INTERNATIONAL
Textile Raw Material Price 2016-06-28
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
993.10 |
USD/Ton |
-0.15% |
6/28/2016 |
|
VSF |
2028.34 |
USD/Ton |
0% |
6/28/2016 |
|
ASF |
1895.92 |
USD/Ton |
0% |
6/28/2016 |
|
Polyester POY |
987.08 |
USD/Ton |
0.61% |
6/28/2016 |
|
Nylon FDY |
2181.82 |
USD/Ton |
0% |
6/28/2016 |
|
40D Spandex |
4288.40 |
USD/Ton |
0% |
6/28/2016 |
|
Nylon DTY |
2407.52 |
USD/Ton |
0% |
6/28/2016 |
|
Viscose Long Filament |
5611.03 |
USD/Ton |
0% |
6/28/2016 |
|
Polyester DTY |
1218.81 |
USD/Ton |
0% |
6/28/2016 |
|
Nylon POY |
2038.87 |
USD/Ton |
0% |
6/28/2016 |
|
Acrylic Top 3D |
2068.96 |
USD/Ton |
0% |
6/28/2016 |
|
Polyester FDY |
1117.99 |
USD/Ton |
0.13% |
6/28/2016 |
|
30S Spun Rayon Yarn |
2708.46 |
USD/Ton |
0% |
6/28/2016 |
|
32S Polyester Yarn |
1655.17 |
USD/Ton |
0% |
6/28/2016 |
|
45S T/C Yarn |
2415.04 |
USD/Ton |
0% |
6/28/2016 |
|
45S Polyester Yarn |
1790.59 |
USD/Ton |
0% |
6/28/2016 |
|
T/C Yarn 65/35 32S |
2106.58 |
USD/Ton |
0% |
6/28/2016 |
|
40S Rayon Yarn |
2858.93 |
USD/Ton |
0% |
6/28/2016 |
|
T/R Yarn 65/35 32S |
2181.82 |
USD/Ton |
0% |
6/28/2016 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
0% |
6/28/2016 |
|
32S Twill Fabric |
0.81 |
USD/Meter |
0.19% |
6/28/2016 |
|
40S Combed Poplin |
1.14 |
USD/Meter |
0% |
6/28/2016 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
6/28/2016 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
6/28/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15047 USD dtd. 28/06/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Centre plans to implement the entire incentive package for the textiles and garments sector announced recently — which includes fiscal sops as well as labour law flexibilities — over the next three months. “We need to come out with notifications in most cases while in some instances, like changes in the Employees Provident Fund scheme, there may be need for amending the necessary Act. But, we hope to get all this done in three months,” Textile Ministry Joint Secretary Sunaina Tomar told BusinessLine. The fiscal incentives in the package, which is expected to cost the ex-chequer an estimated ₹6,000 crore, include enhanced duty drawback coverage with refund of State levies not being compensated so far, additional funding under the Technology Upgradation Fund Scheme (TUFS) and enhanced scope of income tax exemption under Section 80JJAA of the Income Tax Act. The Textile Ministry has asked the industry to provide data on the State taxes being paid by exporters which need to be reimbursed. “We have short-listed 550 exporters spread across the country to give a detailed list of all such taxes which include octroi, municipality tax and various levies so that the government gets the appropriate inputs for calculation of fresh drawback rates,” AEPC Chairman Ashok Rajani said. Rajani said that the government has promised that the new rates will be applicable with retrospective effect from June 22, 2016.
Several relaxations in the labour law, including introduction of fixed term employment in the sector, making EPF optional for employees earning less than ₹15,000 per month and the government bearing the entire employer’s contribution of 12 per cent under the EPF Scheme for new employees of garment industry earning less than ₹15,000 per month, for the first three years, are also part of the package. The new incentives will help Indian exporters beat competition from countries like Bangladesh and Vietnam and fill the space being vacated by China in the global market for clothing, according to the Apparel Export Promotion Council (AEPC). Garments exports from India will increase by a whopping $ 30 billion over the next three years once the incentive package for the textile sector announced recently is fully implemented, the industry body said. “With China already vacating space in the global market for garments, there is a huge opportunity for Indian exporters to fill the gap. The new incentives will make the garments sector in the country more competitive as exporters will be able to match the low prices offered by Bangladesh and Vietnam,” Rajani said. In 2015, India’s garments exports were worth $17.1 billion, which was 3.6 per cent higher than exports worth $16.5 billion in the previous year. China, on the other hand, exported garments worth $162.5 billion in 2016, which was lower by 3.5 per cent compared to what it exported the previous year.
SOURCE: The Hindu Business line
Indian textile and apparel industry has the potential to create over 50 million jobs, bring social transformation and gain global dominance, says a study on the Indian Apparel, Made-ups & Textile Industry commissioned by the Confederation of Indian Industry (CII) to the Boston Consulting Group (BCG). The task can be achieved by implementing GST, bold labour reforms, and robust export infrastructure coupled with innovation & technology, says the study tasked with identifying the key catalysts that will enable breakout growth. As the textile and apparel industry is shifting its base away from China, it is creating a potential market of $280+ billion for other countries to capture, according to the CII. The shift is already happening in the apparel sector, large shifts are expected in fabric and yarn sourcing as well. Though Bangladesh and Vietnam are the current frontrunners, emergence of hubs in Africa (e.g. Ethiopia) and a strong resurgence seen for manufacturing in the US, the future landscape could be dramatically different.
Capturing this opportunity can bring immense social and economic benefits for India, where the sector is the largest industrial employer of women. If the industry achieves breakout growth, the report estimates another 50 million jobs to be created by 2025; with 70-80 per cent of those jobs going to women. “The study estimates that the industry can triple in size over the next 10 years, get $150 billion annually in foreign exchange, and spur the apparel, made-ups and textile industry to reach $300 billion by 2025. The domestic market will also grow at least 2.5 times to become around $150 billion in size,” CII said. “India is uniquely positioned to capitalise on this opportunity. We are the only country in the world other than China to have the entire value chain from fibre to fashion, both in cotton and synthetics, an abundant and young labour force, a vibrant domestic market and a good starting point in exports (2nd largest exporter of textiles, apparel and made-ups in the world),” said CII director general Chandrajit Banerjee. The study notes that shifts in the global apparel, made-ups and textile industry are going to be shaped by four major factors: a) cost competitiveness, especially in labour/wage structures and energy structures per unit of output; b) ease of market access (both in terms of tariffs/duties and time to market); c) ease of doing business; and d) technical innovations. The CII 6-point agenda identifies the following game-changers for the Indian apparel, made-ups and textiles industry.
Firstly, build scale, as the industry is currently highly fragmented and lacks scale. Being highly labour intensive, introduce flexible labour laws; job linked support schemes, innovative hub and spoke models for apparel/textile parks to employ labour in hinterlands and introduce PPP models for industry to provide scale and create jobs. Secondly, bridge the operating cost gap, especially on synthetics. Entrepreneurs need to aggressively drive up productivity by investing in world class facilities, process improvements and build a culture of manufacturing excellence. Simplified tax structures and neutral implementation of GST for both cotton and synthetic products will give the much required boost to the industry. Thirdly, infrastructure, especially at ports, import facilities and clearance procedures should be streamlined to cut turnaround times. Signing FTAs with major markets like the European Union can equalise market access positions with key competitors like Bangladesh. Fourthly, increased investments in technology, especially processing and technical textiles, either through capital subsidy or technology partnerships, can help in quick and efficient production. The ATUFS released in December 2015 has taken welcome steps in this respect. Fifthly, to actualise 'Make in India' movement, government can create a comprehensive umbrella of support schemes under the 'Make in India' banner. Entrepreneurs need to advertise the made-in-India aspect aggressively, over-invest in quality and make their products worthy of putting up 'Proudly Indian' labels. And lastly, Indian entrepreneurs need to invest both financial and human resources on technology and innovation to address the constantly evolving markets. Investments are required in technical textiles, processing, and apparel making in particular. India needs to create its own 'silicon-valleys' for technical textiles, with a full ecosystem of investors, start-ups, production facilities and ultra-fast clearances. Ease of doing business is equally critical for innovation.
SOURCE: Fibre2fashion
The apparel sector is buoyant after the recent announcement of Rs 6,000 crore special package by the government. Within 120 hours of the announcement the sector has pledged to invest Rs 623 crore, according to the Apparel Export Promotion Council (AEPC). Texport Industries, Texport Syndycate and Midas Touch Export have pledged the maximum amount in Rs 623 crore, which is expected to generate 30,120 new jobs. This was disclosed at a press conference organised by the AEPC. Speaking at the conference, Sunaina Tomar, joint secretary (exports), ministry of textiles, thanked the government for introducing labour friendly reforms. “The reforms have been initiated for the betterment of the labour, like the government bearing the employers' contribution of the EPF Scheme for those earning less than Rs 15,000 per month, for the first three years. This will leave more money in the hands of the labour,” she said. AEPC chairman Ashok G Rajani gave an introduction and explained AEPC's approach towards the package and a roadmap to achieve the targets. “We not only have to reach the export target of Rs 30 billion that the government has set for us, but we have to go ahead and exceed that target. With our strategies and the reforms, I do not think that this is going to be very difficult,” he said. He presented four strategies as a part of AEPC's road map: strategy for HS Code wise promotion of garments, to accelerate export growth rate in preferential market and market diversification, facilitate input availability for enhancing competitiveness and speed to delivery, and roadmap for publicity plan and review.
SOURCE: Fibre2fashion
India’s garment export is expected to rise to USD 20 billion during the current fiscal, helped by the new initiatives announced by the government for the sector, an industry official said. The Union Cabinet last week approved a Rs 6,000 crore package for textiles and apparel sector with an aim to create one crore new jobs in three years and attract investments of USD 11 billion with an eye on USD 30 billion in exports. “India’s garment exports, estimated at USD 16.80 billion now, is expected to reach USD 20 billion during the current fiscal. The special package announced by the government will not only help in attracting large investments but also enhance production capacity,” Clothing Manufacturers Association of India (CMAI) president Rahul Mehta told reporters here. The inclusion of state-level taxes in the computation of duty drawback will provide a major relief to the exporting segment, Mehta said. However, the prevailing downturn in the global economy continues to adversely impact India’s garment industry. During the first quarter ended June 2016, the industry may see a five per cent decline in exports. Total exports of apparel from India stood at around USD 4 billion in April-June 2015. The domestic garment industry also faces dull market conditions and may see flat growth or a two per cent decline in consumption in the quarter ended June, 2016, Mehta said. CMAI is organising a mega trade show – ‘The National Garment Fair’ – on July 13-15 in Mumbai. The event will see participation from 812 brands and nearly 40,000 retailers from across the country are expected to visit the three-day B2B fair, Mehta said.
Commenting on Britain’s exit from EU, Mehta said there may not be an immediate fallout of the referendum on the business front, but there could be a period of uncertainty and confusion for some time. He said there may not be any dramatic impact on India’s garment exports to the UK or EU. However, a lot would depend on the exact agreements and treaties to be worked out by both sides, especially on tax implication on movement of goods between the two geographies. Mehta demanded aggressive follow-up for Free Trade Agreement (FTA) with EU and other countries. Post-Brexit, he felt, there could be a further delay in the signing of the FTA with EU. The apparel industry also sees huge export potential in Iran, which has a USD 16-billion market and nearly 60 per cent of the demand is met through imports, he added.
SOURCE: The Financial Express
India, the second most attractive market for global retail brands to expand. Arvind Retail Ltd, largest textile maker in India that sells foreign labels, after seeing sales growth topping its own expectations, now plans to accelerate expansion for the global brands in the Indian market. Arvind sells global brand such as Tommy Hilfiger, Nautica and Ed Hardy. In the year ended 31 March it added four more brands to its portfolio - GAP, Aeropostale, Sephora and The Children’s Place (TCP). J. Suresh, chief executive officer of Arvind’s retail and brands business said that the four brands added to their portfolio from which they earlier expected revenues of Rs.2,000 crore in the next five years are now giving good response, as a result they have stepped up on their expansion plans and will achieve this (Rs.2,000 crore revenues) in four years. The plan initially was to open 12 GAP stores in two years. The company has already opened 10 and will now have 14 Gap stores in the first two years of operations. The company has already opened seven TCP stores and will beat its target of 12 stores with a total of 15 outlets by the end of fiscal 2017 and an additional 15 shop-in-shops as well.
Likewise, for Areopostale, the initial plan was to open 40 stores in 4-5 years. This will now be achieved in 2-3 years, said Sumit Dhingra, who oversees the Nautica, Gant and Aeropostle brands. When the retailer opened its first store at Select CityWalk, a month after H&M, it did sales per square feet per day of Rs.293 in the first 30 days. Brands like Benetton, Louis Phillippe and Levis do about Rs.50 per sq ft per day, which is considered good, said Dhingra. According to The 2016 Global Retail Development Index report by consultancy AT Kearney, India is the second most attractive market for global retailers to expand in after China. But infrastructure bottlenecks, high attrition rates and limited high-quality retail space remain concerns for retailers.
India has in the past couple of years improved the ease of doing business. Greater clarity on foreign direct investment (FDI) regulations has helped. According to Kenneth Ohashi, senior vice president, international and global licensing, Aeropostale, who expects India to contribute 20% of its international sales in five years said that India is one of the corner stone’s of BRIC (Brazil, Russia, India and China) and it is the first country in BRIC that they went into. Swedish fashion retailer Hennes and Mauritz (H&M), which opened its first store in October, is expanding rapidly. H&M will have 12 stores by end of the year-end, the company said on 20 June. However, challenges remain as India continues to be a complex market for foreign retailers, where understanding dynamics at the state level is important as the country’s 29 states have the power to opt in or out of foreign direct investment reforms.
SOURCE: Yarns&Fibers
The Centre has assured Arunachal Pradesh of funds for establishment of a textile park in the state. Union Textile Minister Santosh Kumar Gangwar gave assurance to Deputy Chief Minister Kameng Dolo for a textile park yesterday, an official release said. Stating that the state government would be informed as and when the proposal would be cleared by the ministry, Gangwar advised government (of Arunachal Pradesh) to submit a detailed project report (DPR) at the earliest, it said. Gangwar has said he would be visiting the state next month to inaugurate the garment manufacturing unit at Pasighat in East Siang district. During his visit, the union minister said, he would announce some developmental packages for the state in the textile and handloom sectors. During the meeting Dolo, who also holds the Textile and Handicrafts portfolio, expressed willingness to establish weaver service centre in Itanagar so that poor weavers of Arunachal, are benefited, the release said. At present, the Weaver Service Centre at Guwahati has been providing services to the state. Manipur and Nagaland too have such centres. The deputy chief minister informed Gangwar that permission for single brand under 'Make in India' programme has been obtained from the IKEA, a Sweden based company, for bamboo products and its technical advisor Pratap Goswami is working on the project. Dolo also urged him to clear all the pending proposals lying with the ministry. Gangwar said the ministry would release the second installment under North Eastern Textile Promotion Schemes shortly after completing the required formalities. "The proposal for textile tourism at Poma near the state Capital will also be cleared," Gangwar said.
SOURCE: The Economic Times
After Modi govt’s easier labour norms, textile exporters vow to add jobsLess than a week after the government announced radical changes to labour laws and offered a R6,000-crore package to the garments sector, exporters are pitching in to do their bit. As many as 38 garment exporters — including 13 small and medium enterprises with a turnover of under R5 crore each — have pledged to hire 37,720 more people and invest R710 crore over a period of one to three years, according to a list prepared by the Apparel Export Promotion Council (AEPC) and exporters FE spoke to. Sudhir Dhingra, chairman of one India’s largest garment companies, Orient Craft, told FE his company will add 4,000 people to its existing workforce of 32,000 over the next three years. Apart from replacing a small unit in Noida with a bigger one, Orient will set up one more facility in the city, he said. Richa Global, another large exporter, will add 3,000 people within a year to its existing employee base of 11,000 people, said its chairman Virender Uppal. Narendra Kumar Goenka of Texport said his company is looking to hire 4,500 people over the next three years, recording a sharp increase over the current workforce of 1,000 people. The number of exporters willing to create jobs is only going to rise, as many of them are awaiting fine prints to get to the bottom of the package announced, according to Ashok G Rajani, the chairman of AEPC. Rajani, also the chairman of Midas Touch Exports, has pledged to invest Rs 75 crore and hire 650 people in response to the package. The pledges by so many SMEs show the government’s move will help inclusive growth, he added. This is important, as roughly 80% of the labour-intensive garment sector is dominated by small-scale industries. Overall, the companies have pledged to hire people in the range of 50-4,500.
The government last week announced a raft of measures, including the introduction of fixed-term employment, optional contribution to the Employees’ Provident Fund by workers earning less than Rs 15,000 a month, the refund of employers’ contribution of the EPF, additional incentives under the Amended Technology Upgradation Fund Scheme, enhanced duty drawback and some income tax relief, to boost the garment sector. Through the package, the Narendra Modi government is aiming to create 10 million additional jobs, $30-billion additional exports and investments worth Rs 74,000 crore in the textile and garment sector. The steps will also encourage the consolidation of garments units under fewer roofs and more units may come under the organised sector. At present, close to 32 million people are employed in the textiles and garments sector, which is the largest jobs provider after agriculture and accounts for roughly 15% of the country’s exports. The country’s textile and garment exports stood almost flat at $40 billion in the last fiscal, with clothing accounting for $17 billion. While analysts feel the targets set by the government are ambitious, given stressed balance sheets of most companies, subdued demand and dented cost competitiveness of Indian exporters vis-a-vis Bangladesh’s or Vietnam’s, some industry players believe these are not impossible to realise. Dhingra says if the proposed free trade agreement with the EU and another one with Britain are clinched, all these targets will be easily realised. The EU makes up for 37% of India’s garment exports and Britain alone used to account for roughly one-third of the EU demand. That is because Indian exporters are paying close to 10% duties for supplies to the EU, while key competitor Bangladesh, Pakistan and Cambodia have zero duty access to it.
SOURCE: The Financial Express
Cargo handling at Chennai Airport shot up by 22.7 per cent as of May compared to the year-ago period. Revenues rose to Rs 27 crore from Rs 22 crore during the same period, a top airport official said today. “Cargo handled up to May 2016 (from June 2015) was 42,765 tonnes as against 31,649 tonnes registered during the same period last year,” Airport Director Deepak Shastri said. Revenue from cargo handling was close to Rs 27 crore, against Rs 22 crore during the same period last year. “We have already begun reaping the benefits of our initiatives in cargo handling,” Shastri told PTI. On the efforts taken to improve facilities at the airport to ramp up cargo handling, he said, “The Airports Authority of India has introduced self-feeding of data by respective agents instead of depending on AAI officials.” “It means a separate counter has been provided, which has become an instant success as 50-100 consol related entries were fed by bulk agents directly,” he said. “Nokia Solutions, Lenovo, Foxconn, Nissan and BMW have started to increase their volumes through airport,” he said. A single window clearance system introduced for faster clearing of cargo was now functioning “effectively,” he added. Aimed at benefitting more industries in automobile and electronic sectors, a new concept in advanced planning has been introduced to help industries forward their day-to-day clearance plan to AAI well in advance, he said. “The respective cargo will be kept on stand-by for delivery without wasting any time for locating the consignments. This has been facilitated for prompt delivery,” he added.
SOURCE: The Financial Express
Great Britain’s exit from the European Union after the referendum to quit on 23 June will have marginal impact on India’s fibres and yarns export to that destination as it is now a big buyer. While entire West Europe accounted for less than 7% of total fibre and yarn exports in 2015-16, UK was just 0.2%. Within export to West Europe, UK was just 3%. This show that volume of trade between India and Britain. In 2015-16, UK imported US14.7 million worth of fibres (natural and manmade) and spun yarns including filaments. This included US$8.13 million of spun yarns, US$3.44 million of filament yarns and US$3.15 million worth of fibres. During the year, it imported cotton yarn, polyester/wool, polyester yarn and acrylic yarn, each worth more than US$1 million. Among fibres, UK imported PSF and VSF during the year. Even textile machinery manufacturers’ body India ITME Society does not see any immediate threat from Brexit. According to Sanjiv Lathia, Chairman, England is not a big buyer of textile machinery. Textile manufacturing moved away from England long ago to China. He also sees not much impact on Indian textile machinery manufacturing. However, garment exporters are a worried lot. Post separation they want a trade treaty with Britain. EU is a major destination for readymade garments, with the UK a leading market. Europe makes up 46% of apparel exports, of which Britain's share is 40 per cent.
A free trade agreement (FTA) will be paramount to boost garment exports to the UK. Knitwear exporters are also pitching for FTA with the EU, also want a separate pact with Britain. India currently enjoys a 12.5% tariff preference in the EU under its Generalised Scheme of Preferences programme. Although Europe is a large market for India, it is more or less saturated now. But high valued added products will be immediately picked up in the coming years. Recently, the government had approved a INR6,000-crore special package for the textiles and apparel sectors with an aim to create 10 million textile jobs within three years.
SOURCE: Yarns&Fibers
Britain is likely to explore direct bilateral trade agreements with India which could impart a fillip to sluggish UK-India trade ties after the UK's exit from the European Union (EU), a Singapore bank said. "Post exit EU, the UK is likely to explore direct bilateral trade agreements with other trading partners including India," said Development Bank of Singapore (DBS). "This might provide an alternate route to India, in comparison to the tough and the drawn-out negotiations on the EU Free Trade Agreement, in turn providing a fillip to a slowing India-UK trade," said DBS. The UK accounts for 15 per cent of India's total merchandise trade, but its share has been declining. Trade in services has also eased, but particularly for the information technology sector, about 17 per cent of India's service exports heads to the UK, second only to the US, according to the Nasscom. Investment links are meanwhile notable, DBS pointed out. UK is the third largest inward investor into India, after Mauritius, and Singapore, with cumulative Foreign Direct Investment (FDI) equity investments of USD 22.7 billion (from April 2000 to December 2015), or eight per cent of the total FDI inflows. In turn, India is the third largest investor, based on the number of projects, into the UK. Indian businesses that tap the UK domestic markets are unlikely to face many challenges. However, firms that intend to utilise UK as a base to gain access into European markets, might have to rethink plans. A risk here is the imposition of trade barriers, scrapping preferential rates and higher taxes between UK and the rest of EU, which might pose a hurdle for foreign companies to invest in the UK. These factors could slow investment flows from India to the UK, until more clarity is available in this regard, believes the bank.
Beyond the short-term risk dislocations, India's domestic focus will also be on the rainfall progress, government's reform agenda and monsoon parliament session. Any potential threat to external trade might also likely be offset by the pick-up in consumption spending, thereby leaving the ongoing recovery intact. "The situation is quite fluid at this stage and thereby risks of sporadic volatility in the G3 currencies and associated shakeout in the global markets should not be ruled out, especially as focus is on EU's ability to deal with fresh crisis," it said.
SOURCE: The Economic Times
Among various uncertainties following Brexit, those on investment rules as part of the FTAs recently concluded, or being negotiated by the EU, can be significant. The EU is engaged in several trade and investment negotiations, including the Trans-Atlantic trade and investment partnership (TTIP) with the US. It has recently finished negotiating important trade agreements with Canada and Vietnam and is discussing Economic Partnership Agreements (EPAs) with African countries. Discussions on trade and investment with India, and on investment with China, are also significant.
The EU has been a major actor in bilateral free trade and regional trade agreements. Over time, it has taken over the mandate of negotiating trade and investment agreements on behalf of its member states with the rest of the world. This includes negotiating bilateral investment treaties (BITs). The EU’s Lisbon Treaty of 2009 gave it exclusive authority for negotiating foreign investment issues on behalf of members. This meant henceforth there would be only one overarching EU BIT that members would adhere to and partners would have to deal with. The move created confusion over the fates of existing BITs that individual EU members had with other countries. China and India, for example, have BITs with 25 of the EU member countries, signed before the Lisbon Treaty. These BITs have been variously invoked in investment disputes, such as, for example, India’s BIT with the Netherlands. While the confusion was yet to be resolved, Britain’s exit from the EU has added new complications. China is already negotiating a BIT with the EU, while India’s FTA talks with it include trade and investment. These would now have to proceed on the assumption that investment issues pertaining to Britain would not be resolved within these frameworks.
The implications are significant for China and India as they are now significant capital exporters into EU and Britain. In all probability, they will have to revisit bilateral investment protection agreements with the UK separately. They still have time to absorb the implications of Brexit on investment negotiations with the EU given that their talks are yet to be concluded. In a sense, the delay in concluding their negotiations with the EU can be seen as a blessing in disguise. The situation though is more complicated for other countries that have recently concluded trade and investment negotiations with the EU. These include Canada, Vietnam and the US.
Both Canada and Vietnam are members of the US-led TPP. They have worked out individual FTAs with the EU with the larger objective of gaining preferential market access in Europe so that they have similar market access conditions and are able to trade with broadly identical rules in both the Pacific and Atlantic. With the US and EU negotiating the TTIP, which is almost at its final stages, the urge of other TPP members to work out preferential trade and investment deals with the EU is understandable. EU’s FTAs with Canada and Vietnam contain elaborate provisions on investment. The most significant among these are the Investor-State Dispute Settlement rules (ISDS).
The ISDS empower businesses to arbitrate against sovereign governments of parties of the FTAs. It is not necessary that the ISDS only feature in FTAs and RTAs. On the contrary, they used to mostly feature in BITs earlier. But the EU and US have preferred their inclusion in the FTAs they are negotiating given that investments are integral to cross-border trade in services between countries. Thus the ISDS feature in EU’s FTAs with Canada and Vietnam and are part of the TTIP as well.
The Canada and Vietnam FTAs are done deals. Given that the ISDS provisions in both these agreements have been based on the assumption of cross-holding of companies across Europe, including Britain, the latter’s exit has implications for the protection that both businesses and states would visualize for capital exports into Europe. A necessary implication would be negotiating separate BITs with the UK by Canada and Vietnam, as well as by the US, post-TTIP. But that would take time. The contents of future BITs with the UK would require aligning them as close to investment provisions in FTAs and BITs with the EU as possible.
As Britain and EU work out modalities in the coming months over Britain’s exit, considerable attention will be on the institutional economic relationship between them. International persuasion is likely to play an important role in this regard. Most countries having FTAs with the EU, or working them out, would prefer Europe and Britain to retain a certain degree of institutional synergy. This is particularly important from the perspective of investments. The larger objective of the non-European partners of the EU and Britain would be to ensure that rules governing cross-border management of investments, particularly arbitration, remain similar between EU and Britain, so that, for investment purposes, both continue to be visualised integrated notwithstanding Brexit.
SOURCE: The Economic Times
Brexit is likely to have an adverse impact on India’s growth with domestic GDP expected to decline by up to 60 basis points in a high-stress scenario within the next two years, Morgan Stanley today said in a report. According to the global financial services major, with the UK’s referendum to leave the European Union, the impact on Indian economy would be through trade and financial channels. However, it noted that owing to lower direct exposure in terms of exports to the UK, the Brexit impact would be “less” as compared to other more open economies in the region. “In a medium-stress scenario, we expect downside of 10-20 bp to GDP growth in the next two years, while in a high-stress scenario, we expect downside of 30-60bp to GDP growth,” Morgan Stanley said.
In terms of policy response to the situation, Morgan Stanley said it expects the monetary policy to be more focused on mitigating liquidity tightness through open market operations (purchase of government securities) in the eventuality of capital outflows. “Given that overall fiscal policy stance remains slightly expansionary, we do not expect any major change in fiscal policy by the government,” it added. On the upside, the report noted that several indicators have pointed towards broadening of the country’s economic recovery on account of pickup in discretionary consumption following the improvement in public capital expenditure and foreign direct investment flows, which remain strong. “The pick-up in consumption is of particular significance given that discretionary consumption has been on a weak trend since mid-2012,” the report said. “Retail loan growth, petrol consumption, air passengers flown and consumer durables production have shown an improving trend over the last four months, indicating a pick-up in discretionary consumption,” it added. Moreover, there has been a pick up in two-wheeler sales as well as improvement in steel and cement demand reflecting a rise in infrastructure related activity, among others. On private capex, the report said there would be an initial period wherein capacity utilisation levels would rise as consumption demand picks up as well as an improvement in corporate profitability. “This will create the base for private corporate capex to kick in, which we think will take 12-18 months to recover on a full-fledged,” it added.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 45.35 per barrel (bbl) on 28.06.2016. This was lower than the price of US$ 45.43 per bbl on previous publishing day of 27.06.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 3078.74 per bbl on 28.06.2016 as compared to Rs. 3084.67 per bbl on 27.06.2016. Rupee closed stronger at Rs. 67.89 per US$ on 28.06.2016 as against Rs. 67.90 per US$ on 27.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 28, 2016 (Previous trading day i.e. 27.06.2016) |
Pricing Fortnight for 16.06.2016 (28 May, 2016 to June 13, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
45.35 (45.43) |
47.63 |
|
(Rs/bbl |
3078.74 (3084.67) |
3193.12 |
|
|
Exchange Rate |
(Rs/$) |
67.89 (67.90) |
67.04 |
SOURCE: PIB
Major worldwide markets such as the US, China, Japan, India, Canada, Australia and New Zealand are likely to lose interest in the EU, if the full exit of UK from the EU goes ahead, says a latest report. The loss of interest by major markets will be because very few of the people in these countries know any European languages, except English, says a study carried out as part of Europe 2016 Wealth Report by New World Wealth. According to the report, after Brexit, Ireland will be the only English speaking country left in the EU. This will likely result in a large inflow of EU migrants into Ireland as most EU citizens have English as their second language (very few EU citizens know French, German or other European languages). “As a result, we expect over 3 million EU citizens to enter Ireland over the next 5 years – this may create some panic in Ireland and may cause them to hold their own referendum in a few years,” says the report. UK's exit will also have its impact on Turkey's plan of joining the EU, which is less likely to materialise now. For many EU citizens, the possibility of going to the UK without restriction was the cherry on the cake as it was an English speaking country with a good social welfare system and offered a route to other English speaking countries such as the US and Australia through work transfers. However, with Brexit, this facility would go away and it will become the main factor that encourages other countries to leave the EU. “We expect Holland and Ireland to be the next countries to leave the EU (within 5 years). We expect the 'big 4' EU markets of Germany, France, Italy and Spain to stay,” the report states. The study suggests that UK should re-introduce two year working visas for young people from other English speaking countries like Australia, New Zealand and Canada. This will ensure that well educated young people continue to come to the UK.
SOURCE: Fibre2fashion
An increase in import duty on raw cotton would badly affect the textile industry, said All Pakistan Textile Mills Association (APTMA) on Tuesday, continuing its trend of being irked by policy developments. “One percent increase in import duty (from 2% to 3%) would effectively increase the total duty to 4% because there is already 1% additional duty in place,” it said in a press release. According to the association, the government was showing an indifferent attitude at a time when the textile industry was reeling from the effects of a massive crop failure in the country. The production of cotton declined almost 35% this year, which badly hurt the overall Gross Domestic Product (GDP). “It is not possible for the textile industry to continue to operate in these conditions and contribute to higher exports and provision of yarn to the domestic downstream if they are made to pay such exorbitant amount of duty on its basic raw material,” stated the association. “Pakistan has become a net importer of raw cotton; despite the fact that the textile industry is trying to remain competitive, contributing to the national exchequer and at the same time retain jobs of millions,” it added. “If we have to eventually import over 3 million bales due to the crop failure, then the government should abolish the duty completely,” they demanded. “The industrialists are already suffering due to high cost of doing business and acute shortage of energy and now it has to compete with a surge in cotton yarn imports from its regional competitors,” APTMA Chairman Tariq Saud said. He urged the government to restore the free trade regime in cotton trade as originally envisaged and announced by the Prime Minister Muhammad Nawaz Sharif.
SOURCE: The Tribune
Trade ministers of countries, including India, China and Japan, will meet on August 5 in Laos to iron out issues holding back negotiations of the Regional Comprehensive Economic Partnership (RCEP). There are several complex issues, including the proposed three-tier system of tariff relaxation and services sector matters, which need intervention at a ministerial level, a senior official said. "On August 5, all the trade ministers will meet to deliberate on those issues and try to resolve them so that the talks can be concluded on time," the official added. In the recently-concluded 12th round of negotiations for the mega trade deal - RCEP - in Auckland, a few members raised concerns about the three-tier system proposed by countries, including India, to cut or eliminate taxes on goods. "A few countries want duty elimination on about 99 per cent of the goods traded among the RCEP members, but nations, including India, are of the view that moderate relaxation in taxes too would give significant market access to all the member countries," the official said. India has decided to offer greater access to its market for ASEAN countries -- with which it has a free trade agreement in place -- and has proposed to eliminate duties or tariffs on 80 per cent of items for the 10-nation bloc under this proposed pact. Similarly, for Japan and South Korea, it has offered to open up 65 per cent of its product space. For Australia, New Zealand and China, Delhi has proposed to eliminate duties on only 42.5 per cent of products, as India does not have any kind of FTA with these three countries. RCEP is a mega trade deal which aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. The talks for the pact started in Phnom Penh in November 2012. The 16 countries account for over a quarter of the world's economy, estimated to be more than USD 75 trillion. India already has FTAs with the ASEAN grouping, Japan and South Korea. The 16-member bloc RCEP comprises 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners -- India, China, Japan, South Korea, Australia and New Zealand
SOURCE: The Economic Times
