INTERNATIONAL
The Union government has undertaken a Rs..1,038 crore ($156 million) scheme in the northeast to boost textile exports, increase jobs and and curb the migration of workers. Funded by the union Ministry of Textiles under the North-East Region Textile Promotion Scheme (NERTPS), the project is also aimed at developing and modernising the textile sector by providing region-specific flexibility in execution. “Under the NERTPS, the textile ministry has been providing Rs.18 crore each for setting up of a ready-made garment manufacturing unit or ‘Apparel and Garment Making Centre’ (AGMC) in each of the eight Northeastern States. It would also provide financial assistance to run the units after their commissioning,” Textiles Secretary Rashmi Verma said. The first AGMC was inaugurated in Nagaland on April 6 and the second one in Tripura on April 8. “The AGMCs in other six States are expected to start manufacturing in a month. After starting production of all the eight AGMCs, there would be a landmark development in the textile sector in the northeastern region,” the senior IAS officer added. “The AGMCs aim to boost the scopes of employment and exports and curb migration of workers from this region to other parts of the country,” she said.
Three hundred Japanese computerised sewing machines will be installed in each of the eight AGMCs. The Tokyo-based Juki company, which started making sewing machines in 1947, has customers in 170 countries from China to the Vatican. Of the 300 sewing machines, 200 would be used for manufacturing and 100 for providing training. Each AGMC will provide direct employment to 1,200—1,500 people, mostly women, and take care of skill up—gradation and marketing of finished products. Each unit is expected to meet the demand for uniforms and garments of the police, security and paramilitary forces — as also schoolchildren and civilians — in the region. This is just for starters. A host of schemes are planned in the northeastern states under the NERTPS, which covers projects across the textiles sector ranging from sericulture, handlooms, handicrafts, power looms to apparel and garmenting. Mr. Verma said that under the cluster development projects for handlooms, the rich and well—liked handloom sector of the northeast would be developed and modernised to increase production, productivity, employability and value addition of the handlooms by means of technology up-gradation. “As bamboo is one of the rich resources of the region, handicrafts with a variety of designs and its diverse use in northeastern states have an immense global market. This sector must be developed,” Verma said, adding: “Sericulture is another viable sector which also has tremendous scope to -rovide more and more employment and to earn foreign exchange.”
With a 46 million population, the northeastern states share a more than 5,435—km border with China, Myanmar, Bhutan, Bangladesh and Nepal. Some of the states have trade ties with a few of these countries, especially Bangladesh and Myanmar. Thus, the AGMCs have scope to exporting readymade apparel to these adjoining and other countries. Verma said that the readymade garments contribute 11 percent of India’s exports, seven percent to GDP and provides the maximum employment after agriculture. India’s current share in the global apparel and garment market is a mere 3.7 percent against Bangladesh’s 6.1 percent and Vietnam’s 4.3 percent, signifying that India has the potential to step up output, both for domestic requirements and exports.
SOURCE: The Hindu
The government is set to cancel formal approvals given to five special economic zone (SEZ) projects — all in West Bengal — on the ground that the developers did not make any effort to indicate future plans for the proposed projects despite the approvals expiring several years ago. The projects to face the axe include Dalmia & Co Ltd’s leather complex in Bantala, The others are Orion IT Parks Pvt Ltd’s IT SEZ at Rajarhat, Kolkata, Salarpuria Properties project in South 24 Parganas, Bengal Shristi Infrastructure Development Ltd in Asansol, Burdwan and Abex Infocom’s IT SEZ in South 24 Parganas. The Board of Approval (BoA) for SEZs, in its meeting on April 28, will consider the proposal for cancellation of these SEZs made by the development commissioners (DC) of these zones. The DCs, in all the five cases, observed that not only did the developers not submit any documents for extension of the expired approvals, but most did not turn up for hearings for cancellation of the formal approval. A number of SEZ developers have voluntarily given up their formal approvals citing the industrial slowdown and withdrawal of tax incentives for both developers and units as the reason for the projects becoming unattractive. Development commissioners have also recommended extension of formal approval for five projects, expressing satisfaction with the work the developers have done so far to indicate their interest in the projects. These include Wipro’s IT SEZ in Bangalore, Vedanta Aluminium Ltd’s proposed SEZ for manufacture and export of aluminium in Odisha and Mayar Infrastructure Development’s proposed bio-technology SEZ at Gurugram, Haryana.
SOURCE: The Hindu Business Line
Several trade experts on Thursday warned the government against rushing into the proposed Regional Comprehensive Economic Partnership (RCEP) agreement, which will create the world's largest free trade area, fearing the possible surge in imports from China. Indian industry fears that Chinese imports will flood the market once the government agrees to allow near-zero duty import of several goods. This has prompted India to offer tariff reduction and elimination for only 4042% of the products compared to 85-90% in case of other FTAs. For long, the government has been wary of a pact with China but was virtually forced to engage through RCEP , fearing that by staying away it would not be able to participate in the discussions and might have to pay a high price for engaging later.
During a first-of-its-kind consultation conducted by the commerce department, there were also suggestions that RCEP was not as extensive as the Trans Pacific Partnership (TPP) agreement where 12 areas were included compared to eight for the largest trade bloc.RCEP -being negotiated by China, India, Japan, South Korea, Australia and Asean countries -is seen as a counter to TPP. But some of the experts suggested that there was no need to enter RCEP , given that India already had an agreement with Asean members, Japan and Korea, with talks to finalise a deal with Australia at an advanced stage. Jayant Dasgupta, India's former ambassador to WTO, is learnt to have suggested that the government could contemplate an agreement with the US to counter the impact of TPP. But, there were also con cerns about inadequate preparation with former commerce secreatry Rahul Khullar saying Indian negotiators should not enter the room with a bargaining chip in their pocket.
Abhijit Das, who heads the Centre for WTO Studies, a commerce department funded think tank, also pointed out that the negative list, which was prepared some years ago, was inadequate. Another former commerce secretary G K Pillai also warned about the high stakes involved in FTAs. "Trade is war. We are not negotiating trading but fighting a sort of a war," a source quoted Pillai as saying.
SOURCE: The Economic Times
The maritime sector has a vital role to play in India’s growth story. It is of paramount importance to revitalise the ports and the shipping sector to increase capacity and efficiency. India must take full advantage of the lower logistics costs of water routes — both internationally and inland. India’s marine export-import trade has been growing at a rate of 4.5 per cent y-o-y (5-year volume CAGR) and accounts for 95 per cent of total exim trade volume for India. The development of a robust maritime sector is pivotal to economic development in countries with long coastal boundaries. A three-pronged plan consisting of a workable policy, fiscal incentives and infrastructure, would ensure development of India’s coastal shipping sector and strong growth.
Apart from having a multiplier effect on the economy, the maritime sector itself has the potential to significantly contribute to GDP. India’s main trade commodities are crude and petroleum products, bulk commodities such as coal, iron ore and containerised cargo. Trade growth is expected to remain strong, at 5-10 per cent, for most commodities over the next 10 years. This represents a massive opportunity.
Significant opportunity
India’s total international trade increased by more than 230 per cent between 2000 and 2014, to 811 million tonnes (mt) in 2013-14 but Indian shippers saw their trade rise by just 26 per cent, while the share of trade carried by Indian flag vessels sank to below 9 per cent during FY2013-14 compared to 40.7 per cent during 1987-88. It is estimated that investment opportunity of close to Rs. 1.14 lakh in inland waterways development and Rs. 3 lakh crore in port-led development under the flagship Sagarmala project exists in India. The biggest benefit from a robust shipping sector will be massive cost-saving: the cost for coastal shipping is Rs. 0.15-0.2 per tonne/km compared to Rs. 1.5 for railways and Rs. 2.5 for road. This represents the potential to lower logistics cost by Rs. 21,000-27,000 crore by 2025. In addition, coastal shipping can be a catalyst for coastal industrial clusters and fit in with the plan to develop new smart port cities. The passage of the National Waterways Bill is a key step. Inland waterways extend to about 14,500 km across the country. In sharp contrast to peer countries, only 3.5 per cent of India’s trade is being done through waterways as against 47 per cent in China, 40 per cent in Europe, 44 per cent in Japan and Korea, and 35 per cent in Bangladesh. Moreover, inland water transport is an environment-friendly and cost-effective mode of transportation, which has the potential to establish an optimal modal mix and reduce logistic cost and relieve the congestion on road and railways. Four waterways are currently under development, namely Ganga, Brahmaputra, Mahanadi and Buckingham Canal.
Partnerships and financing
There are compelling reasons to invest in Indian ports: 1. Projected cargo traffic to be handled by 2021-22 is 1,695 mt according to the National Transport Development Policy Committee, an increase of 643 mt from 2014-15; 2. 2,422 mt of cargo handling capacity is required by 2021-22; 3. Additional cargo handling capacity of 901 mt is required to be created in the next 6-7 years. The Government has facilitated opportunities for fresh investments in the sector. It has allowed 100 per cent FDI in ports. Additionally a 10-year tax holiday has been extended to enterprises engaged in developing, maintaining, and operating ports, inland waterways, and inland ports. The Government must focus on the improvement of infrastructure and deployment of technology. To project sea transport as the prime mode of transportation and effectively utilise our 7,517-km coastline, we need first and last mile connectivity, largescale containerisation of cargo, and development of efficient multi-modal transport services. Setting up port-based SEZs at all ports housing a cluster of maritime-related industries, warehouses and ship repair facilities would help develop a robust maritime sector.
SOURCE: The Hindu Business Line
A good monsoon may help India’s economy maintain the pace of growth seen in recent quarters, but it faces several downside risks, including from the weakness in global economy, finance minister Arun Jaitley told a G20 meeting in Washington. India’s economy grew by 7.6%, 7.7% and 7.3% in Q1, Q2 and Q3 of FY16, respectively. In its advance estimate, the Central Statistics Office has pegged FY16 growth at 7.6%. The government’s economic survey in February has predicted a broad range of 7-7.75% for FY17 GDP growth. “The fading impact of lower input costs on value addition in manufacturing, persisting corporate sector stress and risk aversion in the banking system, and the weaker global growth and trade outlook pose as downside risks to India’s growth outlook,” Jaitley said on Wednesday at the G20 finance ministers and central bank governors’ meeting.
While the government was dealing with these challenges through various policy measures, he noted that a normal monsoon would aid growth. Signalling robust farm output and benign inflation, the India Meteorological Department has predicted above normal rainfall this year at 106% of the benchmark Long Period Average (LPA), with a model error of ±5%. The IMF on Tuesday retained its growth forecasts for India at 7.5% in FY17 and FY18, but pared global growth by 0.2 percentage point to 3.2% in 2016 and by 0.1 percentage point to 3.5% in 2017 due to loss of growth momentum in the advanced economies and continuing headwinds for emerging countries. The key downside risks which could derail the fragile global recovery were weak demand, tighter financial markets, softening trade and volatile capital flows. India has always emphasised the need for globally co-ordinated policy decisions to remedy the global economic turbulence, he said. At the moment, the recent use of negative interest rate policies has been identified as an area of concern by member countries.
Jaitley also appreciated the efforts being undertaken by the Chinese government in rebalancing their economy and in particular in reducing excess capacity in several sectors. This would create necessary space for manufacturing activity in other countries. “Further, we feel that the efficacy of monetary policy instruments has reached its limits and that its pass through has not been seamless. The time is ripe for a re-evaluation of the fiscal policy space, with a greater focus placed on public investment,” Jaitley said. Separately, Jaitley and his US counterpart treasury secretary Jacob J Lew met for the sixth annual US-India Economic and Financial Partnership on Wednesday to further strengthen economic ties between the two countries. Among other issues, both countries agreed to increase cooperation in sharing of cross-border tax-information. The US promised to support India’s National Investment and Infrastructure Fund and smart city projects.
SOURCE: The Financial Express
The Union Finance Minister Shri Arun Jaitley and U.S Treasury Secretary Mr Jacob J. Lew met for the Sixth Annual U.S.-India Economic and Financial Partnership (EFP) in Washington D.C. yesterday. Following the conclusion of the dialogue, Minister Shri Jaitley and Secretary Mr Lew released the following Joint Statement:
“We were pleased to participate in the sixth annual ministerial meeting of the Economic and Financial Partnership and to welcome Federal Reserve Chair Janet Yellen, Reserve Bank of India Governor Raghuram Rajan and other participants. The United States Treasury and India’s Ministry of Finance launched our Economic and Financial Partnership in 2010 as a framework commensurate with the growing importance of our economic relationship and the significant business and cultural ties that already exist between our two nations. At this meeting, the last for the Obama Administration, we took stock of the impressive efforts that have been undertaken by both sides to deepen mutual understanding, and to improve cooperation across a wide range of bilateral and multilateral issues. We reiterated that the U.S.-India partnership will be one of the defining relationships of the 21st century.
Contributing to our bilateral relationship, five work streams have been underway at the sub-cabinet level in India and the United States. Progress has been made on all fronts.
Over the past year, our tax authorities resolved a significant portion of bilateral tax disputes between the United States and India. In addition, our governments have begun to accept bilateral Advance Pricing Agreement applications by companies in both jurisdictions in an effort to enhance cross-border business processes and strengthen our commercial ties.
We have noted the progress in sharing of financial information between the two countries under the Inter-Governmental Agreement pursuant to Foreign Account Tax Compliance Act (FATCA). The two sides will continue to engage in discussions on full reciprocal arrangement on FATCA. We look forward to increased cooperation in sharing of cross-border tax-information.
We are committed to continued collaboration and sharing of experience in tackling offshore tax evasion and avoidance, including joint tax audits and tax examination abroad. We look forward to the Competent Authorities of the two countries engaging in bilateral dialogue to move forward cooperation in these areas. Earlier this year, in India, the U.S.-India Financial Regulatory Dialogue brought together our respective financial regulators to discuss a range of issues pertinent to our domestic financial sectors and to financial stability, including banking sector reform and development of capital markets. In addition, expert staff from Treasury and the Ministry of Finance are having consultations on the United States experience and international perspectives on the regulatory design for India’s recently launched payment banks.
Under the U.S.-India Investment Initiative launched in January 2015, our governments have worked in collaboration with private sector to identify specific policies, regulatory reforms, and technical collaboration aimed at mobilizing capital from both domestic and foreign investors to build infrastructure and create jobs. We are working together to support India’s National Investment and Infrastructure Fund (NIIF) in order to increase financing options for India’s infrastructure growth. We look forward to continuing discussions in areas such as municipal finance under the future work of the Initiative. The next meeting of the Investment Initiative will be in the United States later in 2016.
Public debt management is an area of focus for India. India believes in continued efforts for more efficient debt and cash management, as well as the development of a deeper and more robust domestic debt market. It presents an opportunity for India’s Ministry of Finance and the U.S. Treasury’s Office of Technical Assistance to engage in knowledge and information sharing in India’s government debt management program. Accordingly, a Terms of Reference was signed between the two to collaborate on India’s government debt program.
We have enhanced our cooperation in tackling money laundering and combating the financing of terrorism through increased information sharing and cooperation, including a dialogue held recently in India. We both agree on the importance of fighting illicit finance in all forms as an important means of tackling global terrorism.
Finally, we are committed to further deepen our understanding of each other’s economies. As partners and peers, we are committed to working together to collaborate in multilateral fora, such as the G20, to steer our economies toward stronger, sustainable, and balanced growth. Under the aegis of our Economic and Financial Partnership, we held a sub-cabinet level discussion among our Deputies in India in early 2016. We are encouraged with the developments that have taken place since the launch of the Economic and Financial Partnership and look forward to continued engagement in an effort to strengthen our relationship, our economies, and the global economy.”
SOURCE: PIB
America's National Council of Textile Organizations (NCTO) which represents domestic textile manufacturers, has applauded the announcement of a memorandum of understanding (MoU) between the US and China with respect to an agreement by China to terminate export subsidies under its “Demonstration Bases-Common Services Platform”. “We thank the Obama administration for working diligently to construct an arrangement to eliminate these subsidies which directly damage US manufacturing jobs, output and investment,” said NCTO CEO & President Augustine Tantillo. “There is no doubt that China's rise to become the world's largest exporter of textile and apparel products has been aided by a pervasive series of illegal state-sponsored subsidies,” Tantillo continued. “These subsidies are clearly inconsistent with the rules of the World Trade Organization, and they are unfair to domestic textile manufacturers and the hundreds of thousands of U.S. workers they employ,” Tantillo added. The NCTO chief said American companies must play by free-market rules, and it is time that Chinese textile manufacturers did the same.
SOURCE: Fibre2fashion
Asia Pacific emerging markets to be global FDI hotspots Over the next decade, Asia Pacific is forecast to be the fastest growing region of the global economy and the region that offers the biggest potential gains for foreign direct investment with India set to outpace China for first time in over 30 years. IHS Inc. the leading global source of critical information and insight, announced the findings from its study on Asia's top ten foreign direct investment hotspots at the company's Global Economic and Country Risk conference in Vienna. “Over the next decade, the Asia Pacific region will grow at an average annual rate of 4.5 per cent per year, boosted by rapid growth in consumer spending in China, India and Southeast Asia,” said Rajiv Biswas Asia Pacific chief economist for IHS. “A key source of strength for Asia Pacific is the rapidly growing size of the economic region, which now accounts for around one-third of world GDP, generating strong intra-regional trade and investment flows.” “For the Asia Pacific region, a key long-term growth driver will be China's 'One Belt, One Road' initiative,” Biswas said. “This will be catalyzed by new infrastructure financing for Asian emerging markets into sectors such as power generation and transmission, railroads, ports and highways from the recently launched Asian Infrastructure Investment Bank, the Silk Road Fund, as well as a number of Chinese bilateral infrastructure financing commitments to a number of Asian countries.” The initiative will help to accelerate the development of many inland Chinese provinces as well as accelerating the growth of the Greater Mekong Sub-region as a new global manufacturing hub, and will benefit many countries in Southeast and Central Asia.
In China, despite the slowdown evident in the manufacturing sector, strong growth in consumer spending is driving rapid growth in service sector industries such as financial services, healthcare, retailing, e-commerce and logistics. China's service sector industries are expected to continue to show strong expansion over the medium term outlook, helped by continued rapid growth in consumer spending, with overall Chinese GDP growth forecast to average 6.4 per cent per year between 2016 and 2020. The Indian economy is forecast to be one of the fastest growing large emerging markets over the medium term, growing at an average pace of 7.6 per cent per year between 2016 and 2020, outpacing China for the first time in over three decades. “The strong growth outlook for India is underpinned by improving consumer spending, accelerated infrastructure development and stronger FDI inflows. The favourable impact of low global oil prices has reduced inflationary pressures and lowered the current account deficit,” Biswas said. “The Modi government's new initiatives to boost infrastructure development, develop smart cities and attract investment into Indian manufacturing are helping to lift FDI flows into India.”
SOURCE: Fibre2fashion
This year's Saigontex 2016 textile exhibition held in Ho Chi Minh City, Vietnam concluded successfully with 24 countries or regions participating representing 1,063 exhibitors. The exhibit was held from March 30 to April 2 at the Saigon Exhibition and Convention Center (SECC). The Taiwan Textile Federation (TTF) also promoted the island's unique sample at this year's exhibit including eco-textiles, function and fashion textiles, dyes and trimmings. Under the slogan "Think Taiwan for Textiles," the federation is promoting the island's textile industry under the three themes of fashion, function and eco-friendliness. The TTF's Textile Export Promotion Project (TEPP) is organized by Taiwan's Ministry of Economic Affairs' Bureau of Foreign Trade and promotes the textile industry by organizing trade missions, collaborating meetings and the attendance of international shows. The quality of Taiwan's textile prowess is indicated by its partnerships with brands such as Decathlon, Oasis, Thai Tuan, Garmex, Lime Orange, Vinatex, Poong In and Walmart. Export to the Vietnamese textile market has grown in recent years due to the countries trade ties under ASEAN and future regional trade agreements such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).
SOURCE: The China Post
