Textile Secretary U P Singh said that a total of 67 proposals were received under the PLI scheme for the textiles sector. The government on Thursday said it has approved 61 applications of companies, including Ginni Filaments, Kimberly Clark India Pvt ltd, and Arvind Ltd, with an investment potential of over Rs 19,000 crore under the production linked incentive (PLI) scheme for textiles. Textile Secretary U P Singh said that a total of 67 proposals were received under the PLI scheme for the textiles sector. "In the approved 61 applications the proposed total investment expected from the applicants is Rs 19,077 crore and a projected turnover is Rs 184,917 crore with a proposed employment of 240,134 people,” Singh told reporters here. The government had approved the PLI scheme for Textiles products like MMF apparel, MMF fabrics and products of technical textiles for enhancing manufacturing capabilities and boosting exports with an approved financial outlay of Rs 10,683 crore over a five-year period. Out of 67 applications, 15 were received under Part-1 and 52 under Part-2, the official said. In Part 1, the minimum investment requirement is Rs 300 crore and the minimum turnover required to be achieved for incentive is Rs 600 crore, and in Part-2, the minimum investment should of Rs 100 crore and the minimum turnover is Rs 200 crore. The companies whose proposals have been approved include Avgol India Pvt Ltd; Goa Glass Fibre Ltd; H P Cotton Textile Mills; Kimberly Clark India Pvt Ltd (subject to formation of a new company for investment and production under the scheme); Madura Industrial Textiles; MCPI Pvt Ltd; Pratibha Syntex; Shahi Exports; Trident Ltd; Donear Industries; Gokaldas Exports; and Arvind Ltd. Singh said that the scheme would help increase India’s share in the global man-made fibre and technical textiles sector. "We are targeting to increase exports of technical textiles from USD 2 billion to about USD 8-10 billion,” he added. Talking about the Mega Investment Textiles Parks (MITRA) scheme, the secretary said they have received 17 proposals from 13 states, including Madhya Pradesh (4) and Karnataka (2). The Textiles Ministry will follow a "challenge method” to select states for the scheme, under which seven parks will be set up in the country. "We are evaluating these proposals as under the scheme, only seven parks will be approved in the first phase..we are also sending teams to these states to know about the ground reality,” he said. Apart from 1,000 acres of land for one such park, the ministry will look at some important things like nearby availability of raw material, all kinds of infrastructure including port, road and rail connectivity, water and power availability, and incentives of states among others. In the phase-2, "we will find master developers because we would be giving 30 per cent assistance for infrastructure or Rs 500 crore maximum and another Rs 300 crore incentive for industries…but balance investment has to be done by a private investor, who will recover the money from the industry that would come there at the park,” he said.
Source: Money Control
Although various options are under consideration, the Council is likely to settle for an 8% GST for most items that currently attract 5% levy, say sources With most states on board to raise revenue so that they do not have to depend on Centre for compensation, the GST Council at its meeting next month is likely to consider a proposal to do away with the 5 per cent slab by moving some goods of mass consumption to 3 per cent and the remaining to 8 per cent categories, sources said. Currently, GST is a four-tier structure of 5, 12, 18 and 28 per cent. Besides, gold and gold jewellery attract 3 per cent tax. In addition, there is an exempt list of items like unbranded and unpacked food items which do not attract the levy. Sources said in order to augment revenue the Council may decide to prune the list of exempt items by moving some of the non-food items to 3 per cent slab. Sources said that discussions are on to raise the 5 per cent slab to either 7 or 8 or 9 per cent, a final call will be taken by the GST Council which comprises finance ministers of both Centre and states. As per calculations, every 1 per cent increase in the 5 per cent slab, which mainly includes packaged food items, would roughly yield an additional revenue of Rs 50,000 crore annually. Although various options are under consideration, the Council is likely to settle for an 8 per cent GST (Goods and Services Tax) for most items that currently attract 5 per cent levy. Under GST, essential items are either exempted or taxed at the lowest rate while luxury and demerit items attract the highest tax. Luxury and sin goods also attract cess on top of the highest 28 per cent slab. This cess collection is used to compensate states for the revenue loss due to GST roll out. With the GST compensation regime coming to an end in June, it is imperative that states become self-sufficient and not depend on the Centre for bridging the revenue gap in GST collection. The Council had last year set up a panel of state ministers, headed by Karnataka Chief Minister Basavaraj Bommai, to suggest ways to augment revenue by rationalising tax rates and correcting anomalies in the tax structure. The group of ministers is likely to finalise its recommendations by early next month, which will be placed before the Council in its next meeting, likely by mid-May, for a final decision. At the time of GST implementation on July 1, 2017, the Centre had agreed to compensate states for five years till June 2022 and protect their revenue at 14 per cent per annum over the base year revenue of 2015-16. The GST Council over the years has often succumbed to the demands of the trade and industry and lowered tax rates. For example, the number of goods attracting the highest 28 per cent tax came down from 228 to less than 35. With Centre sticking on its stand not to extend GST compensation beyond five years, states are realising that raising revenues through higher taxes is the only option before the Council.
Source: Business Standard
As per the changes notified by the commerce and industry ministry, requests for export obligation extension should be made within six months of expiry instead of the earlier prescribed period of 90 days. However, applications made after six months and upto six years are subject to a late fee of Rs 10,000 per authorization. In a move to reduce compliance burden and facilitate ease of doing business, the government has relaxed certain procedures under the Export Promotion Capital Goods (EPCG) scheme that allows duty free capital goods imports subject to an export obligation. Exporters have to export finished goods worth six times of the actual duty saved in value terms in six years. As per the changes notified by the commerce and industry ministry, requests for export obligation extension should be made within six months of expiry instead of the earlier prescribed period of 90 days. However, applications made after six months and upto six years are subject to a late fee of Rs 10,000 per authorization. The changes also include annual reporting of export obligation (EO) by June 30 every year instead of April 30 with specified information but any delay would be subject to a late fee of Rs 5,00. “With a view to enhance ease of doing business and reduce complaince burden, certain provisions of chapter 5 related to the EPCG scheme of the Handbook of procedures (2015- 20) are amended for EPCG authorisations issued under Foreign Trade Policy (2015-20),” the Directorate General of Foreign Trade said in a public notice. Further, requests for block wise export obligation extension need to be made within six months of expiry but applications made after six months and upto six years are subject to a late fee of Rs 10,000 per authorization. Applications made after six years will be subject to a fee of Rs 5,000 per year. Earlier, no specified time limit was prescribed leading to discretionary interpretations. Further the facility to pay customs duty through scrips (MEIS/RoDTEP/RoSCTL) for default under EPCG has been withdrawn. Home Govt to widen crackdown on low-grade imports.
Source: Economic Times
Prime Minister Narendra Modi in 2019 envisioned making India a USD 5 trillion economy and a global economic powerhouse. The Indian GDP is estimated to be around USD 3 trillion in 2021-22 The focus on capex in the recently announced Budget for the current fiscal year will boost manufacturing and tax revenue collections, thereby keeping India on track to becoming a USD 5 trillion economy, the finance ministry said on Thursday. Tax revenues in last fiscal year grew by a record 34 per cent to Rs 27.07 lakh crore, which the ministry said is "a remarkable testimony to the rapid recovery" of the economy following successive waves of COVID-19. "The central government's focus on making India a global economic powerhouse and the host of measures adopted towards this commitment has directly reflected in India's GDP growth in recent years. "This has translated into increased revenue collection for the exchequer while keeping India well on the track towards achieving a USD 5 trillion economy...," the ministry said in a statement. Prime Minister Narendra Modi in 2019 envisioned making India a USD 5 trillion economy and a global economic powerhouse. The Indian GDP is estimated to be around USD 3 trillion in 2021-22. The ministry said apart from a brief setback owing to COVID-19, the government has maintained the nominal GDP growth above 10 per cent in recent years. GST, a simplified way of collecting indirect taxes, has been a revolutionary step propelling India's GDP. "With a big push to capex in the Union Budget of 2022-23, the coming years are going to see a surge in domestic manufacturing as well as growth in employment. These in turn will directly boost tax contribution to the exchequer," the ministry said. The gross corporate taxes during 2021-22 was Rs 8.6 lakh crore against Rs 6.5 lakh crore in the previous year. This, the ministry said, shows that the new simplified tax regime with low rates and no exemptions has lived up to its promise, enhancing Ease of Doing Business for the corporate sector, stimulating India's economy and increasing tax revenues for the government. In the last fiscal year, direct tax collection rose by a record 49 per cent to Rs 14.10 lakh crore, while indirect taxes recorded a growth of 20 per cent to Rs 12.90 lakh crore-- reflecting buoyancy in economy and the impact of anti-tax evasion measures. For the current fiscal year, capital expenditure (capex) is budgeted to rise by 35.4 per cent to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemicbattered economy. The capex last year was pegged at Rs 5.5 lakh crore.
Source: Business Standard
Like the India-UAE CEPA, a stringent rule of origin should be included in the agreement with the United Kingdom to guard against duty-free imports of transhipped products along with a permanent bilateral safeguard mechanism to deal with any sudden surge in imports With multilateralism yielding limited results in the recent times, India is in the race to conclude a series of bilateral trade agreements with the United Kingdom, Australia, Canada, Israel, and the European Union. Amidst this, the third round of India-UK FTA negotiation is due. The interim agreement would serve as a frontrunner to clinching a more comprehensive FTA between the fifth- and sixth-largest economies in the world. The total trade between India and the UK stood at $24 billion in 2020, with investment of $31.4 billion in the last two decades. The Nitty-Gritty India is claimed to be a high-import tariff jurisdiction, however it is interesting to note that 94 percent of India’s imports from the UK face tariff of less than 13.5 percent. Major exception being ‘beverages, spirits and vinegar’ category with tariff of 107.6 percent, and constituting 2.6 percent of the total imports. Around 80 percent of this above-mentioned 2.6 percent is of scotch whiskey, with a tariff of 150 percent. British-made cars also face tariff of 125 percent. These two items are a major point of contention, and in the ongoing FTA negotiations, London seeks to bring down these tariffs. It would also be negotiating for better access to India’s agriculture, and value-added dairy product market. In comparison, more than 98 percent of India’s exports to the UK fall within 12 percent effectively applied tariff with higher tariffs on processed food and tobacco products. However, India would also be expecting greater access for its textiles and garments, and engineering goods in the UK market. Consequently, in case of an FTA, India will have to give greater concessions through tariff cuts, which are relatively higher than the UK whose tariff levels are already low. But without any doubt, India’s total trade with the UK will rise ahead of the FTA. Considering that both countries are major services exporters, there lies an underlying opportunity for both to align their interests, and act in complementarity. This will further boost ties and help them become the world leaders in the services exports. A preliminary study conducted by India Exim Bank estimated that under certain assumptions in the model, a preferential trade agreement between India and the UK could result in rise of India’s imports by $2.3 billion, with an expected net revenue loss of $385.7 million. India’s exports could rise by $245.1 million with an expected net revenue loss of $110.5 million to the UK. With imports acting as inputs for the exported products, cheaper imports also reduce the cost of exports, thus making it more competitive in the international market. India could promote investments from the UK by allowing its services suppliers to establish operations in India, and collaborate with Indian companies, thus adding to its competence in the global market. India’s insurance and banking sectors are of particular interest to the UK. India should leverage its position to further facilitate movement of people and provide the much-demanded social security agreement to the Indians in the UK. Similarly, Indian manufacturers could gain from the UK’s advanced technical know-hows in the renewable energy and electric vehicle sectors. Both countries need to strike a mutually-beneficial, comprehensive agreement comprising goods and services, investment, and movement of people. Considerations In Negotiations While negotiating a comprehensive FTA, instead of concentrating only on list of products for tariff concessions, the focus should be on the products in the sensitive/negative list on which tariff concession would be limited to protect the interest of the sector. India should seek to reduce the non-tariff barriers faced by Indian exporters like in the case of the dairy sector. This necessitates both countries to work towards drawing up ‘Mutual Recognition Agreements’. Like the India-UAE CEPA, a stringent rule of origin should be included to guard against duty-free imports of transhipped products along with a permanent bilateral safeguard mechanism to deal with any sudden surge in imports. The FTA also needs to address the inverted duty problem to ensure that raw materials have lower duties, except for any sensitive items — this will further help India move up in the global value chain, and boost Make in India through promoting manufacturing in India.
Source: Money control
According to sources, a single candy of cotton (355 kg) is sold at Rs 93,500. The Confederation of Indian Textile Industry (CITI), New Delhi, and the Southern India Mills' Association (SIMA), Coimbatore expressed hope that yarn prices would start to moderate in May after the Union government removed duty on cotton import. Addressing media persons, CITI chairman T Rajkumar, and SIMA chairman Ravi Sam, said, "From May, the prices will gradually come down. We request and expect the yarn industries to reduce the prices soon. The duty cut has come at the right time and would help livelihood of thousands of workers." They further said, "This year's cotton production is estimated to be around 340 lakh bales, but we expect to receive around 325 lakh only. Also, we fear production will be 45 lakh bales less than the previous year.The industry started facing cancellation of export orders owing to the steep increase in cotton prices. Indian cotton is costlier by 7% to 10% due to the import duty. Under this scenario, the competing nations started grabbing the export opportunities of India. For example, India's share in US bedlinen exports declined from an average of 55% in 2021 to 44.85% in the month of January 2022 only. Meanwhile, Pakistan's share increased to 25.71% from 20% and China's share increased to 19.37% from 12% during the same period. Therefore, the industry had demanded the government to remove the import duty levied on cotton." According to sources, a single candy of cotton (355 kg) is sold at Rs 93,500. With duty cut, the price is expected to drop below Rs 80,000 in the next few weeks. Also, India is likely to get more orders from international markets due to the situation in Sri Lanka and Pakistan. "We are not against farmers. They won't be affected by the import. In Madhya Pradesh, farmers have been cultivating extra long staple cotton of 36 mm. But they are able to cultivate only 2 lakh bales. So, we need to encourage other state farmers including Tamil Nadu to cultivate such varieties." the industry captains added
Source: New Indian Express
Weaving and processing units in Surat, the country’s biggest man-made fabric hub, are grappling with both input inflation and a shortage of key raw materials. Prices of coal and lignite are up over 100%, electricity bills are bigger by about 10-15% and the workers too are now demanding 10-12% more. Aakash Patel runs a small weaving unit in Surat but of late he has not been able to deliver the finished products to his customers. The grey fabric has been made but there is a long queue at the processor’s end where it needs to be dyed and printed. The steep rise in costs of raw materials and the shortage of chemical agents, has forced processing houses to run fewer shifts. Vipul Desai, for instance, is using his goodwill with fellow processors to source discharging agents and soda ash to be able to complete some orders. But he must return the raw materials in a week. Weaving and processing units in Surat, the country’s biggest man-made fabric hub, are grappling with both input inflation and a shortage of key raw materials. Prices of coal and lignite are up over 100%, electricity bills are bigger by about 10-15% and the workers too are now demanding 10-12% more. The textile cluster, in and around the commercial capital of south Gujarat, was just beginning to recover from the impact of the pandemic but that momentum has reversed. Polyester yarn prices have jumped 30% in the last six months, says Ashok Badani, who runs a processing unit making it difficult to buy in big quantities. Weaver Lalit Pipaliya says the steep rise in inventory costs is hurting to a point where the operations are being pared; very few units can afford to run two shifts and most are running just one 12-hour shift a day. Before the pandemic, nearly 40 million meters of fabric was being processed every day but unable to fund the inventories, the output has been restricted to about 30 million metres a day. Unless the situation reverses, the Surat cluster, which by one estimate generated some `80,000 crore of sales annually pre-pandemic, will see the turnover fall to 60-65% of this amount in the current year. Also, operating margins are being squeezed as not all the additional costs are being passed on to the consumers; processors say their margins have almost halved compared with the levels they made two years ago. Of the 50,000 plus weaving units and more than 400 textile processing houses, over 75% are relatively small units or MSMEs. Their small capacities, according to Jitendra Vakharia, president of South Gujarat Textile Processors Association (SGTPA), make it harder for them to absorb the sudden hike in raw-materials and other costs. “Processing houses are the biggest sufferers of higher raw-material prices in the entire value chain. The prices of discharging agents, including those for rongalite, sepiolite, sodium hydro-sulphite, have doubled in the span of seven to eight months,” says Vakharia. He says processors have been able to hike the end prices only by about 25%. Surat’s textile cluster provides direct employment to over two million; for hundreds more, the commerce in the region is a source of livelihood. Raghu Yadav, a 40 year-old migrant who transports grey fabric from weaving units to processing houses, is worried about the slowdown. But he carries on regardless, trying to do at least three 10-15 km trips everyday even if it’s hot and humid. Else, his family of four cannot afford even a simple life.
Source: Financial Express
Finance ministry officials said the inverted duty structure in textile was deferred at the last meeting, and would be taken up at the forthcoming meeting. The GST Council plans to take up the vexed issue of inverted duties on textiles at its meeting likely later this month. In December, the council had dropped plans to hike the GST rates for most textile products in the man-made fibre value chain to 12 per cent from 5 per cent amid protests from the industry in Gujarat and other states. The council hiked the rate to 12 per cent from 5 per cent for footwear sold below Rs 1,000, while the rate for footwear above Rs 1,000 was lowered to 12 per cent from 18 per cent. Finance ministry officials said the inverted duty structure in textile was deferred at the last meeting, and would be taken up at the forthcoming meeting. When faced with inverted duties — where the rate on the finished product is at a lower tax bracket compared with the raw materials — the government usually raised the rate on the finished product. But the textile duty hike faced stiff opposition from the industry. The increase in the duty for footwear below Rs 1,000 also sparked protests leading to a rollback . Pratik Jain, partner, PwC said “the GoM is likely to focus on correction of inverted duty structure at present. These issues do require detailed consultation and the GST Council may like to extend the timelines for the GoM to come up with their recommendations.” M.S. Mani, partner, Deloitte India, said “while the rollback of the GST rate hike proposed on many textile products would benefit the sector, it would be necessary to find out a solution to the problems of inverted duty structure in the textile sector”. Ritesh Kanodia, partner, Dhruva Advisors, said “the industry was asking for a reduction in rates on raw materials to resolve the inverted duty issue, rather a rate increase was made. However, it is still beneficial when compared with the rate increase which would have had a direct impact on the prices”. Analysts said the council would have to perform a tough balancing act while addressing inverted duties, with the growing spike in global commodity prices adding to the inflationary pressure on the economy. The tax rate on man-made fibre (MMF) at present is 18 per cent, MMF yarn 12 per cent, while fabrics are taxed at 5 per cent. The council in its meeting in September had decided to correct the inverted duty structure in footwear and textile sectors. With effect from January 1, all footwear, irrespective of prices, will attract GST at 12 per cent. It was also decided that a 12 per cent uniform GST rate would apply on textile products, except cotton, including readymade garments. Pratik Jain, partner, PwC said “the GoM is likely to focus on correction of inverted duty structure at present. It appears that not much deliberation has taken place on the merger of tax slabs (from four to 3) as yet. These issues do require detailed consultation and the GST Council may like to extend the timelines for the GoM to come up with their recommendations.” M.S. Mani, partner, Deloitte India, said "while the rollback of the GST rate hike proposed on many textile products would benefit the sector, especially SMEs and MSMEs who operate in this employment intensive sector, it would be necessary to find out a solution in future to the problems of inverted duty structure in the textile sector". Ritesh Kanodia, partner, Dhruva Advisors, said “the industry was asking for a reduction in rates on raw materials to resolve the inverted duty issue, rather a rate increase was made. The move puts back the industry in an inverted duty structure regime requiring them to claim refund of input taxes, however it is still beneficial when compared to the rate increase which would have had a direct impact on the prices”. The GST collection in March touched an all-time high of over Rs 1.42 lakh crore because of various rate rationalisation measures undertaken by the council to correct the inverted duty structure, the finance ministry said.
Source: Telegraph India
India entered the post-Covid-19 era with two major free trade agreements (FTAs). On February 18, it signed the comprehensive deal with the UAE. India has signed free trade agreements with the United Arab Emirates (UAE) and Australia on the trot, breaking a dry spell for such pacts that lasted years, and is working to conclude similar arrangements with the UK, the European Union (EU), Israel and Canada. India entered the post-Covid-19 era with two major free trade agreements (FTAs). On February 18, it signed the comprehensive deal with the UAE. Less than two months later, it inked a comprehensive but interim trade deal – the Economic Cooperation and Trade Agreement (ECTA) or phonetically “ekta”, which in Hindi means unity – with Australia on April 2. The negotiation process for the comprehensive economic partnership agreement (CEPA) with the UAE, signed by commerce minister Piyush Goyal and UAE economy minister Abdulla bin Touq Al Marri, was one of the shortest in recent memory. The two sides began work on the pact last September. Similarly, negotiations for the India-Australia ECTA were formally re-launched barely six months ago, on September 30, 2021. Two major global economies now keen to forge long-term trade partnerships with India are the UK and the EU. A bilateral free trade agreement will be at the top of British Prime Minister Boris Johnson’s agenda for his two-day visit to India from April 21. The UK is working overtime to forge new trade arrangements after its exit from the EU, and the deal with India is expected to boost total trade by £28 billion annually by 2035. India will host the third round of discussions on the FTA with the UK in a hybrid mode from April 25. At the second round of talks in March, the two sides shared the draft treaty text covering 26 chapters or policy areas. The two sides have completed discussions on four chapters and reportedly made significant progress in the remaining 22 chapters. The British side has signalled it will focus on treaty architecture and seeking market access commitments in the third round of talks. India and the UK agreed to double trade in goods and services to about $100 billion by 2030 as Goyal and UK trade secretary Anne-Marie Trevelyan launched formal negotiations for an FTA on January 13. Total two-way trade is currently around $50 billion, including $35 billion of services and $15 billion of goods. India and the UK expect expeditious finalisation of tariffs and terms on matters where interests of the two sides converge, but there are some sensitive issues for both, which may be handled after taking the views of all stakeholders. For example, the visa issue for Britain and agriculture, dairy and duty on liquor, particularly Scotch. India and EU have decided to conceptualise basic frameworks for negotiating a comprehensive deal to raise two-way trade to more than $220 billion in five years. The issue will figure prominently in European Commission President Ursula von der Leyen’s discussions with Indian interlocutors when she visits New Delhi in the last week of April. Key discussions with the UK and the EU were also held when a team led by commerce secretary BVR Subrahmanyam visited London and Brussels this month. While India and the EU earlier eyed the possibility of stitching up an investment treaty before moving towards more contentious trade issues, the European side is now keen to have parallel discussions on investment, trade in goods and services and geographical indications so that a comprehensive package deal can be concluded, people familiar with the matter said. The EU-related developments are significant because trade negotiations had stopped in 2013 after 16 rounds of talks. Among the contentious issues were movement of Indian professionals and high tariffs on European farm produce. The Netherlands, Germany and France are among EU members pushing for the speedy conclusion of talks, the people cited above said. “There was a narrative after India withdrew from the Regional Comprehensive Economic Partnership (RCEP) in 2019 that the government was against FTAs. But recent developments have shown that India is willing to sign FTAs when its interests and concerns are addressed,” said an official who declined to be named. A second government official, asking not to be named, said: “The four deals – two already concluded [the UAE and Australia] and two in the pipeline [EU and UK] have the potential to surpass trade volume of over $500 billion in five years.” Goyal has said India is also working on FTAs with Canada, Israel and the six-member Gulf Cooperation Council (GCC), which brings together the UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. Though India and Israel had announced they intend to conclude talks on an FTA by June 2022, the people cited above said the negotiations are expected to take some more time. Israeli Prime Minister Naftali Bennett’s planned visit to New Delhi this month, which was put off after he tested positive for Covid-19, would have given a push to the issue, the people said. The people added that a trade pact with the US was not on the cards in the immediate future despite some recent engagements on trade issues. India could successfully negotiate FTAs with the UAE and Australia because of four broad factors – Prime Minister Narendra Modi’s excellent relations with top leaders of these two countries, wider consultation with stakeholders (trade and industry), respecting sensitivities of partners, and complementarity instead of competition. “India earned immense goodwill during the Covid period when Prime Minister Modi distributed vaccines to other countries. In the post-Covid era, India has emerged as a reliable and trusted partner for the developing and developed world,” the official said. The two bilateral deals are strategically fit for all partners. India, which is focused on “Make in India” and “Make for the World”, will source valuable inputs in terms of energy and minerals from the UAE and Australia, and in turn will assure them of an efficient and reliable supply chain for goods and services. Goyal has said the trade pacts with the UAE and Australia have been “very well received” and didn’t elicit “a single negative response” from any sector thanks to the wider consultations. The CEPA with the UAE was signed during a virtual summit between Modi and Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed Al-Nahyan on February 18 and is set to enter into force on May 1. The agreement envisages a comprehensive economic partnership covering trade in goods and services, rules of origin, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, dispute settlement, movement of natural persons, telecom, customs procedures, pharmaceutical products, government procurement, IPR, investment and digital trade. The CEPA covers almost all tariff lines dealt in by India (11,908 tariff lines) and the UAE (7,581 tariff lines). India will benefit from preferential market access provided by the UAE on over 97% of its tariff lines, which account for 99% of Indian exports to the UAE in value terms, especially for labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, agricultural and engineering products, medical devices, and automobiles. India will offer preferential access to the UAE on over 90% of its tariff lines. On services, India offered market access to the UAE in around 100 sub-sectors, while Indian service providers will have access to around 111 sub-sectors from the 11 broad service sectors such as business, communications, construction and related engineering services, distribution, education, environment, finance, health, social services, tourism and travel, culture and sports and transport. Both sides agreed on a separate annexure on pharmaceuticals to facilitate access of Indian pharmaceutical products, with the UAE agreeing on automatic registration and marketing authorisation in 90 days for Indian medicines given regulatory approval in the US, the EU, the UK and Japan. The UAE’s importance is evident from the fact that bilateral trade has gone from $180 million per annum in the 1970s to $60 billion in FY 2019-20, making it India’s third largest trading partner. India’s exports to the UAE were worth $29 billion in 2019-20, while imports were valued at around $30 billion, including crude oil worth about $11 billion. The UAE is the eight largest investor in India, with estimated investments of $18 billion. The India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) was signed at a virtual summit on April 2. Modi summed up the significance of the deal in his address on that day: “Our economies have great potential to meet each other’s needs…This agreement will make it easier for us to exchange students, professionals, and tourists, further strengthening these ties.” ECTA is India’s first trade agreement with a developed country after more than a decade. It covers areas such as trade in goods and services, rules of origin, TBT, SPS measures, dispute settlement, movement of natural persons, customs procedures and pharmaceutical products. The deal is also significant because India and Australia are members of Quad, which was revived to counter Chinese aggressive actions. Trade ministers of the two countries said a shared partnership under the Quad, along with the US and Japan, helped them strike a trade deal that will reduce dependence on China. Australian trade minister Dan Tehan attributed the growing relationship between India and Australia to the Quad’s values. “Keeping the Indo-Pacific free and open as a place where liberal democracies can flourish is just so, so important,” he said. Friction between Canberra and Beijing has resulted in a series of official and unofficial Chinese trade sanctions on Australian exports and India has been looking to boost exports, including by offering an alternative to China at a time when the Ukraine war has caused an East-West division. ECTA covers almost all the tariff lines dealt in by India and Australia. India will benefit from preferential market access on 100% of its tariff lines. India also offered preferential access to Australia on over 70% of its tariff lines, including raw materials and intermediaries such as coal, mineral ores and wine. Australia is India’s 17th largest trading partner and India is Australia’s 9th largest trading partner. India-Australia trade for merchandise and services was valued at $27.5 billion in 2021. India’s merchandise exports to Australia grew 135% between 2019 and 2021.
Source: Hindustan Times
Former minister of state for finance and chairman of the committee Jayant Sinha said such a platform will make it possible to provide MSME an affordable line of credit with products like the MSME Vyapar credit card. The Parliamentary standing committee on finance has pitched for providing a credit card to MSME entrepreneurs on the lines of Kisan credit cards, putting in place a mechanism for payment scores and a significant ramp up of SIDBI to ensure access to regular credit to small businesses. Former minister of state for finance and chairman of the committee Jayant Sinha said such a platform will make it possible to provide MSME an affordable line of credit with products like the MSME Vyapar credit card. The card, on the lines of Kisan credit card, will help the small businesses with working capital, ensure trade financing for their revenues, provide capital loans at affordable rates, and necessary credit guarantees. "The idea is that when you sign up for the Udyam portal, you automatically get a credit card which is the Vyapar credit card. Every institution can decide how big a line of credit they want to give and with that they establish your payment history," Sinha told ET. He said this will not only bring MSMEs in a formal financing system but will cater to their immediate financing needs. The panel, in its report, has noted that out of 6.34 crore MSMEs, less than 40% borrowed from the formal financial system. The overall credit gap in the MSME sector is estimated to be Rs. 20-25 lakh crore. Sinha said a reason why banks were reluctant in lending to the MSME sector was due to the lack of reliable data about enterprises operating in this sector and hence there was a need to create an integrated digital ecosystem. The panel has also batted for creating a mechanism to provide payment scores on the lines of credit scores.
Source: Economic Times
Seeks to firm up standards for a wide range of products The government is planning to firm up quality specifications for a broader range of imported products, as it intends to harden a crackdown on the inflows of substandard goods from overseas. Official sources told FE that the Bureau Of Indian Standards (BIS) has convened a meeting on April 20 of officials from several ministries that oversee the trade of various products or develop standards for them. “The idea is to identify imported products for which standard specifications are yet to be developed or revised,” said one of the sources. “BIS director general Pramod Kumar Tiwari, who will chair the meeting, will also monitor whether enough testing facilities are in place at the district level and whether common testing facilities can be developed for MSME clusters,” he added. The move goes beyond the government’s initial plan to formulate standards/technical regulations or put in place quality control orders (QCOs) for 371 key products in the first phase. Imports of these 371 products were to the tune of $128 billion, or a fourth of the total purchases from overseas, in FY19, before the Covid outbreak. The decision isn’t specific to any country but it could hurt China, as Beijing is the biggest supplier of low-grade products to India. Nevertheless, keeping with the principle of free and fair trade and to ensure domestic consumers have access to quality products, both Indian manufacturers and foreign suppliers will have to conform to the same standard specifications. Importantly, it will also prompt domestic producers to collectively enhance the quality of their products so that they will be better placed to take advantage of various trade agreements that the government has forged or is planning to conclude with even developed economies. Recently, it sealed a deal with Australia and is planning to get into free trade agreements with the UK, Canada and the EU. India’s move to develop technical specifications for products in recent years marks a shift in its approach to curb low-grade imports; its earlier approach was to raise tariffs. Since substandard products are usually imported at much cheaper rates, they not just pose risks to consumer health and environment but also hit domestic manufacturing because of the price competitiveness. Concerned about protectionism by stealth adopted by some nations, commerce and industry minister Piyush Goyal has been asking industry associations to flag non-tariff barriers faced by Indian exporters in various countries so that New Delhi can firm up appropriate remedial responses. The dozens of products where quality control orders have been issued include air conditioner, toys, footwears, pressure cooker and microwave. The government has also firmed up standards as well as technical regulations for hundreds of products across sectors, including consumer electronics, steel, heavy machinery, telecom goods, chemicals, pharmaceuticals, paper, rubber articles, glass, industrial machinery, some metal products, furniture, fertiliser, food and textiles. Analysts have said India seems to have taken a cue from developed and major developing nations that have erected non-tariff barriers to target non-essential and substandard imports. For instance, the US put in place as many as 8,453 non-tariff measures, followed by the EU (3,119), China (2,971), South Korea (1,929) and Japan (1,881), according to a commerce ministry analysis in 2020. In contrast, India had imposed only 504 of them. Of course, non-tariff measures are not always aimed at curbing imports (for instance, safety, quality and environmental standards are put in place by all countries for imported products). But what have often worried analysts is that they can be abused for trade protectionism.
Source: Financial Express
Thakur highlighted the steps taken by PM Modi to promoting the 'Skill India' mission. "Skill training is provided so that you do not become job-seekers, and instead become jobgivers," he said. He mentioned that culture and educational structure in the country did not focus much on the pride of labour. Stating that there was no dearth of talent in India, Union minister Anurag Thakur on Sunday said 'Aatmanirbhar Bharat' was being strengthened through initiatives like Hunar Haat. He was speaking here after inaugurating the 40th edition of the Hunar Haat, a platform to provide market and opportunities to traditional arts and crafts of India. The 12-day event is being held at the MMRDA Ground in the city's BandraKurla Complex. "We started producing PPE Kits, masks and even ventilators," he said. Speaking about the 'One District-One Product' initiative of the Union government, wherein each district is recognised for one product, he said this initiative not only allowed people to generate their own income, but also created job opportunities for a few others in the vicinity when economies across the world were affected by the pandemic. Thakur highlighted the steps taken by PM Modi to promoting the 'Skill India' mission. "Skill training is provided so that you do not become job-seekers, and instead become job-givers," he said. He mentioned that culture and educational structure in the country did not focus much on the pride of labour. "But PM Modi has stressed a lot on dignity of labour," he added. Talking about TEJAS (Training for Emirates Jobs And Skills), a skilling programme launched by the Centre under which India will send skilled manpower to UAE, he said, "Within a year, 30,000 skilled job-seekers will be sent to UAE." On the occasion, Union Minority Affairs Minister Mukhtar Abbas Naqvi said that one will get to witness 'Ek Bharat Shreshtha Bharat' and experience the essence of 'Unity in Diversity' at the Hunar Haat in Mumbai. You will get to experience the country's culture and skill right from Kashmir to Kanyakumari and from Kutch to Cuttack," he said, adding that in the last seven years, more than nine lakh artisans and craftspersons have benefited by getting employment opportunities through Hunar Haat. GST Council Proposes An End To 5% Rate And Move Items To 3% And 8% Tax Slab. (https://www.latestly.com/agency-news/latest-news-gstcouncil-may-do-away-with-5-rate-move-items-to-3-8-slabs3600187.html) More than 1,000 artisans and craftspersons from 31 states/Union Territories are participating, displaying variety of wares and skills in the current edition. In line with the themes 'Vocal for Local' and 'Best from Waste', exquisite products made from used and discarded items, such as plastic, paper, ply, wood, glass, ceramic, jute, cotton and wool, as well as banana stems, sugarcane pulp, paddy and wheat straw, husk, rubber, iron, brass, will be showcased. At 'Vishwakarma Vatika', the main attraction of Hunar Haat, artisans will display live demonstration of how traditional indigenous products are created.
Source: Latestly
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made a request for removing export-import related trade barriers to save time and cost and boost bilateral business with India. BGMEA President Faruque Hassan made the request on Saturday when he paid a courtesy call on Harsh Vardhan Shringla, foreign secretary of India, at his official residence in New Delhi, according to a statement. BGMEA director Tanvir Ahmed was also present at the meeting. The trio discussed potential areas of cooperation to enhance trade between Bangladesh and India, said the statement. They also talked about existing problems in export-import trade and non-tariff barriers, especially in textiles products trading, and possible means to address them. "Both neighbouring countries can gain mutual trade benefits by complementing each other, particularly in boosting apparel and textile businesses," Mr Hassan said. “India is one of the major markets for importing raw materials for our RMG industry. We import man-made fibre, yarn, fabric, chemicals, machinery, dyes etc. Bangladesh is giving emphasis on high-end MMF-based apparel items. India, as a major supplier of textiles including MMF fabrics, can meet the growing demand of Bangladesh.” On the other hand, India is a promising export market for Bangladeshi readymade garments due to geographical proximity, competitive price and quality, he said. So, both countries have scope to tap into the reciprocal trade benefits, he added. The BGMEA president requested the Indian foreign secretary for steps to expedite and facilitate trade, especially removing non-tariff barriers and simplifying export-import procedures through the land ports in order to reduce time and cost.
Source: Financial Express
A US-China Business Council (USCBC) report on US exports to China reaching a new record in 2021, helping support 860,000 American jobs, is yet another proof of the mutually beneficial nature of China-US economic and trade ties, China's commerce ministry recently said, urging the US government to do away with the tariffs and stop crackdowns on Chinese firms. Addressing the latest report by USCBC, ministry spokesperson Shu Yuting said China hopes the United States remove the tariffs on Chinese imports as soon as possible and stop its crackdown on Chinese enterprises, creating a normal atmosphere for expanding bilateral cooperation, Chinese media reported. According to the US Export Report 2022, US goods exports to China grew by 21 per cent to reach an all-time high of $149.2 billion in 2021 underpinned by growth in grain, semiconductors and energy products, as global trade continued to recover from the pandemic.
Source: Fibre2 Fashion
The Mexican Standard NOM-004-SE-2021, which is set to come into effect from January 15, 2023, will establish all the commercial information required for labelling and is applicable to textile products and items, clothing, accessories and household linens, whose textile composition is equal to or greater than 50 per cent in relation to its mass. All products within scope that are intended for consumers and are marketed within the territory of the United Mexican States should comply with this new standard, even if they contain plastics or other materials. This new standard supersedes NOM-0040SCFI2006. On January 14, 2022, Mexico’s ministry of economy published a new standard in their Official Gazette of the Federation, Mexican Standard NOM-004-SE-2021. Garments, their accessories and household linens must display the following information legibly, on one or more permanent labels placed at the bottom of the neck or waist, or in any other visible place, according to the characteristics of the garment. QR codes may be used on labels. The details required are trademark, description of materials, size, for garments and accessories, or measurements for household linens, care instructions, country of origin and the responsible person for the product. There are similar but slightly different labeling requirements for other textile products in this new standard. All commercial information required by the standard must be presented in Spanish (notwithstanding that it may also be presented in any other language), be truthful, be described and presented in such a way that it does not mislead with respect to the nature and characteristics of the product, SGS said on its website. When the product is marketed in closed packaging that does not allow the content to be seen, the packaging must indicate the name of the product and the quantity of products contained. When garments are marketed as pairs made of the same material, the label may be present on only one of the items. In the description of materials, the generic fibre names must be used in accordance with Mexican Standards NMX-A-2076-INNTEX-2013 and NMX-A-6938-INNTEX-2013. Any use of abbreviations or names other than those indicated in the standards is not acceptable. Any fibre present in a percentage of less than 5 per cent of the total may be designated as “others” or “other fibres.” When recovered or recycled fibres, or mixtures of these with other virgin fibres are used, the percentages and generic names of each of the fibers must be indicated by stating “recovered” or “recycled” before the generic fibre name.
Source: Fibre2 Fashion
The country’s imports during July-March 2021-22 totaled $58.877 billion (provisional) as against $39.489 billion during the corresponding period of last year showing an increase of 49.10 percent, says Pakistan Bureau of Statistics (PBS). The exports and imports data released by the PBS revealed that the imports in March 2022 were $6.425 billion (provisional) as compared to $5.853 billion in February 2022 showing an increase of 9.77 percent and increased by 14.10 percent as compared to $5.631 billion in March 2021. The country’s textile group exports witnessed 25.43 percent growth during the first nine months (July-March) of the current fiscal year and remained at $14.242 billion compared to $11.355 billion during the same period of the last fiscal year. The textile group exports decreased by 3.51 percent on a month-on-month basis and remained at $1.625 billion in March 2022 compared to $1.684 billion in February 2022. The country’s overall exports during March 2022 were $2.782 billion (provisional) as compared to $2.834 billion in February 2022 and showing a decrease of 1.83 percent but increased by 17.68 percent as compared to $2.364 billion in March 2021. On a year-on-year basis, textile group exports witnessed 19.9 percent growth in March 2022, when compared to $1.355 billion in March 2021. Cotton yarn exports registered a growth of 25.97 percent during July-March 2021-22 and remained at $908.487 million compared to $721.216 million during the same period of last year, and decreased by 19.33 percent in March 2022 and remained $92.385 million when compared to $114.524 million during the same month of last year. Petroleum group imports witnessed an increase of 96.09 percent growth as it reached $14.812 billion in July-March 2021-22 compared to $7.553 billion during the same period of the last fiscal year and registered 48.83 percent growth in March 2022 and remained $1.864 billion when compared to $1.252 billion in February 2022 and registered 68.19 percent growth on year-on-year basis in March 2022 when compared to $1.108 billion during the same month of last year. Construction and mining machinery imports witnessed growth of 32.40 percent during the July-March 2021-22 and remained at $138.501 million compared to $104.605 million during July-March 2020-21. The country’s exports during July-March 2021-22 totalled $23.255 billion (provisional) against $18.687 billion during the corresponding period of last year showing an increase of 24.98 percent. The country’s trade deficit widened by 70.76 percent from $20.802 billion in July-March 2020-21, to $35.522 billion in July-March 2021-22. Main commodities of exports during March 2022 were knitwear (Rs76,350 million), readymade garments (Rs61,937 million), bed wear (Rs46,869 million), cotton cloth (Rs37,732 million), rice others (Rs33,981 million), cotton yarn (Rs16,594 million) and petroleum products (Rs8148 million). Main commodities of imports during March 2002 were petroleum products (Rs185,419 million), petroleum crude (Rs95,202 million), plastic material (Rs59,200 million), palm oil (Rs52,183 million), mobile phone (Rs33,031 million), and electrical machinery (Rs30,890 million).
Source: Aaj TV
Cambodia-Vietnam bilateral trade reached over $9 billion last year—a sharp increase of 80 per cent over the 2020 figure—and continued a positive growth in the first quarter of this year, according to Cambodia’s ministry of foreign affairs and international cooperation. Vietnam continues to rank first among the Association of Southeast Asian Nations in foreign direct investment (FDI) in Cambodia, it said. www.citiindia.org 22 CITI-NEWS LETTER A press release from the ministry said Vietnamese Prime Minister Pham Minh Chinh recently spoke to Cambodian counterpart Hun Sen on phone. Both agreed on the need to continue strengthening political trust, increase cooperation to prevent the COVID-19 pandemic in the new normal to promote socio-economic recovery and continue to cooperate in building a common border of peace and friendship, Cambodian media reported.
Source: Fibre2 Fashion
Trade between China and members of the Regional Comprehensive Economic Partnership (RCEP) witnessed steady growth since the trade agreement took effect at the beginning of the year, according to official data. China's trade with the other 14 member states expanded by 6.9 per cent year on year (YoY) to reach 2.86 trillion yuan ($448.6 billion) in the first quarter (Q1) of 2022. The trade with the RCEP member states accounted for 30.4 per cent of China's total foreign trade value, according to the General Administration of Customs (GAC). Data showed exports and imports between China and RCEP members logged steady growth, increasing by 11.1 per cent and 3.2 per cent YoY respectively to 1.38 trillion yuan and 1.48 trillion yuan, a state-run news agency reported In the first three months of this year, China's trade with South Korea and Japan each took up 20 per cent of the country's total trade volume with RCEP members. And exports and imports between China and multiple countries, including South Korea, Malaysia and New Zealand, registered double-digit YoY growth, GAC data showed.
Source: Fibre 2 Fashion
The import of textiles and apparel by the United States continues to grow at high rate and rose by 29.61 per cent to $20.191 billion in the first two months of 2022, compared to $15.578 billion in the same period of 2021. With 27.76 per cent share China continues to be the largest supplier of textiles and clothing to the US, followed by Vietnam with 13.50 per cent share. Apparel constituted the bulk of textiles and garments imports made by the US in January February 2022, and were valued at $15.021 billion, while non-apparel imports accounted for $5.170 billion, according to the latest Major Shippers Report, released by the US department of commerce. Segment-wise, among the top ten apparel suppliers to the US, imports from Pakistan and Indonesia shot up by 61.06 per cent and 55.97 per cent year-on-year respectively. Imports from China, India, Bangladesh and Cambodia too grew between 44-50 per cent. On the other hand, imports from Honduras registered a growth of only 15.24 per cent compared to the same period of the previous year. In the non-apparel category, among the top ten suppliers, imports from Cambodia soared by 64.62 per cent year-on-year. Imports from Italy and South Korea too climbed 33.08 per cent and 22.10 per cent respectively. Of the total US textile and apparel imports of $20.191billion during the period under review, cotton products were worth $9.011 billion, while man-made fibre products accounted for $10.207 billion, followed by $473.648 million of wool products, and $499.986 million of products from silk and vegetable fibres. In 2020, the US textile and apparel imports had decreased sharply, mainly on account of the COVID-19 pandemic induced disruption, to $89.596 billion compared to imports of $111.033 billion in 2019. But imports rebounded again in 2021 to surpass pre-pandemic level and ended at $113.938 billion.
Source: Fibre2 Fashion
An International Finance Corporation (IFC) program to help Cambodian garment suppliers slash their energy and water consumption is bearing fruit just as the Southeast Asian country is looking to boost its competitiveness and productivity in the textile trade. Ten cut-and-sew and garment-washing manufacturers that implemented resource efficiency measures in 2019 and 2020 as part of the IFC’s Cambodia Improvement Program (CIP) have reduced their energy and water consumption by 18 percent and 29 percent respectively, according to the agency, which lends to companies in developing countries. Despite the disruptive nature of the pandemic, participating manufacturers were able to adopt 60 percent of the program’s recommendations over a period of 22 months, from low-cost measures that avoided steam loss to more complex schemes that included the installation of highly efficient washing systems. Once all recommendations are completed, the interventions could collectively reduce their annual energy consumption by 29 percent, water by 44 percent and greenhouse-gas emissions by 25 percent over 2018 levels, the IFC said. The news followed the unveiling of Cambodia Garment, Footwear and Travel Goods Sector Development Strategy 2022-2027, a five-year roadmap by the Cambodian government to transform the country’s production of garment, footwear and travel goods into an environmentally sustainable and high-value-added operation. The apparel sector is Cambodia’s largest employer with roughly 800,000 mostly female workers. Europe, its biggest customer, receives roughly 40 percent of the country’s clothing exports, which rose by 15.2 percent year over year to $11.38 billion in 2021 as orders spilled over from post-coup Myanmar and locked down Vietnam. Still, high energy costs and low productivity continue to blunt Cambodia’s edge in the region. “High energy costs and poor productivity have impacted the competitiveness of Cambodia’s garment industry,” Rana Karadsheh-Haddad, IFC Asia Pacific regional director for manufacturing, agribusiness and services, said in a statement. “It’s why IFC has been supporting the greening of global textile value chains at the local level to promote sustainable private sector growth and improve the competitiveness of local manufacturers. Building on these positive results, IFC will leverage its partnerships with leading global brands to drive sustainability in Cambodia’s garment sector, boost the recovery and build resilience.” Suppliers with higher sustainability profiles are able to receive pricing incentives from IFC’s Global Trade Supplier Finance (GTSF) program, which offers short-term financing to exporting manufacturers by discounting their invoices once they are approved by their buyers. In 2021, the GTSF program mustered $276 million for Cambodian factories. The CIP, which the IFC launched in 2019 with support from Korea’s Ministry of Economic and Finance, aims to boost the garment industry’s competitiveness, productivity and sustainable growth while helping Cambodia hit its 40 percent greenhouse-gas reduction target by 2030. Part of the agency’s wider ambition to decarbonize manufacturing industries across Asia through knowledge and expertise sharing, it runs alongside similar programs in Bangladesh, Pakistan and Vietnam.
Source: Khmer Timeskh
Canada and Indonesia recently agreed to intensify economic cooperation, especially on trade, investment and energy transition. Indonesian foreign affairs minister Retno Marsudi and Canadian counterpart Melanie Joly signed the Indonesia-Canada Plan of Action for 2022-2025 during the latter’s visit to Indonesia to take ahead the cooperation initiatives. To further strengthen bilateral trade, both countries already started the first round of negotiation of Comprehensive Economic Partnership Agreement (CEPA) last month. Bilateral trade increased by almost 30 per cent in 2021 and reached $3.12 billion. “We agree to intensify the negotiations to be concluded within a clear time frame,” Marsudi was quoted as saying by a news agency. On investment, however, the figure in 2021 slightly increased by almost four percent. Canada invested in several infrastructure projects, including the development of the Cikopo-Palimanan Toll Road and the infrastructure project for the Port of Gresik expected to be operational next year. To continue this synergy, cooperation with the Indonesia Investment Authority (INA) in renewable energy and green infrastructure will be mostly welcomed, Marsudi remarked. Both countries are committed to accelerating energy transition to progress towards achieving a net-zero emission future. They agreed to promote cooperation on the transition to cleaner energy sources, including on hydrogen fuel cell technology and development of green hydrogen strategy, as well as potential partnership between Carbon Engineering Limited and PT Pertamina on carbon capture, utilization, and storage (CCUS).
Source: Fibre 2 Fashion
