Indian govt urged to announce amnesty for export obligation defaulters
NTC forms panel for rehabilitating people living on mill land, says Piyush Goyal
Apparel, drugs, and leather exporters under scanner for tax scheme misuse
India's apparel exports to Mauritius up 5.96% in FY22 post FTA
Telangana seeks funds in Union Budget for various projects
India & Vietnam ideal substitutes for 67% supply chain leaders: Report
Manufacturing in India, Brazil strongly hit by COVID-19: Study
INTERNATIONAL
Performance in Q1 FY23 satisfactory: Bangladesh finance minister
Cambodia's GDP projected to grow at 6% in 2023: NBC
Govt committed to fully revive Kenya’s manufacturing sector - Industrialization PS
CPTPP creates impetus for export growth
Pakistan:Textile exporters secure export orders in exhibition
NATIONAL
The Tiruppur Exporters’ Association (TEA) recently requested the minister of finance and corporate affairs Nirmala Sitharaman to raise the interest benefit under the Interest Equalisation Scheme to 5 per cent across the board, announce an amnesty scheme to settle export obligation default, and set up an infrastructure development fund for textile clusters in the next budget. Raising the interest benefit under the Interest Equalisation Scheme would help protect the knitwear industry, said TEA president KM Subramanian in a letter to the minister. Some exporting units in Tiruppur have been finding it difficult to fulfil their export obligation for capital goods imported under Export Promotion Capital Goods (EPCG) scheme and raw materials imported under Advance Licensing Scheme within stipulated period due to the impact of the pandemic, a rise in yarn prices and the Ukraine-Russia war. As the exporting units have to pay the interest apart from normal customs duty to regularise the case, the association requested the minister to announce an amnesty scheme to settle the issue. The knitwear exporting units in the Tiruppur cluster are now facing a severe threat to their existence due to issues like low orders, delay in receiving payment, non-acceptance of booked orders, and deferment of shipment, Subramanian wrote. The association suggested that the Export Refinance Scheme should be extended to banks to augment export credit, and banks may be encouraged to provide export credit in Indian rupee to exporters and the same amount can be refinanced by the Reserve Bank of India at the repo rate. “There is no doubt that such a mechanism will bring down the interest cost for export credit providing much needed competitiveness to our exports,” the letter said. The association called for a specified scheme for micro, small, and medium enterprises (MSMEs) under the Emergency Credit Line Guarantee Scheme (ECLGS). It said 10-20 per cent of the existing credit should be immediately offered to bail out the knitwear garment sector as many units are finding it difficult to service their loan to banks and sustain in the business. It also requested the minister to announce 1 per cent of export turnover of garment clusters for an Infrastructure Development Fund.
Source: Fibre2Fashion
To expedite the redevelopment of the mill land, the National Textile Corporation (NTC) has formed a committee to study and suggest ways for rehabilitating the people living in the premises of nine of its defunct mills in the central areas of the megapolis, Union industry and commerce minister Piyush Goyal said on Sunday. The city is home nearly a dozen shuttered cotton/textile mills and tens of thousands of people still live in the dilapidated hutments/chawls in these mill premises. National Textile Corporation, along with the Maharashtra government, including Mhada and MMRDA, has formed a committee to speed up the redevelopment of the land under nine of its mills in the city, Goyal told reporters without specifying which are those mills being identified. The minister said these nine mills house 1,860 chawls housing tens of thousands of people and the job of the committee is only rehabilitation and These nine mills can release 56,000 square meters of land for redevelopment, he said, adding there are 11 chawls on the non-mill land parcels as well. Goyal further said the said committee has already appointed realty consultant Cushman & Wakefield to submit a plan on rehabilitation of these chawls. They will not report on redevelopment of the land parcels where there are chawls, he specified. The Centre has also asked Maharashtra to convert non-cessed buildings to cessed ones so that the rehabilitation and the ensuing redevelopment can be expedited. Goyal expects the panel to complete the inspection of the identified land banks over the next few weeks by that time Cushman & Wakefiled will also submit their report. Over the next 30-45 days, there will be some significant development, he said, adding the whole process will have the active involvement of both the state's housing body Mhada and the Mumbai planning body MMRDA. Till about the middle of the last century the city had over 130 cotton mills, the first of which was Bombay Spinning Mill set up by Cowasji Nanabhai Davar in 1854. But today none of them are functional today their ruins covered with moss are the only remaining traces of its mill culture and history. As the city grew they lost their sheen and the Great Bombay textile strike of 1982, was the last nail on the long history if the city's origin. Some of the noted redevelopments are the High Street Phoenix Mall in Lower Parel, which has a spanky shopping mall a five-star hotel, a multiplex, commercial space, and a residential tower. Phoenix Mill's history dates back to 1905. Another is the nearby plush Kamala City business park which used to be Kamala Mills. And the country's tallest residential tower, the Palais Royale in nearby Worli, is built on the remnants of the Shree Ram Mills.
Source: Economic times
Exporters are misusing the government’s duty drawback scheme by claiming it along with refunds of integrated goods and services tax (GST), according to GST authorities, who are doing an investigation into this. Over 100 such exporters — mainly in apparel, drugs, and leather — have been “illegally” drawing benefits from two routes, according to two officials privy to the probe. “We have detected that several exporters have been allegedly making integrated GST refund claims on exports while part of the amount is also being claimed through the duty drawback route, which is illegal,” one of the officials said. From the probe, the authorities are learnt to have stalled the refunds of about 600 exporters, amounting to Rs 2,000-3,000 crore and pending since September 2022, according to an exporter. Some have filed writ petitions in different courts, he said. An official said this could delay refund issuances to exporters. These exporters are from mainly four cities, Mumbai, Surat, Ludhiana, and Tirupur, officials said. In case the exporters are found guilty, show-cause notices will be issued by the GST authorities. Subsequently, they have to pay for the wrongful gains in the form of an 18 per cent interest rate and penalty. Explaining the illegality, an official quoted above said the duty drawback scheme was for compensating “unrebated taxes and duties” embedded in the cost of manufacturing exported goods. Exporters pay taxes and duties such as value-added tax, mandi tax, and electricity duties.
Claiming both for the same goods is prohibited.
On the other hand, under IGST, exports would be zero-rated, which means they can take credit of taxes (GST) paid on the input side for making the output supply. The suppliers hence are entitled to claim refunds. Currently, IGST refunds are issued to exporters automatically based on the shipping bills filed with the Customs and goods and services tax returns filed with the central tax authorities. The refunds are issued within a fortnight of filing returns without any manual intervention.
Duty drawback claims take a month.
“Duty drawback and IGST refunds are separate schemes to incentivise exporters and must not be linked to interpreting issues. Any delay in giving these benefits impacts the working capital flow and is against the objectives of the government to provide timely benefits to exporters,” said Abhishek Rastogi, founder of Rastoji Chambers. In the past, exporters had allegedly misused the duty drawback scheme, taking advantage of the difficulty in ascertaining the market value of exports. An exporter may quote a higher price on low-quality ready-made garments to claim higher reimbursement, sources said, explaining the reasons behind such evasion. Though there are value caps, meaning that an exporter cannot get more than a certain percentage irrespective of the value of export, there have been instances of exporters selling goods below the declared prices, thus getting a much higher drawback than what was justified or due, they said. “It is essential to build safeguards to protect genuine exporters and ensure that their refunds are released expeditiously. Merchandise exporters are operating in a globally competitive environment with several headwinds and require working capital support to navigate the landscape,” said M S Mani, partner, Deloitte India.
Source: Business-Standard
India’s apparel exports to Mauritius noted mild gains after the free trade agreement (FTA) came into force on April 1, 2021. The exports increased by 5.96 per cent year on year to reach $36.008 million during April 2021 to March 2022 (FY22). Apparel exports from India to Mauritius amounted to $19.31 million in the first half (H1) of 2023. On a quarterly basis, the shipment had increased to $12.251 million in Q1 2022, which eased to $7.059 million in Q2 of the same year. The outbound trade is yet to reach the level of April 2016-March 2017 when the shipment had peaked at $42.672 million. India’s shipment of apparel to Mauritius decreased by 7.71 per cent to $33.984 million in April 2020-March 2021 due to the pandemic. India’s apparel exports to Mauritius were recorded at $34.170 million in April 2017-March 2018, $31.322 million in April 2018-March 2019 and $36.824 million in April 2019-March 2020, according to Fibre2Fashion’s market insight tool TexPro. The industry is confident that FTAs will encourage India’s exports to partner countries. Sanjay Garg, president of North India Textile Mills Association (NITMA) recently said, “The trade agreements with the UAE and Mauritius have already begun to provide better results.” Mauritius is a minor market for Indian apparel exports. Mauritius contributed merely 0.23 per cent in the total outbound apparel trade of India, which was at $15.747 billion in April 2021-March 2022.
Source: Fibre2Fashion
Telangana's Minister for Industries and Information Technology, K.T. Rama Rao has sought budgetary support from the Centre for various industrial projects in the state. Reminding the Narendra Modi-led Central Government about the promises made to Telangana, he said that the upcoming Union Budget 2023-24 is the right occasion for the Centre to show its commitment to the development of the state. After writing a series of letters urging the Centre to support various sectors in the state, Rama Rao on Saturday dashed off a letter to Union Finance Minister Nirmala Sitharaman about the budgetary support that Central government has to extend to various projects in Telangana industrial sector. KTR, as the Telangana minister is popularly known, said that if the Centre truly believes in the slogans - Make in India, Aatmanirbhar Bharat, then support has to be extended to progressive states like Telangana which is filled with the potential to actualise those slogans. Stating that Telangana's pioneering policies achieved notable progress in the industrial sector after formation of the state, the minister said that world-class infrastructure is being created to meet the needs of industries and attract more investments. As part of it, KTR said, India's largest textile park, world's largest single pharma cluster - Hyderabad Pharma City are being established. He said that the industrial parks will usher in development of not only the state but the entire country. Reiterating that the country's progress can be fast tracked if states are strengthened, KTR sought huge funds to be allotted to Telangana which became a key player in the nation's industrial sector. KTR said that though the state sought Centre's support many a time in the past, it did not receive sufficient funds in the previous eight Union Budgets introduced by the BJP-led Union government. In his letter to the Union Finance Minister, KTR listed the industrial corridors, industrial parks and various other projects spread across the state which need budgetary support from the Union government. He sought funding support for external infrastructure development at NIMZ, Zaheerabad. He said the Centre should provide Rs 500 crore out of the total estimate of Rs 9,500 crore. KTR also sought budgetary support for development of Hyderabad-Warangal industrial corridor and Hyderabad-Nagpur industrial corridor. At least 50 per cent of the total cost of Rs 5,000 crore is required to join two nodes of Hyderabad Pharma City and NIMZ Zaheerabad, he wrote. The Union minister was also urged to provide fund support for development of Hyderabad-Vijayawada industrial corridor. KTR sought Rs 1,500 crore out of Rs 5,000 crore to newly identified Hyderabad, Jadcherla, Gadwal, Kothakota nodes Establishing a Common Effluent Treatment Plant (CETP) in Jadcherla Industrial Park under TIES scheme and gas allotment for the same, sanction and upgradation of Brownfield Manufacturing Clusters, reopening of Cement Corporation of India in Adilabad, setting up a national design centre in Hyderabad, budgetary support for Hyderabad Pharma City, inclusion of Hyderabad in the proposed Defence Industrial Production corridor, support for development of Kakatiya Mega Textile Park and sanctioning of Mega Powerloom Cluster including Textile Park, Weaving Park and Apparel Park in Sircilla under the Comprehensive Powerloom Cluster Development Scheme (CPCDS) are among the other requests made by the minister.
Source: The Smetimes.in
About 67 per cent of supply chain leaders consider India and Vietnam as ideal alternatives for China plus one strategy, according to the ‘Container LogTech’ predictions report for 2023 by Container xChange. The majority of the respondents surveyed, 88 per cent, fear that the biggest impeding factor for businesses in 2023 will be inflation and recessionary fears, followed by implications of war (57 per cent), impact of COVID in China (53 per cent) and worker strikes (23 per cent). Both India and Vietnam are expected to be top choices for supply chain leaders, as the US will emphasise on ‘friendshoring’ in 2023 and will aim to gradually shift its manufacturing facilities away from China. The long-term shipping contract rates will see an uptick in 2023, though gradually. This slow increase applies to all modes of transport. With negotiations going on to bring contract rates in line with spot rates, a reset is expected. On the other hand, until there is a balance reached between supply and demand, forwarders will favour short-term contracts until the rates stabilise. “Freight forwarders will employ a ‘wait and see’ approach before making any long-term air cargo capacity commitments particularly,” the report claims. Trucking rates for both dry and reefer cargo will continue to drop in 2023. Freight tonnage will continue to contract as market conditions and volumes return to pre-pandemic numbers. The unresolved worker strikes of 2022 will spill over in 2023. Furthermore, the chances of new strikes coming up are high due to inflation-related rises in prices putting pressure on workers’ disposable incomes. Labour dissatisfaction might grow in European and North American economies. In that case, it will cause disruptions in global supply chains. The report further covers the growing expectation of the 3PL (third-party logistics) market to solidify in 2023. Reportedly, it’s projected to reach $1,789.74 billion by 2027. Another key trend on the list is the digital transformation of the industry. In the years to come, the adoption of digital technologies in shipping will focus on vessel schedules, intuitive booking interfaces, instant slot booking, and capacity confirmations. In this regard, the industry’s major concern will be on having systems interact directly via automating the data-analysis-decision-action cycle. “The overall outlook for the year 2023 remains gloomy. Europe is hit hard with all-time high inflation; China struggles to cope with the virus, and the US continues to witness hinterland transportation challenges and labour unrest. Most of these challenges will stay in 2023. Consumer confidence will pick up, but it really depends on whether we witness more disruptions in the coming times,” said Christian Roeloffs, cofounder and CEO, of Container xChange, an online container logistics platform.
Source: Fibre2Fashion
The COVID-19 pandemic strongly affected the manufacturing sector in India and Brazil, while human health, public administration and defense were strongly hit in the United States and Sweden, according to a study which offers new insight into how countries respond to systemic shocks. The construction sector was moderately or strongly affected in all nations. Unlike other countries, retail trade—excluding motor vehicles and motorcycles—was quite strongly affected in India relative to other sectors, as was the land transport sector, the researchers said. While earlier attempts to quantify the impact of the pandemic mostly looked only at it in a single dimension, this study, published in PLOS One peer-reviewed journal, explored resilience across a variety of social, economic and political domains in several countries. ''We found significant discrepancies between what experts had predicted would be the most resilient countries if struck with a pandemic,'' Sara Del Valle from the Los Alamos National Laboratory in the United States was quoted as saying. ''For example, we saw stricter governmental pandemic policy was associated with higher political unrest across states within the US, while the opposite was true for states in Brazil,'' she said. Education played a key role in pandemic response, the researchers found. Even after adjusting for strictness of governmental COVID policies, they found that higher education was significantly associated with lower amounts of political unrest across the United States.
Source: Fibre2Fashion
INTERNATIONAL
Bangladesh finance minister AHM Mustafa Kamal recently placed a report in the Parliament that said the position of basic macroeconomic indices, including revenue collection, remittances, export growth, annual development program (ADP) expenditure and money supply, in the first quarter (Q1, July-September) of fiscal 2022-23 fiscal was satisfactory. The Q1 revenue collection was 19.33 per cent compared to 18.72 per cent in the previous fiscal. Public expenditure was 11.14 per cent against 11.9 per cent in the same period of the last fiscal, while implementation rate of ADP was 8.55 per cent in Q1 against 8.26 per cent. “Revenue collection was done as per the target, positive trend was seen in import and export income, and as a result I am hoping that we will be able to attain our desired target in the current budget,” the minister was quoted as saying by Bangla media reports. The finance minister said that due to the increase of import expenditure, there was a deficit in the current account balance, which reduced to $36.47 billion in the reserve on September 30 last year. It was $46.22 billion in the same period of 2021. The export income growth rate was 13.38 per cent in Q1 this fiscal against 11.37 per cent during the same period of the last fiscal. The import expenditure increased by 11.67 per cent in the quarter against 47.56 per cent in the same duration of the last fiscal. The annual average inflation was 5.5 per cent in September 2021, while it increased to 6.96 per cent in September last year. The point-to-point inflation in September 2021 was 5.59 per cent, while it increased to 9.1 per cent in 2022.
Source: Fibre2Fashion
Cambodia’s gross domestic product (GDP) is projected to grow by around 6 per cent in 2023 by the National Bank of Cambodia (NBC). The growth would be backed by garment and non-garment products that are estimated to grow by 6.9 per cent and 14.3 per cent respectively. The prolonged Russia-Ukraine war is the reason behind the highly uncertain inflation in 2023. However, in the scenario of the slowdown in the global economy and declining food prices, inflation in Cambodia is projected to decelerate to 2.5 per cent after it peaked at 7.8 per cent by the end of the first half of 2022 and has gradually declined in the second half as fuel and food prices subdued. An NBC report, titled ‘Macroeconomic and Banking Sector Development in 2022 and Outlook for 2023’, shows the agriculture sector is forecasted to further rise by 1.1 per cent on the back of the implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) and bilateral free trade agreement (FTAs). “Flight operations from China to Cambodia have been gradually resumed and the travel restrictions on Chinese people going abroad have been lifted … as well as the withdrawal of the tariff preference for the imports of rice to European markets amid the rising domestic demand in the affordable real estate market segment while the market demand of non-residents for high-end properties will take times to return to pre-crisis levels,” the report was quoted as saying by Cambodian media outlets.
Source: Fibre2Fashion
State Department for Industrialization Principal Secretary Juma Mukhwana said President William Ruto’s administration is eager to strengthen the country’s manufacturing capacity and create more job opportunities for Kenyans. Speaking during a tour of Rivatex East Africa Limited, a textile manufacturing company in Eldoret town, the PS noted that investments in the sector is in line with Kenya Kwanza government’s ‘Buy Kenya, Build Kenya’ agenda. “Rivatex had previously collapsed and it has undergone a significant makeover I want to applaud the factory’s management for bringing it back to life, it has now created employment to more than 1000 people. I am confident that the new Rivatex will boost this administration’s efforts to create more jobs for the youth in the future,“ said Dr Mukhwana. The PS said plans to revive collapsed companies like Ken Knit Raymond and Farmers choice are ongoing and that Kenyans will soon see the results. “The government has invested up to ksh.7 Billion in the factory (Rivatex) over the past five years and has unveiled plans to expand the textile manufacturing industry with the goal of increasing revenue ten times than of the previous year which was Ksh 50 Billion, while increasing employment from 50,000 to 500,000 over the next five years, “he said. He further revealed that according to the Agoa agreement with USA, Kenya is allowed to export textile items to the country, and we have already done so far Sh50 Billion and Kenya is yet to fully exploit this opportunity to revive the cotton industry noting that the ministry has already rolled out initiatives to return the sector to its glory days. “Providing cotton producers with new opportunities we are encouraging local farmers to grow cotton on a large scale because the market is readily available, “noted Mukhwana. “When the factories stopped running farmers stop planting, and as a government we have allocated 50 million for cotton purchases, and this year we have set aside 200 million for the same therefore we will have cotton buying centers for farmers to sell because up to 80% of our cotton supply is imported, “the PS said. Rivatex East Africa CEO, Thomas Kipkurgat, said that the expansion strategy will see the firm employ more people across the country and the expansion of the apparel industry will help both domestic and international markets. “We have acquired acres of land across the country in a bid to grow more cotton to support our expansion drive,” said Prof Kipkurgat. Some of the counties that the textile manufacturer has partnered with include Elgeyo Marakwet, West Pokot, Baringo and Kitui, among others.
Source: The kbc.co.ke
From January-November last year, this enterprise shipped 530.8 million USD worth of seafood to foreign countries, up 70% year-on-year. The Vietnam Association of Seafood Exporters and Producers said the company took the lead among the CPTPP members in seafood shipments to Canada and Mexico. In the past three years, Vietnam has witnessed strong growth in exports to CPTPP members, with revenue in 2021 of 45.7 billion USD, a year-on-year rise of 18%. During the January - October 2022 period, it shipped 38.8 billion USD worth of goods to these markets, up 21% year-on-year, and enjoyed a trade surplus of 4.4 billion USD. With certificates of origin and tax preferences, Vietnam’s garment and textile and leather shoe sectors increased shipments to CPTPP members by 15% compared to before the agreement. The CPTPP offers tax preferences on Vietnamese goods, helping local firms gain a competitive edge over their regional rivals. However, the advantages may not last for too long in this changing world, requiring that the firms ramp up efforts to better capitalise on the trade pact.
Source: The VNA
Pakistani exporters who participated in Heimtextil 2023, an annual textile trade fair, have claimed that they have secured a record number of export orders during the exhibition. The international exhibition was held in Frankfurt, Germany from January 10 to 13, 2023. Around 2,400 exhibitors from over 120 countries took part, including 260 exporters from Pakistan. Pakistan had the fourth-largest number of exhibitors after China, India and Turkey. To facilitate smaller exporters, the Trade Development Authority of Pakistan (TDAP) had also set up a national pavilion, in which 59 exporters be presented their products to global buyers. Textile exporters said that Heimtextil broght good prospects for Pakistan, and found new buyers along with the existing ones.
Source: The Pakobserver
