africa. Incentivising global distributors of electronic components to open up their warehousing in India, it says, will address the supply chain disruptions to some extent. “There can be other policy corrections too, such as the definition of software. By treating software as a product, it would exempt developers who supply solutions to the domestic area from TDS deduction, which is cumbersome and leads to blockade of funds, as TDS can be availed only by the end of the financial year. Also, there is the need to have a relook at the definition of royalty, copyright, etc., to make them business-friendly,” adds the ESC chief.
Source: Economic Times
The businesses and taxpayers can now calculate interest on delayed payment while filing their monthly tax payment form GSTR-3B. In a notification, the GST Network said the system will compute interest on the basis of the tax liability values declared by the taxpayers, along with the details about the period. The GST Network has made interest calculation functionality operational on the GST portal, a move which will improve ease in filing return for small businesses. The businesses and taxpayers can now calculate interest on delayed payment while filing their monthly tax payment form GSTR-3B. In a notification, the GST Network said the system will compute interest on the basis of the tax liability values declared by the taxpayers, along with the details about the period.
Source: Economic Times
Leaders of five central Asian countries welcomed India's proposal to establish a joint working group to boost connectivity to the region through the Chabahar port in Iran Leaders of five central Asian countries on Thursday welcomed India's proposal to establish a joint working group to boost connectivity to the region through the Chabahar port in Iran. During the India-Central Asia Summit hosted by Prime Minister Narendra Modi with presidents of Kazakhstan, Kyrgyz Republic, Uzbekistan, Turkmenistan and Tajikistan, the leaders emphasised that connectivity projects could be a force multiplier for trade and economic cooperation and contacts between countries and people. The leaders also stressed on making concerted efforts to boost trade and investment in sectors such as medicine, healthcare, education, information technology, business process outsourcing, infrastructure, agriculture and agri-processing, energy, space industry, textiles, leather and footwear industry, gems and jewellery. Trade between India and the central Asian countries is just about two billion dollars, which the leaders said was far below the true potential. The five leaders also supported India's proposal to include Chabahar port in Iran and Turkmenistan's proposal to include the Turkmenbashi port within the framework of the International North-South Transport Corridor (INSTC) that seeks to link the Indian Ocean to the Caspian Sea via the Persian Gulf and onwards into Russia and northern Europe. The leaders agreed that connectivity initiatives should be based on the principles of transparency, broad participation, local priorities, financial sustainability and respect for sovereignty and territorial integrity of all countries. India has extended a one billion dollar Line of Credit in 2020 for infrastructure development projects and has offered to provide more training slots and scholarships including customised training programmes to meet the requirements of Central Asian countries. The leaders paid special attention to the need to establish cooperation between specialised national institutions, including in the fields of finance, renewable energy, information, digital and other advanced technologies. "In this context, they welcomed the proposal for establishment of an 'IT/ITES Task Force' between the IT organizations, IT parks and IT companies of India and the Central Asian countries to work towards greater digitalisation and E-Governance in their countries, as well as business process outsourcing (BPO) by sharing of best practices, knowledge," the Delhi Declaration adopted at the Summit said. The sides encouraged the India-Central Asia Business Council (ICABC) to accelerate efforts to promote business linkages, facilitate greater understanding of business regulations and incentivise mutual investments. They leaders also took note of the proposal to create an India-Central Asia Investment Club under ICABC to promote investment opportunities in each other's countries. Kazakhstan President Kassym-Jomart Tokayev, Kyrgyz President Sadyr Japarov, Tajikistan President Emomali Rahmon, Turkmenistan President Gurbanguly Berdimuhamedov and Uzbekistan President Shavkat Mirziyoyev attended the first IndiaCentral Asia Summit in virtual format.
Source: Business Standard
The BPJ-led Governments in the Centre and in the State have launched various welfare schemes to benefit a cross-section of people and they are committed to protecting the interest of the farming community, Minister for Large and Medium Industries Murugesh Nirani has said. He added that the State Government has constituted a directorate to help value addition in agricultural produce to double farmers income. After unfurling the tri-colour and inspecting the parade during the 73rd Republic Day celebrations at the District Armed Reserve Police Grounds here on Wednesday, Mr. Nirani said that the setting up of the directorate for secondary farm activities is an extension of Prime Minister Narendra Modi’s ambitious proposal to double farmers income by 2023-24. Besides this, the Centre has implemented different schemes to revive the agriculture sector and to improve the economic conditions of farmers. To encourage farmers children to pursue higher education, the State Government has launched the Chief Minister Raitha Vidya Nidhi Scholarship Scheme. Students will get an annual scholarship between ₹2,500 and ₹11,000. The scheme has been implemented for 2021-22 and 22,263 students in the district have received ₹544 lakh scholarship. Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme, 2.68 lakh farmers from the district have received financial assistance of ₹528.79 crore from 2019-20 to 2021-22. As part of its efforts to give a fillip to the local economy and generate employment in the region, the Union Government has sanctioned a mega textile park for the district. The State Government has proposed to acquire 5,000 acres of land together for industrial development, he added. The Minister said that the Centre has extended relief of ₹50,000 each to 287 below poverty line (BPL) families and 332 above poverty line (APL) families in the district that had lost their family members to COVID-19, while the State Government has paid ₹1 lakh each to 205 bereaved families in the district. ₹2,771 cr. released So far, the Kalyana Karnataka Regional Development Board (KKRDB) has allocated ₹2,771.25 crore for the district to take up 8,095 development works of which the board has spent ₹1,712.48 crore to complete 6,700 works, while 1,397 works are in progress, Mr. Nirani added. Member of Parliament Umesh Jadhav, Deputy Commissioner Yeshwanth Gurukar, Superintendent of Police Isha Pant, Police Commissioner Y.S. Ravikumar, Zilla Panchayat Chief Executive Officer Dilesh Sasi and MLAs and MLCs were present.
Source: The Hindu
Power assets in India most vulnerable, country needs to balance multiple priorities of economic growth, climate change India may need to invest about 11% of Gross Domestic Product (GDP) over the next three decades as the world makes the transition to the goal of net- zero emissions by 2050, compared to the global average of about 7.5 per cent of GDP, according to consulting firm McKinsey. In a study released on Tuesday, McKinsey said the higher investment will be required because the Indian economy is largely driven by fossil fuels, with 40 percent of GDP exposed to such economic sectors. These higher investments will also be accompanied by phases of higher electricity cost, an investment shift to low fossil emission technologies and jobs, said McKinsey. These shifts will be felt across regions and sectors but disproportionately in power, and some industries such as cement and steel. To put the number in perspective, 11 percent of India’s estimated GDP for 2021-22 at present prices can be spent to build roughly 170,000 kilometres of four-lane highways, according to a Moneycontrol estimate. This much money can be used to build over five times the entire length of India’s fourlane roads. India, the third largest contributor to global emissions, has traditionally been sixth or seventh and has a much lower share if one were to calculate the emissions on a per capita basis, said Rajat Gupta, senior partner at McKinsey and Asia leader of sustainability at the consulting firm. India ranks third largely because of emissions from power generation (about 3 percent of global carbon dioxide emissions) and carbon-emitting heavy industries. And most of India’s emissions are rather recent, with 45 percent of India’s cumulative historical emissions taking place only since 2010. Prime Minister Narendra Modi, at the COP-26 Summit held in Glasgow late last year, said India will be a net zero emitter by 2070, not 2050.
Power assets in India may get stranded The global transition to net-zero could lead to assets getting stranded, which means existing physical assets remain either underutilized or are shut down before their utility ends. In the power sector alone, $2.1 trillion worth of assets could be stranded by 2050, McKinsey estimates. Of this, 80 percent would be relatively new fossil fuel–based power plants in operation today, primarily coal-fired plants in countries such as China and India. “Early retirement of these assets can lead to value reduction, bankruptcies and credit defaults, with potential knock-on effects on the global financial system. And markets may well pronounce their verdict before the actual stranding has taken place,” the consultancy said. Under current policies, 60 percent of the annual average investment would be on lowemissions assets. That needs to go up to 80 percent for net zero by 2050, said Gupta. Much of this spending in the country will be used to cut the use of coal power and increase low-emissions electricity capacity. Moreover, the investment, including in India, needed in the initial few years will be much higher. For instance, the cost of producing equivalent solar-based power will require 1.5- 2 times higher (taking into account grid costs) compared to coal, said Gupta. Cost increases in power, steel, cement will be likely in the range of 20-100 percent depending on the technologies used, said Gupta. However, if we don’t build coal, steel or power plants in cleaner ways, then we will be stuck with stranded assets, said Gupta. So India will either have to adopt cleaner technologies for building coal, steel, cement plants, or replace them with sustainable, low emission alternatives like renewables. During three decades, India’s energy demand is expected to grow four-fold.
Indian economy’s exposure to net-zero transition will be very high India will be amongst the countries that will face the highest levels of exposure to transition as it has a relatively lower GDP per capita with a higher concentration of jobs, GDP, and capital stock in sectors that have emissions-intensive operations, products, and supply chains. Other studies have earlier indicated that 30 to 65 percent of the emissions in China and India are triggered by foreign final demand or export in some manufacturing sectors, such as chemicals, textiles, leather, and apparel. “As demand for high-emissions goods falls and low-emissions goods increases...shifts in consumer preferences or the presence of carbon taxes or other regulatory measures could produce advantages for countries that make products with low emissions intensity” said the report. So India may lose export business to other countries if it is seen as a laggard in adopting greener technologies to produce its goods.
India needs to plan carefully for net-zero transitions India should clearly define its path to short-term and long-term targets through debate, said Gupta. Without careful planning, countries like India may continue to spend on lower-cost, high-emissions assets that could force the assets to shut down after a few years as the world transitions to a net-zero path. Gupta called for pricing carbon more explicitly although India already prices carbon through taxes on fossil fuels and a cess on coal. “It will be good to price carbon explicitly,” he said.
Job shifts and balancing many needs There will be job losses in emission-intensive sectors. But more jobs will be created involving newer technologies and India may see near-term job opportunities in the construction sector, said the report. Consumers may face additional upfront capital costs and have to spend more in the near term on electricity if cost increases are passed through, and lower-income households are naturally more at risk. Consumer spending habits may also be affected by decarbonisation efforts, including the need to replace goods that burn fossil fuel, like vehicles and home heating systems, and potentially modify diets to reduce high-emissions products like beef and lamb. The upfront capital spending for the net-zero transition could yield lower operating costs over time for consumers. For example, the total cost of ownership of electric vehicles is expected to be lower than internal combustion engine cars in most regions by 2025. Mekala Krishnan, partner at the McKinsey Global Institute and lead author of the report, said that navigating the journey will be challenging as in the next three decades we aim to transform what took 100-150 years to build. Countries like India will have to balance the transition to net zero with other priorities— such as a growing economy with high energy demand, rapid urbanization, and severe impacts of climate change. Half of Indians, by 2050, will be impacted by droughts, floods, heat-waves and storms at a much higher frequency than now. Also, 400 million Indians will not be able to work outside a quarter of the time.
Source: Money Control
The retail industry, which struggles with low footfalls and poor sales whenever a new wave strikes and movement curbs are introduced, wants the government to restructure GST formalities, extend the moratorium on loans and create a national policy for retail. The beleaguered retail industry expects a slew of relief measures to help it tide over challenging times as it struggles with footfalls and low sales again, amid the third wave of the Covid pandemic. Additionally, the industry is also looking forward to announcements around a National Retail Policy, restructuring of GST formalities and initiatives to boost consumption in the upcoming union budget. “The two years of the pandemic have impacted many in the poorer sections of the population. Many were without jobs thanks to reverse migration and lockdowns. Any scheme that helps increase the spending power of the poor would be welcome,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI). Similarly, he added, the salaried class of the population also needs to get more money in their hands to help them consume with confidence. “Rising inflation is a worry, and this can be faced better only with more money in the hands of the consuming class,” he said.
Streamlining GST Companies operating in the retail sector are also seeking a few reforms around GST. “We hope that the finance minister will consider restructuring GST formalities, specifically the delay in getting input credit by monthly filers due to quarterly filing of returns by quarterly filers,” said Shivendra Nigam, CFO, Cantabil Retail India. Rajagopalan, meanwhile, feels the government needs to give the industry a better direction for the implementation of GST. “Any increase in GST on clothing, food and housing creates a direct impact on consumption. A direction for a more predictable GST regime would be welcome. Similarly, many clauses around carrying forward and refund of GST needs clarification,” he added. Last September, the GST Council had decided to correct the inverted duty structure on textiles and footwear from January 1 and hiked the GST rate to 12 percent from 5 percent. After a backlash from the industry, which said the increase would impact demand, especially given the inflationary situation, the Council deferred the rate hike on textiles in December but went ahead with its decision on footwear.
Other expectations The retail industry expects the finance minister to announce a slew of measures to help the beleaguered retail industry. Mall owners, for instance, are demanding a moratorium on loans. “During the first lockdown, shopping malls were offered a moratorium on loans for an extended period of seven-eight months, but no such relief was given to us during the second wave, which was even more severe,” said Gurvineet Singh, CEO of Thane-based Viviana Mall. “With the third wave, the retail industry has been hit again and a moratorium on loans will help it sustain,” he added. For some years now, mall owners have also been demanding infrastructure status for shopping centres, which would help them gain access to institutional funding at much lower borrowing rates and help the industry survive in these challenging times. The retailers are also expecting announcements around a National Retail Policy, a long pending demand from the industry. The policy will make it easier for retailers to set up shops and ensure ease of doing business, a much-awaited reform by the industry. “Several licences and compliances are required currently to open even a small store; bringing a National Retail Policy into the picture will make the processes hassle-free for us,” said Vineet Jain, CFO, V-Mart Retail. Besides these, the retail industry is also seeking MSME and ECLGS (Emergency Credit Line Guarantee Scheme) support for retail and a policy around digitisation.
Source: Money Control
Brexit has hurt two-way trade between the European Union and Britain, with the auto, textile and aviation sectors the worst hit, the French economy ministry said on Thursday. The ministry released data on the sidelines of an EU ministerial meeting in Paris dedicated to reviewing the fallout from Britain’s departure from the bloc a year ago. EU exports to Britain fell by 15 per cent in the first 10 months of last year compared to the same period in 2019, before the pandemic, according to the French economy ministry. EU imports from Britain sank by 30 per cent over the same period. The Covid-19 pandemic has also had a major effect on trade flows between the two sides. But the EU’s total imports and exports exceeded 2019 levels during the first 10 months of last year, according to data from the bloc’s Eurostat agency. The new trade deal between Britain and the EU that took effect at the beginning of 2021 re-established customs checks at the border, creating an administrative burden for transport firms. It also created delays and added complexity for firms that relied on prompt, regular shipments. British retailer Marks & Spencer closed many of its Paris shops after struggling to keep perishables on the shelves. Some 80 per cent of trade with Britain goes through France, which has hired 700 customs officers and created a bar-code system that allows trucks to go through the border without stopping after getting approval to do so before travelling. Nine out of 10 trucks go through customs without stopping now, compared to one quarter in the first weeks of 2021, according to the French economy ministry. But the trucks carry less merchandise than before Brexit, it said. “This massive challenge was met without a hitch,” European Commission’s customs office director general Gerassimos Thomas said. But trucks have faced queues as long as 10 kilometres at Channel ports in Britain this month, with some blaming the bottlenecks on Brexit. The delays have been attributed to several factors, including the UK government implementing further customs controls at the start of January. Trucks now take longer to pass through Channel ports as their paperwork is verified. Logistics UK, which represents an array of road, rail, sea and air operators, urged the French and UK government on Monday to hold “constructive” talks on the issue.
Source: Bol News
The EU has requested dispute settlement consultations at the World Trade Organization (WTO) with Egypt on its compulsory import registration requirements. The EU considers that these requirements violate WTO rules because they place import restrictions on a vast range of goods, from agricultural products to household appliances. EU exports to Egypt on the wide range of goods concerned fell by 40% following the imposition of the compulsory import registration requirements in 2016. Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “The EU is today acting to defend EU exporters who are facing unfair restrictions in accessing the Egyptian market. These import restrictions are illegal under WTO rules and we regret that Egypt has not acted to remove these, despite our repeated requests and efforts to resolve this issue. This is why we are now taking the next step by requesting consultations at the WTO.” Since 2016, foreign factories and companies wishing to import certain goods into Egypt are required to register with the Egyptian authorities. The registration requirements currently cover 29 categories of goods, including agricultural and food products, cosmetics, toys, textiles, garments, household appliances, furniture and ceramic tiles. The registration process is arbitrary and can take years. The Egyptian authorities have failed to process the applications of many EU companies for long periods of time despite numerous interventions from both the affected industries and the EU. The compulsory registration and related delays in the processing of applications constitute restrictions on imports and as such are incompatible with the WTO Agreements on Tariffs and Trade (GATT 1994), on Agriculture and on Import Licensing Procedures. Next Steps The dispute settlement consultations that the EU has requested are the first step in WTO dispute settlement proceedings. If they do not lead to a satisfactory solution, the EU can request the WTO to set up a panel to rule on the matter.
Source: EIN News
Abdus Sattar, a resident of Mahishamuri village in Lalmonirhat's Kaliganj upazila, was a weaver by profession like his father before him, the late Amir Chand. Sattar, who was involved in weaving since childhood, has been earning a living as a daylabourer for the last two years as he was forced to sell his handloom at a low price to make ends meet. Still though, he hopes to raise enough capital one day to start weaving again. Like Sattar, Alim Uddin of the same village now earns a living as a mason as he cannot maintain his expenses by weaving. As such, his handloom is tucked away in storage but if given enough capital support, Uddin plans to return to his ancestral profession. Uddin's late father Haran Ali taught him all he knows about weaving, a profession which once brought prosperity to his family. Now, he has to live with his wife, two sons and a daughter in extreme poverty. Like Uddin and Sattar, many traditional weavers have been unable to hold on to their ancestral professions due to a lack of working capital. Some sold their handlooms while others stored them away and are now earning money by joining various professions. Some work as agricultural labourers, day labourers and on ferries while others drive rickshaws and the like. The weavers told The Daily Star that the clothes they made were popular a decade ago, when demand. Now though, the demand is decreasing day by day as machine-made fabrics look brighter than woven fabrics, making them the preferred choice among buyers. However, woven fabrics are still more comfortable than their machine-made counterparts. About 9 to 10 years ago, weavers of Kakina union would make blankets for sale yearround. In winter, these blankets were often bought by the government as well as nongovernment organisations (NGOs) for distribution among the cold-stricken poor people. But ever since these blankets started being made in factories, weaved blankents are no longer being bought and now, only a few retailers buy and sell them in local markets. Another weaver, Meher Ali, told The Daily Star they used to sell more than four lakh pieces of blankets and bedsheets every year during winter. At the time, each weaver could sell up to 6,000 of these products. Each blanket would cost between Tk 80 to Tk 100 to make while they would sell for about Tk 200 to Tk 250. "The capital crisis is our biggest problem. Secondly, the market advantage is not available as the value of weaving cloth is declining in the market. The number of users of weaving cloth is also decreasing day by day," Ali said. "But weaved cloth is still being sold satisfactorily to low-income people as our fabrics are available at relatively low prices. If we get the capital and market advantage, we will be able to rise as before," he added. Khorshed Alam, a local NGO representative, told The Daily Star that 8 to 10 years ago, he used to buy 10,000 to 12,000 pieces of weaved blankets to distribute among the poor during the winter every year but now, he distributes factory-made blankets. Like Alam, many NGO representatives used to buy the blankets made by handlooms from weavers. "Blankets are also available at a lower price," he said. Weaved bedsheets can be used for a few years at least but the blankets can be used for a maximum of two years. "So, I think weaving sheets are much better than blankets but we are getting allocations for blankets," Alam added. Fazlal Ali, president of the Lalmonirhat Weavers' Association, told The Daily Star that there were about 1,500 handlooms in the district 10 years ago. Now there are just 250 to 300 handlooms, all of which are in Mahishamuri village of Kakina union, but only a few of these are in operation. Weavers have been unable to keep their handlooms running due to the lack of capital support. "Once upon a time, the blankets and sheets weaved in Kakina were in high demand but now, there is no market for it," Ali said. "Besides, we are not able to make much of a profit as the price of yarn has gone up," he added. Hafizur Rahman, a weaver from Mahishamuri village, said he operated his handloom up till last year but could not start it this year due to a lack of capital. If engaged in weaving, the worker needs to keep at least five to six maunds of yarn in stock. But since Rahman cannot afford to buy and store these yarns, he kept his handloom inside the house. "We make shirt fabrics, pant fabrics, bedsheets, towels, lungis, saris, and other items with our handloom," he said. "'We dream to maintain our ancestral profession but it has become difficult for us due to a lack of capital support," Rahman added. Sohrab Ali, a weaver from the same village, told The Daily Star that they cannot turn a profit if they buy the required yarn with interest-bearing loans. Instead, they could have kept their professions afloat if they got interest free or low interest loan facilities. "I have kept myself afloat with interest-bearing loans but I have not been able to make much profit," he said. "Some 8 to 10 years ago we could have made a profit by selling handloom sheets but with the advent of big garment units, the demand for sheets has come down and we do not have enough capital to compete," he added. Tamiz Uddin, a weaver from the same village, said he had not sold his handloom yet considering the lack of capital, he finally decided to sell. "I am not able to make a profit by buying yarn at a higher price. If we could keep the handloom running with our own capital, we would earn Tk 800 to Tk 1,000 every day," Uddin said. "It is very difficult to keep the handloom running. Once upon a time, weaving was going on day and night. Everyone in the family was busy. The knocking sound of the handloom filled our souls but now the handlooms are idle," he added. Farida Begum, a weaver from Kakina village, said that she was the daughter of a weaving family and was married to a weaver. As such, her relationship with the handloom is from birth. Her financial situation would be better if she weave regularly but their handlooms are keeping idle and so, she spends her days lazily. Her husband, Alim Uddin, is now working as a day labourer. "If we had the capital, we could have kept the handloom running," she said. Babul Mia, a local weaver and businessman of Kakina, said that at one time the business of weaving clothes was booming in the area. Wholesalers used to come from all over the country but now, only a handful of weavers have been able to keep their operations running. At one time, Kakina's weaved sheets were officially procured through tenders and distributed to cold-stricken people. "This has not been happening for the last few years and weavers in the district will be wiped out in the next three to four years if they cannot resume weaving without government patronage and full capital support," Mia added.
Source: The Daily Star
The economy grew 5.7% in 2021, the strongest since 1984. It contracted 3.4% in 2020, the biggest drop in 74 years U.S. economic growth accelerated in the fourth quarter as businesses replenished depleted inventories to meet strong demand for goods, helping the nation to post its best performance in nearly four decades in 2021. Gross domestic product increased at a 6.9% annualized rate last quarter, the Commerce Department said in its advance GDP estimate on Thursday. That followed a 2.3% growth pace in the third quarter. Economists polled by Reuters had forecast GDP growth rising at a 5.5% rate. Estimates ranged from as low as a 3.4% rate to as high as a 7.0% pace. The economy grew 5.7% in 2021, the strongest since 1984. It contracted 3.4% in 2020, the biggest drop in 74 years. Growth last year was fueled by massive fiscal stimulus as well as very low interest rates. The momentum, however, appears to have faded by December amid an onslaught of COVID-19 infections, fueled by the Omicron variant, which contributed to undercutting spending as well as disrupting activity at factories and services businesses. Last year's robust growth supports the Federal Reserve's pivot towards raising interest rates in March. Fed Chair Jerome Powell told reporters on Wednesday after a two-day policy meeting that "the economy no longer needs sustained high levels of monetary policy support," and that "it will soon be appropriate to raise" rates. The sharp rebound in growth last year could offer some cheer for President Joe Biden whose popularity is falling amid a stalled domestic economic agenda after the U.S. Congress failed to pass his signature $1.75 trillion Build Back Better legislation. It, however, diminishes prospects of more money from the government. ALL ABOUT INVENTORIES Inventory investment accounted for the bulk of the increase in GDP growth in the fourth quarter. Businesses had been drawing down inventories since the first quarter of 2021. Spending shifted during the pandemic to goods from services, a demand boom that pressured supply chains. Growth last quarter was also lifted by a jump in consumer spending in October before retreating considerably as Omicron spread across the country. Consumer spending, which accounts for more than two-thirds of economic activity, has been hampered by shortages of motor vehicles and other goods. A global chip shortage is hurting production. Reduced household purchasing power, with inflation way above the Fed's 2% target, also hindered consumer spending at the tail end of the fourth quarter. The Omicron-driven outbreak in infections has also impacted the labor market, though this is likely temporary. Employers are desperate for workers, with 10.6 million job openings at the end of November. A separate report from the Labor Department on Thursday showed initial claims for jobless benefits dropped 30,000 to a seasonally adjusted 260,000 during the week ended Jan. 22. Despite the anticipated soft patch in the first quarter because of challenges from the never ending pandemic, the worst inflation in decades, supply chain bottle necks and upcoming interest rate increases, the economy is expected to soldier on this year, with growth estimates as high as 3.9%.
Source: Business Standard
The recent United Nations (UN)-World Trade Organisation (WTO) joint report has underrated the progress of Bangladesh’s readymade garments (RMG) sector in some cases, according to the country’s apparel manufacturers, who recently disagreed with a few indicators that show Bangladesh behind Vietnam and said the report underrated the progress made by the domestic industry. The competitiveness report, titled ‘The Textile and Clothing Sector in Asian Graduating Least Developed Countries: Challenges and Ways Forward’, scores Bangladesh lower than Vietnam on 10 indices out of 12. In product quality, lead time and sustainability, Bangladesh's RMG sector is not as good as that of Vietnam, it says. Bangladesh scored 3.5 and Vietnam scored 4.5 in both the product quality and lead time indices. In sustainability, Bangladesh scored 2, while Vietnam scored 3.5. Bangladesh is ahead of Vietnam and China only on two indicators—price and tariff advantage. According to the report, Bangladesh is little ahead in most of the indicators than three other least developed countries (LDCs) of Asia—Cambodia, Laos and Nepal. Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the report specifically mentioned environmental compliancerelated risks as a downside for sourcing from Bangladesh. “But the industry has made a huge stride to transform workplace safety, workers’ wellbeing, and environmental sustainability; the rating seems to be inappropriate,” he said. Through the joint initiatives of the government, entrepreneurs, buyers and ILO, a paradigm shift has happened in the area of structural, fire and electrical safety, he was quoted as saying by Bangla media outlets. “We took a zero tolerance policy in ensuring compliance across the sector,” he said. With 155 LEED certified green factories, Bangladesh has the highest number of green garment factories in the world, he said. “While assessing the competitiveness, the report stresses the need for vertical integration, raw material sourcing, innovation, flexibility, agility and speed to market. We have also prioritized all these points,” he said. The sector has also identified diversification, value addition, innovation, technological upgrades, and re-skilling and upskilling as our core priority areas, added the BGMEA president.
Source: Fibre2 Fashion
