The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 21 MAY, 2016

NATIONAL

 

INTERNATIONAL

 

Govt committed to help exporters in the best possible way: DGFT

The Government of India is committed to help trade industry in the best possible way and consider them as a stakeholders and partners in the economic revival process of the country said Anup Wadhawan, Director General of Foreign Trade (DGFT). The DGFT said that efforts are to move to fewer footfalls and paper work in its Offices all over India and for seamless flow of trade Government is working on a single window clearance system to ease of doing business. Regarding Merchandise Exports of India Scheme (MEIS), Wadhawan informed that after announcement of the Scheme on 1st April, 2015, Rs. 4000 crores has further been put in the Scheme covering more tariff lines and markets. As and when Government release further funds for the Scheme, more tariff lines will be considered by the Committee headed by the Commerce Secretary taking into all aspects of the Scheme. Wadhawan informed that his Department has been taking necessary steps to assist the exporters in their export efforts and announcements of several recent measures are in this direction. He was speaking in New Delhi in an Interactive Session organized by the Federation of Indian Export Organisations (FIEO) and EEPC India on April 20, 2016.

Speaking on the occasion S C Ralhan, President, FIEO hoped that exports will move into positive territory from June onwards and the continuous downfall since December, 2014 will come to an end as exports data released for April, 2016, haves hown promising results. Ralhan said that the recent measures announced by DGFT like resolving landing certificate issue, etc. will make the things easy and add to the competitiveness while simultaneously reduce transaction cost. The FIEO Chief urged upon the DGFT to address the problem of simultaneous availment of EPCG and SHIS which has landed many exporters into problem for no fault of their own besides considering release of the Target Plus benefits and Incremental Exports Incentivization benefit for 2013-14 at the earliest.

Resolving the issue of separate MEIS application for exports made from each EDI Port is also equally important, Ralhan added. The Session was attended by more than 80 prominent exporters from the Region who had interaction with the DGFT on the issues being confronted by them in their export efforts and deliberated the issues and suggestions which were given a patience hearing by the DGFT and assured wherever possible he shall try his best to resolve such issues hindering export growth.

SOURCE: The SME Times

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List of countries exempted from testing Azo Dyes samples for export of textiles to India extended

Testing samples of presence of Azo Dyes has been exempted for import of textile and textiles articles originating from five more countries – Australia, Canada, Japan and South Korea along with the existing list. “Australia, Canada, Japan and South Korea have been added in the Appendix-2X under Foreign Trade Policy, 2015-20,” Directorate General of Foreign Trade (DGFT) has said in a notification. In addition to countries already included herein, import of Textiles and Textiles Articles from these countries is also exempted from testing of samples for presence of Azo Dyes, DGFT notification added. The existing list of countries which are exempted for testing samples are – European Union (EU) Countries; Serbia; Poland; Denmark; and China.

SOURCE: The KNN India

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India to sign agreement for Chabahar port with Iran

Ahead of Prime Minister Narendra Modi’s two-day visit to Iran on May 22 and 23, the government Friday said that a trilateral agreement will be signed during the visit between India, Iran and Afghanistan on a transport and transit corridor using the Chabahar port as a hub. Officials said the signing of the agreement is likely to be witnessed by Modi and Iranian President Hassan Rouhani. Afghanistan government officials indicated that President Ashraf Ghani is also likely to be present in Tehran for the signing of the pact, and details are still being worked out.

PM’s visit to Tehran: With Iran, historical ties and a history of ditheringPM's visit to Iran: The New Delhi-Tehran story needs energy to take it forward Focus on Chabahar port project as Sushma Swaraj meets Iranian leadersIran offers India a bigger role in Chabahar port: ReportPM Narendra Modi, Hassan Rouhani discuss energy, connectivityIran port: India for Kabul on board,talks PM’s visit to Tehran: With Iran, historical ties and a history of dithering PM's visit to Iran: The New Delhi-Tehran story needs energy to take it forwardFocus on Chabahar port project as Sushma Swaraj meets Iranian leadersIran offers India a bigger role in Chabahar port: ReportPM Narendra Modi, Hassan Rouhani discuss energy, connectivityIran port: India for Kabul on board,talksPM’s visit to Tehran: With Iran, historical ties and a history of ditheringPM's visit to Iran: The New Delhi-Tehran story needs energy to take it forwardFocus on Chabahar port project as Sushma Swaraj meets Iranian leadersIran offers India a bigger role in Chabahar port: ReportPM Narendra Modi, Hassan Rouhani discuss energy, connectivityIran port: India for Kabul on board,talks. External Affairs Minister Sushma Swaraj and Shipping and Transport Minister Nitin Gadkari had prepared the groundwork over the last few months, even as Iran came out of the international sanctions regime.

On his arrival, Modi will be accorded an official reception following which he will hold talks with Iran’s Supreme Leader Ayatollah Sayyid Ali Hosseini Khamenei and President Hassan Rouhani. “The two leaders (Modi and Rouhani) will discuss in depth bilateral relations, and exchange views on regional situation and global issues of mutual interest,” Gopal Baglay, joint secretary (Pakistan, Afghanistan and Iran) in the Ministry of External Affairs, said. The two leaders will then witness the signing of bilateral documents after which Rouhani will host a lunch in Modi’s honour. “Thereafter, the trilateral agreement on Transport and Transit Corridor among India, Afghanistan and Iran will be signed at a separate event,” Baglay said. “It will highlight the significance India attaches to developing connectivity, using Chabahar as a regional hub.” The joint secretary said the bilateral contract on development and operation of Phase I of Chabahar port would be signed between Indian Ports Global and Arya Banader of Iran. “Documents on EXIM Bank line of credit to Iran, including for the port, will also be signed,” he said. India will invest over $200 million as a line of credit, of which EXIM Bank will extend $150 million, in the first phase. Progress on the Farzad B gas field would further elevate India’s energy partnership with Iran beyond a buyer-seller relationship, Baglay stated.

SOURCE: The Indian Express

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‘India can replace China as world’s leading textile manufacturer’

India could soon replace China as the world's leading textile manufacturer, with the latter shifting its focus on manufacturing activities, said the president of South India Chamber of Commerce and Industry, Palani G Periyasamy, on Friday. He also urged the domestic textile industry to focus on modernisation and keep itself updated on the latest trends to remain globally competitive. "The textile industry has a remarkable future, but there will be a stiff competition in the global arena. One has to remain fit to grab opportunities. With China shifting its focus on manufacturing activities, India, currently the second largest textile manufacturing country in the world, could become the global leaders in this front in the coming decade. For this, manufacturers should concentrate on innovation, energy services, automation and online control to become globally competitive," Periyasamy said. He was speaking on the sidelines of the inaugural day of Texfair 2016, a four-day exhibition for the textile industry, at CODISSIA here. He said the textile industry should work to its potential by making the best use of special schemes announced by the central and state governments. The four-day international fair, organised by the Southern India Mills' Association (SIMA), is expected to showcase modern developments in the industry. Speaking on the occasion, president of SIMA, M Senthilkumar, said "Textile mills on an average spend 2.5%-3% of their annual turnover on spares and accessories and 4%-6% on modernisation. We hope that this fair would be an ideal platform for these mills to zero in on their requirements, meet all suppliers under one. The 10th edition of event has 220 exhibitors displaying their products across 231 stalls. Major products on display are textile machinery, spares, accessories, testing equipment and electrical and electronic components. The chairman of SIMA, Senthilkumar, said event features exhibitors from China and Italy, besides Gujarat, New Delhi, Goa, Maharashtra and Punjab. The fair would conclude on Monday at 6pm.

SOURCE: The Times of India

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Exim Bank net profit plunges 56.5% to Rs 316 cr in FY16

Exim Bank on Friday reported a 56.5 per cent plunge in net profit to Rs 316 crore for the fiscal 2016, despite logging a healthy growth in loan disbursals, which crossed Rs 1 lakh crore mark for the first time. The lender had posted a profit of Rs 726 crore in FY15. The company did not attribute any reasons for the massive drop in profits, but said its bad loans grew by 26 basis points to 0.86 per cent during the reporting year. Exim Bank Chairman and Managing Director Yaduvendra Mathur said the bank's loan portfolio grew 18 per cent to Rs 1,02,537 crore, thus crossing the Rs 1 lakh crore for the first time. He said net worth of the bank too increased by 16 per cent to Rs 11,486 crore, while non-funded portfolio rose 6.5 per cent to Rs 11,555 crore and the total business increased 17 per cent to Rs 2,07,409 crore. Mathur said, as of March end, the bank's lines of credit stood at 203, covering 63 countries with credit commitments of over $14.26 billion. During the year, the bank inked nine LoCs amounting to $2.61 billion with Bangladesh, Cote d'Ivoire, Congo, Guyana, Guinea, Tanzania, Zimbabwe and Myanmar.

During the year, it funded 95 project export contracts in 39 countries by 50 exporters, aggregating to Rs 22,551 crore, while under the buyer's credit it sanctioned $2.19 billion for 22 projects valued $2.49 billion. The bank has also given in-principle commitment to support several projects and the current active pipeline includes 36 proposals aggregating $5.11 billion under this scheme. During the year, its approvals under the overseas investment finance programme amounted to Rs 5,264 crore, comprising Rs 5,217 crore towards acquisition/setting up of 26 overseas ventures and Rs 47 crore towards renewal of existing facilities. During the year, the bank raised debt worth Rs 23,183 crore and foreign currency resources of Rs 13,781 crore.

SOURCE: The Business Standard

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Indian economy is estimated to register 7.6 percent growth in 2015-16: Jaitley

Union Finance Minister Arun Jaitley has said the Indian economy is estimated to register 7.6 percent growth in 2015-16, notwithstanding contraction of global exports and two consecutive years of shortfall in monsoon. Amid weaker outlook across the globe, he said that India’s experience of strong economic growth, comfortable price situation, low Current Account Deficit (CAD) and adherence to path of fiscal recovery have projected it as an outpost of opportunity for global investors. Jaitley, who was speaking at a meeting with a group of Executive Directors (EDs) of the World Bank Group here yesterday, said the focus of the present government is on areas like non-conventional power generation, the nation-wide sanitation campaign, electrification of villages in India, major and minor irrigation projects and rural housing for all among others.

Highlighting the various macroeconomic variables favorable to India, he pointed out good monsoon forecast, political reform process and low current oil prices as the key drivers of economic growth. The Finance Minister emphasized on the macro-economic benefit that India is experiencing due to the fall in oil prices. He stated that the fall in global oil prices during the time when India was recovering from the impact of global financial crisis, has greatly benefitted India in the recovery process.

Talking about the World Bank Group’s role in world development, Jaitley stressed on the need for the World Bank to have a larger capital base, more activity and more projects. He also stated that the role of World Bank Group could be expanded in areas like social sector – education and health, agricultural development, small-scale industry and handlooms etc. The discussions held ranged from the performance of ongoing World Bank Projects in India to various policy issues related to the World Bank Group financing. A group of nine World Bank Executive Directors is currently on a six- day official visit to India as a part of their South Asian Region visit. They will also be visiting Bangladesh and Sri Lanka. In India, their visit covers meeting the senior Government of India officials and getting a firsthand experience of the implementation of the World Bank projects in Agra, Bhubaneswar and Jaipur.

SOURCE: The Financial Express

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Firms approaching arbitration tribunals to pay service tax: CBEC

Firms with a turnover of over ₹10 lakh who go in for arbitration proceedings will be liable to pay service tax at the rate of 14 per cent. “The services provided or agreed to be provided by an arbitral tribunal to a business entity (turnover exceeding ₹10 lakh)… is taxable under reverse charge mechanism and recipient of service is liable to discharge service tax liability,” said the Central Board of Excise and Customs in a new clarification after doubts arose over who would pay the service tax. As part of efforts to broaden the tax base, Finance Minister Arun Jaitley had in the Union Budget 2016-17 included the services provided by “a senior advocate to an advocate or partnership firm of advocates providing legal service” and “a person represented on an arbitral tribunal to an arbitral tribunal” within the ambit of service tax. These are now taxed at 14 per cent from April 1, 2016. However, with firms paying hefty fees to arbitrators and tribunals, the question of who would pay the service tax arose. The CBEC noted that the concept of “forward charge mechanism” or payment of the tax by the service provider does not apply in this case and is not the correct interpretation of law. “Services are provided or agreed to be provided by the panel of arbitrators, as comprising the several natural persons on the said panel, to the business entity or to the arbitration institution approached by the business entity for purposes of arbitration,” it said. The CBEC, however, said that the services provided by an arbitral tribunal to any person other than a business entity and a business entity with a turnover up to ₹10 lakh in the preceding financial year are exempt from service tax.

SOURCE: The Hindu Business Line

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Rupee ends at over 2-1/2 month low, down 8 paise to 67.44

The rupee on Friday weakened by another eight paise to close at two-and-a-half-month low of 67.44 to a dollar, falling for the seventh straight session, on persistent demand for the US currency from banks and importers amid higher crude oil prices and fall in domestic equities. Foreign capital outflows also affected the rupee value against the dollar, a foreign exchange (forex) dealer said. Brent crude powered back above $49 a barrel in Asia on Friday, as oil prices resumed their rise after the dollar eased and militants blew up another pipeline in African producer Nigeria. The rupee resumed lower at 67.43 as against Thursday's closing level of 67.36 at the Inter-bank forex market and slid further to 67.50 on initial dollar demand from importers. However, it recovered afterwards to 67.31 before ending at more than 2-1/2 month low of 67.44 per dollar, showing a loss of 8 paise or 0.12 per cent. The domestic currency has lost 88 paise or 1.32 per cent in seven days. It hovered in a range of 67.31 per dollar and 67.50 per dollar during the day. The domestic currency had last ended at 67.54 per dollar as on March 2. The dollar index was up 0.03 per cent in the late global trade against a basket of six global currencies. Meanwhile, the RBI fixed the reference rate for the dollar at 67.4076 and euro at 75.5437. In cross-currency trades, the rupee recovered against the pound sterling to finish at 98.19 from 98.55 yesterday. However, it dropped against the euro to 75.65 from 75.49. The domestic currency recouped against the yen to 61.09 per 100 yens from 61.33 previously.

SOURCE: The Business Standard

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Indo-UAE Global Investment Summit to boost ties with Gulf Corporation Council

The Indo-UAE Global Investment Summit to be held here next week will boost trade between India and the Gulf Corporation Council (GCC) countries in sectors such as infrastructure, construction, renewable energy and oil & gas. The day-long summit on May 24 will explore prospects for expansion and diversification of trade opportunities between India and GCC nations to widen the two-way trade basket. The GCC comprises six Middle Eastern countries -- Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman. "India has emerged as the new frontier of investment opportunities, especially with the initiatives by government to facilitate trade and investment," PHD Chamber said. The Government in March cleared an MoU between India and the UAE to explore opportunities for mobilisation of up to $75 billion long-term investment in the National Investment and Infrastructure Fund (NIIF). In December 2015, the government had set up the Rs 40,000 crore NIIF, which is an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 45.51 per bbl on 19.05.2016

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 45.51 per barrel (bbl) on 19.05.2016. This was lower than the price of US$ 46.72 per bbl on previous publishing day of 18.05.2016.

In rupee terms, the price of Indian Basket decreased to Rs. 3059.64 per bbl on 19.05.2016 as compared to Rs. 3126.44 per bbl on 18.05.2016. Rupee closed weaker at Rs 67.23 per US$ on 19.05.2016 as against Rs 66.91 per US$ on 18.05.2016. The table below gives details in this regard:

 

Particulars

Unit

Price on May 19, 2016 (Previous trading day i.e. 18.05.2016)

Pricing Fortnight for 16.05.2016

(28 Apr to 11 May, 2016)

Crude Oil (Indian Basket)

($/bbl)

45.51                (46.72)

43.00

(Rs/bbl

3059.64            (3126.44)

2859.50

Exchange Rate

(Rs/$)

67.23                (66.91)

66.50

 

SOURCE: PIB

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Trans Pacific Partnership Agreement - Ratification and Key Impact for Vietnam

If the TPP is ratified and goes into effect, what do you see as the key areas of impact on Vietnam and its economic future?

Answer: Vietnam would be the largest beneficiary of this trade pact. Statistics show that by participating in the TPP, Vietnam’s GDP would add an additional increase of 13.6% to the baseline scenario. According to the World Bank and other institutions, Vietnam’s GDP in 2020 will increase by USD 23.5 billion and USD33.5 billion in 2035. Export value will also increase by USD 68 billion in 2025. Vietnam’s real income by 2025 is also forecast to increase by 10.5%, leaving Malaysia’s as the second highest income rising country out of the TPP members far behind at 5.6%.

TTP will help Vietnam balance relationships with key markets, approach larger markets including the U.S, Japan, Canada, boost import-export, reduce import deficit, and attract foreign investment. In addition, TTP will also help Vietnam’s economy allocate its resources more effectively, enabling active supports to the processes of restructuring, innovation and improving regulations, and improve administrative reforms.

What industries do you see within Vietnam would benefit the most, and where do you see major risks to established industries if the TPP is ratified?

Answer: The TPP will have significant positive impact on Vietnam’s exports in textile, footwear, agriculture, forestry and fisheries sectors. This is due to major reduction in import duties for goods from Vietnam, especially in Japan and the United States. Supply chain established after the effectiveness of the TPP will also bring Vietnam a lot of new opportunities. Recently, many big corporations have chosen Vietnam as a part of their production chain of high tech products. The TPP will help to develop this trend. The livestock industry will suffer from fierce competition as a result of the TPP. In Vietnam, the livestock industry is still small, not modernized, mainly household scale with participation of small and medium enterprises. Products have certain difficulties in meeting high quality and sanitary standards.

Textile industry is also a sector which bears negative impact from the TPP. The yarn-forward rule of origin makes Vietnam’s textile products difficult to be entitled with preferential import duties, as the domestic weaving industry has not well developed. Vietnam still has to import cloth and fabrics from non-TPP countries (for example, China). The textile industry sees this as an opportunity to re-structure the whole industry and improve the supply chain.

In your view, if the US does not ratify the TPP, do you see the RCEP as a replacement for Vietnam? And if so, what do you see as the major impacts (positive or negative) on Vietnam, as a result of implementing the RCEP without having a TPP?

Answer: I take a positive view that the TPP will sooner or later be ratified. However, in the unlikely worst scenario that the TPP will not be materialized, Vietnam will lose a great opportunity to integrate its economy deeper in the Asia- Pacific Region. RCEP has a lower level of trade liberalization and smaller commercial scale. RCEP does also not take a single-package approach, or in other words, it is not a comprehensive trade agreement which covers new issues of the era such as labour and environment standards, competition, SOEs, government procurement, IP rights, etc.) as the TPP. Thus, RCEP’s positive impacts on transforming Vietnam’s economy will not be as large as the TPP’s. Without the TPP, Vietnam will face strong competition from China – which is not a party to the TPP and this is Vietnam’s advantage over China. RCEP will put Vietnam in a disadvantaged situation in its relationship with China as a result of more liberalized and preferential bilateral trade from RCEP. Vietnam will no longer benefit from RCEP due to the similarities in the export structure between Vietnam and China.

If the TPP is ratified and goes into effect, do you see any effect with Vietnam – China trade? Especially given that there is already a trade agreement in place as part of the ACFTA.

Answer: Vietnam’s participation in the TPP will not harm Vietnam – China trade. I note that Vietnam has great trade deficits with China. However, while China is the biggest trading partner of Vietnam in terms of two-way trade, the United States is still Vietnam’s largest market. By being part of the TPP, Vietnam can take advantage of this opportunity to access to other TPP members’ market, improve its competitive capacity, thus reducing its reliance on China. Vietnam – China trade relations will then be improved towards better balance, stability and for mutual benefits.

SOURCE: The Lexology

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Czech Rep to cement trade ties with Pakistan, sees large scope in textile

Jan Fury, Ambassador of Czech Republic to Pakistan, speaking at a meeting of Pak-Czech Business Council on Wednesday said that his country is extremely interested in investing in China-Pakistan Economic Corridor, and to access the Central Asian states through Pakistan. He further added that a high-level Pakistani delegation was due in Prague shortly, with which many issues would be taken up, including bilateral trade and cooperation, CPEC and route to the resource-rich Central Asia. The Czech Prime Minister would also be visiting Pakistan to cement the trade ties, as there existed a large scope for cooperation in the fields of textile, steel, transportation, IT, electronics and heavy machinery. The ambassador said that Pakistan’s major exports were textile products, which must be diversified. He underlined that their trade with India is satisfactory but not as per the potential with Pakistan for which both the governments and the business community could play their role. They need to improve communication between the business communities of the two countries as the trade volume between the two countries is low for which he also invited Pakistani businessmen to take part in the Europe’s oldest trade fair, scheduled in September, which would help explore avenues for enhanced collaboration and bring the business communities of Czech Republic and Pakistan closer. The participants, led by Amir Atta Bajwa, assured all-out cooperation for enhancing economic ties between Pakistan and the Czech Republic, and pledged that not only they would heavily participate in the trade fair but would also establish a Pakistan pavilion there. The Pak-Czech Business Council meeting was attended by Council Chairman Amir Atta Bajwa, FPCCI VP Jauhar Ali Raki, ICCI President Atif Ikram Sheikh, Chairman Coordination FPCCI Malik Sohail and representatives of Sargodha and Faisalabad Chambers of Commerce.

SOURCE: Yarns&Fibers

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SWIFT tells banks to share information on hacks

International financial messaging service SWIFT told clients on Friday to share information on attacks on the system to help prevent hacking, after criminals used SWIFT messages to steal $81 million from the Bangladesh central bank. Earlier on Friday, Reuters reported that Wells Fargo, Ecuador's Banco del Austro (BDA) and Citibank, whose managing director, Franchise Risk & Strategy, Yawar Shah, is SWIFT's chairman, did not inform SWIFT of an attack last year in which more than $12 million was stolen from BDA. The banks and Shah all declined to comment on why they did not inform SWIFT. Banks use secure SWIFT messages for issuing payment instructions to each other. The network is considered the backbone of international finance but faith in its security has been rocked by the theft from Bank Bangladesh's account at the Federal Reserve Bank of New York. SWIFT said in a communication to users on Friday that they should "immediately inform SWIFT of any suspected fraudulent use of their institution's SWIFT connectivity or related to SWIFT products and services."

SWIFT spokeswoman Natasha de Teran said banks whose SWIFT systems had been hacked should inform SWIFT. She said she was unable to say whether banks, such as Wells Fargo, that received messages they later discovered were fraudulent, should inform SWIFT. SWIFT has a role to play in educating its members about cyber threats, said Doug Johnson, senior risk adviser at the American Bankers Association, noting there were disparate levels of security across financial institutions globally. The ABA is a powerful lobby group for the U.S. banking industry. “This is a teachable moment for everybody who uses the SWIFT system to recognize that there is an effort by criminals underway to compromise the end points of companies using that system,” Johnson said in a statement to Reuters after SWIFT communicated to its users on Friday. SWIFT is especially concerned about the use of malware to access interfaces with the SWIFT network. The Belgium-based co-operative, which is owned by its user banks, said it needed technical information from systems which have been compromised with malware to better understand the risks of attack. Malware was used in the hacks on Bank Bangladesh in February and in the BDA case in January 2015. "It is essential that you share critical security information related to SWIFT with us, "SWIFT said. SWIFT told clients it would notify them as soon as possible of cases where malware had been used to attack systems "so that you can better target your preventative and detective efforts". SWIFT did not inform clients about the BDA theft because it was unaware of it, a spokeswoman told Reuters.

SOURCE: The Reuters

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