INTERNATIONAL
Textile Raw Material Price 2016-07-11
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1014.36 |
USD/Ton |
-0.15% |
7/11/2016 |
|
VSF |
2069.05 |
USD/Ton |
0.51% |
7/11/2016 |
|
ASF |
1882.31 |
USD/Ton |
0% |
7/11/2016 |
|
Polyester POY |
1019.59 |
USD/Ton |
-0.66% |
7/11/2016 |
|
Nylon FDY |
2173.62 |
USD/Ton |
0.34% |
7/11/2016 |
|
40D Spandex |
4257.62 |
USD/Ton |
0% |
7/11/2016 |
|
Nylon DTY |
2390.24 |
USD/Ton |
0% |
7/11/2016 |
|
Viscose Long Filament |
5570.75 |
USD/Ton |
0% |
7/11/2016 |
|
Polyester DTY |
1247.41 |
USD/Ton |
0% |
7/11/2016 |
|
Nylon POY |
2031.70 |
USD/Ton |
0.37% |
7/11/2016 |
|
Acrylic Top 3D |
2054.11 |
USD/Ton |
0% |
7/11/2016 |
|
Polyester FDY |
1138.35 |
USD/Ton |
0% |
7/11/2016 |
|
30S Spun Rayon Yarn |
2689.02 |
USD/Ton |
0% |
7/11/2016 |
|
32S Polyester Yarn |
1665.70 |
USD/Ton |
0% |
7/11/2016 |
|
45S T/C Yarn |
2397.71 |
USD/Ton |
0% |
7/11/2016 |
|
45S Polyester Yarn |
1777.74 |
USD/Ton |
0% |
7/11/2016 |
|
T/C Yarn 65/35 32S |
2689.02 |
USD/Ton |
0% |
7/11/2016 |
|
40S Rayon Yarn |
2823.47 |
USD/Ton |
0% |
7/11/2016 |
|
T/R Yarn 65/35 32S |
2166.16 |
USD/Ton |
0% |
7/11/2016 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
0% |
7/11/2016 |
|
32S Twill Fabric |
0.80 |
USD/Meter |
0% |
7/11/2016 |
|
40S Combed Poplin |
1.14 |
USD/Meter |
0% |
7/11/2016 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
0% |
7/11/2016 |
|
45S T/C Fabric |
0.66 |
USD/Meter |
0% |
7/11/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14939 USD dtd. 11/07/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
After announcement of special package by Government of India, Textile industry looks at appointment of high profile Smriti Irani as Textile Minister with high hopes. Industry sources are looking forward to Irani to driving growth and achieving the export target of $300 billion by 2024-25. According to a study conducted by the Crisil Research, the textile sector MSMEs will create new employments to every new 10 lakh output, which is the second largest after furniture industry.
Talking to KNN, Prabhu Damodharan, Secretary General, Indian Texpreneurs Federation (ITF) said “For the last two years, textile ministry has created a good platform for growth by improving the efficiency in the system and has also designed few good policies to trigger growth in this sector. Now, Irani can drive the textile sector towards $300 billion exports targeted by 2024-25.” “We have to plan segment-wise exports and fix targets for each category (of item)”, he continued. “For example – India’s export of yarn to Bangladesh is huge, more than 60 per cent, but fabric export is a meager 12 per cent. Bangladesh is reducing the import of yarn year-on-year and increasing the import of fabric. The Indian industry is geared to export fabrics. The ministry and the industry should work in tandem to capture this huge market,” the secretary said. “An immediate PTA with UK will help to strengthen our position and apart from the traditional markets, tremendous effort is required to tap new markets like Russia. Russia imports Rs. 65000 crore worth of textiles, out of which India’s share is just Rs. 500 crore”, he said. ITF has appealed to the Ministry for appointment of an officer of Joint Secretary Rank only to monitor export growth and advise suitably. Reverting to cotton, the Federation perceives that the Government should use a mechanism to analyses and assess the cotton crop and stock data every month. With fashion moving to cotton-manmade fiber blends, duty rationalization of MMF would trigger growth, the ITF Secretary said, inviting the new minister to visit the textile manufacturing clusters across the country to understand the strengths of each of these.
SOURCE: The KNN India
The textile sector, along with construction, agriculture and tourism is one of the four most labour-intensive sectors of the economy. It has a huge potential for generating sustainable jobs as well as export earnings. Currently, it employs about 35 million people and contributes 12 per cent of exports. But just 15 years ago, the share of textiles and clothing in India’s manufacturing exports was more than 25 per cent. How did this sharp decline happen? Why are textile and clothing exports declining and not growing at double digits? India’s garment exports have now been overtaken in dollar terms even by its neighbour Bangladesh, and Vietnam may not be far behind. Of course, Bangladesh has benefitted from duty-free access to the European Union, and indeed some Indian entrepreneurs too have located themselves in that country for that reason. But Bangladesh’s transformation of its garment sector within a decade is nothing short of fantastic, offering some lessons for us as well. India has a unique opportunity to reverse the decline in its export share and seize a global leadership position. Some of this opportunity is arising due to changing labour dynamics in China, which has been the world’s textiles behemoth.
Opportunity for India
Chief Economic Advisor (CEA) Arvind Subramanian has been championing the cause of this sector with very compelling data. For instance, he points out that most of the sustained East Asian growth of past decades was on the back of the textile and clothing boom. Most tellingly, a unit of investment in the clothing sector generates 12 times as many jobs as the automobile sector and 30 times that of steel. Clearly, there is a big bang for the investment buck in textiles. Not surprisingly, the CEA’s passionate advocacy is showing results.
The reforms announced last month by the cabinet under a “textile package” address some key impediments, and the package is timely. First, the reforms removed some of the embedded tax burden from exports through a duty drawback scheme. Secondly, firms are provided incentive to hire more workers through a subsidy to meet the EPF costs. But clearly much more needs to be done to harness the great promise. A CII-BCG study for textiles, made-ups and apparel estimates that the sector can generate 50 million jobs in the next nine years. Of these, more than 70 per cent will be for women. (The Bangladesh garment industry has close to 90 per cent women). The study also shows that the shift of textiles and garments away from China (due to rising labour costs) is an annual opportunity of about 280 billion US dollars for other developing countries.
Following global pattern
This is a huge opportunity. India has some advantages in being present in all parts of the value chain, beginning from fibre, yarn, fabric and going all the way to clothing, branded apparel and fashion. This is not to mention the new emerging markets like technical textiles that have industrial applications.
But here are two additional considerations that need close attention. First is the issue of fibre neutrality. In India, there is a curious frenemy relationship between cotton and man-made (synthetic) fibres. The global consumption pattern is 65:35 in favour of synthetics (like polyester, rayon, acrylic), whereas in India it is exactly the reverse. The net imports of the US and EU show a steady decline in cotton textiles vis-à-vis manmade fibre products over the past five years.
If we are to tap into the export opportunity to these developed nations, our domestic mix has to mimic the global demand pattern. In India, cotton makes up 80 per cent of all fibre consumption whereas in China it is 50 per cent. This skew has been made worse due to the highly unequal excise tax treatment of cotton versus the rest. The textile ministry is aware of this asymmetry, and a fibre-neutral policy is on the anvil. Hopefully the GST regime will also discontinue the sharp asymmetry that has persisted for the past ten years.
Impact of FTAs
The second is the impact of free trade agreements. Fortuitously, the CEA himself is heading a committee to evaluate the costs and benefits of the several FTA that have been signed by India in the past couple of decades. Prima facie it appears that India’s trade deficit has uniformly gotten worse following several FTAs. No doubt, there has been trade enlargement, but not necessarily to India’s benefit. The reasons could be many – some fair, some unfair.
For instance, if our trading partners inherently have a lower cost of doing business, more efficient logistics and transportation, higher labour productivity, then naturally their goods are cheaper, of better quality and flood our markets. But if in addition they also resort to unfair practices like dumping, or state subsidy, then it is a cause for serious concern. Let us not forget that China still has a huge overhang of excess capacity in fibre, yarn and fabric parts of the value chain. Their manufacturers get power subsidy and non-transparent VAT rebates against which our manufacturers cannot compete.
There is also the looming shadow of the mega treaty called the Trans Pacific Partnership which goes much beyond trade, and makes it compulsory for the entire value chain to be located in member countries. India is not a member of TPP and can potentially be at a serious disadvantage. Fortunately, the TPP is losing political support, so it may be several years into the future. Finally, despite these various hurdles, let us not lose sight of the huge promise of this sector (it is after all one of the trinity of roti, kapada, makaan), in generating large-scale jobs, especially for women, and healthy foreign exchange earnings. With proper policies and reforms, the textile sector in India is definitely heading for a high noon of great fortune.
SOURCE: The Nav Hind Times
In the wake of the Cabinet clearing a Rs 6,000-crore package for the textiles sector recently, NITI Aayog is pushing for similar reforms in other labour-intensive sectors such as footwear, electrical and electronics engineering, besides light manufacturing segments such as umbrella, cutlery and furniture to generate mass employment. A NITI Aayog official said under-employment is bigger problem for India than unemployment. Citing a survey on employment by the National Sample Survey Office (NSSO), he said India’s unemployment rate was around three per cent but under-employment could be much more. He said the problem arises because small-scale industries, which have less than 20 workers, employ 73 per cent of the working population, but contribute only 12 per cent of the total output. While the package for the textiles sector included duty drawback for the garments sub-sector, the most notable feature was the introduction of the fixed-term employment. To encourage hiring, the government would contribute to the employees’ provident fund (EPF), 12 per cent of basic salary, on behalf of the employers. All new employees in the garments sector earning less than Rs 15,000 a month would benefit from this scheme for three years.
In a recent presentation to the Prime Minister’s Office, the Aayog said much of the demand for these labour-intensive sectors might be lying in export markets. For example, China exported footwear worth $55 billion in 2014, while India’s outbound shipment of footwear stood at merely $3 billion. The Aayog official said the $18 trillion global export market presented a huge opportunity for India to increase its share from just 1.7 per cent at present. The official said development of coastal economic zones (CEZs) could help in attracting big players to such sectors. NITI Aayog Vice-Chairman Arvind Panagariya has been pushing for Shenzhen-style CEZs on India’s western and eastern coasts. These should be near deep-draft ports that could handle very large and heavily-loaded ships, said the official. He has also been calling for tax breaks to such zones.
“Apart from conventional infrastructure, the zones should create urban spaces to house the workforce. For firms that create certain level of direct employment (50,000 jobs) tax holiday for a pre-specified period may be offered. To incentivise early investments in such zones, the tax holiday may be limited to investments made in the first three or four years of the creation of such zones,” Panagariya wrote in his blog. According to an estimate by ICRA, footwear industry holds a crucial place in Indian economy for its employment potential, especially for weaker sections. It can also support the economy through its foreign exchange earnings. India is the second-largest global producer of footwear after China, accounting for nine per cent of the global annual production of 22 billion pairs, compared with China’s share of 60 per cent. India produces 2.1 billion pairs a year, of which 90 per cent are consumed domestically while the remaining are exported, primarily to European countries. According to a report, the country’s footwear sector is highly fragmented with 15,000 small and medium enterprises operating largely in the unorganised segment and the limited presence of the organised segment. With the influx of a large number of global brands and organised footwear companies’ penetration in Tier-II and Tier-III cities, these players’ market share has gained significantly in the recent past and it continues to be on the rise. India exported $2.1 billion worth of leather footwear in 2015-16, down six per cent from the previous year. According to the ministry of heavy industries and public enterprises, the size of domestic electrical equipment industry exceeded $25 billion, contributing 1.4 per cent to the country’s gross domestic product. The industry provides direct employment to about 0.5 million people and indirect employment to about one million. The industry contributes about 1.5 per cent of India’s total exports, whereas its share of imports is 3.2 per cent of the total imports. India’s trade deficit in this sector has been widening, which is a matter of serious concern. The Electronic Industry Association of India estimates that the demand for electronic products would grow to about $400 billion by 2020, but domestic production would be able to meet only one-fourth of it. India exported $5.7 billion worth of electronic items in 2015-16, down five per cent from the previous year.
SOURCE: The Business Standard
The First Home of India Handloom Brand Products stores are already operational in five major metro cities-- Delhi Bengaluru, Mumbai, Chennai and Kolkata. As part of its expansion plan, India Handloom Brand (IHB) opened its network in Coimbatore city, said Alok Kumar, Development Commissioner (Handloom), Ministry of Textile, in a release. IHB has also identified 83 locations to open such stores over a period of time and six stores are successfully functional, selling various products at an affordable price, he claimed. IHB products are getting very good response from its customers and market and the showcased collections are made using textiles from across India to create a unique identity and promote the rich Indian culture and heritage. Alok Kumar said that the presence of IHB logo would differentiate their products and assure the customer of its quality. The premium branding will enable the weavers to use good quality raw material and produce high quality products and enhance their sales and earnings through bulk marketing of these products both within and outside India. The Ministry of Textile’s main focus is to retain the sanctity of the traditional hand-woven textiles while moulding the styles for a more contemporary look. This is part of a continued initiative by the IHB to promote Indian Handloom.
SOURCE: Yarns&Fibers
Even as good quality long staple cotton is expected to command impressive prices of up to Rs 6,200 per quintal in January 2017, the area under cotton cultivation in India could drop by one third in the wake of good monsoon this year, according to an analysis by Tamil Nadu Agricultural University. Quoting trade sources, the analysis predicted that the area of cotton in India may decline up to 35 % as the farmers have shifted to crops like groundnut, pulses, paddy and sugarcane. The white fly attack in major cotton growing regions during last season and the above normal rainfall during monsoon as per the weather forecast had led the farmers to go in for other crops, it said. The University also forecast the prices cotton is likely to command in December-January 2017 under its Price Forecasting Scheme. Based on the cotton prices that prevailed in Konganapuram Regulated market in the state for the last 10 years it arrived at the conclusion that the commodity could fetch between Rs 6,000 and Rs 6,200 per quintal for good quality long staple. It advised state farmers to make their sowing decisions accordingly. During 2014-15, 0.53 million bales (170 kg a bale) of cotton was produced in Tamil Nadu, while the area under cotton production was 0.1 million ha. Major cotton producing districts in the state were Perambalur, Salem, Trichy, Dharmapuri, Ariyalur and Cuddalore.
SOURCE: Fibre2fashion
The Haryana government is planning to set up industrial clusters in Ambala to encourage micro enterprises in the state. Apart from this, the state government is making concerted efforts to develop the textile market of Ambala, Haryana's Finance Minister Capt Abhimanyu said interacting with media-persons after presiding over a monthly meeting of District Public Relations and Grievances Redressal Committee here. On being asked about setting up of a tool room for science industry and micro-enterprises in Saha here, the minister said that "the previous state government had only misled the people and entrepreneurs by laying its foundation stone, but no budget provision was made for its construction." He said that the present state government had got approval from the Central government for setting up of two tool room centres. There would be provision of Rs 100 crore for the tool room to be set up in Saha, he added. While taking a dig at the functioning of Congress government, Abhimanyu said that "they used to make only announcements whereas the present State Government believes in implementation." During the meeting, the minister heard a total of 54 complaints and directed the officers to redress these complaints at the earliest. He directed the Deputy Commissioner, Ambala to send report of those officers who were absent from the meeting today along with reason of their absence.
SOURCE: The Business Standard
Ahead of the monsoon session of Parliament beginning next week, the government has reached out to the Congress for passage of the long-pending goods and services tax (GST) Bill in Rajya Sabha, where it does not have a majority. The new Parliamentary Affairs Minister Ananth Kumar has already held telephonic talks with Leader of the Opposition in the Upper House Ghulam Nabi Azad and deputy leader of Congress in the House Anand Sharma and formal talks are likely to take place shortly. When contacted, Sharma made a strong pitch for evolving a “genuine” common market through the key tax reform, insisting that the GST should be both “meaningful and substantive”. The government, he said, needs to “ring-fence” the GST rate so as not to burden the common man. The GST, which is being touted as the most significant reform in indirect tax since Independence, is being held up in Rajya Sabha because of stiff opposition by the Congress, which, among other things, is demanding a constitutional cap on the GST rate.
Dismissing suggestions that the Congress was against the Bill, he said the party is the author of the Bill and its only concern is that it should be “meaningful and substantive”. Sharma said the Congress also wants clarification from the government on taxability of various goods like petroleum, alcohol, tobacco and electricity. Besides, government needs to clarify whether the GST would subsume various cesses, including the Swachh Bharat cess. The government plans to push the Constitution Amendment Bill in Rajya Sabha for rollout of GST in the monsoon session, beginning July 18. The Bill was approved by Lok Sabha earlier. “There has to be firm ring-fencing of the GST cap. It is for the government to give proposals to address the issue,” Sharma said, adding “the ball is in their court”. He further said the Congress leadership would take a “considered view”, once it hears from the government. “We have never said we will not talk. Once we know the government’s stand, we will see where the meeting point is and the Congress leadership will take a considered view”. He regretted the government instead of engaging the Congress in a constructive dialogue on GST for a consensus chose to be “confrontationist”.
SOURCE: The Business Standard
Indian economy is likely to grow at 7.9 per cent in the current fiscal provided the country receives normal monsoon as it will boost agriculture growth and lift rural demand, says a report. As per the rating agency Crisil’s latest report, GDP is expected to grow by 7.9 per cent in 2016-17 as against 7.6 per cent in the previous fiscal if “monsoon is normal and global situation does not deteriorate from here”. “If the rains are normal, it would give agriculture a one-time growth kick, particularly given the low-base effect of the two previous years… that should lift sagging rural demand and by extension, overall GDP growth,” it said. Accordingly, the rating agency expects the Reserve Bank of India to continue its accommodative monetary stance and cut the repo rate by another 25 bps this fiscal.
Noting that the economy’s modest recovery has been shaped by “good luck” on crude oil and commodities, Crisil said the medium-term outlook will be shaped by progress on initiatives such as cleaning up of bank balancesheets and successful implementation of the goods and services tax (GST). Besides, financial inclusion through initiatives like Jan Dhan and digitisation, among others, will also potentially have a transformative impact on the economy’s growth, it added. On the employment front, Crisil Chief Economist Dharmakirti Joshi noted that the government needs to bring in about 6,000 jobs a month, but it is falling short of the target. As per the report, addressing core physical infrastructure issues such as seamless availability of electricity, creation of road network and social aspects like health and education are crucial to sustaining growth. “The current fiscal, therefore, will be closely watched for more reforms and relentless implementation of executive and policy actions already announced,” the report said. According to Crisil, India’s ranking on ease of doing business and competitiveness is expected to rise in 2016, given the government’s reforms initiatives. However, it observed that steps to raise efficiency in goods and labour markets, health, education as well as technological readiness are found to be lacking.
SOURCE: The Financial Express
Commerce and Industry Minister Nirmala Sitharaman met her Russian counterpart Denis Manturov and discussed ways to enhance bilateral trade ties in various sectors, including high-end engineering. "There is a strong potential for growth in India-Russia bilateral trade. Be it high-end engineering, or manufacturing, India is moving towards being synonymous to quality, reliability and durability," Sitharaman said. In her meeting with Russian Minister of Trade and Industry Denis Manturov, Sitharaman discussed various specifics to further strengthen industrial and trading ties, a statement said. Sitharaman is leading a business delegation to Russia. Indian businesses are participating in the annual international industrial trade fair - INNOPROM 2016. "We are proud to be the partner country at INNOPROM 2016. The Indian companies participating will highlight the strengths in the area of engineering and innovation," she said. Sitharaman also participated in the India-Russia business forum where she stressed on strong business to business ties between the countries. The India- Russia business forum is expected to form business associations between various Indian and global firms.
Noting that India has relaxed FDI norms in segments like defence, civil aviation, pharmaceuticals and food products, Sitharaman invited Russian entities to partner with the country so that the two nations "can play a major role in reviving global growth", Engineering Exports Promotion Council (EEPC) quoted the minister in a statement. As many as 110 companies are taking part in the engineering trade fair, including the Department of Heavy Industries, Department of Electronics and IT, Ministry of New and Renewable Energy, Bharat Forge, Sun Group, NTPC and NHPC. EEPC is also participating in 'INNOPROM 2016'. EEPC Chairman T S Bhasin said the engineering manufacturers would exploit all possibilities to attract leading buyers from across the globe. The bilateral trade between the countries stood at $ 6.18 billion in 2015-16. India and Russia have set the goal of boosting bilateral trade to $ 30 billion and mutual investment to $ 15 billion by 2025.
SOURCE: The Economic Times
With India needing about a trillion dollars for infrastructure development, India's Minister of Road Transport, Highways and Shipping Nitin Gadkari has highlighted investment opportunities in India for US investors. With Prime Minister Narendra Modi making the country's infrastructure development the top-most priority of the government, "This is a golden opportunity to invest in India," he told a roundtable organised here Monday by the US-India Business Council (USIBC). "We are committed to improving the country's road, highways, and port connectivity in a time-bound, result oriented, corruption-free and transparent manner that includes e-governance and fast-tracking decision-making," Gadkari said. "The pace of road construction has accelerated to an all-time high of 20 kilometres per day and next year we plan to increase it to 41 km per day," he said. Gadkari later told Indian media that thanks to recent government decisions there are no road blocks to investment in transportation sector with 95 percent of issues facing investors resolved. "Previous image of investment climate in India is completely changed." During his meeting Monday with US Secretary of Transportation Anthony Foxx, he had discussed at length all the problems facing India in the transportation sector. Gadkari said he had made road safety his first priority as he was very much disturbed by about 500,000 accidents every year that took a toll of about 150,000 lives. US side had expressed its willingness to share all manuals of National Highway Traffic Safety Administration to help bring about standardisation of codes and greater safety, he said. The roundtable at the USIBC was attended by senior executives of US and Indian companies that included TransAsia Infrastructure, Uber, Bentley Systems, Tata, Caterpillar, Moody's, DLZ Corporation and Texas Instruments. The discussion was focused around Gadkari's plans and vision to strengthen India's infrastructure, investment opportunities in road construction and port-led industrialization, and how US industry can collaborate with the Government of India. Gadkari also spoke on the new highways under construction in the country, financing mechanisms under PPP models, framing policies for logistics parks, modernisation of roads, building intelligent traffic systems for road safety and further innovation and technology to India's logistics sector. Gadkari has envisaged around $150 billion investments for the highways sector in the next five years with a range of projects to suit each investor's risk and return expectations. Gadkari's team highlighted specific investment opportunities in the highways sector and shared details of the Sagarmala Project - the Ministry's flagship port-led development initiative to bring down logistics cost and boost investment, exports, and jobs. "With an upsurge in India's e-commerce markets and the unprecedented growth in Indian cities, there is a critical need for advanced logistical services and better transportation infrastructure," USIBC president Mukesh Aghi said. "It is timely and urgent to explore the full potential of US-India collaboration in this sector," he said. Gadkari also gave a talk Monday on "A window into India's Infrastructure Development "organized by Atlantic Council, a Washington-based think tank.
SOURCE: The Economic Times
Prime Narendra Modi on Monday said that ‘Make in India’ and ‘Make it Kenya’ can become complementary to each other, since both the country share the commitment to make the future of its people. “We launched Make In India to make India global manufacturing hub. Similarly, you’ve launched ‘Make It Kenya’. Two can become complementary since our commitment is to make the future of the people and since the people are largely the same,” he said. Addressing a large number of people in the India-Kenya business summit forum, Prime Minister Modi said India is the fastest growing economy and is improving its ranking in various global indicators. “India is fastest growing large economy globally & is improving its rank in various global indicators,” he said. He added that Kenya’s economy and infrastructure makes it an influential player in the region. “Kenya’s economy & infrastructure make it an influential player in region. You are only developing country which host Headquarters of UN agencies,” he said.
PM Modi acknowledged that India is becoming one of the favoured destinations for African students to live and work. “Your scholars and students consider India as a very comfortable place to live, learn and work,” he said. He assured Kenya that India will always work to strengthen and enrich its resources. “I assure Kenya that India will always work to strengthen your processes & enrich your resources,” PM Modi said. India and Kenya signed seven agreements to strengthen ties between the two nations. The list of MoUs signed between the two nations are: MoU on Defence Cooperation, MoU on Cooperation in the field of National Housing Policy Development and Management and MoU between Bureau of Indian Standards and Kenya Bureau of Standards, Agreement on Exemption of Visa for holders of Diplomatic Passports. The other agreements include Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, Line of Credit Agreement for US$ 15 million to IDB Capital Limited, for development of small and medium enterprises [SMEs] and Line of Credit Agreement for US$ 29.95 million to the Government of Kenya for upgrade of Rift Valley Textiles Factory (RIVATEX).
SOURCE: The Financial Express
As the Regional Comprehensive Economic Policy negotiations enter the fourth year, contours of the probable final outcome are gradually emerging. Based on the developments after the 13th round of negotiations that took place in Auckland between June 12 and 18, we get a big picture of what industry can hope to get from RCEP. Firstly, RCEP will not create a large integrated market. Experts are convinced that replacing the current ‘noodle-bowl’ of numerous competing free trade agreements (FTAs) with an overarching RCEP would have simplified trade rules and created stronger production bases in the RCEP area. To become a large integrated market, RCEP must agree to a zero tariff area among members. However, this ambitious solution was never on the agenda. The next best solution could have been RCEP countries agreeing to a single tariff concession list providing uniform tariffs for products across member-countries. However, even this was not agreeable to all. Following the negotiations, all current FTAs will continue and RCEP will just be adding numerous new concession lists.
Of consensus and contours
Secondly, RCEP will not slash tariffs substantially in most cases. Large-scale slashing is theoretically not possible among the countries already connected through FTAs. For example, Asean countries and their FTA partners have already opened over 80 per cent trade through existing FTAs. They can, at best, make small incremental offers to each other, under RCEP. Country groups such as India-China, India-Australia and New Zealand or China-Japan do not have any existing FTA relationship with each other and hence there’s scope for exchanging deeper tariff slashing. However, many countries in the group are not enthusiastic about this, probably due to a tough economic climate. The level of tariff slashing these countries will finally agree upon is yet to firm up. Thirdly, consensus on adopting common Rules of Origins (ROO) will make movement of goods easier, predictable across the member-countries. However, this is just a framework and product level details for almost 5,200 product sub-headings are yet to be negotiated. ROO criteria determine nationality of goods. For instance, if squash is made in India from Nagpur oranges, the squash obviously originates in India. But what if the squash is made in India from oranges grown in the US? Which is the country of origin for squash here: India or the US? There is no standard answer. However, two broad interest groups are visible: Export-driven trading economies such as many Asean countries argue that even minor processing should qualify a product for FTA benefits whereas manufacturing economies such as the US, China or India argue that processing should be substantial else non-FTA country products will enter the domestic market. RCEP will have a tough time balancing the conflicting needs of the stakeholders, comprising a mix of manufacturing and trading economies. While a few countries are pushing for large MNC-centric rules, RCEP being home to over 100 million SMEs, may struggle to find a balance. Fourthly, contours of the final outcome are yet to emerge in the area of IPR, services and investments. RCEP will have to reconcile the interests of many conflicting interest groups to ensure that IPR provisions do not compromise on public health issues as it contains 45 per cent of the world population, of which the majority is poor. Another contentious issue before it is ‘investor-state dispute settlement (ISDS)’ that seeks to enable an investor to sue a foreign government. Detailed provisions of these issues are expected to be debated till the last day of negotiations.
Industry trends
These developments at the RCEP negotiations would broadly translate into the following trends for industry sectors and countries:
Preparing the ground
India may emerge as an attractive investment destination for China. To offset the increasing labour costs, Chinese firms have been relocating labour-intensive manufacturing to Vietnam, Cambodia, Thailand and Indonesia. By setting up manufacturing joint ventures in India, China can effectively reach India’s domestic market and also a large European market once India signs an FTA with the European Union. If this story plays out, India’s trade deficit with China will come down as well. RCEP may still take over a year to conclude. We may use the intervening period to tie up loose ends. The Cabinet’s decision on June 22 on introducing labour reforms for the textiles and apparel sector may prove to be a welcome grand step in this direction.
SOURCE: The Hindu Business Line
Seeking to bolster their ties, India and Kenya today decided to deepen and expand cooperation in a wide range of areas as they signed seven pacts, including in the field of defence and security and avoidance of double taxation. Prime Minister Narendra Modi, after his talks with Kenyan President Uhuru Kenyatta here, also announced extension of concessional Line of Credit (LOC) of $44.95 million to the African nation to help it in development of small and medium enterprises and textiles. India will also build a cancer hospital in Kenya to provide quality and affordable healthcare. “The multifaceted development partnership is a key pillar of our bilateral relationship,” Modi said at a joint media interaction with Kenyatta after the talks. He said Kenyatta and he had "agreed that terrorism and radicalisation is a common challenge for our two countries, the region and the whole world. We have agreed to deepen our security partnership including in fields of cyber security, combating drugs & narcotics and human trafficking.” The MoU on Defence Cooperation signed will entail staff exchanges, expertise sharing, training, cooperation in hydrography and equipment supply.
At another event, Addressing the students at the University of Nairobi, Modi pitched for a world free from terror and hate, saying safety and security of people and societies is essential for realising the benefits of the economic progress. “Preachers of hate and violence are threatening the fabric of our society,” he said. Underlining the need to counter radicalisation, he said “Youth can play an important role in building a counter narrative to extremist ideologies." Addressing the event with Kenyatta, Modi said the two countries have shared common interest in the security, including in maritime security, since they are connected by the Indian Ocean. “Closer cooperation in field of maritime security occupies an important place in our defence and security engagement,” he said.
SOURCE: The Business Standard
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 42.98 per barrel (bbl) on 11.07.2016. This was lower than the price of US$ 43.29 per bbl on previous publishing day of 08.07.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2886.06 per bbl on 11.07.2016 as compared to Rs. 2920.05 per bbl on 08.07.2016. Rupee closed stronger at Rs. 67.14 per US$ on 11.07.2016 as against Rs. 67.46 per US$ on 08.07.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on July 11, 2016 (Previous trading day i.e. 08.07.2016) |
Pricing Fortnight for 01.07.2016 (June 14, 2016 to June 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
42.98 (43.29) |
46.34 |
|
(Rs/bbl |
2886.06 (2920.05) |
3127.02 |
|
|
Exchange Rate |
(Rs/$) |
67.14 (67.46) |
67.48 |
SOURCE: PIB
There's bad news for global trade. The WTO's new World Trade Outlook Indicator (WTOI) designed to provide “real time” information on trends in global trade, which was unveiled in Shanghai on July 8, indicates that trade growth to remain sluggish in the third quarter of 2016.Still, the WTOI was more positive than the WTO's quarterly merchandise trade volume index after a weak result in Q1. This suggests that world merchandise trade may rebound in Q2 but that the underlying weakness will likely persist into Q3. For the current period, the WTOI came in slightly below trend, with a reading of 99.0, and with a downward tendency in the most recent data, signalling that trade growth will continue to be sluggish in July and August. WTO Director-General Roberto Azevêdo said, “In serving as a quarterly signal of current and short-term trade conditions, the World Trade Outlook Indicator responds to strong interest from policymakers and the business community for more immediate, real time information on trade and trading conditions. The WTOI should provide an early signal if trade is likely to slow or accelerate in the near future. At present it suggests that trade growth will remain weak into the third quarter of 2016.” The reading was slightly more positive than that for merchandise trade, which declined in the first quarter 2016, as noted in the WTO's recent quarterly trade statistics. The WTOI therefore suggests that world merchandise trade may rebound in the second quarter, but that the underlying weakness will persist into the third quarter. Components of the WTOI give a mixed picture. Export orders in leading traders have rebounded above trend and continue to pick up. Meanwhile, international air freight data from IATA and container throughput data from major seaports remain weak but show signs of stabilising.
SOURCE: Fibre2fashion
The Government of Canada remains committed to working with Ukrainian government and business leaders to deepen the commercial ties between our countries and create jobs, strengthen the middle class, and grow our economies. Today, Prime Minister Trudeau, Ukraine’s President Poroshenko and Prime Minister Groysman witnessed the signing of the milestone Canada-Ukraine Free Trade Agreement (CUFTA), which will open our markets to products, grow our communities, and give our citizens a higher standard of living. The Agreement is part of Canada’s continued commitment to supporting Ukraine’s efforts to build a stable, democratic, and prosperous country. Both Canada and Ukraine are committed to the timely ratification and implementation of CUFTA – so that Canadians and Ukrainians alike can take advantage of its benefits as soon as possible.
Quotes
“The Canada-Ukraine Free Trade Agreement represents a significant milestone in the relationship between Canada and Ukraine. It will bolster our economies, spur innovation, and lead to long term benefits for the middle class and those working hard to join it.”
– Rt. Hon. Justin Trudeau, Prime Minister of Canada
“Canada and Ukraine know that trade is essential to jobs and growth. By improving market access and creating more predictable conditions for trade, the Canada-Ukraine Free Trade Agreement will generate new opportunities for Canadians and Ukrainians alike.”
– The Hon. Chrystia Freeland, Minister of International Trade
Quick Facts
SOURCE: The PM News
The EU trade commissioner said today that China has to give European companies the same kind of market access that Chinese companies enjoy in Europe before discussions can start on a bilateral free trade agreement. Cecilia Malmstrom, (pictured), said market access and other issues need to be ironed out first in an investment agreement, which is currently being negotiated, to establish "a more level playing field.'' In a speech at a university in Beijing, Malmstrom said the 28-member EU supported Beijing's path toward a more market-oriented economy promised in 2013, but hadn't seen "much progress.'' Recently established free-trade zones in China have made "relatively limited progress or been abandoned and there are still concerns about the enforcement of intellectual property rights, [and] discrimination against EU businesses remains a fact,'' she said. She also said China had made steps backward with laws concerning national security and nongovernmental organizations, and in the field of cybersecurity. Concerns remain "about the predictability and transparency of the legal and regulatory systems.''
In the past year, Chinese authorities have launched an unprecedented crackdown on lawyers and human rights defenders, passed a law that they said would help NGOs but that subjects them to police supervision, and enacted a national security law that particularly targets online activity. "Moving China to the next phase of development requires that rule of law be part of that,'' Malmstrom said. She criticized limitations on lawyers and restrictions on online freedom. "Barriers to that, whether it's banning social platforms or by requiring storage of content locally, impinge China's economic progress as much as freedom of expression,'' she said. The EU is China's biggest trading partner, and China is the EU's second-largest trading partner, after the United States. Malmstrom said people ask why can Chinese firms make high-profile purchases of European companies, including tire manufacturer Pirelli and Volvo Car Corp., "when European investors face major barriers, including equity gaps, forced technology transfer or licensing restrictions'' in various sectors in China. "Why do European steelmakers have to lay off workers when they are competing with Chinese firms who benefit from European subsidies? Why do Chinese firms competing in Europe get impartial treatment from independent regulators when the same treatment is not available in China?'' Malmstrom said. "Keeping the EU market open is a benefit for us and for China but it requires us to address these questions of reciprocal openness,'' the trade commissioner said.
Chinese officials have previously tried to reassure foreign companies they are welcome in its economy. In March, Xu Shaoshi, chairman of the Cabinet's National Reform and Development Commission, pledged to "promote two-way opening up and liberalization'' before an audience that included executives of top global companies. Malmstrom said that the EU's long-term goal is a free trade agreement with China, "but we need to get this investment agreement first.'' "This is to establish a more level playing field in investment, and until we have that it will be very difficult to enter into the specific free trade negotiations,'' she said. Foreign Ministry spokesman Lu Kang told a daily briefing that China hoped to reach "a mutually beneficial investment agreement with the EU as soon as possible.'' "Particularly given the sluggish world economy, we believe that if China and the EU, as two major world economies, can reach such an agreement, it will benefit not only the two sides but also the prosperity, recovery and growth of the world economy,'' Lu said. Malmstrom spoke and answered questions from students at the University of International Business and Economics, ahead of a China-EU summit tomorrow
SOURCE: The Standard
As Britain's Home Secretary (Minister of Interior) Theresa May emerges today as the successor to David Cameron as the country's next Prime Minister, one of her leading supporters in Parliament has called for swift action to be taken to negotiate Free Trade Agreements with Britain's main trading partners outside the European Union, including the UAE. May, Home Secretary since 2010, will take over from Cameron, who resigned after the British vote last month to leave the EU. Andrea Leadsom, the only other remaining candidate in the governing Conservative party's internal election to select the new leader, withdrew from the contest. In an article on the 'Conservative Home' website this morning, David Davis, a close adviser to May who is predicted by many observers to be offered an important post in her Cabinet, outlined a series of economic initiatives that, in his view, need to be taken to prepare Britain for life outside the EU. Key amongst these, he suggested, is the rapid negotiation of Free Trade Agreements with Britain's major international trading partners. The British economy, he said, needs to move towards "a more export-led growth strategy, based on higher productivity employment. Fortunately, this will prove eminently possible as a part of a Brexit-based economic strategy. Indeed, far from being the risky option that many have claimed, Brexit gives us many tools to deal with the very serious economic challenges that the country will face in the coming decades."
Under the terms of Britain's membership of the European Union, Davis noted, all such Free Trade Agreements can only be negotiated by the EU as a whole. "Leaving the EU gives us back control of our trade policy, and gives us the opportunity to maximise returns from free trade," Davis wrote. "Because any deals currently settled are obtained by finding a 28 nation compromise, the EU is clumsy at negotiating free trade deals. That is why we currently only have trade deals with two of our top ten non-EU trading partners. This is incredibly important to us, as about 60 per cent of our trade is with the non-EU world. In fact, we sell as much to non-EU countries with which we have no trade agreements as we do to the EU." Davis said that a first objective for the new Government should be enter into negotiations quickly to prepare for Free Trade Agreements to come into force as soon as Britain formally leaves the European Union.
Noting that positive statements about such future agreements have already come from countries like the United States, Australia, China and India, Davis went on to say that: "Single countries, with the ability to be flexible and focussed, negotiate trade deals far more quickly than large trade blocs. For example, South Korea negotiated a deal with the US in a single year, and with India, which is notoriously difficult, within three years. Chile was even faster, negotiating trade deals with China, Australia and Canada in under a year." In contrast, he said, the EU can take over six years to conclude trade deals, "and, without the often conflicting requirements of 28 different countries to consider, deals negotiated by single countries tend to be broader and have more favourable terms on matters that are important to us, such as services." Davis predicted that the new Prime Minister would, very quickly, "trigger a large round of global trade deals with all our most favoured trade partners. I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months." It is likely to take up to two years to complete negotiations between Britain and the rest of the EU on the terms of any future agreement on trade and other topics. Before the expiry of that period, Davis said, "we can negotiate a free trade area massively larger than the EU. Trade deals with the US and China alone will give us a trade area almost twice the size of the EU, and of course we will also be seeking deals with Hong Kong, Canada, Australia, India, Japan, the UAE, Indonesia – and many others." Any such agreements would only come into effect at the time that Britain leaves the EU, "but they will be fully negotiated and therefore understood in detail well before then," Davis said. "That means that foreign direct investment by companies keen to take advantage of these deals will grow in the next two years."
SOURCE: The Emirates
Points of discord remain, time is running thin, and the public mood is souring on free trade - does TTIP stand a chance? The EU and the US are meeting for the 14th time, and the Sisyphean boulder is only getting heavier. The European Union and the US have been negotiating the terms of their Transatlantic Trade and Investment Partnership (TTIP) now for three years - with the 14th round of talks soon to begin in Brussels. But they are far from reaching agreements on many important points. Arbitration tribunals, for instance, are a hot-button issue in Europe, especially in Germany. Such private tribunals give investors the opportunity to sue a government if they feel that a country's laws restrict their "legitimate expectations." The EU and Canada were able to overcome this hurdle in their CETA (Comprehensive Economic and Trade Agreement) negotiations by agreeing to nix arbitration courts in favor of a permanent dispute settlement tribunal. But it remains unclear whether TTIP negotiators can strike a similar compromise. The same goes for rules concerning government bids. There is a lot of money at stake, said Laura von Daniels of the German Institute for International and Security Affairs in Berlin. "Inside the EU, public bids amount to 16 percent of GDP," she said. "In the US, it is up to 12 percent."
Buy American?
Europeans feel they will be put at an unfair disadvantage when it comes to securing government contracts across the Atlantic. "The USA implemented a Buy American Clause in their stimulus packages," von Daniels added. "Bids must be given primarily to US companies, unless there is an important reason not to."
TTIP negotiations enter crucial round
European negotiators are urging their American counterparts to relax these regulations. But the Americans might not have room to wiggle even if they wanted. "It is disputed whether the US government is even authorized to fix in an internationally binding contract how states and communities have to issue their public bids," von Daniels said. And there is another issue that has European tempers running high. Do genetically modified groceries have to be labeled as such? When it comes to consumer protection, Europe follows a precautionary principle. That means that if it is suspected that a product is harmful, it should be banned, or at least clearly marked as dangerous. The US takes a different approach - the product is innocent until proven guilty. This could change. Last Thursday, the US Senate passed a law that call for the labeling of groceries that contain genetically modified organisms. It is expected that the House of Representatives will also pass the bill. But even if one tangle is smoothed, another, bigger one has emerged. The UK's vote last month to leave the EU has prompted many questions that will take a long time to answer and have shaken up political calculations on all sides.
Europe is doubting
At the moment, too much seems up in the air to foresee an end to negotiations. On a visit to Germany in April, US President Barack Obama said he expected the agreement to be hammered out by the end of the year. But since then, the prospect of free trade has grown more and more unlikely. It is even uncertain whether the already finalized agreement between the EU and Canada will enter into force, after it was decided that it will have to be independently ratified by all national EU parliaments. There is considerable opposition in Germany, for instance. Jürgen Trittin, former German environment minister and current Green Party parliamentary representative, called CETA "a bad agreement." The Greens form part of the regional government in 10 German states, giving them sway in the country's upper house of parliament, the Bundesrat, which must ratify CETA. "An agreement like that shouldn't be applied - neither provisionally, nor finally," Trittin added. Peter Ramsauer, head of the German parliament's economic committee, links the opposition to the Canadian agreement to the older uproar over the US negotiations. "No one would get upset about CETA if TTIP did not exist," he said, decrying the resistance against free trade as irrational. But in any case the resistance runs deep in society. "All surveys show that Germans are concerned it could come to an erosion of standards in our country and in the EU," said Laura von Daniels. From environmental standards and data protection to the matter of groceries, "people are worried."
America is distracted
TTIP is less of a cause for concern in the US. If people talk about the negotiations at all, the tenor is usually positive, von Daniels said. "Even unions, who are generally critical of free trade agreements, are hoping TTIP will increase workers' and environmental protection." But free trade is nonetheless on the defensive there too, where with the Trans-Pacific Partnership (TPP), the US's agreement with eleven Pacific nations, including Mexico, Japan, Vietnam and Malaysia, is frequently lambasted.
German-US Culture Clash
TPP has become an abiding theme in the US presidential elections. Republican contender Donald Trump called it "a bad, bad deal." And Democratic candidate Hillary Clinton has grown more careful in her support of free trade agreements. The US does not share Germany's big worries about labor and environmental standards. "The main concern is that cheap imports crowd out American companies and lead to further job losses," von Daniels said. TTP has already been signed, but it too is awaiting ratification, in this case by the US Congress. Whether a TTIP agreement with the EU will ever make it this far is unclear. But it will take a big push to keep the wheel's spinning past President Obama's time in office, and now doesn't seem to be the time to expect one.
SOURCE: The DW
