The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 13 JUNE,2016

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2016-06-12

Item

Price

Unit

Fluctuation

Date

PSF

1008.56

USD/Ton

0.15%

6/12/2016

VSF

2059.77

USD/Ton

0.15%

6/12/2016

ASF

1919.61

USD/Ton

0%

6/12/2016

Polyester POY

993.32

USD/Ton

1.09%

6/12/2016

Nylon FDY

2224.31

USD/Ton

0%

6/12/2016

40D Spandex

4341.98

USD/Ton

0%

6/12/2016

Nylon DTY

2094.81

USD/Ton

0%

6/12/2016

Viscose Long Filament

1115.96

USD/Ton

0.76%

6/12/2016

Polyester DTY

2452.84

USD/Ton

0%

6/12/2016

Nylon POY

5681.13

USD/Ton

0%

6/12/2016

Acrylic Top 3D

1234.04

USD/Ton

0%

6/12/2016

Polyester FDY

2064.34

USD/Ton

0%

6/12/2016

30S Spun Rayon Yarn

2788.01

USD/Ton

0.55%

6/12/2016

32S Polyester Yarn

1675.85

USD/Ton

0%

6/12/2016

45S T/C Yarn

2437.60

USD/Ton

0%

6/12/2016

45S Polyester Yarn

2925.12

USD/Ton

0%

6/12/2016

T/C Yarn 65/35 32S

2209.08

USD/Ton

0%

6/12/2016

40S Rayon Yarn

1812.97

USD/Ton

0%

6/12/2016

T/R Yarn 65/35 32S

2132.90

USD/Ton

0%

6/12/2016

10S Denim Fabric

1.35

USD/Meter

0%

6/12/2016

32S Twill Fabric

0.82

USD/Meter

0%

6/12/2016

40S Combed Poplin

1.16

USD/Meter

0%

6/12/2016

30S Rayon Fabric

0.68

USD/Meter

0%

6/12/2016

45S T/C Fabric

0.68

USD/Meter

0%

6/12/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15235 USD dtd. 12/06/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

SRTEPC’s Source India-2016 to be held in Surat this August

The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) has organized its flagship 'Source India-2016', a global buyer sellers meet for MMF and textile in Surat, under the theme 'future trends in man-made fiber'" with the aim to achieve the target of $9 billion worth of man-made fabric (MMF) export from India. Chairman of SRTEPC Anil Rajvanshi and the vice-chairman, Narain Agarwal were in Surat on Saturday for the exhibitors' roadshow. The SRTEPC has urged the textile entrepreneurs in city's MMF sector to participate in the meet in order to get the maximum exposure to the fabrics, yarns and fibres manufactured in Surat. SRTEPC Chairman, Anil Rajvanshi said that Surat contributes 40 percent of the country's MMF fabric demand. The buyers from international markets, big brands in India into readymade garments and sports wear etc. have been invited at the Source India meet. This is an opportunity to showcase Surat's prowess to the world. Rajvanshi informed that fashion shows will be organized during the two days of the event. Also, fashion forecast for the next year will be done during the meet. SRTEPC vice-chairman, Narain Agarwal said that out of the 5,000 members of SRTEPC in the country, around 2,200 are from Surat. The opportunity is waiting at the doorsteps and it is time to take the Surat fabric world-over. The SRTEPC has invited over 200 buyers from more than 36 different countries around the world to participate in the first-ever Source India meet in Surat. The two day long global buyers and sellers meet will be held at the Surat International Exhibition and Convention Centre (SIECC) at Sarsana starting from August 13.

SOURCE: Yarns&Fibers

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Textiles exports jump to 15% of total

The textiles industry now contributes 15 per cent to India’s exports, marking the sector’s growth, Textiles Minister Santosh Kumar Gangwar said on Friday while announcing the Ministry’s two-year achievements. “More than Rs. 6,500 crore has been spent by the Ministry of Textiles on various schemes for promotion and development of the textiles sector. Approximately five lakh additional jobs have been created in the past two years in the sector,” Gangwar said. The Ministry also aims to increase the earning of handloom weavers to Rs. 500 per day. According to the Ministry, apparel and handicrafts recorded 22 per cent growth, while textile exports grew by eight per cent during last two years compared with the previous two years. “To safeguard interests of domestic cotton growers, a well-planned, largest ever Minimum Support Price operation was carried out by the Cotton Corporation of India in the 2014- 2015 season in all 11 cotton producing States. This operation was successful, with procurement crossing 86 lakh bales up to March 30, 2015; and as I speak to you today, out of this stock of 86 lakh bales, only 60,000 bales are left in our stock, the rest has been sold. “Apart from this, in the 2015-16 season too, we have procured around nine lakh bales through MSP operations, out of which we have a stock of three lakh bales at present,” the Minister said.

24 textile parks

In a bid to give a boost to the sector, 24 new textile parks have been sanctioned under the Scheme for Integrated Textile Parks with a potential investment of Rs. 4,500 crore and employment for 66,000 people, the Ministry said in a statement. Among the other initiatives, the Ministry also said import of raw silk from China has come down due to a 51 per cent increase in Bivoltine silk production over last two years. The government has spent Rs. 60 crore to upgrade 55,000 plain looms to powerlooms, the Ministry announced.

SOURCE: The Hindu Business Line

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Indian filament yarns export declines 24.1pc in April

In April 2016, all types of filament yarns export from India aggregated 32.2 million kg, declined 21.5 per cent YoY while value was down 24.1 per cent to US$53 million. Filament yarns include polyester, nylon, polypropylene and viscose filament yarns and were exported to 80 countries from India during the month. More than 88 per cent of filament yarns were of polyester, of which, DTYs were the largest at 62.2 per cent. Brazil and Turkey continued to be the major importers of polyester filament yarns, followed by South Korea. The three together accounted for 47.6 per cent of polyester filament yarn exports. Brazil was also major importer of polyester DTYs and Bangladesh was major importer of PFYs. USA was the major importer of nylon filament yarn in April while Sri Lanka and Japan were the other largest markets for nylon filament during the month. Polypropylene filament yarns were exported to 13 countries in April and Djibouti was the major importer of PP yarns. USA and United Arab Emirates were the other major importers of PP filament yarns in April. Viscose filament yarns were exported to 23 countries from India in April valued at US$4.1 million. During the month, 166,000 kg of VFYs were exported to Japan. It was followed by USA and Germany.

SOURCE: Yarns&Fibers

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Textile sector still in knots over child labour

Textile units in Tamil Nadu have grabbed headlines several times in the past for the wrong reasons. Non-governmental organisations, including international organisations, have alleged that child workers are employed in many textile mills and that some units that employ young women do not provide adequate facilities for those who stay in hostels within the mill premises. Though employment of children has reduced drastically in the last few years and there are only “rare instances” now, the problem seems to persist in an industry that employs about 50 lakh workers directly in the State. “Thanks to mandatory audits and pressure on industry to comply with norms from western buyers, child labour is almost nil in the garment sector,” says A. Aloysius, founder of Social Awareness and Voluntary Education, an NGO in Tirupur. But, there are instances of children employed in medium-sized textile mills in areas such as Udumalpet, Dharapuram, Vellakoil, etc., he says. Further, several north Indian workers have moved to Tirupur for work, with their families, and live in specific localities. Their families do handwork, such as stitching buttons, and there are cases where they involve the children at home for this work rather than sending them to school. Though these children do not go to factories for work, they work out of home. This is a development in the last two or three years, he says. According to him, the State needs to have proper monitoring mechanisms to identify employment of children in such work. Officials, textile management sources, and voluntary organisations say that one reason for employment of children in some of the textile mills is labour shortage.

But, the situation is changing, contend sources in the management. Almost 30 per cent of workers in textile mills in Tamil Nadu are from other States. With more mills employing north Indian workers, the number of women employed has reduced drastically. Further, the mills in the State are investing heavily in automation. If 40 workers were needed for a facility with Rs. 1 crore investment 10 years ago, it is just 25 to 30 workers now in a fully integrated unit, they say. Textile industrial associations have said that action should be taken against all units that employ child workers or those who do not provide proper facilities at hostels. They have also come out with systems to encourage compliance with labour norms.

Employable age

There are also problems for mills because according to the Child Labour Act, children aged below 14 years should not be employed. But, as per ILO convention children aged less than 18 years should not be employed. About 30 per cent of workers in textile mills are in the adolescent age group (ie 15 to 18 years). With increasing awareness, automation, and more north Indian workers coming in, this problem will not arise any more. More and more mills are going in for 100 per cent north Indian workers or the aged above 18, the sources said. An official of the National Child Labour Project in Coimbatore says the focus in Coimbatore and Tirupur districts is on textile units and domestic sector. Special drives were conducted among north Indian workers in Tirupur in the last two years and children were rescued. There will be more awareness programmes and enforcement drives among these workers to ensure children are not employed in any work, the official said.

SOURCE: The Hindu

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TEA urges Jaya to take up knitwear sector issues with PM Narendra Modi

Tirupur Exporters' Association (TEA) today requested Tamil Nadu Chief Minister J Jayalalithaa to take up the issues facing the knitwear business during her June 14 meeting with Prime Minister Narendra Modi. In a letter to her, TEA President A Shaktivel highlighted an array of issues like the need for an ESI hospital for Tirupur Knitwear Cluster workers, hostel for women workers' and Rs 200-crore central grant to set up effluent plants. Stating that existing ESI centres in Tirupur do not have proper amenities for medical treatment, he said an ESI hospital in Tirupur with necessary facilities to cater to patients with various major health problems was the need of the hour.

Considering that more than five lakh workers, mainly women, are employed in the sector directly and indirectly, TEA requested the Chief Minister to include the issue in the Memorandum and urge the PM to intervene and provide financial support to construct the same. Though Tirupur was included in the list of Smart Cities, unfortunately while announcing implementation of the programme in the first and second phase, it was not done, he claimed. The Tirupur knitwear trade contributes Rs 33,000 crore revenue per annum, both from exports and the domestic market without any comparative advantages like counterpart cities, mainly in infrastructure and other business facilities. Tirupur stood first among 506 cities and towns in India in terms of providing employment, he said, adding that 44 per cent of its 8.78 lakh population was employed in the knitwear and stakeholder units. The issue should be taken up with the Centre so that the city makes it to the next list of the Smart City programme, as it would directly help increase exports from that town and lead a quality life, Shaktivel said. TEA also emphasised the urgent need for working women's hostels and labour quarters to provide shelter for them, as 65 per cent of the 3.5 lakh workers are women from a rural background.

SOURCE: The Economic Times

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Tirupur knitwear exporters seek inclusion of 59 items under EPS

A. Sakthivel, president of Tirupur Exporters Association, handed over memorandum consisting of many demands to Union Finance Minister Arun Jaitely on Friday. Among the many demands Tirupur knitwear exporters seeks inclusion of 59 additional items as “speciality fabrics” to avail the import benefits under Export Performance Scheme and sought absorption of premium for post-ship guarantee by the banks. Mr. Sakthivel pointed out that the speciality fabrics, which were there in the existing list for availing the benefits under the Export Performance Certificate scheme, did not have the ones used by the exporters in Tirupur knitwear cluster. Hence, they have given a list of 59 items that are widely used in Tirupur like 100 percent polyester filament single jersey fabric, cotton and modal blended fabric, and cotton and viscose blended fabric, among others, for enhancing competitiveness of Tirupur exporters. The exporters also requested to enhance the service tax refund from 0.21 percent to 0.5 percent. On the premiums, Mr. A. Sakthivel said that banks were deducting the premium amount to be paid for Export Credit Guarantee Corporation’s coverage against all export advances, from the exporters’ account. He further added that since the post-shipment guarantee is mainly intended to benefit the banks, the cost of premium with respect to whole turnover post-shipment guarantee has to be absorbed by the banks and should not be passed on to the exporters to avoid paying double premium.

SOURCE: Yarns&Fibers

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Government unlikely to settle Rs 3,000 crore dues of 'blackout' period

Government is unlikely to settle Rs 3,000-crore dues towards committed liabilities arising out of 'blackout and leftout' period cases under technology upgradation scheme for the textile industry. "They (liabilities related to the blackout/leftout period cases) will be given a silent burial. Of course, there is clamour from the industry but as of now, there is no plans to settle those liabilities amounting to Rs 3,000 crore," a top Textiles Ministry official told. The official cited paucity of funds as the main reason behind it. The blackout period (June 20, 2010 to April 27, 2011) refers to the time when the government had halted subsidy payment temporarily, seeking to change the contours of TUFS from an open-ended scheme to a closed-ended one, and announced the introduction of the revised scheme only from April 2011. For those who had invested during those 10 months of blackout period were left out and are awaiting a decision on the eligibility of TUF scheme on the blackout period. The settlement of committed liabilities has been a grey area after the government did not mention it when it notified the Amended Technology Upgradation Fund Scheme (ATUFS) for the textile sector earlier this year. The Union Cabinet approved the ATUFS in December, 2015, in place of the Revised Restructured TUFS (RRTUFS) for technology upgradation of textiles industry -- a move aimed at boosting job creation and exports for the sector. "Textile industry is continuously under severe stress since April 2014 due to the non disbursal of committed liabilities under TUFS scheme and several hundreds of spinning mills are facing closure as they are likely to become NPAs. Our request is to urgently disburse the committed liabilities under TUFS scheme and extend all the export benefits for cotton yarn under MEIS and IES on par with other textile products. Otherwise, such decisions of officials will lead to a dangerous situation of closure of these mills," Binoy Job, Secretary General, Confederation of Indian Textile Industry (CITI) said.

SOURCE: The Economic Times

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Southern Gujarat Chamber of Commerce and Industry (SGCCI) and South Gujarat Textile Processors' Association (SGTPA) joined hands to develop textile processing and weaving cluster

Southern Gujarat Chamber of Commerce and Industry (SGCCI) and South Gujarat Textile Processors' Association (SGTPA) have joined hands to develop a state-of-the-art textile processing and powerloom weaving cluster at Pinjrat village in Olpaad taluka, some 25 kilometre away from the Diamond city in the coming years. SGCCI has written to Gujarat government seeking allotment of 50 lakh square metre of coastal land at Pinjrat village for setting up the cluster. SGCCI authorities said the chamber and the SGPTA have decided to deposit one percent of the jantri rate of the land at Pinjrat village with the state government's exchequer along with the application for land allotment in the next few days. SGCCI president B S Agarwal said that barring a few big process houses and weaving units, most of the factories produce fabric in smaller volume. Importers prefer the suppliers producing goods in bulk quantity. Thus, they want to set up a cluster for those wanting to produce fabric in bulk quantities. Around 50 textile processing houses in China are willing to set up units in Surat. A delegation from SGCCI and SGTPA will soon visit China to explore possibilities.

Regarding the facilities at the cluster to be developed at Pinjrat, Agarwal said that the textile processing units will be connected with a common boiler system thereby discouraging the use of chimneys emitting pollution. There will be wind power and solar power generation, common drainage, CETP plant, tertiary treatment plant etc. It's not only processing and weaving, but they are eyeing garment units to come to the cluster at Pinjrat. Thus, they also plan to visit Trichy, the garmenting hub, to attract investors looking for expansion. SGTPA president Jitu Vakharia said that the cluster project at Pinjrat is going to be a huge success, but they are awaiting the state government's approval for the land. If everything goes well, the textile processing and powerloom weaving units could be shifted from the Diamond City to the more quieter place in the outskirts at Pinjrat village.

SOURCE: Yarns&Fibers

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Power loom sector seeks reduction of items reserved for handlooms

The power loom sector in the region has voiced its demand for further reduction in the number of products reserved for handloom textile items. The number has already been reduced from 21 items to 11. But for the products that require intricate skills, the restriction must be lifted for other items for which the handloom sector is unable to meet the demand, according to Duraisamy, Chairman of Power loom Development and Export Promotion Council (PDEXCIL), a unit of the Union Textiles Ministry that has its Regional Office in Erode. Though 22 lakh handlooms are stated to exist in the country as against 24 lakh power looms, the productivity is quite low in handloom. A bulk of the handlooms are in the North-Eastern States where women weavers mostly engage themselves as a part-time activity, Mr. Duraisamy said, adding that production never matches the demand. The textile items reserved for handlooms include saris with extra warp and extra weft designs, saris with solid coloured woven boarder, tie and dye saris, dhotis, towel and ‘angawastram’, lungi, ‘jamakkalam durry, and shawl.

Official sources said the Central Government has constituted a committee to amend the Handloom Reservation Act, to pave way for removing some items from the list. There are, however, apprehensions expressed by votaries of handloom sector based at Chennimalai that dilution of the Handloom Reservation Act will ruin the sector. According to industry sources, Tamil Nadu, with five lakh power looms, ranks next only to Maharashtra which has the highest of eight lakh power looms. The Western part of Tamil Nadu accounts for most of the power looms centred in and around Palladam, Avinashi, Somanur, Tiruchengode, Karur, Salem and Komarapalayam.

SOURCE: The Hindu

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NIFT-TEA Institute inks draft MoU with Sri Lankan establishment

The NIFT-TEA Knitwear Institute, promoted by Tirupur garment exporters, on Friday, has signed a draft Memorandum of Understanding (MoU) with the Sri Lanka Institute of Textile and Apparel under the Lankan government, for utilising the Lankan expertise on production management. The draft MoU, signed in Colombo between the representatives of NIFT-TEA Institute and Sri Lankan institute, automatically gets implemented once the Lankan Government gives the formal approval.

Speaking to The Hindu from Colombo, NIFT-TEA Institute’s chairman for skill development division T. R. Vijayakumar said that as per the agreement, NIFT-TEA Institute would hold one diploma course and four certificate courses with experts deputed by the Sri Lankan institute take classes. “This tie-up is very important as the Lankan institute been famous for producing some of the best technical experts in production technology and management in the textile industry across the globe”, he said. The courses would be on topics connected to production, management and merchandising. The youngsters, who get trained under the courses, could be utilised by the units in Tirupur knitwear cluster in key posts in production chain for ensuring cost effective apparel production.

Production cost

At present, large number of units in the cluster have been struggling to minimise the cost of production as well as adapt to technologies when machines used in the apparel production gets updated due to lack of adequate specialised trained people to handle production processes.

SOURCE: The Hindu

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CBEC looks to curb tax evasion; check out how

Taking a cue from the income tax department that employs third parties to report on high-value transactions of various kind in order to verify the veracity of tax filings by individuals, the Central Board of Excise and Customs (CBEC) has given the State Electricity Boards and Reserve Bank of India specific assignments in its efforts to detect and curb tax evasion. According to a CBEC notification issued earlier this year, the SEBs are required to file annual information returns (AIRs) under sub-section (1) of section 15A of the Central Excise Act on the electricity consumed by manufacturing units using induction furnace or rolling mill and whose aggregate (annual) value of clearances exceeds Rs 1.5 crore. The boards need to file the AIRs pertaining to a particular financial year by June 30 in the subsequent year. The idea, of course, is to cross-check information provided by the assessees and ascertain if they under-reported production to evade/under-pay excise duty and/or service tax. The CBEC has also made it mandatory for the RBI to file detailed AIRs on overseas remittances above Rs 50 lakh by companies for the services received by them. While the Modi government has averred time and again that it is committed to a non-adversarial tax regime and has taken many steps in that direction especially in reducing the rigour in tax pricing audits, the taxman is determined to use the information at his disposal to validate the filings by the taxpayers. While the AIR database is mined by the I-T department to find out cases of under-payment of taxes, greater synergy is being achieved in the use of the database now between direct and indirect tax departments.

As reported by FE earlier, even as the NDA government made efforts to make life easier for taxpayers — leaving only the retrospective tax issues largely unresolved — tax disputes have only piled up. At the level of commissioners-appeal (CITs-A), the first recourse of the taxpayer in case of dispute, 2.8 lakh appeals involving a whopping Rs 5.67 lakh crore were pending till October last year, sharply up from the corresponding figures of 2.32 lakh and Rs 3.84 lakh crore at the end of the previous financial year. In other words, in the seven months to October-end last year, unsettled disputes pending before these commissioners rose 21% and the amount locked up surged 48%. In the year to April-end, 2015, a period which too largely belonged to the National Democratic Alliance government, appeals pending before the CITs-A have only risen, though less steeply. However, scores of US-based tech biggies have reduced their tax liabilities in India as New Delhi and the US resolved as many as 100 pending tax disputes involving India-incorporated associates of these firms in the last one year without resort to litigation. The tax disputes arose after India’s tax authorities made allegedly aggressive TP adjustments; these have now been amicably settled thanks to a bilateral framework agreement signed earlier. What paved the way for the agreement was the provision of mutual agreement procedure (MAP) in the India-US Double Taxation Avoidance Convention.

SOURCE: The Financial Express

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Govt plans to ease process for importers

To push its 'Make in India' drive, the government will soon be announcing a scheme to extend single port clearance, deferred duty payment and relief from routine checks for select importers. The finance ministry is uniting and expanding the scope of two existing programmes for importers, the Accredited Clients Programme (ACP) and the Authorised Economic Operator (AEO) scheme. It will extend direct port transfers, allowing members to move their cargo as it arrives at a land or sea port to a warehouse without checks. "The framework has been finalised, after consulting the industry. It is aimed to significantly cut time and cost for importers and boost domestic production," said a ministry official. Only members of the revamped scheme will be eligible for deferred payment benefits. The new scheme will have a benefits matrix, extending most of the benefits, including assured clearance from ports, to direct manufacturers in India. "We will divide a month into two. Importers in the revamped AEO scheme and bringing in shipments by the 15th of a month will get to make payments by a particular date of the second fortnight. Similarly, those bringing in consignments during the second fortnight will have to make payments by a specified date at the beginning of the second month," said an official, who did not wish to be named. "The move will significantly help importers with cash flows." Members will be graded on compliance history. "Those in the business for long and dealing with non-sensitive countries will be rated a higher grade of low risk," said the official. "Importers can keep the transporter ready at the port ahead of the arrival of the cargo and plan their inventories better without a lag."

An AEO programme offers members reduced examination and inspection, higher facilitation than ACP clients, and acceptance of pre-arrival import declarations. Only about 18 entities so far have AEO status in India. The ACP Programme, begun in 2005, has about 300 members; 13 per cent of imports are through this route. The government is aiming that at least 40 per cent of imports occur through the revamped programme, with at least 1,000 members. The US has 11,000 members as part of an AEO programme. The government will probably do away with the eligibility criterion of Rs 10 crore of imports in the earlier financial year, to encourage medium and small enterprises to be a part of this scheme. "Under the revamped scheme, there will be no value thresholds. Minimum documentation will be required," he said. While manufacturers will be given preference, traders will not be barred. "Entry norms were tough under the earlier scheme and not many could qualify. We're easing the minimum import norms, without making the scheme weak. Those with doubtful credentials will not be allowed to join," said another official. The Central Board of Excise and Customs is holding consultations with other government departments, to come on board and mutually recognise imports, and opt for only risk-based assessment for member-importers. "Talks are also on with the service tax and excise duty departments to work out a process for mutual recognition," said an official.

IN THE OFFING

  • The finance ministry is uniting and expanding the scope of two existing programmes for importers, the Accredited Clients Programme and Authorised Economic Operator scheme
  • Only members of the revamped scheme will be eligible for deferred payment benefits
  • Only about 18 entities so far have AEO status in India, while the ACP Programme has about 300 members
  • 13 per cent of imports are through this route
  • Govt is aiming that at least 40 per cent of imports occur through the revamped programme, with at least 1,000 members

SOURCE: The Business Standard

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Govt moves to replace port trusts with board-like set-up

The country’s ports will be managed by boards of the sorts that companies have, instead of the existing port trusts, if the Central Port Authorities Bill is approved by Parliament. The Shipping Ministry on Friday released the draft Bill on which it proposes to seek a Cabinet nod. “We propose to introduce it in the Monsoon Session,” said an official in the know. The Bill proposes to replace the Major Port Trust Act, 1963. It also looks to delegate more powers to ports and set up an independent review board to carry out the residual function of the erstwhile Tariff Authority for Major Ports (TAMP) to look into disputes between ports and public private partnership (PPP) developers. The draft Bill also proposes allowing land lease for 40 years for port-related use, as opposed to the current terminal development contracts of up to 30 years. For periods beyond 30 years, Cabinet approval is required. According to the Shipping Ministry, this step is intended to give more autonomy and flexibility to ports governed by the States and bring a professional approach into their governance.

Composition of the board

The composition of the port’s board has been simplified, a Shipping Ministry statement said. “The board will consist of nine members, including three-four independent members instead of 17-19 under the Port Trust Model. Provision has been made for inclusion of three functional heads of Major Ports as members in the board apart from a government nominee and a labour nominee,” it said. Port-related and non-port related use of land has been defined in the draft. The port authorities are empowered to lease land for port-related use for up to 40 years and for non-port-related use up to 20 years, beyond which the approval of the Centre is required. The need for government approvals for raising loans, appointment of consultants, execution of contracts and creation of service posts has been dispensed with. The Board of the Port Authority has been delegated power to raise loans and issue security for capital expenditure and working capital requirements.

Internal audit proposed

The concept of internal audit of the functions and activities of the Central Ports has been introduced on the lines of the Companies Act, 2015. The Board of the Port Authority has been delegated the power to fix the scale of rates for service and assets. The regulation of tariff by the TAMP has been removed. The status of the port authority will be deemed as ‘local authority’ under the provisions of the General Clauses Act, 1887 and other applicable statutes so that it can prepare appropriate regulations in respect of the area within the port limits to the exclusion of any Central, State or local laws.

SOURCE: The Hindu Business Line

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Policy changes to bring more startups in medium industry

The government is considering policy changes to broaden and energise one of PM Narendra Modi's pet initiatives, Startup India, to include a bigger number of startups under the 'medium industry' category that would be eligible for public procurement incentive and preferential benefits. Under the public procurement policy, central government department and ministries and its central PSUs have to procure at least 20% of their purchases from micro and small enterprises beginning April 1, 2015. This means that slightly bigger startups may miss out on this benefit that could be their initial survival. "The governing policy in the matter includes only small and micro enterprises and does not mention medium industry. We are trying to figure ways to make it part of the policy without breaking the legal framework," a senior government official said.

A medium enterprise as defined in the Micro Small and Medium Enterprises (MSME) Act should have investment of not less than Rs 5 crore and not exceeding Rs 10 crore in equipment if it operates in manufacturing space. In services sector this limit ranges from Rs 2 crore to Rs 5 crore. This will mean most startups will miss this cut off. Department of Industrial Policy and Promotion is talking to the department of expenditure and MSME ministry officials for a solution so that the benefits announced in the Startup India action plan can be extended to such medium industry as well.

Under the action plan, a startup is defined as one having a turnover of more than Rs 25 crore and not be older than five years from incorporation date. In March this year, after Prime Minister Narendra Modi launched the Startup India initiative, the MSME ministry issued an order to all ministries and central public sector units to relax conditions related to prior experience and turnover for startups in all public procurements. However, the order only mentions the small and micro enterprises covered by the Public Procurement Policy for MSE order 2012. "The Startups are normally micro and small enterprises which may not have a track record. These will have technical capability to deliver the goods and services as per prescribed technical and quality specifications and may not be able to meet the qualification criterion relating to prior experience-prior turnover," the order stated. The idea behind this benefit was to provide an equal platform to startups in the manufacturing sector vis-a-vis the established companies and enable startups to participate in such tenders with relaxed eligibility conditions.

SOURCE: The Economic Times

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Mumbai to host 'Gateway of India Dialogue' on June 13-14

In the second part in the series of Foreign Policy dialogues that MEA has launched in 2015 -- Mumbai will host 'Gateway of India Dialogue' on June 13-14 -- that focuses on India's role in geo-economics. The two-day dialogue will see participation of regional leaders including Sri Lankan Deputy Foreign Minister Harsha De Silva, his Indian counter-part Gen (retd.) V K Singh and top international names from the field of geo-economics. The dialogue is hosted by the Ministry of External Affairs and prominent Mumbai-based think tank Gateway House. This is first ever mega foreign policy conference in Mumbai, India's financial capital. 'The Gateway of India Dialogue: Where geopolitics meets business will see Keynote Address by Foreign Secretary S Jaishankar. Over the two days political and business leaders from across Asia and the world, will discuss themes such as Innovating for Asian Integration, The Geopolitics of Energy, Strategic Financing for Effective Economic Diplomacy. The objective is to institute an annual, signature, international geo-economic conference in India - a Davos-meets-Manama-dialogue, set in India's unique context. "By holding this forum in Mumbai, the Modi government bolsters both the position of Mumbai as India's commercial and financial capital and the contribution of corporate India in expanding the country's global engagement. The forum will highlight the role of economic diplomacy in promoting India's strategic and commercial interest," a person familiar with the Dialogue told ET. The first series of Foreign Policy dialogues -- 'Raisina Dialogue' -- on the lines of annual Shangrila Dialogue was organised by MEA and ORF in Delhi in March. A Dialogue on Sino-Indian affairs and India & West Asia are planned in Delhi later this year.

SOURCE: The Economic Times

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India to grow at 7.8 per cent in FY17, led by consumption: DBS

Recovery in the Indian economy is likely to continue and the GDP growth is expected to be higher at 7.8 per cent in the current fiscal, although it will be “uneven”, propped largely by “strong consumption” and public expenditure, says a DBS report. According to the global financial services firm, doubts remain however on the underlying inconsistencies in the GDP numbers. For the 2015-16 fiscal, the GDP growth has been pegged at 7.6 per cent.  “We expect growth to gain momentum in 2016-17 fiscal, with headline real GDP up at 7.8 per cent,” DBS said in a research note. Though the January-March growth fared better than expected on real GDP and gross value added (GVA) basis, it “masked” underlying weakness in fixed investments and non-agricultural growth, the report added.

According to global brokerage firm, the burden of lifting growth is likely to be “uneven” largely led by strong consumption followed by public capex, while private sector investments may improve in October-December quarter onwards. “The upcoming pay commission changes will be additional positive. Rural counterparts are also expected to lend a hand in 2016-17 fiscal following a normal monsoon,” it added. However, private sector remains subdued on the back of limited benefit from easy monetary policy, weak global demand pressure from stressed balance sheets. “Early indications of a turnaround in corporate earnings in the first quarter of this year bode well, but it remains to be seen if higher input prices depress margins,” the report said, adding that net exports are likely to be flat to slightly negative as firmer global oil prices and consumption demand underpin imports.

The Indian economy expanded by 7.6 per cent in 2015-16. The government expects the economy to grow by 7-7.75 per cent in the current fiscal. Regarding the Reserve Bank’s policy stance, the report said that limited disinflation is expected to narrow the room for further rate cuts. “Transmission of 150 bps rate cut since January 2015 and provision of liquidity to meet will continue to be a priority for the RBI, until the room to ease further re-emerges,” DBS said. In its policy review meet on June 7, RBI Governor Raghuram Rajan had kept interest rates intact citing rising inflationary pressure but hinted at a reduction later this year if good monsoon helps ease inflation.

SOURCE: The Financial Express

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Need for vibrant free trade pact to boost ties, says Korean envoy

Large conglomerates as well as small and medium enterprises from the Republic of Korea are keen on investing in India as the climate turns more ‘conducive and attractive,’ said Cho Hyun, the country’s Ambassador in India. “Many big-ticket projects are in the pipeline. Though I cannot name them, they involve huge investments,” he told Business Line in an interaction here. Reminding that Korea has been a big investor in manufacturing sector (automotives, electronics and white goods) in the last two decades, Cho Hyun said Hyundai, Samsung, LG etc., not just manufacture but also export their products in big numbers. The business community is elated over the ‘Make in India’ and Skill India programmes. The cooperation between the two nations will move up with the investor-friendly policies being unveiled by the government. Korea has been doing these things for years and reaped the benefits, the ambassador said. Asked for a growth figure for the bilateral trade from the current $19 billion, Hyun, who was in Hyderabad to promote the Korean Caravan, said, “It would be meaningless to set targets, since we are talking about very big deals in the offing.”

Cautious approach

“I want to bat for the Korean SMEs who can do well in collaboration with their Indian counterparts. The big conglomerates can take care of themselves and come on their own. Therefore, the new free trade agreement assumes importance,” Hyun said. The negotiations for the new Comprehensive Economic Partnership Agreement will begin in July. There is a need for a vibrant, new FTA, which should be in place in a year to give the much-needed push. The Modi government has been quite successful in bringing changes which are getting positive narratives from the Korean industry back home, Hyun said. However, the Indian government has to think of harmonising rules, regulations and taxations in States, some of which are engaged in active competition with different incentives etc. If a country wants big investments, its FDI policy should be predictable and efficiency in dealing with industry high, the envoy said.

Referring to the controversies surrounding investments of Posco in Odisha, Hyun said, “This case has given a bad impression about India back in Korea. Posco investment in the State is a fiasco, but the Korean government will honour its decisions. The company is doing fine in many other areas.” The ambassador identified pharma, electronics, defence, high-end textiles, manufacturing, environment and waste treatment as areas than can see good growth prospects in the long term. India is the ninth biggest trading partner for Korea, but there is potential to notch it up far higher, he said. In defence manufacturing, Korea has expertise in shipbuilding, laser ammunition and advanced technologies which can be offered. Asked about cooperation in aerospace and missile technology, he said it was too early and discussions were on. India had recently offered to prove space cooperation to the South Asian nation, which has become active. In pharmaceuticals, Hyun said both nations have strengths in the generic drug making. A strong collaboration can lead to production of more affordable drugs. Two Indian companies, Mahindras and Tatas, are doing well in Korea and about 1,000 techies are involved in software areas, he added. Hyun felt India-China comparison was not right in FDI and manufacturing sectors. When China started rising 30 years ago, the economic conditions were different and so were the opportunities. Now, as India starts its growth phase, the global economic conditions are vastly different and challenges and competition varied, he added.

SOURCE: The Hindu Business Line

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Growth in manufacturing may take some more time: FICCI on IIP Data

Commenting on the release of IIP numbers for April 2016, President FICCI, Harshavardhan Neotia said, “The manufacturing sector performance is on the expected lines as predicted by FICCI survey too last month.” Adding to this he also said that the growth in manufacturing may take some more time to pick up as the measures taken by the Government in the last few months start yielding results. “There is an unfinished agenda of the reforms which the present Government is trying to address. The manufacturing sector growth is dependent on many other factors too like the overall demand scenario in the economy which needs to be further encouraged,” he added.

SOURCE: The Financial Express

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GDP number not ‘as accurate as possible’, says P Chidambaram

It was good that Dr Raghuram Rajan, governor, RBI, has cleared some of the mist—and myth—surrounding the GDP numbers. He gave two simple examples:

* First example: ‘Exports minus imports’ is a contributory factor to GDP. Exports declined in 2015-16, but imports declined even more. So, ‘exports minus imports’ in 2015-16 was greater than ‘exports minus imports’ in 2014-15. That means growth, contributing to the GDP number (in current prices)!

* Second example: ‘Sales minus input costs’ is another contributory factor to GDP. Sales of all manufacturing firms declined by 9.02% in 2015-16 over the previous year, but input costs declined more sharply (18.42%), thanks to the steep fall in oil and commodity prices. Consequently, ‘sales minus input costs’ was greater in 2015-16 than in 2014-15. Result is growth!

Output declines, growth rises!

In both cases, there was no increase in output. Exporters exported less, factories produced less, firms had lower turnovers, there was little or no additional employment, and yet the sectoral ‘growth’ figures of the export sector and the manufacturing sector were positive, leading to the illusion that export and manufacturing sectors had ‘grown’ at a brisk pace. (Here, I assume that productivity remained constant.) Since the two sectors contributed significantly to the overall GDP number, the GDP number got a boost. The steep decline in oil and commodity prices is a new phenomenon and I think the CSO is not equipped to construct credible growth numbers in such a situation. The disconnect between the numbers and the reality on the ground is very evident. No amount of rationalisation can change the reality that is felt every day by the citizens—CPI inflation upwards of 5%, no new visible investment and no additional jobs on offer. The average person is therefore stunned when he is told that the GDP had grown at 7.6%. We get a more realistic picture of the economy if we look at the output numbers. Of the eight core industries, coal, refinery products, fertilisers, cement and electricity produced more in 2015-16 while crude oil, natural gas and steel produced less than in the previous year. The growth in the Index of Industrial Production of the eight core industries in 2015-16 was only 2.67%. Nevertheless, the CSO reported high growth in the three sectors (that encompass the eight industries), namely, mining and quarrying (7.44%), manufacturing (9.29) and electricity and gas (6.57)!

Deficiencies in methodology

Ever since the CSO moved to the new method of calculation, there has been growing scepticism. Analysts have pointed to several aspects of the new methodology that are suspect. One of the main deficiencies was the choice of deflators. Gross value additions (GVA) are measured in current prices but in order to make them comparable with measurements based on prices in the base year (2011-12), one must ‘deflate’ them with an appropriate deflator. In the cases of ‘trade, hotels, transport, communication etc’ and ‘financial, real estate and professional services’, the GVA at current prices was 6.6% and 7.4%, respectively. The CSO applied negative deflators and reported a growth rate of 9.0% and 10.3%, respectively. When the 12-month average of CPI inflation in 2015-16 was 4.9%, it is difficult to believe that inflation in these two sectors was negative! There has been no convincing explanation why negative deflators were chosen for these two service sectors.

The second deficiency was the use of the MCA21 database. It has been admitted that the database requires to be stabilised. We also know, anecdotally, that small and medium firms find it difficult to report the data about their firms periodically in the new format. Besides the MCA21 database has been shared only with the CSO, and no one has been able to verify the correctness of the data. The GDP growth number is an approximation of the underlying economic activity. Many economic decisions of the government and private investors are based on that number. My analysis leads to the conclusion that the GDP number is not ‘as accurate as possible’ and certainly does not inspire confidence. Some corrections are therefore in order.

Corrections needed

The first correction must be to identify industries and sectors where quantitative output had declined in 2015-16 over 2014-15 (productivity assumed as constant) and assume that growth in such industry/sector was zero. Examples would be exports, crude oil, natural gas and steel.

The second correction would be to re-visit the deflators that were used. There is a huge divergence between WPI inflation and CPI inflation. It makes no sense to use negative deflators for sectors (especially services) where oil and commodity prices have no role to play and where consumer prices have, in fact, increased.

The third correction is to reconstruct the GDP numbers using the old, conventional data and release them alongside the numbers using the MCA21 database until the MCA21 database is believed to have been stabilised.

Finally, there is no harm in publishing, at least for a few years, GDP numbers using the old method and the new method.

SOURCE: The Financial Express

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Industrial output growth slips into negative zone

Growth of industrial output fell 0.8 per cent in April 2016, pulled down by the manufacturing sector, which contracted 3.1 per cent from the same month in 2015. The April numbers are a break in the rising trend of February and March. In March, the Index of Industrial Production (IIP) rose 0.1 per cent over the same month of 2015. Industrial output grew 2.4 per cent in 2015-16, slower than the 2.8 per cent in 2014-15. Contraction in manufacturing, which constitutes roughly three-fourths of the index, led the IIP towards a fall even as electricity generation increased 14.6 per cent and mining output climbed 1.4 per cent, government data showed on Friday. The capital goods sector, which had declined for five consecutive months till March, contracted 24.9 per cent in April, confirming a bleak investment outlook. This contraction has consistently acted as a drag on the IIP. In 2015-16, capital goods output contracted 3 per cent against a rise of 6.3 per cent in 2014-15. In April, 14 of the 22 industry groups within manufacturing posted growth, up from 12 in March. Among product categories, office, accounting and computing machinery gave way to furniture, which registered the highest growth at 28 per cent. Electrical machinery and apparatus continued to fall by the largest margin at 55.9 per cent. Cable, rubber insulated continued to contribute the most to the contraction in the index. Sugar and cotton seed oil came in next. Electricity, gems and jewellery, and telephone instruments, including mobile phones, were the highest positive contributors to growth. Of this, electricity and gems and jewellery have figured on the list for the last few months. Industrial output growth slips into negative zone On the demand side, some relief was seen in the consumer durables sector, which maintained its uptrend at 11.8 per cent. Growth in the sector remained in the positive zone for the eleventh month straight. In 2015-16, consumer durables grew 11.2 per cent, the only sector that clocked double digit growth. Consumer non-durables, on the other hand, continued to decline for the sixth straight month, going down by 9.7 per cent from 4.4 per cent in the previous month. The combined output of eight core infrastructure sectors, which carry a weight of nearly 38 per cent in the IIP, jumped to 8.5 per cent in April due to a sharp pick-up in fertiliser and cement production and a commensurate rise in electricity generation. This had been expected to give a push to the IIP. Also, the gross domestic product (GDP) grew 7.6 per cent in 2015-16, up from 7.2 per cent in the previous year. The government expects GDP growth to be in the range of 7-7.75 per cent in 2016-17. CARE Ratings said the industrial production in FY17 is expected to pick up in coming months on the back of improved infrastructure spending by the government and improvement in the consumer goods segment. "The growth in consumer goods segment is slated to strengthen in the second half of the year with expectations of increased Urban and Rural demand… The increase in consumption demand in turn could help the capital goods segment. Higher infrastructure spending by the government too will have appositive bearing, albeit a gradual one, on the overall growth of capital goods," it added.

SOURCE: The Business Standard

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South Asian nations seek help from India to set up trade portals

India's trade portal has become a source of inspiration for its neighbours, some of which have sought help from the country to set up similar online platforms. Nepal, Bhutan and Sri Lanka have evinced interest in adopting the best practices of indiantradeportal. in, which makes available comprehensive regulatory and business information through a single window to promote international trade. "Our South Asian neighbours like our trade portal and want to learn more about sharing information on rules of origin, duties and incentives with exporters," said Ajay Sahai, director general of the Federation of Indian Export Organisations, which maintains the portal. He said that while Nepal and Bhutan are working on setting up their own portals on similar lines, Sri Lanka is still in the process of examining such a platform and making it sustainable.

Officials said a high-level meeting is set to take place in Colombo in August to discuss trade portals in Asia. In South Asia, only India and Bangladesh have trade portals at present. Besides providing information, the trade portals being set up in Nepal and Bhutan will also benefit India since many consignments headed for the two neighbours are routed from the country. "India is a transit route for consignments going to Bhutan and Nepal, which are landlocked countries. So it is important to have information in a transparent manner," said Sachin Chaturvedi, director general of the external affairs ministry's think tank, Research and Information System for Developing Countries (RIS). "Also, their trade portals will help in setting up a common documentation system that is required for implementing the trade facilitation agreement," he said. He said India should graciously support and reach out to the South Asian countries since it will improve its own cross-border trade.

SOURCE: The Economic Times

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Indian businessmen take part in China's South Asia Expo

A large group of Indian businessmen and traders have taken part in China's annual South Asia Expo which was inaugurated in the country's southwest Kunming city. Indian Consulate General in Guangzhou Y K Sailas Thangal has inaugurated the special pavilions set up by Federation of Indian Export Organisations (FIEO) and Indian Chamber of Commerce (ICC) at the expo. The event which is held for the forth time this year attracts traders from China, South and South East Asian countries and offers a platform to them to showcase and sell their goods as well as strike commercial deals. India will organise an India-China conclave at the event tomorrow to highlight features of 'Make in India' and the investment opportunities, Thangal told PTI from Kunming. The annual event besides being an exhibition is also a fair in which a number of items including handicrafts, handlooms and carpets are sold by businesses from India mainly from eastern region and other South Asian countries.

Chinese officials said about 5,000 enterprises from 89 countries and regions will participate in the 'China-South Asia Expo'. Businessmen and officials from Nepal, India, Bangladesh, Bhutan, Pakistan, Sri Lanka, Maldives and Afghanistan are taking part in the event which will close on June 17. Kunming, provincial capital of Yunnan Province, is China's gateway to South and South East Asia as it is located close to Myanmar. It is the starting point of Bangladesh, China, India, Myanmar (BCIM) Economic Corridor which is part of China Silk Road initiative and shares close trade business and cultural links with Eastern India. Last year, the value of signed deals at the expo stood at nearly $25.2 billion. The organisers estimated that the volume this year could grow by at least 10 per cent, official media reported.

Chinese Commerce Ministry said last month that China's investments in India, Pakistan and other South Asian countries climbed to $12.29 billion and the regional trade crossed $111 billion as BEIJING seeks to make inroads into the subcontinent with its Silk Road initiative. By the end of 2015, China's direct investment in South Asian countries stood at $12.29 billion and South Asia's investment in China totalled $890 million, said China's Vice Minister of the Ministry of Commerce Gao Yan. Chinese investments in India grew six fold in 2015 to $870 million compared to 2014, state-run 'Global Times' reported last month. Last year China's trade with South Asia grew 4.9 per cent from the previous year to $111.22 billion. The India-China bilateral trade totalled to $65.16 billion last year with trade deficit in favour of Beijing mounting to $48.68 billion.

SOURCE: The Economic Times

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India, EFTA meet to resume trade agreement talks

Days after Prime Minister Narendra Modi affirmed India's readiness to resume free trade agreement (FTA) talks with European Free Trade Association (EFTA), the two sides met on Friday to resolve major outstanding issues for an early resumption of negotiations and concluding a balanced agreement in a time-bound manner. "We had a stock taking meeting with them which went off very well... Our data is three years old and we will work on that. We will meet again after stakeholder meetings here," said an official in the know. The India-EFTA Trade & Economic Partnership Agreement (TEPA) negotiations had started in October, 2008. So far, 13 rounds of negotiations have been held at the level of chief negotiators. The last round of negotiations was held in November, 2013 and thereafter the negotiations had remained suspended. While the agreement is to have chapters on trade in goods & services, investment, IPR, competition, government procurement, among others, talks were stuck on IPR related issues such as data safety. "We will try to work in the contours already decided for the agreement," the official said. EFTA is limited to four countries - Switzerland, Norway, Iceland and Liechtenstein. These countries are not part of the European Union (EU) with which India is negotiating a separate trade agreement called the India-EU Broad-based Trade and Investment Agreement or BTIA.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 48.41 per bbl on 10.06.2016  

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$ 48.41 per barrel (bbl) on 10.06.2016. This was lower than the price of US$ 49.35 per bbl on previous publishing day of 09.06.2016.

In rupee terms, the price of Indian Basket decreased to Rs. 3233.64 per bbl on 10.06.2016 as compared to Rs. 3287.65 per bbl on 09.06.2016. Rupee closed weaker at Rs 66.79 per US$ on 10.06.2016 as against Rs 66.63 per US$ on 09.06.2016. The table below gives details in this regard: 

Particulars

Unit

Price on June 10, 2016 (Previous trading day i.e. 09.06.2016)

Pricing Fortnight for 01.06.2016

(12 May, 2016 to May 27, 2016)

Crude Oil (Indian Basket)

($/bbl)

48.41             (49.35)

46.17

(Rs/bbl

3233.64       (3287.65)

3098.47

Exchange Rate

(Rs/$)

66.79             (66.63)

67.11

SOURCE: PIB

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WTO chief calls for greater degree of specificity when taking up new issues

World Trade Organization's director general Roberto Azevedo has asked countries to be specific while discussing new issues like e-commerce and investment to be brought under the ambit of the multilateral organisation. "A range of ideas have been suggested — such as steps to support small and medium sized-enterprises, e-commerce, investment facilitation, private standards, to name just a few. In these areas, members have not yet gone into detail on what they would like to discuss under those broad headings. In each case, we need a much greater degree of specificity than we have at present," he said at a conference on global trade and investment Cooperation. His statement comes a week after business leaders from world over called on the WTO to look at a wide range of issues such as electronic commerce, rules to better facilitate services and investment flows in addition to the current negotiating agenda.

Stating that going ahead, the WTO has two major tasks before it- implementing what is already agreed and following-up on the commitments made, besides agreeing new trade deals, he said: "As that discussion shapes up, I think it is important to seek different views that can enrich the debate and help spark new ideas." Incidentally, e-commerce and investment are some of the new issues that India and developing countries don't want in the WTO's negotiating agenda till the time the exiting issues in the Doha Development Agenda are resolved. In his address, Azevedo said that much of the focus in recent years has been on bilateral and regional trade initiatives — such as the Trans Pacific Partnership or the Transatlantic Trade and Investment Partnership. "However, clearly a patchwork of overlapping trade regulations and standards is less efficient than global rules...And some topics like domestic support in agriculture or fisheries subsidies can only be properly or fully tackled at a global level," he said.

SOURCE: The Economic Times

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Rwanda Budget: Textile, leather industry players push for skills development

Skills and infrastructure development should be seen as central in the implementation of the 2016/17 National Budget that was designed to allocate 27 per cent to key priority sectors, including textile, garments, and leather, sector players say. While used shoes and clothes suffered a major blow in the new Budget with a 12 per cent increase on taxes, the locally produced textile and leather products received a major boost, thanks to the new tax and incentives regimes. Presenting the Rwf1,949.4 billion Budget to Parliament last week, the Minister for Finance and Economic Planning, Claver Gatete, announced 27 per cent of the money will be allocated to economic transformation with key focus on textiles, garments and leather industry, agriculture export crops, agri-business, construction, livestock, wood industry, minerals, tourism and ICT and trade and investment facilitation. He mentioned a number of tax cuts, exemptions and increase on imports from outside the East African region, of which used products entering the local market saw a dramatic increase on their taxes. Used clothes’ tax will be increased from $0.2 to $2.5 per kilogramme, while taxes on second-hand shoes will increase from $0.2 to $3 per kilogramme. Sonia Mugabo, the chief executive and founder of SM House of Fashion, said skilling of local tailors is key in the development of textile and leather market in the country. With the skills, she said, local tailors would be able to produce high quality textile to fairly compete with imported textile and garments. “This is an exciting time for us in the textile industry. We are going to be a priority to be able to promote our products in the Rwandan market,” said Mugabo, who has been in the business for two years. “The Budget support it will enable us to grow, expand and hopefully become global brands and be able to export as well.” Mugabo said without enough textile manufacturing industries, efforts should be put onto ways of establishing a powerful textile industry—where tailors are well-trained to increase textile production. “There has to be trained tailors, trained fabric makers, trained designers—the whole cycle of textile production should be focused on how to boost quality and quantity of textile,” she added.

According to Mugabo, most of the textile and garments dealers get their textile from abroad, subjected to a lot of taxation, hence affecting their pricing. “Raw materials are really expensive, a lot of import taxes, but with mass production—coupled with improved textile industry growth in terms of mass production and quality, prices will go down,” she said. Imported used textile retails for as low as Rwf1,000, while the minimum price for locally made textile stands at about Rwf5,000.

Explaining price issues

Matthew Rugamba, of the House of Tayo, said the high prices are due to the fact that close to 100 per cent of materials used is imported textile, which raises the cost of products. “In some cases we can’t even make certain products because once you factor in all the costs involved, the final price would be too high for the local market,” he said. “Advancements in the textile, garment and leather industries will allow us to produce high-quality and competitively priced products for both local consumption and export,” Rugamba added. Muhammad Mugemangango, the chairperson of Rwanda Association for the Promotion of Leather and Leather Products, (RAPROLEP), told The New Times that in a recent meeting with government officials, they were informed that Italian investors plan to build a factory in Bugesera in the next three years to manufacture local textiles. He said this will definitely help them to provide enough products for the market, but argued that, more focus should, at least for now be put on improving skills of sector players. Mugemangango’s comments were echoed by Kevine Kagirimpundu, the co-founder of UZURI K&Y, a local footwear brand, who said earmarking 27 per cent to the sector is good, but the Government should be mindful of, “who is going to receive that money and for what reasons.” “That is an amazing idea,” Kagirimpundu says, “the question is how are they going to streamline that Budget; is it going to go into real practice or it is going to be given to bureaucrats, who are going to sit in offices planning for things that will not come to action, and pay salaries of those whose ideas are not solving the real issues? That is my only worry.” She stressed the need to invest money in people, skills development of those in the identified sectors and encourage more to join. “Later factories should be built such that we can have more made-in-Rwanda products,” said Kagirimpundu, adding that without trained personnel the plan could backfire. “We need a far-reaching plan to have a successful rollout of the Made-in-Rwanda concept.” With about 20 local trained shoe-makers, UZURI K&Y, produces about 660 pairs of shoes per day, and they sell 20 per cent in the country with 80 per cent going outside the country, according to Kagirimpundu. They serve Japan, Americas and European markets, among others.

SOURCE: The New Times

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Pakistan Textile sector slammed for demanding currency devaluation 

The Pakistan Economy Watch (PEW) on Sunday slammed textile sector for demanding devaluation of local currency to boost exports. The government had accorded zero-rating status to the textile sector in the budget, reduced export refinance rate by 0.5 percent and promised to pay refunds but the textile millers were asking for more which was unjustified, said PEW President Dr Murtaza Mughal. He said that devaluation of the currency to spur exports was an old-fashioned idea and the government should turndown this demand. "Exchange rate erosion provides little relief to exporters while it increases debt and make imports costly," he said, adding that exports should be increased by reforms. Dr Murtaza Mughal said that dollar was worth Rs 60 during Musharraf's regime that has now depreciated to Rs 104.50 but the exports remain stagnant, rather dwindled. He said that the government should try to tackle weaknesses in manufacturing sector, energy crisis, taxation issues, policy hiccups, supply side constraints, value addition, brand development and diversification. "Interests of whole population cannot be sacrificed to provide temporary relief to some exporters through exchange rate adjustment as it will increase debt burden by billions of rupees," he added.

SOURCE: The Daily Times

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Karachi to host the tenth Igatex Pakistan expo in April 2017

Igatex Pakistan, the 10th international garment, textile machinery and accessories exhibition will mark its presence in Karachi on April 26, 2017 featuring high level technology, machinery and equipment thus providing business opportunities and add value to the country's exports. The event is organized by FAKT Exhibition. The event is known to not only introduce newest expertise, but also improvise trade benefits and increase foreign investments and spending through business visits by international delegates. As the largest textile and garment machinery show in Pakistan, it gathers more than 550 exhibitors from around 35 countries including Austria, Belgium, Canada, China, France, Germany, Greece, Holland, India, Italy, Japan, Korea, Portugal, Spain, Sweden, Singapore, Switzerland, Taiwan, Turkey, UK, USA etc with a number of innovative and versatile machinery models to be debuted at the fair. FAKT Exhibitions CEO M Saleem Khan Tanoli stated that the Igatex Pakistan has played a pivotal role in the development of textile industry by introducing efficient machinery to local manufacturers and the event is bound to bore succession and growth for the industry. He further added that IGATEX Pakistan 2018 - The 11th International Garment, Textile Machinery & Accessories Exhibition & Conference will take place from April 26 to 29, 2018 at Expo Centre Lahore and will welcome trade visitors from the Garment and Textile Industry. IGATEX Pakistan is becoming an increasingly significant textile and garment event with its scale setting new records year by year.

SOURCE: Yarns&Fibers

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Pakistan offers incentives to spur dwindling exports

The persistently low performance of the foreign trade sector, especially exports, have forced the government to offer a wide range of incentives to boost it. The new steps will be effective from July 1 - the start up date for the National Budget for FY-2017. What outcome of the new tax concessions and incentives is expected? Finance Miniser Ishaq Dar said: "The concessions and incentives aim at achieving the objective of a 25 per cent increase in exports in FY-17." He said: "We want to increase exports to $35 billion to reduce country's dependence on foreign loans."

Explaining the possibility of achieving this target of $35 billion, Dar said: "The exporters, including the textile sector, which is Pakistan's biggest exporter, promised to us 'if these concessions and incentives are given to us, we will give you 25 per cent increase in exports.'" But that will be quite a high target to achieve. Because the ground reality is that Pakistan's exports which were just $20.5 billion in 10 months, July-April of FY-13, sadly declined to $18.2 billion in the like period of FY-16. Going by these facts, achieving a $35 billion export target in FY-17 will be quite a task. Imports were $33 billion in July-April FY-13 compared to $32.7 billion in the like period of FY-16. Savings in the import bill of oil were nearly 40 per cent. These savings were diverted to larger imports of machinery and industrial raw materials. The import of machinery in the last three years has increased by a cumulative 40 per cent - which is an indication of growing interest of foreign and domestic investors in Pakistan. The government realises the fact that Pakistan's export potential has not been fully achieved due to "depressed international commodity prices and a continuing slowdown in major export market." In order to enlarge export volumes and remove bottlenecks the government has just announced a plan to push exports up to all markets and zones, especially to the UAE, Saudi Arabia and Africa.

The plan includes:

  • Approval of the Strategic Medium Term Trade Policy (SMDTP) framework.
  • Establishment of Export-Import Bank.
  • To Operationalise the trade policy and to push exports the government will spend Rs6 billion.
  • Reduction of bank interest rates under Export Re-finance Facility (EFF) and Long-Term Finance Facility (LTFF), to provide cheaper credit to the industry and exporters. The mark up rates on EFF which was 9.5 per cent in June 2013 has been reduced to three per cent effective from July 1.
  • A Technology Up-gradation Fund (TUF) will be created, to encourage small and Medium Enterprises to invest in new technologies, especially meant for non-traditional exports.
  • Reduction or withdrawal of taxes (zero rating) on purchase of raw materials, energy, electricity, natural gas, furnace oil, and coal for five major export industries - textiles, leather, sports goods, surgical goods, and carpets.
  • Textile industry will benefit from the Technology Up-gradation Fund (TUF) for Textiles, and small and medium enterprises (SMEs). These plans will be made effective July 01, 2017. TUF will invest in new technologies to make Pakistan's products globally competitive, and push exports up.
  • Textile industry will be allowed throughout in FY-17 duty free import of machinery. It will also be widened to include more garment-specific machinery. It will encourage new investment, alongside the plans to provide cheaper bank credit.
  • Concessionary customs duty on man-made fibers, not produced in Pakistan, will continue to help the textile industry exports.
  • The price of fertiliser has been cut from Rs2,050 per beg to Rs1,800 to help the farm sector to produce more, and export more.
  • The volume of special, low-interest credit for the farm sector has been raised from Rs600 to Rs700 billion. The cost of farm credit has also been reduced by two per cent, to help farmers produce more for export.
  • Customs duties on import of machinery for fish farming has been reduced to raise fish export.

All these plans are expected to be fruitful, but still the worrying thought is the declining exports. The government's claims, low export earnings resulted from the crash of international oil and commodity prices. But, Hafiz Pasha, the former Minister for Finance, disagrees. "Smaller quantities were exported, which led to smaller earnings." Export of sugar which was down 47 per cent, cotton yarn 32 per cent, tanned leather 26 per cent and cement 24 per cent." Export were $20.5 billion during July-April FY-13 and were down to $18.2 billionin the like 10 months of FY-16, showing a decline of 11 per cent. A good deal of imports are being financed by remittances, the oversea Pakistani workers are sending home from the UAE, Saudi Arabia, US and UK. Remittances totalled $16 billion in ten months to April FY-16, and are projected by the Ministry of Finance to reach $19 billion by June 30 when FY-16 ends. A large number of concessions aim at promoting and enlarging import of capital and consumer goods. The idea is to expand the domestic industrial base so that it can produce much more, and export more, as well as satisfying the demand of the local population which is enjoying larger per capita income, and has developed taste for modern goods. The country recorded the industrial growth of 6.8 per cent in FY-16. The Large Scale Manufacturing (LSM) growth was 4.6 per cent in the same year - FY-16. In order to expand the industrial sector, Pakistan plans to import a huge quantity of machinery from US, German, EU, Japan, China and other sources. It will also entail huge quantities of capital goods and raw materials for several years to come. It will help boost imports for which Pakistan is looking towards all markets, and investors especially investors from UAE and Saudi Arabia.

Nine categories of industrial investment, imports and processing have been unveiled just now. These include: enhancing tax credit for establishing new industries, expansion of existing plants, tax credit for import of machinery for balancing, modernisation and replacement, larger tax credit for enhancing industrial base for greater employment, tax credit for employment by registered manufacturers and factory employment. Investment in green-fields industry will also get reduction in taxes, besides import of a variety of plants, machinery and equipment for the energy sector, solar plants, dumper trucks. Import of laptops will rise as sales tax has been abolished. But, the buyers of imported mobile phones will pay more tax, in the range of Rs300, Rs500 and Rs1,000 according to import/sale price of the set.

SOURCE: The Khaleej Times

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Dhaka’s pleas for lifting countervailing duty on import of RMG turn down

The two-day meeting of India-Bangladesh Joint Working Group (JWG) on trade led by Munir Chowdhury, joint secretary of the Bangladesh commerce ministry, and his Indian counterpart Bhupendra Bhalla and their delegations ended yesterday afternoon with both sides agreeing to set up six new border haats along borders with the northeastern Indian states of Meghalaya and Tripura but turned down Dhaka’s pleas for lifting countervailing duty on import of readymade garments. The two countries agreed to expand the ambit of a bilateral MoU in a week to facilitate haats along borders, said officials concerned. The two countries already have four border haats.

At the JWG meeting, Bangladesh pressed India for the withdrawal of countervailing duty on import of readymade garments from Bangladesh. India, however, contended that removal of the countervailing duty would affect the level-playing field for domestic Indian garment manufacturers. The countervailing duty of 12.3 percent was imposed in February. The decision had allowed 46 textile items from Bangladesh to enter Indian markets without any duty. The Indian manufacturers, however, demanded duty on Bangladesh garments, claiming that the decision was hurting their interests by rendering their products uncompetitive in the market. The Indian budget for 2013-14 imposed countervailing duty and additional tax of 3 percent on garments imported from Bangladesh.

At the JWG meeting, Bangladesh also raised the issue of India's clamping anti-dumping duty on jute goods imports, but New Delhi rejected any immediate change in its policy. Currently, the issue of anti-dumping duty is before a tribunal in India and the next hearing will be held after this Eid, added the officials. India meanwhile requested Bangladesh to drop the extra charges one has to pay for loading and unloading of goods at ports in Bangladesh on Friday, a weekly holiday, on grounds of reciprocity. Indian ports do not charge anything extra on holidays in India. The Bangladesh side said the matter was under consideration.

SOURCE: The Global Textiles

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US-South Carolina amends law to revive sick textile units

America's South Carolina state has amended a law on revitalizing or reviving sick textile units by enhancing financial incentives available in the South Carolina Textiles Communities Revitalization Act. The “taxpayer-friendly” amendment, cleared on May 23, seeks to remove a 50 percent cap applicable to the income tax credit provided by the Act. The amendment enhances the value of the credit by accelerating the time period for claiming the credit and applies to credits claimed for income tax year 2016, regardless of when the credit was earned. The South Carolina Textiles Communities Revitalization Act provides financial incentives for rehabilitation, renovation, and redevelopment of abandoned textile mill sites in South Carolina. A textile mill site means a textile mill together with the land and other improvements on it which were used directly for textile manufacturing operations or ancillary uses. A textile mill site is considered to be abandoned when at least 80 per cent of the mill has been closed or is non-operational for at least one year. The act provides two credit options: a 25 per cent credit against real property taxes, or a 25 per cent state income tax or corporate license fee credit. The credit is determined based on the rehabilitation expenses incurred to redevelop the textile mill site. Rehabilitation expenses generally include the costs incurred for demolition, environmental remediation, site improvements, and the construction of new buildings, it said.

In order to receive the credit, a taxpayer (business entity) must file a notice of intent to rehabilitate. Expenses incurred before submission of the notice (with the local government in the case of the property tax credit and the Department of Revenue in the case of the income tax credit) are not eligible to avail the tax credit. If a taxpayer seeks to receive the income tax credit, the notice of intent to rehabilitate should be filed before building permits are received. A notice of intent to rehabilitate must include, among other information, an estimate of the rehabilitation expenses. The credit a taxpayer may ultimately receive may be limited or eliminated based on the estimated expenses included in a notice of intent to rehabilitate. Actual expenses which exceed 125 per cent of the estimate are disregarded when determining the amount of the credit. If actual expenses are less than 80 per cent, then no credit is allowed. A taxpayer who seeks to receive a credit against property taxes receives a credit equal to 25 per cent of the rehabilitation expenses incurred. However, expenses exceeding 125 per cent of the estimate included with the notice of intent to rehabilitate are disregarded and a taxpayer must incur expenses that are at least 80 per cent of the estimate in order to receive any credit. The credit for property taxes requires approval of local taxing entities, a public hearing, and specific ordinance approval by a municipality or county. The approval ordinance must provide for the credit to be taken as a credit against no more than 75 per cent of the property taxes otherwise due for up to 8 years. There is no otherwise applicable cap on the property tax credit.

SOURCE: The Global Textiles

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China MEG stays supported as polyester makers build stocks

Monoethylene glycol (MEG) prices in China may stay supported in the near term, with downstream polyester producers in the process of building up stocks ahead of the mandated plant shutdowns in late August, industry sources said on Monday. Demand for MEG is supposed to be in a seasonal lull in June and July, but has stayed firm so far, they said. Most petrochemical plants in eastern China are being required to completely shut production at least two weeks before the Group of 20 (G20) summit at Hangzhou City in Zhejiang province on 4-5 September. The move was to ensure better air quality when leaders of the G20 member countries convene to discuss a host of issues facing the global economy. Spot MEG prices have been rising since late May to $610.00/tonne CFR (cost and freight) CMP (China Main Port) on 10 June, according to ICIS data.

Coming from a low of $555.00/tonne CFR CMP on 15 January, MEG prices peaked on 11 March at $721.50/tonne CFR Asia before sliding down for more than two months until 27 May, the data showed. “Some market players expect MEG prices to rebound, but gains will be limited unless there is a drastic change in the market landscape," an industry source said. For others, the price gains may not continue but any decline would be capped by firm demand in the near term. Polyester production, which accounts for 90% of the MEG usage in China, is being beefed up for the time being, in anticipation of the shutdowns in late August to early September, industry sources said. Increased production in the next two months should ensure supply in October, when exports to the US and Europe typically strengthens, they said. Run rates at polyester plants in China are expected to remain high, as exports for the year are likely to be on par with the previous year. Currently, the average run rate is above 80% for polyester plants - including polyethylene terephthalate (PET) units - largely unchanged from March to May, market sources said. The consequent build-up of inventories, however, will prevent polyester prices from rising, and will in turn cap any further gains in the prices of raw material MEG. MEG producers in Asia have cut production since December last year as their margins are being squeezed by high raw material prices and the weak prices of their own product. “This has resulted in a drop in MEG imports into China [compared with last year]”, a trader said.

SOURCE: The ICIS

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