Enthused over encouraging gross domestic product (GDP) numbers, finance minister Arun Jaitley on Thursday said the government will push ahead with its reform agenda to retain the fastest growing large economy tag and help India move towards becoming “a more developed economy”. “For India to realise its full potential for the next few decades, India certainly needs to pursue its programme for economic growth more vigorously and it’s only then by maintaining higher level of growth that we can attract best response as far as poverty alleviation is concerned,” he said delivering a lecture at Osaka University.
Notwithstanding an unsupportive global environment, India clocked a GDP growth of 7.9% in the January-March quarter and 7.6% for the entire fiscal 2016 on account of the government’s pro-growth policies, he said. “India will maintain this paramount position of fastest growing economy in the world. And if we did that we can present yourself as a society which evolves from an emerging economy and moves towards a more developed economy.” “And we have a pipeline of reforms still left over the next few years to be implemented and notwithstanding global slowdown and two years of bad monsoon, we have reached a situation where we still have the highest growth rate in the world,” Jaitley said.
On future outlook, Jaitley said he wasn’t sure if the world growth would be supportive, but monsoon in India this year promises to be better and that itself will push the growth. “Our reform process I am confident is going to continue. It had helped us in restoring the credibility of the economy and while restoring the credibility both domestic and international investors feel much more confident about investing in India. That has helped us,” he said. Jaitley, who arrived in Osaka on the second leg of his six-day investor-wooing trip to Japan, said he has seen enthusiasm during his visit and various pension and sovereign funds as well as investors were “very seriously looking at India as a possible destination”. “We offer them much better returns and hopefully a combination of these factors are increasing domestic demand,” he said.
SOURCE: The Live Mint
The rupee made a smart recovery against the US currency after a three-day straight fall and ended higher by 16 paise at 67.29 on fresh bouts of dollar selling by banks and exporters. A sharp rebound in local equity markets along with robust capital inflows also supported the domestic unit amid weakness of the greenback in overseas markets. The rupee resumed marginally higher at 67.42 against previous close of 67.45 at the Interbank Foreign Exchange (Forex) market following smooth supply of dollar. It strengthened further to hit an intra-day high of 67.20 before concluding at 67.29, revealing a gain of 16 paise, or 0.24 per cent. The domestic currency had lost 42 paise against the dollar in three-day slide. Meanwhile, the RBI fixed the reference rate for the dollar at 67.2533 and euro at 75.3035. In cross-currency trades, the rupee remained firm against the pound sterling at 97.23 compared to 97.37 earlier, while ended virtually steady against the euro at 75.30. However, it continued to decline against the yen and finished at 61.76 per 100 yens from 61.72 yesterday.
SOURCE: The Economic Times
The government may now decide the red line for each trade negotiation, keeping in mind realities of the country that needs huge funds for development work and rues a relatively low tax-GDP ratio. The estimate was made by the revenue department of the finance ministry at the request of the commerce ministry to help government officials negotiate better, as they seek to balance out interests, often conflicting, of various stakeholders. Such an estimate will also help them gauge how good the other party’s offer is against an Indian commitment. India will participate in the next round of talks for the RCEP from June 12 to 18 in Auckland, New Zealand.
According to the estimate, the potential losses comprise basic customs duties of Rs 64,729 crore, countervailing duties (CVD) of Rs 8,091 crore and special additional duties (SAD) of Rs 2,913 crore, sources told FE. The potential losses will be even higher in the coming years once import picks up. Currently, the country’s average import tariff rate is around 13.5% and in case of non-agricultural items, it’s even lower, at 10%.
Although the CVD and the SAD are imposed even when the basic customs duty is zero, the estimated losses of these taxes are due to the fact that these are levied (in percentage terms) after the basic customs duty is added to the assessable value of an imported product. So, if the basic customs duty is abolished, the CVD and the SAD also drop to a certain extent. The CVD and the SAD are imposed on imported items under the so-called “national treatment principle” to offset any undue disadvantage to a domestic manufacturer (of the same or similar goods) who has to pay local levies such as excise duties and sales tax. They are levied even in cases where the BCD is zero to avoid undue advantage to imported goods over domestic ones. The government has budgeted total customs collection of Rs 2,30,000 crore for 2016-17, including basic customs duty of Rs 64,729 crore, CVD of Rs 116,700 crore and SAD of Rs 34,000 crore. The country’s total customs duty collection stood at Rs 2,09,500 crore in 2015-16, representing 1.54% of its nominal GDP. A former Indian negotiator at the WTO said for a country like India, abolishing the basic customs duty entirely is worth experimentation when commensurate returns are assured. “Ultimately, it’s a political call,” he said. A former commerce secretary recently said India’s free trade agreement with Asean (in goods) in 2009 was guided more by politics than economics, as it was part of the government’s ‘Look East’ policy.
Domestic industry has been critical of the country’s FTA with Asean members, saying its offer on goods was hardly matched by gains in subsequent deals in services and investments and resulted in massive trade deficit. India has been pushing hard to get a fair deal in services and investments in all the current negotiations, including RCEP, if it is making attractive offers in goods (its average tariff of 13.5% is the highest among potential RCEP members, so its sacrifice level will also be greater than others). But sources had earlier told FE that most others are interested only in seeking a better deal from India in goods, but are not willing to offer much in return in services or investments. This could delay the negotiations until a balanced approach is adhered to by all. Another source said: “It’s a myth spread by vested interests that India’s tariffs are a barrier to trade. This is evident from the fact that Chinese goods have flooded the Indian market despite these tariffs,” he added.
India’s imports from China stood at a whopping $60.41 billion in 2014-15, accounting for 13.5% of the country’s total imports, according to the official data. The share of China in India’s total merchandise imports grew further in the last fiscal (up to February) to 16.2%, a sharp rise from 11.3% in 2013-14. What has been vexing Indian negotiators is the tag of being “obstructionists”. “India was blamed for obstructing the WTO’s trade facilitation agreement (TFA) in goods in 2014. Well, it endorsed the TFA in April, but even until now only 81 of the 162 members have ratified it (at least two-thirds of the members must ratify the pact for it to take effect). Why not blame others?” asked the former negotiator at the WTO.
Sources said for a country like India, moderate tariff rates are desirable, as they ensure certain amount of revenue generation along with trade creation. “Studies have pointed out that beyond a point, tariff reduction doesn’t help create additional trade opportunities; it just helps a few at the cost of the rest of a country upon whom higher burden of taxes falls so that revenue losses due to the abolition of the customs tariff is offset,” source said.
SOURCE: The Financial Express
If the Met predictions of above-normal monsoon turn out to be true, India's Gross Domestic Product (GDP) growth could easily cross the 8 per cent-mark in FY17, several representatives of India Inc have said in a survey by Confederation of Indian Industry (CII). The GDP growth for 2016-17 is well poised to be above 8 per cent on the back of higher rural demand and government's economic reforms. The GDP grew by 7.9 per cent in the quarter ended March 2016, beating expectations. As a consequence, full year growth in FY16 accelerated to 7.6 per cent, from 7.2 per cent in FY15. The survey suggests that higher growth in core sectors, which grew by 8.5 per cent in April, can be seen as a sign of things to come. The rise in sales of two-wheelers and the growth in domestic air passenger traffic are among the areas that have shown rising consumer spending.
Although the growth rate of gross fixed capital formation, a proxy for investment, has lagged at 3.9 per cent, CII President Naushad Forbes said, the first quarter of FY17 would show faster growth due to additional spending by the government on infrastructure. This would "crowd in" private investments as well, especially as the interest rates have come down, Forbes added. The share of completed projects as a proportion of projects under implementation has also improved in the quarter ended March 2016, the survey said. The survey results show that growth has bottomed out in the majority of sectors. Also, more sectors have moved from low-growth to moderate and high-growth categories. Capacity utilisation too has picked up, indicating demand acceleration. This reflects the increased growth in private consumption (7.4 per cent) in the official data.
Federation of Indian Chambers of Commerce and Industry (Ficci) also expects high growth, thanks to changing investment environment and business sentiment. "Going ahead, we expect this momentum to be maintained with the government clearly focused on creation of livelihood opportunities through a robust growth performance," said A Didar Singh, Ficci secretary general.
SOURCE: The Business Standard
With the government policies like 'Make in India' and 'Digital India' being in place, crossing eight per cent growth barrier should not be difficult, Railway Minister Suresh Prabhu said on Thursday. “In the last quarter, India grew by close to eight per cent whatever actions taken in the last two years including fixing the balance sheet of the banks, helping the corporates to fix their own balance sheets all of that should add in achieving better numbers in the years to come,” he said at Shriram Sanlam Awards function in the capital. He also asked all the stakeholders, including media, to work together to reach higher growth numbers.
Consumption and investment are two components which are linked to boost growth, he said, adding that both are very much dependent on psychology and sentiment. Indian economy grew at 7.9 per cent in the fourth quarter of 2015-16, taking the overall GDP growth to a five-year high of 7.6 per cent in the fiscal, mainly on account of good performance of manufacturing and farm sectors. Speaking at the occasion, Minister of State for Finance Jayant Sinha said journalists must trust intentions of the government. “The intention of the government is what is in the best interest of the country we are putting nation before anything,” he added.
SOURCE: The Business Standard
Markets regulator Sebi on Thursday proposed warehousing norms for agricultural products traded on National Commodity Derivatives Exchanges, a move which will help in improving the delivery and settlement mechanism. The proposed norms are aimed at ensuring good delivery of commodities during settlement of futures contracts. Under the proposed norms, warehouse service providers (WSP) will be a corporate body with the subscribed share capital of Rs 10 crore. An accredited WSP providing warehousing services would have a minimum net worth of Rs 50 crore for multi-commodities and a minimum net worth of Rs 25 crore for a single commodity. "For a WSP servicing multiple exchanges, the above net-worth requirements shall be increased by the number of exchanges serviced," as per the proposed norms. The commodity exchange would have to ensure that the WSP, its promoters and key management personnel are 'fit and proper' to carry out business of warehousing. "Warehousing infrastructure and its ancillary services play a critical role in the delivery mechanism of the commodity derivatives market. A robust and credible warehousing infrastructure is sine qua non for an effective commodity derivatives market that can inspire confidence amongst the market participants and other stake holders," Sebi said. Sebi has proposed to revise the norms for the WSPs, warehouses, and assayers, while superseding the earlier regulation, on the basis of various observations received during visits to different warehouses, meetings held with the WSPs and national commodity derivatives exchange. The final norms will be put in place after receiving suggestions from all the stakeholders. The Securities and Exchange Board of India (Sebi) has sought public comments on the proposed norms till June 17. The regulator said that for accreditation of WSP, the commodity exchanges will follow a transparent process by issuing open advertisements in leading newspapers and putting up on the exchange website. A WSP can be accredited with more than one exchange.
Besides, the exchange would not make it mandatory that its WSP cannot provide services to another bourse. Sebi said that WSP' promoters should be responsible entities of repute with a good business reputation and credibility and who are in the business of public warehousing for at least three years. They should have an adequate knowledge of and experience in generally accepted warehousing and handling practices for commodities. WSP and its promoters should not have any record of serious violation of laws or being expelled by any exchange in the last three years. The accreditation of a WSP will be subject to renewal after a period of three years unless any expulsion proceedings pending against it. In case of reduction in net worth below the stipulated amount, a time period of six months to one year may be allowed to the WSP to augment its net worth. However, in the event when a WSP is unable to augment the net worth to the requisite level within the allowed time frame, the WSP should not carry out any new business. The WSP should submit an audited net worth certificate to the exchange every six months -- at the end of every June and December, within 30 calendar days. A WSP seeking accreditation with an exchange is required to furnish a refundable security deposit of at least Rs 50 lakh along with the application form. In addition, WSP need to furnish financial security deposits. The exchanges should be responsible for monitoring the warehouses of their accredited WSPs. They also need to ensure independent audit of the stock in the warehouses by expert agencies at regular intervals. The bourses should have to ensure that the WSPs to be eligible for accreditation have reasonable facility and infrastructure for proper handling and storage of commodity, has a Investor Grievance Cell to handle consumer complaints, have a professional management team to oversee its functioning and operations and have its own warehouses. The commodity exchanges should review and appraise operational performance of each WSP every year. "In the event of bankruptcy or insolvency of the WSP or other such contingency, there must be no restrictions placed upon owners/depositors of the commodity wishing to take possession of their individually identified commodity and remove it from the accredited Warehouse(provided rent and handling charges are paid)," as per the draft papers.
SOURCE: The Business Standard
India will attempt to keep the proposed Goods & Services Tax ( GST ) rate as moderate as possible and the government will push for passage of the bill introducing the levy in the upcoming monsoon session of Parliament, finance minister Arun Jaitley said. The GST will replace various indirect taxes with one simple tax , creating a boundary-less national market that some estimate will lift India's GDP by as much as 2%. According to the Constitution (122nd Amendment) Bill, the GST Council consisting of finance minister, minister of state for revenue and state finance ministers will recommend the tax rate. "At what rate the GST Council will start it, I don't know...there have been recommendations which have been made by expert committees, including the one that the ministry of finance had set up. I'm sure we will try to keep rates as moderate as possible," Jaitley told Japanese investors at a Make in India seminar organised by the Department of Industrial Policy & Promotion and the Confederation of Indian Industry. The finance minister, who is on a six-day visit to Japan, said he intended to bring the Constitution amendment bill for GST for consideration of the Upper House in the monsoon session of Parliament, which starts next month. The government's bid to get the GST bill passed in Parliament has been hampered by the lack of a majority in the Upper House. The opposition Congress party has stalled proceedings in the house and has stipulated three conditions, including capping GST rate at 18% in the Constitution amendment bill and scrapping a 1% additional tax on inter-state sales to compensate manufacturing states."...am reasonably hopeful of this being passed. The numbers are overwhelmingly in favour of GST...After the Constitution amendment is approved, there are three legislations that are required to be passed, two by the Central government and one by state assemblies," Jaitley said.
The IT backbone required for implementing GST has made significant headway. The system will provide a standard interface for the taxpayer, including registration, filing of returns and payment of tax, and a shared IT infrastructure between the Centre, the states and other bodies like RBI . Pitching India as an attractive investment destination, Jaitley said the government had undertaken several reforms and the pipeline remains robust with measures. "India has a huge pipeline of reforms left to be implemented over the next few years," Jaitley said, adding that the country is well poised to post better growth on the back of an above-normal monsoon predicted for this year. He said the government had made it easier to do business in the country and brought about predictability in policy. "The government has promised not to change any law halfway," he said. The Centre is also nudging the states to make it easier to do business in the country. Jaitley said India is now the fastest-growing major economy in the world. Its GDP expanded 7.9% in the fourth quarter of 2015-16 and 7.6% in the whole of 2015-16, the government said on May 31. "When the world grows at a faster pace on the strength of the tailwinds that the global economy provides, many economies grow.
But when the global environment is unsupportive and at times obstructive, when shrinkage of trade is taking place - that is the real test because they say when the going is good, everybody is at its best. When the going is challenging, then, to defy the odds and counter the trends is a real challenge. India has received the distinction of being the fastest-growing economy in the last two years, when global growth was slow," he said.
SOURCE: The Economic Times
The Regional Comprehensive Economic Partnership (RCEP) is an initiative to link the ten ASEAN member states and the group’s free trade agreement (FTA) partners—Australia, China, India, Japan, South Korea and New Zealand. In total, the grouping of 16 nations includes more than 3 billion people, has a combined GDP of $17 trillion, and accounts for about 40% of world trade. RCEP is the largest FTA negotiation in Asia, and also the one with the biggest membership, largest scale and widest influences that India has ever participated in. If negotiated successfully, RCEP would create the world’s largest trading bloc and have major implications for Asian countries and the global economy. Negotiations among the 16 parties began in early 2013 and are scheduled to conclude by the end of 2016. So far, 12 rounds of negotiations have been completed, with the 13th round scheduled to take place during June 12-18 in Auckland.
RCEP seeks to achieve a modern and comprehensive trade agreement among members. The core of the negotiating agenda would cover trade in goods and services, investment, economic and technical cooperation, and dispute settlement. RCEP would be a powerful vehicle to support the spread of global production networks and reduce the inefficiencies of multiple Asian trade agreements that exist.
India is a major player in RCEP negotiations and is under pressure to bring about steep reductions in its tariffs. In fact, a steep tariff reduction for goods from China has been the biggest threat for negotiators and the industry, fearing a rush of cheap goods from across the border. In addition, countries such as Singapore, which has near-zero tariffs on most goods, and Malaysia, where 90% of trade carries a negligible customs duty, are exerting pressure on India to lower barriers. According to an internal commerce ministry estimate, the signing of the 16-country RCEP agreement will result in a revenue loss of as much as 1.6% of GDP and this has forced the negotiators to tread cautiously.
According to the latest report, the serious adverse effects of joining the agreement have made India more aggressive in the ongoing negotiations. It is said that India is seeking greater market access in services to be able to justify the closing of the deal at home, where an apprehensive local industry views it as equivalent to signing an FTA with China. This has been the norm and a problem that India has faced since it started negotiating regional trade agreements (RTAs) and RCEP is no exception.
Like in all FTAs and RTAs, one of the objectives of RCEP is eliminating nearly 95% of tariffs. This is an easy proposition for most ASEAN member states whose tariffs are less than 5%. But for a country like India, with average tariffs at around 15%, drastically reducing them to zero or 2-3% is difficult and would entail giving up much greater market access than what it would get in return. However, given the importance of the deal—especially since the Trans-Pacific Partnership (TPP) has already been signed which is likely to hurt Indian exports—India has offered several concessions to member countries in RCEP. For instance, with those with which India has already signed FTAs, such as ASEAN, India has proposed to eliminate tariffs on 80% of items. Similarly, for Japan and South Korea, it has offered to open up 65% of its product space. For Australia, New Zealand and China, Delhi has proposed to eliminate duties on only 42.5% of products. As India does not have any kind of FTA with these three countries, its offer is less. But the expectations from India are high and members are demanding much more. Hence, going ahead with RCEP and other pending FTAs is a politically difficult prospect for India.
India’s interests lie mostly in services, the removal of technical barriers to trade such as those taken under sanitary and phytosanitary measures, and trade in goods such as pharmaceuticals and textiles. India has been negotiating hard for liberalisation on mode 4 (movement of professionals from one country to another) of services agreement to offset the revenue loss from goods liberalisation. The country thinks its best bet is in services export, through which it can supply its burgeoning skilled professionals to other countries, thus partially meeting the demand for jobs from a million people joining the labour market every month. At the same time, there are serious limitations to this as well, as many opine that India’s services trade with ASEAN is not significant and the country faces stiff competition on this segment from countries like the Philippines.
It is high time India decides whether it wants to go ahead with RCEP and conclude it. Procrastinating and delaying the process for which India has earned the ire of many member countries is not good. India needs to have a clear vision and strategy with respect to its FTAs and move forward quickly. This would benefit the country’s external sector as its exports have shown a negative growth for more than a year now. The government needs to act tough and realise that RCEP’s potential future as a major trade bloc will remain uncertain until there is enough political will to go through the arduous negotiation rounds and conclude them. Most importantly, India would need to refrain from holding extreme and established positions, and make a little leeway and reverse the perception of it being a tough negotiator and obstructing talks. The country has to show that it is serious about moving forward with the talks in a positive way.
RCEP will no doubt face stiff opposition from various interest groups within the participating countries. But now that India has decided to join, it will need to balance economic and strategic calculations and prepare to lead in the Indo-Pacific century.
SOURCE: The Financial Express
Commerce and Industry Minister Nirmala Sitharaman and European Union Commissioner for Trade Cecilia Malmström today met in Paris and discussed various issues including possibility of resuming the long stalled FTA negotiations. Both the ministers met on the sidelines of an Organisation for Economic Co-operation and Development’s (OECD) Ministerial Council Meeting in Paris. According to a source, both the sides have deliberated upon ways to promote trade and investments besides the proposed Broad-based Trade and Investment Agreement (BTIA) and WTO related issues.
Started in June 2007, the negotiations for the proposed BTIA have seen many hurdles with both sides having major differences on crucial issues like intellectual property rights, duty cut in automobile and spirits, and liberal visa regime. Before this meeting, senior officials from both the sides had met twice so far this year to resolve the contentious issues. Sitharaman had recently said: “We want to work with the EU. We want to sign that agreement. We shall move forward and talk.” Malmström in her tweet said that she has met Sitharaman and “discussed EU-India trade and investment negotiations + WTO agenda”. Further the Indian minister also held bilateral meetings with her counterparts including the Trade Minister of Canada and New Zealand. “Discussed strengthening bilateral ties and issues touching CECA (comprehensive economic cooperation agreement), RCEP (regional comprehensive economic partnership) and TPP (Trans-Pacific Partnership) with Mcclay-Trade Minister, New Zealand,” Sitharaman said in her tweet. Sitharaman also attended an informal WTO meeting on key trade ministers there.
SOURCE: The Financial Express
Greater industrial cooperation can help reduce distrust between Indians and Chinese, directly benefit their growth and usher in a new climax of globalisation, a state-run Chinese daily said. "Industrial cooperation can help reduce distrust between Indians and Chinese. The future direction of the Sino-Indian relationship depends on whether the nations' economic activities can alleviate their long-standing concerns," an article in the state-run Global Times said. It said the industrial cooperation can directly benefit the growth of both countries, weaken nationalist sentiments embedded in both societies, and offer new perspectives on each other's rise. "China and India should be encouraged to look at the big picture rather than a disputed patch of land. China and India's industrial cooperation will usher in a new climax of globalisation," the article said. It said Apple CEO Tim Cook and Foxconn Chairman Terry Gou recently made trips to India, reportedly announcing plans to relocate their factories from China to India.
Foxconn plans to build 10 to 12 factories in India by 2020. What's more, many Chinese enterprises are showing interest in investing in India," it said. "There are two countries that have the highest potential to replace China's position in the global value chain - Vietnam and India. Their labor costs are lower, and they have already begun taking low- and middle-end manufacturing from China," it said. "The rise of 'Make in India' will probably bring China and India into more fierce competition in some industries, but it will also create more space for mutual development," the article said. It said the key to maintaining the upward trajectory of their economic ties is to reduce direct rivalry and find more industrial connections. Such joint efforts in different industries will produce unprecedented benefits and reinforce the value chain of shared interests, it added. "Many Indians fear China's growing presence. Such a sentiment arises from years of estrangement despite being neighbours. Conservatism emerges in fear of competition. When competitiveness of 'Make in India' is lower than 'Made in China', the railways will ignite concerns among Indians about China-made products," it said. "Such concern is one of the major barriers that obstructs India from introducing more foreign investments into local manufacturing and hinders the revenue streamlining process," it said. "Surpassing China is no longer a long shot for the Indians. When the growth of the Indian economy speeds up, and manufacturing becomes more competitive, the Indians will be more open-minded toward China," it said. "As the Chinese steel, construction, machinery, textile and electronics industries are eager to enter the Indian market, and India's IT, pharmacy and chemical industries are waiting to tap into the Chinese market, there is a great need for a platform where industries, capital and technologies can connect," it added.
SOURCE: The Economic Times
India's entry into the (APEC) grouping will likely be one of the "concrete" topics on the agenda of Prime Minister Narendra Modi in his talks with US President Barack Obama next week, NITI Aayog Vice Chairman Arvind Panagariya has said. "One concrete thing I hope would be on the agenda is India entering into Asia-Pacific Economic Cooperation (APEC)," Panagariya said during a discussion yesterday at the Asia Society Policy Institute when asked what is on India's economic agenda as Modi visits the White House and as Obama's presidency is in its final months. Panagariya had noted during the discussion that trade agreements like with APEC will be a "stepping stone" but APEC by itself "is not going to get you very far" and greater market access requires getting into other agreements. He however added that Prime Minister Modi himself committed to India entry's into APEC and during Japanese Prime Minister Shinzo Abe's visit had sought Tokyo's support for New Delhi's entry into the trading bloc. He said India has been "slower" than other countries in entering free trade agreements, NITI Aayog Vice Chairman Arvind Panagariya said India will need to capture some of the world markets if it has to sustain an eight to 10 per cent growth rate over the next 20-25 years. "On the Free Trade areas, India has been certainly slower than other countries," Panagariya said at the discussion on the two years of the Modi government responding to whether a trade-led growth is a priority for the government. He said the broader question is whether "outward orientation" is part of the government's strategy of development, adding that his push is in that direction.
APEC has grown to become a dynamic engine of economic growth and one of the most important regional forums in the Asia-Pacific. Its 21 member economies are home to around 2.8 billion people and represent approximately 57 per cent of world GDP and 49 per cent of world trade in 2014. As a result of APEC's work, growth has soared in the region, with real GDP doubling from just $16 trillion in 1989 to $31 trillion in 2013.
SOURCE: The Economic Times
A delegation from China Fortune Land Development Co. today met Haryana Industries and Commerce Minister Captain Abhimanyu to discuss investment opportunities and establish a JV in the state. After Wanda Group of China, another company China Fortune Land Development Co. Ltd. has evinced interest to establish a joint venture with the state, an official spokesman said. A five-member delegation headed by Chief Financial Officer (CFO) of the company, Xingchuan Liu, called on Haryana Industries and Commerce Minister Capt Abhimanyu here, the spokesman said. China Fortune Land Development is in the field of setting up industrial parks. "The delegation discussed about their investment schemes in the field of electronics , automobile , aerospace and food processing in Haryana," he said.
During the meeting, Xingchuan Liu said that their company would submit its proposal of schemes by the end of this month. Success of 'Happening Haryana - Global Investors Summit' has attracted a number of foreign investors to invest in the state and set up their ventures here, the spokesman said. The Industries and Commerce Minister apprised the delegation about aplenty investment opportunities available in Haryana due to its favourable geographical location for entrepreneurs from country and abroad.
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 46.83 per barrel (bbl) on 02.06.2016. This was higher than the price of US$ 46.38 per bbl on previous publishing day of 01.06.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3149.48 per bbl on 02.06.2016 as compared to Rs. 3124.10 per bbl on 01.06.2016. Rupee closed stronger at Rs 67.25 per US$ on 02.06.2016 as against Rs 67.35per US$ on 01.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 1, 2016 (Previous trading day i.e. 31.05.2016) |
Pricing Fortnight for 16.06.2016 |
|
Crude Oil (Indian Basket) |
($/bbl) |
46.83 (46.38) |
46.88 |
|
(Rs/bbl |
3149.48 (3124.10) |
3153.62 |
|
|
Exchange Rate |
(Rs/$) |
67.25 (67.30) |
67.27 |
SOURCE: PIB
Global consumption of cotton declined by 3 per cent to 23.6 million tons in 2015-16, and it is likely to remain at the same level in 2016-17 due primarily to low polyester prices and weak global economic growth, the International Cotton Advisory Committee (ICAC) has said in its latest report. In 2015-16, China remained the world's largest consumer and its cotton mill use is estimated at 7.1 million tons. However, its cotton consumption is expected to decrease by 5 per cent to 6.7 million tons in 2016-17 mainly due to high domestic cotton prices, particularly compared with those of polyester, ICAC said. After falling by 3 per cent in 2015-16 to 5.2 million tons, cotton consumption in India is expected to rise by 4 per cent to 5.4 million tons in 2016-17 due to favourable textile export policies, well integrated downstream industries and competitive prices. In Pakistan, mill use fell by 12 per cent to 2.2 million tons in 2015-16 due to the ongoing energy crisis, high costs of production, and weak cotton yarn demand. Mill use is forecast to rise by 1 per cent, to a little over 2.2 million tons in 2016-17. Bangladesh and Vietnam are projected to see significant growth in 2016-17, with mill use increasing by 16 per cent to 1.3 million tons in Vietnam and 10 per cent to 1.2 million tons in Bangladesh.
In 2016-17, world cotton imports are forecast to increase by 1 per cent to 7.4 million tons. Imports by China are projected to fall by 12 per cent to 960,000 tons in 2016-17 due to the government's desire to reduce its cotton reserve stock and restrict imports. However, imports by the rest of the world are expected to increase by 3 per cent to 6.5 million tons, with Vietnam and Bangladesh emerging as the world's largest importers, accounting for 34 per cent of the world's imports. World cotton production dropped by 17 per cent to 21.8 million tons in 2015-16 as world cotton area shrank and many countries experienced below-average yield. However, production is forecast to increase by 6 per cent to 23 million tons as world cotton area expands and yields improve. India is likely to maintain its place as the world's largest producer in 2016-17 and its production is projected to increase by 10 per cent to 6.5 million tons. Production in China is expected to fall by 10 per cent to 4.6 million tons due to reduced subsidies and high production costs.
World ending stocks are expected to decrease by 4 per cent to 19.7 million tons by the end of 2016-17, which would follow an 8 per cent reduction in stocks to 20.4 million tons in 2015-16. However, ending stocks outside of China are projected to rise by 3 per cent to 8.8 million tons in 2016-17.
SOURCE: Fibre2fashion
Turkey's Economy and Customs and Trade ministries increased the number of inspections of textile products due to carcinogenic elements found in imported supplies. In the last five years, the officials have seized a total of 141,000 products that might trigger cancer. According to the figures released by Istanbul Ready-to-Wear and Confection Exporter Association (İHKİB), 14 billion imported textile, ready-to-wear, shoe and leathercraft products underwent carcinogen inspection in 2015 with 49 percent of the products seized by the officials due to containing carcinogenic substances having been imported from Chinese companies. A total of 2,608,145 products failed to pass the inspections in 2015 and the companies responsible for the products were imposed fines. However, consumer confidence rates have increased since 2011. While 38.6 percent of the consumers did not trust imported products in 2011, this has decreased to 2.9 percent in 2015.
SOURCE: The Daily Sabah
Sri Lanka has become the latest WTO member to ratify the new Trade Facilitation Agreement (TFA). Sri Lanka's ambassador to the WTO, R.D. Susiri Kumararatne, presented his country's instrument of acceptance to Director-General Roberto Azevedo on May 31, according to a WTO press release. The TFA which was concluded at the WTO's 2013 Bali Ministerial Conference, contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement. With the acceptance by Sri Lanka, the number of TFA ratifications now stands at 81. Thus, the WTO has received three-quarters of the ratifications needed to bring the TFA into force. On July 31, 2014 Sri Lanka submitted its Category A notification to the WTO indicating which provisions of the TFA it intends to implement upon entry into force of the agreement. The TFA broke new ground for developing and least-developed countries in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.
A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. Implementation of the WTO TFA has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO's flagship World Trade Report released on 26 October 2015. The Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.
SOURCE: Fibre2fashion
Ugandans are spending $888 million (Shs2.991 trillion) on annual textile imports, President Museveni has said. This is money Uganda could have saved since there are textile factories operating in the country. Ugandans also spend Shs568.7 million on second hand vehicles, Mr Museveni said during the State-of-the-Nation address on Tuesday in Kampala. The amount Ugandans spend annually on just these two items could meet 86.19 per cent of the costs of constructing the 600Megawatt Karuma Hydro Power Plant. Besides textiles, Uganda also spends a lot of money on fruit imports - $20.2 million (Shs68 billion) - and leather goods ($0.22 million - Shs741.180 million). Mr Museveni, however, said many of the imports can be manufactured in Uganda. "All these can be made here; fortunately, the investors are here," he said, adding, "They just need a good atmosphere for investment." That atmosphere, Mr Museveni said, means cheap electricity, which should not be more than $0.05 (Shs168.45) per unit. The President directed government institutions, without exception, to buy Ugandan-made products "provided they are of good quality and comparable prices". "That, however, should not be an excuse for continuing to import what can be made here. If the quality is not yet perfect, discuss with the manufacturers how that can be improved. "All the uniforms for the army, the police, the prisons service, the Uganda Wildlife Authority and medical services must be bought locally," Mr Museveni said.
Industry reaction
Experts in the industry say the President's directive on buying local-produced products will give a competitive advantage to local factories. Southern Range Nyanza (NYTIL) director corporate affairs Richard Mubiru expressed gratitude that government is showing commitment to revive the textile sector in Uganda. He said: "As a company, NYTIL has overtime grown her capacity to produce a range of uniforms, garments and other fabrics that can support local clothes manufacturing." He however, called on government to address the need to reduce cost of capital-through Uganda Development capitalisation. At the moment, most garment factories produce largely school uniforms. They include: School Outfitters, Lakai Uniforms, Phenix Logistics, Kwera Garments, Christex Designs, Chrisma Designs, and Unique Garments, among others. A 2007 dissertation by graduate student Rebecca Tusubira noted that Uganda's textile industry got attention out of the African Growth Opportunities Act (Agoa) through which developing countries like Uganda export select items to export to the United States duty free.
Background
A 2009 World Bank paper states that during the 1960s, Uganda was sub -Saharan Africa's largest cotton producer. The paper adds that political instability and poor policy choices of the 1970s led the sector to its demise. Attempts to revive the sector with lending operations during the 1980s failed, but policy reforms combined with a lending operation and the high cotton prices of the 1990s revitalised the sector.paper adds that political instability and poor policy choices of the 1970s led the sector to its demise. Attempts to revive the sector with lending operations during the 1980s failed, but policy reforms combined with a lending operation and the high cotton prices of the 1990s revitalised the sector. According to the 2013/2014 ministry of Agriculture sector performance report Uganda earned $24.7m (Shs83.2 billion) from cotton in FY 2013/14 - the most recent year for which such data is readily available. This was a drop from $27.7m (Shs93.3 billion) in FY2012/13. Officials blamed a long dry spell and low soil fertility for the drop.
SOURCE: The All Africa
Cotton Australia has welcomed the announcement of funding for two programmes that will benefit growers. The funding is part of a $150 million funding commitment for feasibility assessments and construction of water infrastructure across the state. Cotton Australia's reaction came after Deputy Prime Minister Barnaby Joyce today announced $650,000 would be made available to fast-track a feasibility assessment into using recycled water to expand agricultural production in south-east Queensland. "We are very pleased that funding for such a feasibility project would be made available, given its potential to provide up to 100 gigalitres of water for high-value irrigation land on the Darling Downs," said Cotton Australia General Manager, Michael Murray. "Making Brisbane's waste water available for irrigation would be a significant boost to farmers on the Darling Downs and the communities they support, and we welcome this news whole-heartedly." The cotton industry has also welcomed the announcement of an additional $60 million in new funding for the Federal Government's mobile communications black spot programme. There are more than 6000 mobile black spots across regional communities. More than $160 million had already been committed to fix about half of those, with the additional funding bringing the total commitment to $220 million. Murray said that while the use of technology has made Australia's cotton industry the most efficient in the world, yielding more per hectare on average than any other country, the power of that technology has been throttled by poor communications in rural areas, making it difficult to adequately process the extremely valuable useful data this advanced machinery generates. "We welcome the announcement of additional funding to fix these black spots, which is a significant step towards the creation of adequate telecommunications networks that will benefit agriculture," he said.
SOURCE: Fibre2fashion
On Tuesday, cotton prices in Pakistan slid amid lackluster trade due to lack of buying interest from spinners and higher imports of cotton, whereas, cotton prices in the world markets moved higher. The spot rate settled at PakRs5,500/maund (37.324 kilogram each), down PakRs50/maund from the previous level. Around 1400 bales of cotton were changed hand in the ready markets of Sindh and Punjab. Floor brokers stated that the market was expected to witness enthusiasm after a government’s decision to declare textile exports free from duty and taxes. However, there was hardly any change in the trading pattern. The Trading Corporation of Pakistan also sold 2,000 bales to spinning mills as ginners continued to ask high prices for the premium quality fiber amid fast depleting lint stocks with them, said brokers. A major factor for low buying interest was higher imports of cotton, but some brokers said that many spinners believed the arrival of new crop phutti (seed cotton) would be in time.
SOURCE: Yarns&Fibers
For the fifth consecutive quarter, the Brazilian economy, the largest in South America has shrunk. According to government figures released on Wednesday Brazil's economy shrank 5.4 per cent in the first quarter of this year. The news comes with Brazil only two months away from hosting the Olympics in Rio de Janeiro amidst a massive political turmoil. In May, President Dilma Rousseff was temporarily suspended by a congressional impeachment vote. Her vice president, Michel Temer, has taken over as interim president. Production fell in all the three main economic sectors: agriculture, industry and services. Exports were a rare bright spot, increasing by 6.5 per cent compared with the fourth quarter after a sharp fall in the value of the real. Brazil is a major supplier of cotton and petrochemicals. Experts had forecast Brazil's economy to shrink more than it did. The better-than-expected number reflected a last ditch effort by Rousseff to win over public support by increasing government spending in April prior to the vote. Brazil is in its longest recession since the 1930s. Inflation has spiked up, consumer confidence has plummeted and a massive corruption scandal continues to engulf public officials two years since it first began. Unemployment in Brazil had shot up to 11.2 per cent in the period between April and February. There are 11.4 million unemployed Brazilians, up nearly 20 per cent from a year ago. Brazil's recession began at the beginning of 2015 as prices of commodities -- its main engine of growth -- crashed, and the corruption scandal at the state-run oil company, Petrobras, engulfed politicians of all stripes and many business owners. Brazil's central bank estimated in March that the economy would shrink 3.5 per cent this year. Last year, Brazil's economy contracted by 3.8 per cent. According to the Organisation for Economic Cooperation and Development (OECD), the Brazilian economy is expected to contract by 4.3 per cent this year. - See more at:
SOURCE: Fibre2fashion
