The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 25 APRIL, 2022

NATIONAL

INTERNATIONAL

 

Centre committed to resolve issues faced by textile industry: Jardosh

Delegates from 27 national and regional associations of textile industries, interacted with the Union minister, Gujarat State Industries Minister Jagdish Panchal, Textile Commissioner Roop Rashi Mahapatra, and Industries Officer of Government of Gujarat Dr. Munjal Dave at the event. The textile ministry is committed to resolving any issues that the industry is suffering and more so if the matter relates to Gujarat, said Union Minister of State for Textiles and Railways Darshana Jardosh in Ahmedabad Saturday. She was speaking at Textile Interactive Meet and Textile Leadership Conclave 2022, a one-day event organised by the textile task force of Gujarat Chamber of Commerce and Industry (GCCI) at Shree Shakti Convention Centre. Delegates from 27 national and regional associations of textile industries, interacted with the Union minister, Gujarat State Industries Minister Jagdish Panchal, Textile Commissioner Roop Rashi Mahapatra, and Industries Officer of Government of Gujarat Dr. Munjal Dave at the event. Speaking during the event, GCCI President Hemant Shah said India’s textile sector of India stands a chance to benefit a lot from the many Free Trade Agreements and PLI schemes. Gujarat Minister for Forest and Environment Jagdish Vishwakarma, remarked that the technical textile industry of the state and India came to the rescue of the world during the pandemic by providing with uninterrupted supply of masks and PPE kits.

Source: Indian Express

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Indian govt may consider PLI-2 for textile sector: MoS Textiles

The Indian government is likely to float second Productivity Linked Investment scheme (PLI-2) so that other segments of the textile sector can also be promoted, minister of state (MoS) for textiles Darshana Vikram Jardosh told Fibre2Fashion after the inauguration of Fashion Meet- Expo at Gurugram on Thursday. Over 500 top fashion buyers, exporters, manufacturers and foreign delegates from Australia, Canada and Korea are participating in the two-day expo organised by the Apparel Export Promotion Council (AEPC). The minister said that many segments were left out in the previous PLI scheme. “Since the government wants to promote all the segments in the textiles sector, the Ministry of Textiles will prepare a fresh proposal for PLI-2 for approval.” About the timeline of new PLI scheme, the minister said that the government needs to consider financial implications of the scheme. “PLI scheme will boost textile industry in the country as per government’s vision of Local for Global,” Jardosh said at the inaugural session of the expo. Recently, the government has announced the selection of 61 investment proposals under PLI with a total investment of ₹19,077 crore. But the target was not fully achieved in terms of investment, employment, business and approved subsidy. Speaking about the AEPC event, the minister said that such events and expo create vibrancy in the industry and bring buyers-seller on a single platform. She emphasised on the need of diversification in the textiles sector to focus on man-made fibre. “Indian textile industry has vast potential to expand in the global market. India is a leading supplier in a number textile items in global market. India’s share of various products is increasing constantly. But the entire value chain should be developed,” she added. In his speech at the inaugural session, AEPC chairman Narendra Goenka said, “Indian textile industry has potential to expand its market share in the global market. It needs support from the government to achieve the export target.” He appreciated the government’s initiatives like PLI and other programmes which will be instrumental for further growth. The Fashion Meet- Expo ’22 hosted by AEPC - BAA - NAEC in collaboration with SOWTEX witnessed a footfall of over 500 fashion buyers, exporters and manufacturers besides participation of foreign delegates from Australia, Canada and Korea. The event included panel discussions, tech talk, tech innovation, and business growth. Experts from the industry discussed on topics such as conceptualisation of Design Studio at Apparel House, stitching the Value Chain with Sustainability & Traceability, improvement of efficiency using the latest technology, Digital Efficiencies SMART Production Automation and quick & easy Ways to Build Fashion Exports. Industry experts such as Sevraj Syed, Director, TUKATECH, Europe; Puneet Dudeja, Director- Business Development, WGSN; Sonil Jain, Co-Founder & CEO, Sowtex Network; and several others shared their views and insights. The two-day event aims to digitise textile eco-system and fast track design development process to capitalise on India’s recent FTAs with partner countries and achieve the target of $100 billion fashion exports by 2030. Alongside the event, there is a showcase of selected 50 fabrics and trims manufacturers and fashion technology companies from India with their product development capabilities along with USPs based on trends, materials, technology to fashion buyers and manufacturers looking for sourcing quality, sustainable and innovative materials for domestic and international markets.

Source: Fibre2 Fashion

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Several exporters get pending payments for shipments made to Russia

Several exporters have received pending payments for shipments made to Russia before February 24 -- the day Russia-Ukraine conflict began Several exporters have received pending payments for shipments made to Russia before February 24 -- the day Russia-Ukraine conflict began -- and Department of Financial Services is working with banks to facilitate clearance of remaining dues, a government official said. Federation of Indian Export Organisations (FIEO) had shared with the Directorate General of Foreign Trade (DGFT) in March that Indian exporters have payments of about USD 400-500 million pending in Russia. DGFT had shared that information with Department of Financial Services (DFS). About 60 per cent of the exporters have received their payments from Russian buyers and for the remaining, DFS is working to facilitate the payments, the official said. Mumbai-based exporter and Chairman of Technocraft Industries, Sharda Kumar Saraf said some exporters have received their stuck payments but now it has stopped. The government should immediately start rupee-rouble trade with Russia to push exports, Saraf said. Ludhiana-based Hand Tools Association President S C Ralhan too said that several exporters have received their dues as all banks are not under sanctions. The government should take some decision on the matter immediately as it could hamper our exports and they should allow rupee-rouble trade, Ralhan said. FIEO Vice President Khalid Khan said payments are coming in sectors including pharma, and food. However, still exporters are struggling to get money from Russia. The RBI should give clear directions to the banks to accept payments from all the sectors, Khan said. FIEO Director General Ajay Sahai said that while exporters are concerned about pending payments , they are not unduly worried about defaults happening as some mechanism will be found to receive back exports proceeds. Following Russia's invasion of Ukraine, the West has slapped a slew of sanctions on Russia and has also isolated the country from the payment systems, which is impacting settling trade payments. Major export items from India to Russia include pharmaceutical products, tea, electrical machinery and equipment, organic chemicals and vehicles. In the past too, India had devised a mechanism to pay for imports from Iran, when sanctions were imposed on the Persian Gulf nation. India's exports to Russia stood at USD 3.2 billion in 2021-22 as against USD 2.7 billion in 2020-21. Imports were at USD 8.7 billion last fiscal year as against USD 7 billion in 2020- 21.

Source: Business Standard

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EU to pursue trade deal with India to reduce its ties to Russia

In addition to trade, the EU will pursue a technology council with India that could include discussions on the general data protection regulation, social media and broader digitalization efforts, said the official, who asked not to be identified because the talks are private. The European Union plans to relaunch trade talks with India in an attempt to give the South Asian nation a viable alternative to diversify away from Russia, according to a senior official familiar with the plans. In addition to trade, the EU will pursue a technology council with India that could include discussions on the general data protection regulation, social media and broader digitalization efforts, said the official, who asked not to be identified because the talks are private. European Commission President Ursula von der Leyen is planning to meet with Indian Prime Minister Narendra Modi on April 25. The EU is India’s third-largest trading partner and accounts for 62.8 billion euros ($67.8 billion) worth of trade in goods. The EU and U.S. both are trying to establish closer ties with India, which is the world’s top buyer of Russian weapons, which it says it uses to deter aggression from neighbors Pakistan and China

Source: Economic Times

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India, Canada resume FTA talks, eye interim deal

Both the sides have agreed to intensify work towards ensuring market access for Indian farm products, such as sweet corn, baby corn and banana, etc and recognising Canada’s systems approach to pest risk management in pulses, which would ease the inflows of Canadian pulses to India. After a gap of almost five years, India and Canada resumed negotiations for a free trade agreement (FTA) last week and are eyeing an interim trade deal first to bolster bilateral commerce and investment, sources told FE. Both the sides have agreed to intensify work towards ensuring market access for Indian farm products, such as sweet corn, baby corn and banana, etc and recognising Canada’s systems approach to pest risk management in pulses, which would ease the inflows of Canadian pulses to India. Canada has also agreed to examine expeditiously the request for conformity verification body status to APEDA (Agricultural and Processed Food Products Export Development Authority) to facilitate Indian organic export products. While India also wants greater market access for AYUSH products, Canada has sought access for its cherries and lumber. While no time-frame has been firmed up yet for hammering out the interim agreement, official sources indicated that it could be concluded in 6-9 months; the broader FTA will follow. It will likely include high-level commitments in goods, services, rules of origin, technical barriers to trade, and dispute settlement. The stage was set for the revival of negotiations after commerce and industry minister Piyush Goyal held talks with his Canadian counterpart Mary Ng here last month, as part of the fifth ministerial dialogue on trade and investment. New Delhi and Ottawa launched negotiations for the Comprehensive Economic Partnership Agreement (CEPA), as the FTA is formally known, in 2010 and held the last round of formal talks in August 2017. During this period, they held ten rounds of negotiations on a broad range of issues, including goods and services, e-commerce, telecommunications, sanitary and phytosanitary measures, and technical barriers to trade. The negotiations are a part of India’s broader strategy to sign “balanced” trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after New Delhi pulled out of the Beijing-dominated RCEP talks in November 2019. India signed an FTA with the UAE in February, its first with any economy in a decade, and a “substantial” interim trade deal with Australia in April. Similarly, London and New Delhi are eyeing a trade deal by Diwali in October. The resumption of negotiations with Ottawa comes at a time when bilateral trade is running below potential and several Canadian companies — including Canada Pension Plan Investment Board (CPPIB) — have either announced multi-billion-dollar investments in India or enhanced focus on the country. Last year, CPPIB invested $800 million in Flipkart Group. Although Indian goods despatches to Canada are less than 1% of its exports, a joint study before the FTA talks started in 2010 had estimated fairly symmetric gains for both the nations. Annual export gains for Canada were estimated to range between 39% and 47%, and for India, between 32% and 60%. India’s merchandise exports to Canada rose 26% until February last fiscal from a year before to $3.6 billion, while Canada’s rose 14% to $2.9 billion. Major Indian exports to Canada include drugs and pharmaceuticals, iron and steel, marine products, cotton fabrics and readymade garments, and chemicals, while key Canadian exports to India comprise pulses, fertilisers, coal and crude petroleum.

Source: Financial Express

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Rs 3,500 crore boost for spinning capacity in Gujarat

Riding on good revenues of the past two years and higher profit margins, spinners across Gujarat are bullish about augmenting manufacturing capacities for cotton yarn. Estimates of Spinners Association (Gujarat) or SAG suggest that an investment of Rs 3,500 crore is on the cards over the next year and a half, as 7 lakh new spindles will be added in Gujarat to boost the spinning capacity in the state. Unprecedented profit margins were recorded last year. Therefore, many of these spinning mills have planned expansion. In fact, at least 10 new spinning mills are also expected to start operations during this period, according to SAG estimates. “With cotton prices touching an all-time high, yarn makers can command better margins,” said Saurin Parikh, the SAG president. “Anticipating good demand and better business, many spinning mills have planned capacity expansion. Consequently, at least 7- 10 lakh spindles will be added over the next 18-24 months. Gujarat is home to about 110 spinning mills with an installed capacity of 45 lakh spindles. Most of these mills were set up only after the Textile Policy of 2012 was implemented, rolling out incentives for yarn makers. Bharat Boghara, the chairman of SAG, said: “Gujarat did not have significant spinning capacity despite being a leading cotton producing state till 2012.” Boghara added: “By 2017, the state saw new mills coming up and over the past five years, spinners have made huge profits riding on exports as well as on domestic demand.” He went on to say: “Gujarat’s cotton quality is better than that of other states and there is higher demand for Gujarat cotton yarn in the international market too. New investments will strengthen our position in the textile sector.” After the Covid-19 lockdown, the demand for cotton yarn significantly grew as manufacturers in the US and Europe changed their sourcing norms, moving away from China. The exports of India’s cotton yarn, fabrics, and made-ups increased by 55% to USD 15,297 million in 2021-22. Industry experts said that India’s cotton yarn and fabric exports will continue to rise strongly as the sector enjoys duty-free access to markets in Australia and the UAE. A free trade agreement (FTA) between India and the UK is also on the cards. Augmenting spinning capacity in Gujarat will result in higher demand for cotton. Industry stakeholders have therefore emphasized on the need to increase the per-hectare yield of cotton.

Source: Times of India

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States’ feedback sought on raising GST rates on 143 items

“The opinions of the states have been sought on raising the GST rates on 143 items. After getting a sense of the opinion of states, the proposals may be put up before the GST Council,” a state finance minister told FE. To gauge the states’ mood ahead of the Goods and Services Tax (GST) Council’s meeting in late May, the GST Council secretariat has sought states’ views on the scope for raising tax rates on 143 items, in most cases to revert the rate to 28% from 18%. “The opinions of the states have been sought on raising the GST rates on 143 items. After getting a sense of the opinion of states, the proposals may be put up before the GST Council,” a state finance minister told FE. In December 2018, the GST Council slashed the tax rates on a large number of items, including consumer durables, electronic goods and furniture items, from 28% to 18%. These include some televisions, water coolers, ice cream freezers, milk coolers, food grinders, paints, digital cameras, video camera recorders and video game consoles and sports requisites. In November 2017, the rates on chocolates and other food preparations containing cocoa were reduced from 28% to 18%. Separately, suggestions by a group of ministers led by Karnataka chief minister Basavaraj Bommai on GST rate rationalisation will likely be ready soon after taking inputs from states. The GST Council may consider these proposals in the third week of May. Caught between the conflicting objectives of boosting revenue receipts and controlling runaway inflation, the Centre may make a pitch for calibrated hikes in the GST rates over the next couple of years, rather than a one-time trimming of the slabs from four at present to three, according to sources. The states are concerned about a possible drop in their tax revenues after June, when a five-year revenue cover for them will cease to exist. The road map for GST rate hikes will likely factor in the need to take the weighted average GST rate from a little over 11% at present to the estimated revenue neurtal rate of 15-15.5% over a two-three year period, but won’t give a shock to the consumers by way of sharp increase in rates. Currently, there are four main GST slabs: 5%, 12%, 18% and 28%. About 70% of the GST revenues come from over 480 items which attract 18% GST. There is a view in the Centre that items under the 12% and 18% slabs should be shifted to a new median slab of 15%. Kerala finance minister KN Balagopal, a member of the GoM, told FE recently: “We have identified 25 items, including refrigerators, where benefits of GST rate reductions have not been passed on to consumers by the companies. These rate cuts should now be reversed.”

Source: Financial Express

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UK’s passage to India: Stronger business engagement strengthens bilateral trade outcomes

The commitment of the UK and India to strengthen their business engagement itself bids fair to generate higher trade outcomes. UK prime minister Boris Johnson pragmatically side-stepped contentious issues, like India not condemning Russia for its offensive in Ukraine, to focus on strengthening ties with fast-growing India as part of a wider outreach to the Indo-Pacific region. The outcomes of his first two-day visit broadly follow the directions laid out in the virtual summit between him and India’s PM Narendra Modi in May 2021, when they outlined a roadmap 2030 on India-UK relations on trade and investment, defence and security, health, climate change and people-to-people contacts to bolster a comprehensive strategic partnership. To double bilateral trade, they agreed on an enhanced trade partnership towards a comprehensive and balanced free trade agreement. At their in-person meeting, both leaders expressed satisfaction at the implementation of roadmap 2030, including the launch of negotiations for an FTA in January, and set a target to conclude the majority of discussions by end-October. On defence, PM Johnson sent a strong signal on furthering cooperation by streamlining export licensing requirements to facilitate strategic collaboration for modern fighter aircraft and jet engine advance core technologies, among other areas. The UK has committed to $1 billion of investments for climate-related projects. Another takeaway is the finalisation of a Global Innovation Partnership in which India and UK will co-finance up to $100 million to transfer climate-smart innovations from India to third countries. However, considering the long historical association, the growing stakes Indian companies have acquired in the UK, and the presence of a 1.6 million-strong Indian diaspora, the economic component of the bilateral relationship is somewhat underwhelming. Over the last decade, two-way trade has been stagnant, averaging $14- 15 billion, with a trade surplus of $3 billion in India’s favour. If two-way trade is to double by 2030, both partners must step up investments in each other’s economies. India is the second-largest source of inward investments into the UK, with 99 investment projects that created 4,830 jobs in 2020-21, according to the UK’s department of industry. The UK is the sixth-largest investor in India with investments of $1.4 billion in 2021-22 (till December). The sort of investments by the UK that strengthen bilateral trade outcomes are exemplified by Johnson—on the first day of his visit—inaugurating a new exportfocused facility of JCB India that will fabricate parts for global production lines. Or Switch Mobility, the electric vehicle arm of Ashok Leyland, lining up investments across the UK and India to develop electric buses and LCVs. All of these could be part of the investment deals of 1 billion pounds announced by Johnson in various industries, from software engineering to healthcare, including collaboration in satellite launches. Besides investments, bilateral trade is bound to look up even more if both partners also agree to remove trade barriers on the path to full-fledged FTA. Negotiations entail a process of give and take for greater access to each other’s markets. Despite the advantage of a trade surplus in India’s favour, an ambitious deal is not on the cards so long as the simple average tariffs on goods imported into India from the UK are three times higher than tariffs on Indian goods exported to the UK. If India seeks greater market access, it must also allow the UK to sell more of its goods and services. Trade thus can be a win-win situation for both partners. PM Johnson has signaled flexibility on visas for skilled Indian professionals. As a global power in financial services, there is much that the UK can do for India. The commitment of the UK and India to strengthen their business engagement itself bids fair to generate higher trade outcomes.

Source: Financial Express

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Russian consumer Cos turn to India as western brands pull the plug

Russia's e-commerce platforms Ozon and Yandex Market, food supplements firm Pharmstandard, dental products distributor Simkodent, largest food retailer X5 Retail Group and confectionery major UNICONF are among several Russian companies that have reached out to India for business ties amid Moscow's conflict with Kyiv. Due to the conflict and the sanctions, many European and American brands have stopped supplying their goods including consumer electronics, and apparel to Russia. "Many Russian companies have approached but there is apprehension on both sides especially about payment," said an official. Yandex Market, involved in imports, logistics, customs clearance, storage and distribution of goods, is exploring the possibilities of sourcing apparel and fashion, toys, bed linen, home decor, textile fabrics, consumer electronics, kitchen items, tea and leather items from India, according to an industry source. "Yandex Market is exploring different opportunities of global sourcing from the very beginning of 2022," the company replied to an email query from ET. "Currently, we are continuing to focus on that stream, aiming to supply Yandex Market clients with a unique assortment and open the Russian market for brands from all over the world, including from India," it added. Food retailer X5 told ET that it is interested in expanding its cooperation with Indian suppliers of drinks, seafood, tea, coffee, chicory, rice, canned food, kitchenware, and fresh grapes, among other. "X5's representatives will visit India in April last week," an X5 Group representative said in an email reply. Another official said e-commerce major Ozon has shown interest in branding Indian products.

Source: Economic Times

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India's foreign exchange reserves down $311 million to $603.7 billion

In the previous week ended April 8, the reserves had declined by USD 2.471 billion to stand at USD 604.004 billion. The country's foreign exchange reserves declined by USD 311 million to reach USD 603.694 billion in the week ended April 15, RBI data showed on Friday. In the previous week ended April 8, the reserves had declined by USD 2.471 billion to stand at USD 604.004 billion. During the reporting week, the fall in the forex kitty was on account of a decline in the foreign currency assets (FCA), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI). FCAs dropped by USD 877 million to USD 536.768 billion. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Gold reserves increased by USD 626 billion to USD 43.145 billion in the reporting week, the data showed. The special drawing rights (SDRs) with the International Monetary Fund (IMF) dipped by USD 44 million to USD 18.694 billion. The country's reserve position with the IMF decreased by USD 16 million to USD 5.086 billion in the reporting week.

Source: Business Standard

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West Bengal creates MSME, export & sectoral panels to enhance govt industry co-operation

The West Bengal government has announced the establishment of micro,small and medium enterprises (MSME), export and several other sectoral panels to enhance the partnership between government and the industry. To form a co-operative ecosystem, business heads will function as co-chairmen for the panels, said Amit Mitra, the principal chief advisor to Chief Minister Mamata Banerjee. Titagarh Wagons, MD, Umesh Chowdhury will co-chair the MSME panel, Sanjay Budhia from Patton Group will take on the role for exports, Ambuja Neotia Group’s Harsh Neotia for services panel and Luxmi Tea’s Rudra Chatterjee for tourism. As a co-chair of MSME panel, Chowdhury stated that the MSME sector needs the government's support for expansion. Sanjiv Puri, Chairman and MD of ITC Ltd will co-chair the committee for agriculture and allied products. Agreements were signed with NABARD for rural micro-enterprises, textiles, industrial parks and for an electric bus plant at Murshidabad, which will attract an investment of Rs 2,500-3,000 crore. The announcement was made on the second and concluding day of the Bengal Global Business Summit (BGBS) and the next summit will be held in 2023 between February 1 and 3. Home India and UK.

Source: Business Standard

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Sri Lanka economic crisis offers an opportunity: Raymond Group CFO

If the situation prolongs for significant time, and the crisis-hit country doesn’t reach a settlement soon, global customers may increasingly turn to India, says Amit Agarwal Indian businesses to export more, said Amit Agarwal, Chief Financial Officer at Raymond Ltd, a top apparel manufacturer. If the situation prolongs for significant time, and the crisis-hit country doesn’t reach a settlement soon, global customers may increasingly turn to India, he said. “Whether India stands to benefit, it depends on how prolonged the situation remains there. Whether it prolongs for a longer period or it prolongs for a short term. If they get a settlement, obviously there will be some hesitation. But we believe any such thing provides opportunity…We are seeing inquiries already, ” Raymond Group CFO Amit Agarwal told ETCFO. Sri Lanka is one of the major textile exporters in the world, however, the present economic turmoil is seen affecting its ability to cater to the demand in the global markets like the US, Europe and Australia, etc. Sri Lanka is going through one of the worst economic crises in over decades. The South Asian nation has about $2.3 billion left as compared to its $7 billion debt obligations and it is grappling with a record 17.5% inflation. It has sought assistance from India, China and IMF etc to tide over the economic crisis. Raymond CFO said that it is not simple in the textiles business to change things immediately to cater to the possible increased orders from global markets, stressing that proper legwork is necessary and required. Sri Lanka economic crisis offers an opportunity: Raymond Group CFO Financial Conditions Index drops below zero in March: Crisil Ratings Changing consumer behaviour towards sustainable consumption a big business opportunity, says Galaxy Surfactants CFO IMF's India growth projection a little optimistic, downside risks many: Swati Arora, HDFC Bank Amid high inflation, AgroStar CFO aims doubling biz to Rs 1,000 cr in FY23; eyes PAT profitability in next 24 months 22 hrs ago 1 day ago 1 day ago 2 days ago 2 days ago NEWS CFO INTERVIEWS CFO LEDGER CFO WALL CFO VIDEOS EDITOR'S NOTE WEBIN Subscribe Stay updated with the latest news in the CFO community with our daily newsletter 50,000+ Industry Leaders read it everyday I have read Privacy Policy and Terms & Conditions and agree to receive newsletters and other communications on this email ID. Raymond CFO shared India’s textile exports are already getting a fillip as in the wake of prevailing anti-China sentiment. Customers are increasingly looking at India as an additional supplier base, he said. “We are seeing an increase in demand for our products. Because the whole anti-China sentiment is playing very well for us. Some of the customers who were buying very cheap material in the past who could not buy from us or we could not deliver to them because price levels which we sell were slightly higher than the levels they buy, now they have come around and started to buy from us at our price levels,” he said. India in a 'right spot' Raymond CFO said India is poised in the “right spot” to drive global exports. He mentioned that free trade agreements signed with other nations enable India to export more. Agarwal hailed the recently signed treaty by India with It is not so easy in the textile business in a garment today you change from today to tomorrow. Because it is the fabric, then the style and everything that takes 7-8 months of approval process. What happens is that we have to go through a proper detailed approval process by the customers. Also, I think it will take some time for the Sri Lanka thing to come around. ~ RAYMOND GROUP CFO AMIT AGARWAL “ CFO TV ETCFO Leadership Summit, 2022: Is the GST Council listening? GST restructuring is expected soon - which means a structural revamp, from trimming tax exemptions, tax rate… Keynote Fireside Chat with Ram Charan on Race Against Time: Sustainability & Future of Finance Grant Thornton India CEO Vishesh Chandiok on SEBI's CMD Split Rule Economic realities of ESG achieving net zero infrastructure 18 days ago 23 days ago 43 days ago View April 2, India had signed the Economic Cooperation and Trade Agreement (ECTA) with Australia; Under the agreement, India is expected to benefit from preferential market access provided by Australia on 100% of its tariff lines. This includes all the laborintensive sectors of export interest to India such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and automobiles. Raymond branded textiles’ business was at Rs 1,572 crore in FY21, the company’s annual report for the period showed. Its exports constitute about 17- 18% of total sales; the company sells products to more than 35 countries

Source: Economic Times

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India, UK aim to seal free trade deal by Diwali: PM Modi, British PM Boris Johnson pledge to boost ties

Both countries to join hands on new fighter jet technology and to detect and respond to threats in the oceans. India and the UK pledged on Friday to further bolster trade, defence and energy ties, with visiting British Prime Minister Boris Johnson pitching for wrapping up a proposed free trade agreement (FTA) by as early as Diwali. After holding wide-ranging talks with Prime Minister Narendra Modi here, Johnson said negotiators from the two countries were expected to complete the FTA by the end of this year. “We are telling our negotiators to get it done by Diwali in October. This could double our trade and investments by the end of the decade,” he said. For his part, Modi highlighted the “good progress” being made in the FTA negotiations and offered to move “at the same pace and with the same commitment” with which New Delhi recently hammered out trade deals with the UAE and Australia. Both India and the UK launched formal negotiations in January for the FTA, which could ultimately cover more than 90% of tariff lines. They aim to double bilateral trade of both goods and services to about $100 billion by 2030. The India-UK trade is dominated by services, which make up about 70% of the overall annual commerce. Johnson has favoured more visas to Indian skilled IT professionals to tide over a shortage in the UK. “We have also agreed to enhance cooperation in the defence sector. In the defence sector, we welcome the UK’s support for ‘self-reliant India’ in manufacturing, technology, design and development,” Modi said. On his first visit to India as the leader of the United Kingdom, Johnson said his country is creating an open general export licence for India to “reduce bureaucracy and slash delivery times” for defence procurement. The commitment to strengthen bilateral defence co-operation comes at a time when western nations want to wean India away from its dependence on Russian weapons, a reliance that, western analysts believe, prevented New Delhi from condemning Moscow over the latter’s military aggression in Ukraine. Describing Modi his “khas dost” (special friend), Johnson said both the countries have agreed to work together to meet new threats across land, sea, air space and cyber domains. The UK, he said, will join hands with India on new fighter jet technology and to detect and respond to threats in the oceans. During their talks, the two leaders also pledged to step up partnership on clean and renewable energy. Johnson said it was aimed at supporting India’s energy transition from imported oil and raising its resilience through secure and sustainable energy. As for the Ukraine crisis, Modi reiterated India’s call for an immediate ceasefire of violence and resolution of the crisis through dialogue and diplomacy. “We also reiterated the importance of respect for the territorial integrity and sovereignty of all countries,” he said. At the same time, with an eye on China’s belligerence, Modi stressed the need for maintaining a free, open, inclusive and rules-based order in the region and noted that India had hailed the UK’s decision to join the Indo-Pacific Oceans Initiative.

Source: Economic Times

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Pakistan: Govt assistance sought to push textile exports to $50bn

The textile industry has filed a package of submissions with Prime Minister Mian Mohammad Shehbaz Sharif for his nod, which will help pave the way for increasing textile exports to $26 billion in the next fiscal year and $50 billion in next 5 years. In a letter written on April 20, 2022 to the new chief executive of the country, All Pakistan Textile Mills Association (APTMA) urged him to ensure the continuation of Regionally Competitive Energy Tariff (RCET) to the textile Industry with RLNG price at $6.5/MMBTU and electricity at 7.5 cents/unit, immediate provision of gas connections to the new units coupled with extension of load for enhanced capacity and revival of sick units, and reaffirmation for export sector priority in gas allocation. APTMA also called on the Prime Minister to ensure the cotton support price for this season was fixed at Rs8,000/maund for the upcoming season to encourage farmers to grow more cotton, making a point that the country every year loses at least $ 3 billion/annum on account of low production of cotton. The textile sector demanded a review of duty on Polyester Staple Fibre and removal of anti-dumping duties to enable Pakistani export products to compete internationally. It also asked the government to implement a weighted average cost of gas in letter & spirit, enabling uniform and rational gas or RLNG prices across the country. In the letter, APTMA drew the PM’s attention towards the success story of exports showing the increase by 26 percent over the previous year to a record of $ 23.3 billion, the majority of which were textiles (61 percent). It pleaded that the growth was enabled by implementation of Regionally Competitive Energy Tariff (RCET), investment of over $5 billion in expansion and establishment of 100 new textile units resulting in enhanced export capacity of $ 500 million per month. “The reduction in area and lower productivity has reduced the cotton production from a high of 14.81 million bales to 7.44 million bales last year. Cotton has lost 1 million hectares during the last decade and if this area reverted to cotton than the country will produce an extra 5 million bales of cotton which will add 1.523 percent to GDP and will save the country’s $ 5 billion directly while generating incomes in the rural economy of Pakistan and playing a vital role in poverty alleviation,” the APTMA said in the letter. Coming to the energy issues, APTMA said that the cost to the exchequer of Regionally Competitive Energy Tariffs has been 2.44 percent of textile exports which was a tiny fraction of the cost of potential foreign currency borrowing that the forex earnings were replacing.

Source: The News

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RCEP trade to benefit recovery of world economy  

Almost four months after the Regional Comprehensive Economic Partnership came into action, China-stationed foreign diplomats said the forms of intraregional trade will be further diversified and facilitated, enriching the Asia-Pacific region's economic vitality through inclusive and sustainable economic recovery amid the pandemic. As the RCEP is a trade deal between the 10-member Association of Southeast Asian Nations and China, Japan, the Republic of Korea, Australia and New Zealand, they said the pact will reinforce regional trade and investment and help companies, especially small and medium-sized businesses, gain better access using both traditional and new foreign trade formats, including cross-border e-commerce and international trade, and boost global gross domestic product in a sizable market that covers a third of the world's population. Eager to ship more products to China in the coming years, consul-generals of Vietnam, Thailand and Malaysia in Nanning, Guangxi Zhuang autonomous region, participated in a livestreaming event in late March to promote trade-related innovation and business ties between China and the ASEAN. These diplomats promoted such products as Vietnamese coffee, Thailand's latex pillows and Malaysia's Musang King durian to domestic consumers and interacted with audiences online by partnering with a TikTok livestreamer. The three consul-generals also recommended Guangxi specialties, such as jasmine tea, tangerines, edible bird's nests, medical supplies and luosifen rice noodles to Southeast Asian countries via Lazada, a cross-border e-commerce platform. "Since the outbreak of the COVID-19 pandemic, more Thai consumers have taken a liking to online shopping. This event will further enhance trade ties between Thailand and Guangxi, as well as support the tangible growth of the RCEP," said Benjamas Tanvetyanont, Thailand's consul-general in Nanning. According to Peng Jian, the organizer of the event and director of the foreign affairs office of the Nanning municipal government, the event was designed for diplomats to experience the development of cross-border business in Nanning and promote mutual prosperity with the implementation of the RCEP. "Taking into account the pandemic situation, there is no better time for us to dive into the e-commerce sector where we are able to shop and also have a glimpse of the world around us and understand how other people live their lives by the products they use," said Azlimi Zakaria, consul-general of Malaysia in Nanning. He said the cross-border e-commerce cooperation between Malaysia and China, particularly in Guangxi, is set to expand even further as both sides are fairly serious about the growth of this sector. Backed by Malaysia's favorable natural conditions, the official added that the ChinaMalaysia Qinzhou Industrial Park-the flagship project of investment cooperation between the two countries-has already established a processing trade base for edible bird's nests in Guangxi. At present, there are three preprocessing centers in Malaysia that have been registered overseas by China's General Administration of Customs. The trade base for edible bird's nests in the park is operated by 15 bird's nest production and processing companies, and 11 of them have been approved by the Chinese government for deep processing qualifications. Do Nam Trung, consul-general of Vietnam in Nanning, said he would like to promote mutual understanding by displaying Vietnam's coffee culture to Chinese consumers. As a new form of foreign trade, cross-border e-commerce has become an important driving force for stabilizing China's imports and exports, and has witnessed rapid growth despite the disruption of the COVID-19 pandemic. It surged from less than 1.2 trillion yuan ($187.05 billion) in 2018 to 1.98 trillion yuan in 2021, according to the General Administration of Customs. With the China (Nanning) Comprehensive Cross-Border E-Commerce Pilot Zone starting operations in 2018, the park to date has attracted more than 100 companies to establish businesses within the zone. They reported a transaction volume of 7.77 billion yuan in 2021, up 259 percent year-on-year, according to the government of Guangxi. Zhang Jianping, director-general of the Beijing-based China Center for Regional Economic Cooperation, said closer ties among the RCEP signatory countries will not only have a far-reaching impact on regional trade, investment and market integration but also help the recovery of the global economy.

Source: China Daily

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Uzbekistan names most imported and exported goods since year beginning

The Central Bank of Uzbekistan published data on the volume of exports and imports of goods and services for the first quarter of this year, Trend reports citing Kun.uz. According to the press service of the regulator, in the first quarter of this year, exports of goods (excluding non-monetary gold) increased by 14%, or by $268.3 million, compared to the same period last year, amounting to $2.2 billion ($1.9 billion for Q1 last year). The main share of exported goods was textiles ($805.7 million), base metals and products made from them ($386 million), as well as vegetable products ($221.3 million). Compared to the same period last year, exports of services increased by 31%, or by $133 million, amounting to $557.3 million. At the same time, the increase in trade turnover in services is the result of a recovery in global business activity, as well as a significant increase in international travel this year. As for imports, compared to the same period last year, imports of goods increased by 41%, or by $2.0 billion, and amounted to $6.7 billion. The main share of imported goods was machinery, equipment, mechanisms ($1.5 billion), base metals and products from them ($974.7 million), chemical industry products ($838.3 million), as well as means of land, air and water transport ($735.2 million). Compared to the same period last year, imports of services increased by 61%, or by $516 million, and amounted to $1.4 billion. “The main changes in the structure of imported services compared to last year fall on trips, which increased by $284.3 million. In addition, an increase was observed in transport services – by $237.7 million,” the report reads.

Source: The Trend

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EU-India FTA: Need of the hour

Enhancing strategic partnership key to future ties As European Commission President Ursula von der Leyen lands in New Delhi for her first visit, the war in Ukraine is likely to dominate her agenda. However, there are other issues that are equally important for both the sides as they look to enhancing their strategic partnership. A free trade agreement ought to top this list. The flurry of visits by international leaders to New Delhi seems to be getting even more exciting. British Prime Minister Boris Johnson has been hogging the limelight with his rather unsubtle images during his visit to India and one can expect that to continue as the maverick leader meets Indian Prime Minister Narendra Modi in New Delhi today. Johnson’s agenda in India has been a mixed basket, with Ukraine somewhere near the top, but by far it is trade and investment that seems to be the key to this visit, going by the utterances by Johnson, his Indian hosts and the two entourages. The details are likely by the end of the day once the official visit comes to an end and Johnson heads back to the United Kingdom. Hours after Johnson would have landed back in London, another high-profile European visitor would be packing her bags on an equally important visit to New Delhi. Indeed, European Commission President and the de-facto head of the European Union Ursula von der Leyen will be reaching India on Sunday on a two-day trip. Her agenda would also be dominated by Ukraine and indeed her office has already referred to the importance that she attaches to this issue vis a vis Indian stance which has so far disappointed the Europeans and their American allies. But, while she is in New Delhi, neither India nor the EU should ignore the economic side of the relationship which faces the threat of stagnation. In the face of fast changing geopolitical developments India and European Union cannot afford to ignore their strategic economic interest, and a free trade agreement between them could be important. The FTA will not only bring EU and India businesses closer but also create new dynamics in the world of trade and business in the two continents. In this, an FTA is the next frontier in the EU-India strategic partnership. It is unthinkable that the two largest democracies and trading partners who are in the negotiation for a Free Trade Agreement for last 15 years have not been able to design a trade architecture to deepen their strategic relations. But this could be changing now. After seven years of stalled negotiation for a comprehensive trade agreement, European Union and India have come back on the negotiating table. This “de-freezing” of the statusquo appears to have been necessitated because India gaining confidence in negotiating free trade agreements. In the last two months, India has successfully negotiated two trade agreements (with United Arab Emirates and Australia). India hopes that with EU too it can rebuild its trade negotiating strategy in the background of the above two successfully negotiated FTAs. There is also a political element into India’s aggressive negotiating strategy. The recent state elections in which the ruling party was a major beneficiary, has given Prime Minister Narendra Modi the required strength to take hard decisions. Also, the general election still months away, PM Modi can afford to take risk of economic reforms. The surge in India’s goods and export reaching more than USD 400 billion has added self-confidence in India’s policies.

Brussels comes calling again The meeting in Brussels in the first week of April with EU trade officials was to exchange their negotiating positions in the wake of the developments of the last seven years and to take stock of the lost decade. It appears that the Indian Commerce Secretary was able to convince the EU side that if EU was serious to have the FTA inked, it must also take into account the economic developments taking place around the world currently and how both EU and India can be reliable, dependable economic and trade partners. In a way, this was a positive meeting between EU and India with meeting of minds. Both parties have decided to meet again in New Delhi in the middle of June to give their negotiating framework a serious direction. Both agree that FTA would be a game changer for social and economic development in the two continents. War in Ukraine: Common concern but limited choice The Russia-Ukraine war, that has come on top of the ongoing effects of the Covid-19 pandemic, is exacerbating international food and fuel price volatility. It has already contributed to spiking food prices, with possible major consequences for global food security. Crude oil is also hovering close to record highs and neither India nor the EU are insulated from these price rises. There is a general view among the European leadership that by staying away from the conflict India has missed an opportunity to play a decisive role in the global affairs. This has come into greater focus due to India’s close relations with the European Union. Although India has nurtured progressive relations with EU for last several years but the fact that even after 22 years of strategic partnership, Europe has failed to create significant security and economic conditions for India to have a stake in Europe, should be seen as Europe’s failure. Also, had there been a free trade agreement in place, India’s position could have been different. However, it would not be wrong to say that the longer is India’s silence and deeper India shelters under its non-aligned policies, the harder it will be for India to seek support in its global ambitions. Textile could be big beneficiary But it is not all grim for both sides. Their differences on Ukraine apart, they have managed to progress in trade talks and one important outcome of the meeting in Brussels was that EU has agreed to include textile and garment in the negotiation agenda. This is a major development because Indian textile export to EU has been falling over the years and competition from other nations as well as the GSP plus trade privilege to Pakistan being some of the factors. Pakistani exports to the EU are dominated by textiles and clothing, accounting for nearly 80 pc of Pakistan’s total exports to the EU in 2020. The EU absorbs nearly 34 pc of the country’s total exports to the world. Around a quarter of the items imported to the EU from Pakistan are from the textile sector, like bed linen, table linen and toilet and kitchen linen. The textile industry contributes over 60 pc to the country’s exports. In a way, India’s loss is Pakistan’s gain in the textile sector. India’s apparel exports to EU over the past five years have grown 2.6 pc, while those by Bangladesh & Vietnam galloped at 9.6 pc. The textile industry has been trying to hold its own in the face of challenges like surge in cotton prices, acute labour shortages and competition from nations such as Vietnam and Bangladesh. A free trade deal could have proved extremely significant for textiles going forward to leverage the opportunity presenting itself. Europe is a major market for Indian textile products including apparels, and any incentives will help India to increase its export to Europe. Indian textile export to EU still attracts nearly 10 pc tariff. As Pakistan is not able to fulfil its textile quota because of continuing financial crisis in the country, India should have taken advantage of this and impressed upon EU with offer of export at reasonable tariff. In my view India has lost both time and opportunity and it would not be easy for the country to compete with some Asian countries who have become major exporter to EU to fill the gap vacated by Pakistan. This also shows the poor policy and planning and of course, lack of seriousness in taking the trade cause with EU with strategic strength. Is it finally time for FTA? EU and India are learnt to have exchanged their positions on the issues that had forced them to ‘freeze’ their negotiations eight years ago. Some of the irritant issues that includes key agricultural and dairy products, sanitary and phytosanitary standards or SPS, automobiles, and some issues of digital trade. If an agreement on FTA were to be reached, there would be vast with implications for all sectors and constituencies, including agriculture and dairy, key industrial products, medicines, and the digital economy. It could also bring in a host of regulatory issues in question in both continents. However, a trade agreement will provide a competitive edge for European and Indian businesses in the face of economic slowdown. By reducing and eliminating certain barriers to international trade and investment, FTA will benefit Indian and EU exporters, importers, producers, and investors. A renewed engagement in the EU-India trade negotiations, which should focus on addressing a number of issues where progress would improve business conditions and support the investment that India needs. Besides textiles, another key area of concern for India relates to its large pharmaceutical industry. For many years India has played a pivotal role in providing a sustainable supply of quality-assured generic medicines that are vitally important for public health systems around the world. At no time perhaps has this aspect of India and its know-how been more visible to the entire world than it has been over the past two years since the outbreak of the pandemic when almost all parts of the world, including the rich countries, waited anxiously for their share of Covid-19 vaccines manufactured in India. Thus, the EU must recognise that it is critical for the safety and health of the world that the EU-India FTA agreement remains free of TRIPS-plus measures and heavy-handed enforcement provisions that could jeopardise access to, and production of, affordable generic medicines. Indeed, such a provision would almost certainly come back to bite the Europeans themselves. With large differences still remaining on other issues like patents, data treatment and the like, it may be preferable that both the sides start working on less controversial issues first and the more difficult ones can be taken up later, as any deal there will take time to materialise. Multilateral rules for free-trade agreements: WTO factor Negotiating a free-trade agreement will need both EU and India to satisfy all the rules of the World Trade Organisation of which they are members. In the context of next stage of the negotiations that both EU and India want to move, it is important to know that the internationally agreed rules for the content of free-trade agreements fall mainly under the purview of the WTO. In other words, free-trade agreements have to meet not only the WTO rules and disciplines, but they may also have to satisfy many other international requirements contained in multilateral conventions. A key rule, and in a way the guiding factor, of the multilateral trade system is that reductions in trade barriers should be applied, on a most-favoured nation basis, to all World Trade Organisation’s members. This means that no WTO member should be discriminated against by another member’s trade regime. However, regional trade agreements (RTAs) are an important exception to this rule. Under RTAs reductions in trade barriers apply only to the parties to the agreement. This exception is allowed under Article XXIV of the General Agreement on Tariffs and Trade (GATT) for trade in goods, in Article V of the General Agreement on Trade in Services (GATS) for Trade in Services and in the Enabling Clause for developing countries. There are two major types of regional trade agreements under the WTO – customs unions and free trade areas. Some countries may also sign interim agreements, which operate during a transition period, ultimately leading to the creation of a customs union or a free trade area. WTO rules state that the same trading terms must be applied to all WTO members, unless there is a trade agreement between 2 or more countries. For the above reasons both parties have decided to meet in New Delhi after the WTO meeting which takes place in the middle of June in Geneva. This will help both parties to take into account the WTO rules and will satisfy the issues that fall under WTO rules. UK-India FTA As UK-India FTA negotiation is progressing on the expected lines and they are slowly coming to the stage of “zeroing” the most difficult and most complex issues, it could also become a factor that would influence EU and help India in the negotiation. The visit of the British Prime Minister Boris Johnson to Delhi to discuss several strategic issues including the FTA, reaffirms that UK and India are on the right course and on same wavelength on the negotiation. It appears that India is far keener to ink an FTA with Britain than with the EU in the present circumstances. The UK-India FTA is predicted to boost Britain’s total trade by up to GBP 28 billion pounds annually by 2035.

Challenges for trade diplomacy This is also a testing time for trade diplomacy for both EU and India. In any trade agreement, give and take is the secret and this should govern India’s trade policies. India should look at the long-term gain and how through the FTA it could make the EU not only a dependable trading partner but also a strategic partner in true sense. India and EU will need to recognise that if the negotiation has taken more than 15 years and still not complete, there are issues that are politically and economically sensitive. They must avoid a situation where a trade deal becomes the source of social unrest. The EU and India are like a multi-generational family in which there is a small amount of shifting of the extended family, sometimes with friction, but with continuity of the group. Absence of any significant “give and take” for both EU and India will only hurt their interests in long term. It is therefore time to implement some innovative ideas so that they can ink the trade deal which will become guiding factor for future trade negotiations for both the EU and India. -Sunil Prasad is secretary general of the Europe India Chamber of Commerce and lives in Brussels

Source: Media India

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UK government confirms list of luxury goods sanctions against Russia

The UK government has confirmed the list of products which face an export ban to Russia, which covers products priced over £250 including handbags; garments, clothing, accessories and shoes; carpets, rugs and tapestries; pearls, semi-precious stones, and jewellery; sports equipment. The statutory instrument has laid down the list of banned luxury goods. The list contains the various HS codes and outlines that the sanctions include any item that falls within the codes, provided that the sales price per item exceeds £250, UKFT said in a press release. UKFT had prepared a briefing document to outline some of the implications of UK and EU sanctions on Russia and Belarus following the Russian invasion of Ukraine, which is available to UKFT members. It also looks at the interaction of the UK’s sanctions and bans and those levelled by other countries, including the EU, as these too will have a direct bearing on UK businesses. It covers import bans from Russia/Belarus into the UK, UK export bans on luxury fashion and textiles, EU export bans on luxury fashion and textiles, likely outcomes of the conflict and their impact on export, expropriation and breach of contract and actions UK businesses should be taking now.

Source: Fibre 2 Fashion

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