INTERNATIONAL
Textile Raw Material Price 2016-08-03
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1037.84 |
USD/Ton |
0% |
8/3/2016 |
|
VSF |
2410.08 |
USD/Ton |
0.63% |
8/3/2016 |
|
ASF |
1897.94 |
USD/Ton |
0% |
8/3/2016 |
|
Polyester POY |
1063.45 |
USD/Ton |
0% |
8/3/2016 |
|
Nylon FDY |
2274.51 |
USD/Ton |
0% |
8/3/2016 |
|
40D Spandex |
4338.14 |
USD/Ton |
0% |
8/3/2016 |
|
Nylon DTY |
1935.60 |
USD/Ton |
0% |
8/3/2016 |
|
Viscose Long Filament |
2071.16 |
USD/Ton |
0% |
8/3/2016 |
|
Polyester DTY |
1186.96 |
USD/Ton |
0% |
8/3/2016 |
|
Nylon POY |
2485.40 |
USD/Ton |
0% |
8/3/2016 |
|
Acrylic Top 3D |
5616.99 |
USD/Ton |
0% |
8/3/2016 |
|
Polyester FDY |
1308.97 |
USD/Ton |
0% |
8/3/2016 |
|
30S Spun Rayon Yarn |
2982.47 |
USD/Ton |
0.51% |
8/3/2016 |
|
32S Polyester Yarn |
1807.56 |
USD/Ton |
0% |
8/3/2016 |
|
45S T/C Yarn |
2417.61 |
USD/Ton |
0% |
8/3/2016 |
|
45S Polyester Yarn |
3133.10 |
USD/Ton |
0% |
8/3/2016 |
|
T/C Yarn 65/35 32S |
2395.02 |
USD/Ton |
0% |
8/3/2016 |
|
40S Rayon Yarn |
1958.19 |
USD/Ton |
0% |
8/3/2016 |
|
T/R Yarn 65/35 32S |
2349.83 |
USD/Ton |
0% |
8/3/2016 |
|
10S Denim Fabric |
1.38 |
USD/Meter |
0% |
8/3/2016 |
|
32S Twill Fabric |
0.85 |
USD/Meter |
0% |
8/3/2016 |
|
40S Combed Poplin |
1.19 |
USD/Meter |
0% |
8/3/2016 |
|
30S Rayon Fabric |
0.70 |
USD/Meter |
0% |
8/3/2016 |
|
45S T/C Fabric |
0.68 |
USD/Meter |
0% |
8/3/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15063 USD dtd 04/08/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The price hike of viscose staple fibre (VSF) is on the anvil. The domestic VSF prices are expected to be increased by Rs. 5000 to Rs. 6000 per tonne for August deliveries, informed market sources. The 1.2 Denier basic price is presently quoted at Rs. 146,000 per tonne in the domestic market, sources said. The prices hike is inevitable considering the rising price trend in the international market. The international prices of VSF are quoted at US $ 2.07 cents per kg. The current international VSF price is all-time high for the VSF industry and is likely to go up on account of lower VSF production in China. Many Chinese VSF plants have shut down on account of environment issues and another shut down in likely on account of which prices are expected to escalate further, sources informed. The prices of VSF also started moving on account of increasing cotton prices in the international and domestic markets.
In view of rising cotton prices, the yarn production of the mill industry is witnessing a paradigm shift from natural to man-made fibres. This situation is to stay in India until the new cotton crop arrivals start and domestic cotton prices stabilise, informed market sources. Sources further said that on account of rains, the arrivals will be delayed this year by around 3-4 four weeks. The pressure of arrivals will not be felt till mid November. Only when cotton arrivals gain momentum that cotton prices will ease. Until then the man-made fibres will continue to have a good run, sources pointed out.
Meanwhile, sources informed that the polyester staple fibre have been rolled over by the domestic polyester producers for August deliveries. The POY and FDY prices have also been rolled over for the current month, sources said. Responding to the proposed increase in VSF prices, one of the major VSF user noted that Rs. 5000 to Rs. 6000 per tonne hike in VSF prices will be too much for the blended yarn spinner to absorb. An increase of Rs. 3000 to Rs. 4000 per tonne can be absorbed and passed on to the weaving community. Anything over this will find resistance from the downstream industry, he stressed. If VSF prices are hike is too steep, then blended yarn spinners will shift to higher polyester blends. Therefore, it would be prudent on the part of VSF player to go slow on the price hike, he said.
SOURCE: The Tecoya Trend
An educational seminar regarding schemes of Ministry for Textiles was today organised at Government College of Education, Canal Road, here, by the Regional Office of Textile Commissioner, Amritsar. The objective of holding the seminar was to raise awareness among the entrepreneurs/weavers about various schemes of Ministry of Textiles for development of textile industry in the State. During the seminar, stress was laid on schemes like Amended Technology Upgradation Fund Scheme (ATUFS), Modified Group Workshed Scheme (M-GWS), Scheme for Integrated Powerloom Sector Development and Group Insurance Scheme for powerloom workers. The participants were informed that the M-GWS is focussed at decentralized power loom Industry with an aim to develop the powerloom cluster, where modern weaving machines are established so that Indian textile industry can compete with the international market.
Explaining the Scheme for Integrated Powerloom Sector Development, it was informed that the Centre regularly organises exposure visits for the Power loom Workers/ Weavers to educate them regarding upgraded modern machines established under the scheme. The participants were also made aware about Group Insurance Scheme for powerloom workers which the Government of India is introducing soon.
SOURCE: The Daily Excelsior
The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday gave its approval for the terms and conditions for transfer of 12 acres of National Textile Corporation Ltd. (NTCL), Indu-6 Mill land to Government of Maharashtra for construction of a memorial of Dr. B.R. Ambedkar. The Chaityabhoomi of Bharat Ratna Dr. Babasaheb Ambedkar is situated in the vicinity of the land of Indu-6 Mill of National Textile Construction Limited (NTCL), Mumbai; a place of pilgrimage for millions of Indians. The Union Cabinet had already approved the transfer of 12 acres of Indu-6 Mill land, vested in National Textile Corporation, to Government of Maharashtra for construction of a befitting Memorial for Dr. Babasaheb Ambedkar on payment of compensation as required under section 11A of the Sick Textile Undertakings (Nationalisation) Amendment Act, 1995 and ratified tripartite Memorandum of Understanding signed between Government of India, Government of Maharashtra and National Textile Corporation Ltd.
SOURCE: The Business Standard
Four months after the government levied excise duty on garments worth over Rs 1,000, manufacturers in India have started gradually shifting from the maximum retail price regime (MRP) to fixed price regime. Union Finance Minister Arun Jaitley, while announcing the Union Budget 2016-17, announced a 2% levy of excise duty on garments and made ups with retail price of over Rs 1,000. This means, excise duty was levied on garments based on its MRP, irrespective of the actual realisation for the retailer. In case the retailers offer seasonal discounts, being the usual practice to exhaust old stocks to make room for the new ones, they are required to pay excise duty on the portion of discount as well. For example, a branded shirt with an MRP tag of Rs 1,400 is sold with a 50% discount. Then, the actual realisation for the retailer works out to Rs 700. If the retailer sells the same shirt at “fixed cost” basis at Rs 700, there will be no change in the retailer’s realisation. While the shirt will come under excise net if it is sold with MRP tag, it won’t attract the duty if it is sold with “fixed price” tag. “It makes business sense to shift to ‘fixed price’ tag with actual realisation rather than tagging with MRP and offer heavy discounts thereafter. Such a shift will not only prevent us from calculating excise levy payment but also lower duty payment burden,” said Vijay Agarwal, managing director, Creative Garments and former chairman of Apparel Export Promotion Council (AEPC). However, excise duty will be applicable only for those manufacturers who do not claim input tax credit (ITC), popularly known as central value added tax (Cenvat), paid on various raw materials. Manufacturers who claim ITC, however, will need to pay 12.5% excise duty. Until now, excise duty was “nil” on manufactures without ITC claim and 6-12.5% for those who claimed ITC.
Interestingly, excise duty is paid on MRP, irrespective of the actual realisation from the garments. Through this shift, around a third of garments priced over Rs 1,000 would be exempted from the excise net due to their actual price would come down to below Rs 1,000. “Excise duty on garments is levied for years. In the last Union Budget, however, it was capped on a branded garment with a price tag of Rs 1,000. So, retailers are changing their business tactics,” said R K Dalmia, Chairman, The Cotton Textiles Export Promotion Council (Texprocil) and Senior President, Century Textiles and Industries. According to trade sources, existing stocks continue with MRP tag with offer of 40-50% discount. But, new stocks come only with “fixed price” tag. This means, customers may not find luring discount offers of 40-50% or “buy one, get one free” kind of banners on the walls of garment retail shops. So, the product mix of garments stocks has seen a rapid change in the last four months. From around 100% of MRP-based products before the Union Budget in February, half of the stock is coming now with “fixed price” tag. “Earlier, MRP was fixed on inflated basis to consider all aspects including discounts, duties etc. So, even if the actual realisation was lower than the statutory excisable price limit of Rs 1,000, excise duty was paid. On MRP, however, huge discounts were offered to attract customers’ footfalls. But, manufacturer would fix a tag with the genuine price,” said Rahul Mehta, President, Clothing Manufacturers Association of India (CMAI). Fixed price or genuine price, according to Mehta, would include cost of manufacturing and other expenses viz duties, labour and transportation costs etc. Thus, the “fixed price” will be the actual gross realisation of garments, he added.
SOURCE: The Business Standard
Textile design refers to the designing of different patters/designs on fabrics. Designers work with a variety of textile materials, techniques and processes to come up with a range of products. The designs can be used on garments, home furnishings, automobile interiors, textile art and installations. It is important for a textile designer to be aware of textile traditions in India and in countries around the world. With increasing population and purchasing power of the middle class population, the need for textile designers is on the rise. Most of the textile designing work for people all over the world is carried out in Asian countries, including India, Pakistan, Bangladesh, Indonesia, China, and Japan.
“As India is one of the most important textile manufacturer countries in the world, there are many textile domains in our country. Designers can work in the textile export industry, handloom industry, crafts sector, with NGOs and industrial manufacturing industry, etc. Textile designers usually work with other types of designers, like fashion designers or interior designers in an attempt to create the perfect pattern,” says Aarti Srivastava, programme co-ordinator at the National Institute of Design. This career gives one the opportunity to work with new materials, techniques, contemporary products and also to work with artisans etc. Working in a team as designer is only one tiny element in the entire chain of the textile industry. One can earn Rs 6 lakh per annum onwards depending on years of experience and level of creativity. To pursue textile designing as a career, one needs to have a bachelor’s degree in designing. It is always advisable to do a master’s degree and find out more about the demands of the profession.
SOURCE: The Hindustan Times
The rupee surprised the market with a sharp reversal from the high of 66.7 to test 67 levels on Wednesday. The sudden reversal has jolted the strong up-move that was in place for more than a week. Following last Wednesday’s fall, the currency had strengthened sharply breaking above the key psychological resistance at 67. Both the domestic as well as the global factors aided the rupee and helped it strengthen beyond 67 in the past week. On the domestic front, positive sentiment, as hurdles were cleared for passing the Goods and Services Tax (GST), supported the rupee. On the global front, the dollar falling sharply over a per cent on Friday after the weak GDP data release helped the rupee break and open with a gap-up above 67 on Monday. The US grew (advance estimates) at just 1.2 per cent in the second quarter and the first quarter growth numbers were revised to 0.83 per cent from 1.1 per cent. The weak numbers saw the US dollar index tumbling from around 96.6 to 95.5 on Friday. Also, stronger yen pulled the index further lower towards 95 on Tuesday. At the moment, the index is managing to sustain above 95. A strong break below it can drag it to 94.75 initially and then to 94.5. On the other hand, if the dollar index manages to hold above 95, it can remain range bound between 95 and 96 for a few days.
Events to watch
The coming week will witness a couple of key events. The US unemployment numbers are due for release on Friday. Weak job numbers could add pressure on the dollar and drag it lower as it would reduce the hopes of another rate hike from the US Federal Reserve this year. It could help in limiting the downside in the near-term for the rupee. On the domestic front, the RBI’s monetary policy meeting is on Tuesday (August 9).
Rupee outlook
The sudden reversal from 66.7 on Wednesday leaves the near-term outlook unclear. However, the currency seems to face strong resistance at 66.7. Further strength is likely only on a break above the hurdle at 66.7. The next targets will be 66.5 and 66.25. In such a scenario, the possibility of the rupee revisiting 66 levels cannot be ruled out in the short-term. However, 66 is a strong resistance which has been capping the upside in the rupee since December and an immediate break above 66 looks less probable. On the other hand, if the rupee manages to break below 67 in the coming days, it can fall to 67.25 and 67.50. However, the short-term outlook will turn negative only on a strong break below 67.5. Such breaks will open doors for a fresh fall to 68 or even 68.5 thereafter. To sum up, the rupee can trade inside the 66.5-67.5 range in the short-term.
SOURCE: The Hindu Business Line
As the country braces for a goods and services tax (GST) regime, the man-made textile segment, long neglected by policy makers, finally expects a “level-playing field” vis-a-vis cotton textiles. At present, while man-made fibres attract a 12% excise duty, cotton fibres attract none. This duty disparity has distorted the domestic consumption pattern in favour of the cotton fibre, contrary to the global trend. Although the actual GST rate applicable to textile and garment products will be announced in due course, senior textile industry executives say the current disparity in the excise duty rates of cotton and man-made fibre will be “erased”, unless the government decides to give some exemption to cotton fibres. Industry executives expect a GST rate of around 15%, if the peak rate is 18%, arguing that textile and garments are essential items. “Man-made fibre-based products will be more competitive vis-a-vis textiles items based on cotton fibre. This will be a good policy push, in sync with the global realities,” said noted textile expert DK Nair, who is also an adviser to South Indian Textile Mills Association. However, both cotton and man-made fibre are also subject to 4-5% state VAT, which will be subsumed by the GST.
However, if the duty treatment of all cotton and man-made fibres remains the same, prices of textile items made of cotton fibre could rise a tad, Nair added. But equal tax treatment will give a push to man-made fibre production and subsequent exports. The industry has long been complaining that the duty disparity is preventing domestic producers from scaling up operations and, consequently, hurting India’s export competitiveness in man-made textiles. This is because while man-made fibres account for around 70% of the world’s total fibre consumption, they make up for less than 30% of India’s demand. The government in June announced radical changes to labour laws, apart from some concessions to the garments sector, aimed at boosting exports of textiles and garments by $30 billion over the next three years from $40 billion in 2015-16. Last year, the textile ministry had recommended a reduction in the excise duty for the man-made textile sector to 6% from the current 12%. However, such a step was never approved by the government.
SOURCE: The Financial Express
A high-pitched debate. Worry about the future. Voting. And, the Goods and Services Tax (GST) Constitution (Amendment) Bill was passed by the Rajya Sabha on Wednesday evening. At final count, all the 203 members present in the upper House voted in favour of the Bill. The AIADMK, with 13 members, had staged a walkout over disagreements.
ON THE POCKET
Cars, SUVs, two-wheelers, Watching movies, Electronics
Eating out, Mobile calls, Travelling
Alcohol, petroleum products
Now, a few more steps would enable the Centre and states to frame laws on the new indirect tax. The GST regime would be a historic economic reform, making the country a unified market. But, it requires further consensus on the GST Bills over which differing opinions were voiced by the Opposition and the Treasury benches. This indicates the road ahead for the GST - planned to be implemented on April 1, 2017 - will be challenging. The Congress tried and failed to get an assurance from Finance Minister Arun Jaitley that rates would be capped in the GST Bills and that the Central GST Bill would be a financial legislation - not a money Bill. The Rajya Sabha cannot reject a money Bill. There were also divergent opinions on the dispute-resolution mechanism. Even as administrative control over scrutiny and assessment of tax remained an issue, Jaitley assured the House it would be resolved. "The GST Bill is the most reformative tax reform," he said, adding it would give the country an economic boost. "Legislation of this kind cannot be based on partisan considerations. Almost every major party is a part of the power structure in the country. A larger political consensus was necessary. We have worked towards it." There was a broad consensus, but unanimity remained elusive with the missing AIADMK members at the time of voting.
When the GST regime comes into force, it will subsume a slew of indirect central taxes, including excise duty, service tax, countervailing duty and those of the states, such as value added tax, sales tax, luxury tax and octroi. The Bill was passed in the Rajya Sabha one-and-a-half years after the Lok Sabha cleared it. It became possible after the government yielded to some of the Congress' demands, such as scrapping a contentious one per cent additional levy on inter-state supply of goods. Other amendments related to compensating states for revenue loss for up to five years and requiring the GST council to establish a mechanism for adjudication of disputes between the Centre and states or among states.
THE ROAD AHEAD…
The new Bill, with the amendments, will return to the Lok Sabha at the earliest - possibly by next Monday - to get its nod. Former Union finance minister P Chidambaram wanted disputes other than those arising out of the proposed GST Council's recommendations should also be taken up by the dispute-resolution mechanism that will come up. Jaitley highlighted the co-operation of the Centre and states for the GST. "The Centre and the states will have to work together. This will be federalism at play." Jaitley added the GST would bring about the best economic management. "It will empower the states and increase revenue. It will discourage and bring down evasion." The finance minister allayed fears that the proposed GST would increase inflation.
Congress leader P Chidambaram said he welcomed the "friendly and conciliatory tone" of the finance minister Jaitley, who later said the amended Bill will be introduced in the Lok Sabha "very soon". The debate on Wednesday saw divergent views on subsequent GST Bills. Most political parties in the Opposition, including Congress, Communist Party of India (Marxist), Janata Dal (United), Samajwadi Party and Trinamool Congress demanded the Central GST Bill and the Integrated GST Bill be passed by both Houses - not as a money bill, which only requires approval by a simple majority in the Lok Sabha. Chidambaram said, "I want an assurance from the finance minister that GST will be brought as a financial Bill and not a money Bill." His party colleagues Jairam Ramesh, Gulam Nabi Azad, Kapil Sibal supported him. However, Jaitley said he could not give an assurance as the proposed GST Council is yet to be set up. "It has not even framed the draft GST Bills." Congress also pressed for a low GST rate, which is ring-fenced in the subsequent GST Act. "On behalf of my party, we demand the standard rate of GST - which applies to over 70 per cent of the goods and services - should not exceed 18 per cent," said Chidambaram.
SOURCE: The Business Standard
Assocham president Sunil Kanoria said the goods and services tax (GST) regime will boost positive sentiment in the country but is likely to miss its rollout target of April 1 next year. There are positive signs that the economy is moving towards an 8% growth trajectory with sectors such as roads, mining and railways picking up, Kanoria said. "The green shoots of economic recovery have started to appear. India is among the fastest growing economies in the world at present," Kanoria told ET. "Government's increased budgetary allocation for infrastructure sector is fuelling this growth." Kanoria said passage of the GST Bill will boost positive sentiment and convert India into a single market. "It would be a big boost for India. However, the state assemblies will have to clear it as well. So, it could take some time before GST becomes a reality. I'm not sure whether the government would be able to roll out GST by April, 2017," Kanoria said. The Assocham president said it would lead to much better growth in terms of revenue collection. "There are a lot of inefficiencies in the system today. With GST, the inefficiencies would be ironed out and the volume of transactions coming to the mainstream will increase much more," he said. Kanoria, who's vice-chairman of Srei InfrastructureBSE 0.88 %, said there's a pickup in construction activity, which is being fuelled by government-funded engineering, procurement and construction contracts. "Private investment is yet to pick up, but many of the stuck projects have been rolled out," he said.
On the private sector's reluctance to invest, he said private investment could still take some time to trickle in as there's a huge unutilised capacity which would take some time to be exhausted. "Because of a good monsoon and pay commission, we would see a pickup in demand but it would take at least two years before we see any major change. The domestic industry would start investing by 2018," he said, adding that high interest rate is also a big issue with the industry and is currently undermining investment."In recent years, Interest cost has gone up to 12-14%, making it unviable for industry because the cost of your capital is so high."
SOURCE: The Economic Times
Adi Godrej, the most forceful proponent of GST, thinks that the GDP growth rate will soon be in double digit with the unified tax system. A study done by NCAER that explores the impact on growth due to reduction in direct cost and cost reduction on capital inputs pegged the improvement in growth rates between 2 and 2.5 per cent. Others have estimated the Indian economic growth between 1.5 and 2 per cent faster under the new tax regime. While these projections can come true over the long-term, it is doubtful if there will be an immediate improvement in the growth rate of the economy. In fact, growth can slow down in the initial phase of the GST roll-out before the longer term benefits kick-in.
Negative impact in the short term
The primary reason why growth can be affected, at least in the first year, will be because the tax on services that account for around 60 per cent of the GDP, is expected to increase under GST while taxes on manufactured products that make up 17 per cent of the GDP can move lower. There is a typical tendency to prepone consumption if taxes are expected to move higher. But in this case, since most services are non-discretionary and since tax rates on goods can move lower, output can contract slightly following the roll-out. A panel regression analysis done by Sonal Verma and Neha Saraf of Nomura on 11 countries for the period between 1961-2015 to study the impact of change in effective tax rate shows that for countries where tax rates moved higher, GDP growth picks up in the year prior to the GST implementation (year T-1), likely reflecting preponement of consumption in anticipation of higher prices. “This is followed by a temporary (though insignificant) negative impact on GDP growth due to weaker consumption in the year T, as firms pass on tax increases into higher output prices. Beyond that, growth does rebound, perhaps due to efficiency gains from a more streamlined tax structure and better tax compliance.” However, there is a consensus among most economists that the GST will be positive for the economy over the longer term as it simplifies the tax structure, increasing compliance, reduces tax evasion, expands tax base and significantly improves the functioning of the logistics network.
Expansion of tax base
The GST regime ensures that the tax base for indirect taxes grows through two ways. One, it sets up a system of taking credit for taxes on inputs only if it has been declared and paid by the input manufacturer. This sets up a system of self-policing as it is in the interest of the producer to ensure that he sources goods only from those suppliers who are tax-compliant. Many companies in the unorganised sector who are currently not paying tax are thus expected to fall within the tax net.
Two, the committee set up to recommend the Revenue Neutral Rate (RNR) under Arvind Subramaniam, recommended an exemption threshold of Rs. 25 lakh for goods. Currently, goods producers with turnover less than Rs. 1.5 crore are exempted from paying central excise duties; at the state level, the exemption limit for goods varies between Rs. 5 lakh and Rs. 10 lakh. Decreasing the threshold for GST will therefore make many small manufacturers liable to pay tax on their products. Corporate tax data shows that entities recording revenue between Rs. 25 lakh and Rs. 40 lakh are paying a very small proportion of tax, though they are large in number. The threshold for services will however increase from the current limit of Rs. 10 lakh to Rs. 25 lakh.
Investments-kicker
The RNR report submitted in December 2015 makes the point that investments in the economy will improve “with a more seamless and efficient crediting of taxes paid on capital goods.” Currently, companies sourcing capital goods for capacity expansion cannot claim tax credit on capital goods purchased; this will change with the GST regime. The report says that capital goods prices would become effectively 12-14 per cent cheaper as companies avail tax credit. This is likely to increase investments and help growth. The report says that this could lead to incremental GDP of 0.5 per cent. There is a long way to go and many hurdles to surpass before the GST becomes a reality. The final standard GST rate, exemptions granted, compensations to States etc will determine the actual benefit to the economy. It is to be seen if the bonhomie witnessed on Wednesday between the political parties continues to make the GST a reality.
SOURCE: The Hindu Business Line
GST will turn India into one common market, leading to greater ease of doing business and big savings in logistics costs from companies across all sectors. Some companies will gain more as the GST rate will be lower than the current tax rates they pay, others will lose as the rate will be higher than the present effective rate. While the rate of GST is yet to be decided, industry observers have assumed an 18% rate recommended by a government panel in making their impact calculations. ET looks at the likely impact across sectors.
TECH
Positive
GST will eliminate multiple levies. It will also allow deeper penetration of digital services.
Negative
IT companies can have several delivery centres and offices working together to service a single contract. With GST, companies might require each centre to generate a separate invoice to every contracting party. Duty on manufactured goods is going to go up from existing 14-15% to 18%, which means the cost of electronics from mobile phones to laptops- will rise.
FMCG
Positive
Companies could generate substantial savings in logistics and distribution costs as the need for multiple sales depots will be eliminated. FMCG companies pay nearly 24-25% including excise duty, VAT and entry tax. GST at 17-19% could yield significant reduction in taxes. Warehouse rationalisation and reduction of overall tax rates, is expected to generate saving which could cumulatively range between 200-300bps.
Key beneficiaries: Hindustan Unilever, Colgate, GSK, Asian Paints
Negative
If the recommended 40% "sin/demerit" GST for aerated beverages and tobacco products is levied, then prices may increase by over 20%. Food companies: many see increase in effective tax as many companies enjoy concessional rate of excise.
ECOMMERCE
Positive
GST will help create a single unified market across India and allow free movement and supply of goods in every part of the country. It will also eliminate the cascading effect of taxes on customers which will bring efficiency in product costs.
Negative
The tax collection at source (TCS) guidelines in the GST regime will increase administration, documentation workload for ecommerce firms and push up costs.
TELECOM
Positive
Handset prices likely to come down/even out across states. Manufacturers are also likely to pass on to consumers cost benefits they will get from consolidating their warehouses and efficiently managing inventory. For handset makers, GST will bring in ease of doing business as they may no longer need to set up state specific entities and transfer stocks to them and invest heavily into logistics of creating warehouses in each state across the country.
Negative
Call charges, data rates will go up if tax rate in the GST regime exceeds 15%. Tower firms won't be able to set off their input duty liabilities if petro-products continue to stay outside GST framework. Negative for Bharti Airtel, Idea and Reliance Comm.
AUTOMOBILES
Positive
On-road price of vehicles could drop by 8%, as per a report by Motilal Oswal Securities. Lower prices can be construed as indirect stimulus to boost volumes. Key beneficiaries: Maruti Suzuki, M&M; Eicher Motors' margins may expand.
Negative
Demand for commercial vehicles may be hit in the medium term. GST will subsume local taxes, reduce time at check-posts, ease logistics hurdles. With fleet productivity increasing, operators may not feel the need to expand mid-term.
MEDIA
Positive
DTH, film producers and multiplex players are levied service tax as well as entertainment tax, GST will bring major change and uniformity in businesses. Taxes could go down by 2-4%. Multiplex chains will save on revenues as there will be a more uniform tax, unlike current high rate of entertainment tax levied by different states. It may lower the average ticket price, and increase the footfalls in multiplexes. GST will be a big boon to film producers and studios that currently pay service tax on most of their cost, but cannot charge input credit on creative services (payments to artists etc) as they fall under the negative list. Under GST, they will be able to claim credit of these services also, which will help is lowering the overall cost.
Key beneficiaries : Dish TV, PVR.
INSURANCE
Negative
Insurance policies: life, health and motor will begin to cost more from April 2017 as taxes will go up by up to 300 basis points.
AIRLINES
Negative
Flying to become expensive, as service tax will be replaced by GST. Service tax on fares currently range between 6% and 9% (depending on the class of travel). With GST, the rate will surpass 15%, if not 18%, effectively doubling the tax rate.
CEMENT
Positive
The effective rate of tax for cement companies is now 25%. If GST rates are fixed at 18-20% then the overall tax incidence will be lower GST IS expected to lead to savings in transportation cost, which currently comprises up to 20-25% of total revenue. One common market will bring down the number of depots in the country. Ultratech states that its depots will come down to 100 from 550 at present. Key beneficiaries: Pan India players such as UltraTech, ACC, Ambuja and Shree Cement.
SOURCE: The Economic Times
Sharp rise in rates seen on the cotton market on Tuesday, due to short supply and sporadic rains in some parts of cotton belt. In Sindh seed cotton prices were higher by Rs 50 to Rs 3250 and Rs 3400 and in Punjab, phutti prices gained Rs 100 to Rs 3250 and Rs 3400 per 40 kg, respectively, dealers said. The official spot rate also went up by Rs 150 to Rs 6,600. According to cotton analyst, Naseem Usman, mills and spinners have no choice just to buy cotton even at higher prices. Hovering fears of further rise in the rates is propelling mills to make forward buying. Other analysts said that tight supplies from Punjab haunting ginners to increase prices, to meet their export consignments, mills are importing cotton, seeking no rise in the import duty. While some brokers said that with the passage of time, the prices are rising in the world market and local markets, as well. The following deals were reported to have changed hands as per dealers: 200 bales of cotton from Maqsoodo at Rs 6700/6750, 800 bales from Kotri at Rs 6700/6750, 600 bales from Hala at Rs 6700/6775, 400 bales from Shahpur Chakar at Rs 6750/6775, 1400 bales from Shahdadpur at Rs 6700/6800, 2000 bales from Tando Adam at Rs 6700/6800, 1600 bales from Sanghar at Rs 6700/6800, 1000 bales from Hyderabad at Rs 6700/6800, 2000 bales from Mirpurkhas at Rs 6700/6825, 400 bales from Vehari at Rs 6750, 400 bales from Khanewal at Rs 6950 and 400 bales from Chichawatni at Rs 7000. In ready business, around 10000 bales of cotton changed hands between Rs 6700 and Rs 7000.
SOURCE: Yarns&Fibers
Commerce & Industry Minister Nirmala Sitharaman will have her task cut out at the trade ministers’ meet of the 16-country Regional Comprehensive Economic Partnership (RCEP) in Laos later this week with members refusing to back India’s latest proposal of not reducing tariffs on goods to zero. India’s proposal on moderate tariff reduction, as opposed to tariff elimination being negotiated so far, circulated at the recent negotiations in Jakarta, was not received well by any member, a government official told BusinessLine . New Delhi, however, is determined to stick to its guns, especially with offers in services from other countries still not up to its expectations. RCEP members, which include the 10-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand, are seeking to create one of the largest free trade blocs in the world as the countries account for 45 per cent of the world population and over $21 trillion of gross domestic product. “We have made it clear at the Jakarta meeting that if other members want a reasonable level of commitment from us in terms of tariff reduction in goods, they have to agree to our terms that we will not be eliminating duties in most sectors,” the official added. The level of tariff reduction that India will offer other members will also depend on the quality of offers it receives in services. “So far, offers have been made in over 100 services sub-sectors, but serious offers have not been made in mode 4 which relates to movement professionals and workers. Some kind of bench-marking of offers has to be done in modes, failing which we will not be in a position to be generous in goods,” the official said. A meeting of the Trade Negotiations Committee (TNC) of RCEP is scheduled on August 3, following which trade ministers will meet on August 5. “The TNC will try to hammer out the contentious areas in goods, services and investments following which the trade ministers will decide on a feasible deadline to conclude the negotiations,” the official said.
Changing stand
India’s current position on goods is a departure from its earlier stand when it had agreed, as part of its initial offer, to eliminate tariffs on 42.5 per cent of goods from China, New Zealand and Australia, on 65 per cent of goods from Japan and South Korea and on 80 per cent of goods from the ASEAN. The Centre decided to change its position on goods as complaints from the Indian industry on the negative impact of the older trade pacts with countries such as Japan and South Korea have been growing. At the RCEP, too, with increasing pressure from other countries on equal market access to be offered to all (including China which is India’s greatest concern), New Delhi feels it is best to move away from a zero-tariff commitment, the official said.
SOURCE: The Hindu Business Line
While welcoming over 17,000 visitors from 37 countries and regions, these numbers grew 15 per cent over the previous edition at Intertextile Pavilion Shenzhen, which saw 675 participating exhibitors. Among the top 10 overseas visitor countries and regions were Hong Kong, the US, Canada, India, Russia, Singapore, Korea, Australia, Japan and Turkey. Major fashion brands who visited included, Brooks Brothers, Combi, Descente, Diesel, DKNY, Evisu, G2000, I.T, Initial, Kinji, Macy's, Marc O'Polo, Pepe Jeans, Ralph Lauren, Zara and many more. In addition, the fair attracted a number of well-known Chinese brands like Bosideng, Canto Motto, Cosmo Lady, EITIE, Goelia, Lilanz, Septwolves, WSM and others. According to the organiser, the uncertain global economic situation did not appear to dampen the enthusiasm of exhibitors who were keen to explore the opportunities in the South China market. Wendy Wen, senior general manager of Messe Frankfurt (HK) Ltd, said, “We were delighted to see an over 10 per cent jump in the number of international exhibitors.” “This growth proves the rising importance of the South China textile market for overseas suppliers, particularly those from Asia” she added.
SOURCE: Fibre2fashion
Austrian producer of specialty fibres Lenzing is investing €100 million over the next 20 months to expand capacities for its high quality botanic fibres. Lenzing had earlier set the target of increasing the share of specialty fibres as a proportion of its total revenue to 50 per cent by 2020, which currently accounts for 41.7 per cent of revenue. The major part of investments will be carried out in 2016 and 2017 and the company will fully utilise its in house engineering competence, supported by local construction companies and suppliers. Lenzing AG decided to start its investment program for speciality fibers at its existing sites in Austria and the UK as it allows fast capacity ramp up. Lenzing CEO Stefan Doboczky said, “Given the strong market demand, this expansion will help our customers in their growth plans as well as expanding our global market leadership position for specialty fibres.”
SOURCE: Fibre2fashion
The long-feared Chinese hard landing has become a reality in rustbelt Liaoning. The northeastern province, ground zero in China’s multi-year slowdown, saw its economy contract 1 percent in the first half of 2016 as factories splutter and the coal industry groans under the weight of overcapacity. But the hardship remains localized, with regional data for the first six months showing economic growth in 15 of the nation’s 31 provinces perked up from the first quarter. And while the golden age of across-the-board double-digit growth is history, three provinces still maintained such rates, with inland Chongqing again topping the pack.
Together, the provincial data add to a picture of stabilization as a recovering property market and fiscal support cushion the drag from stalling old growth engines. For policy makers, the sharpening divergence argues for tailored fiscal and monetary settings rather than nationwide stimulus that risks flooding outperformers with liquidity, brewing bubbles and over-investment. The People’s Bank of China has held its benchmark policy rates unchanged since October, instead channeling money via policy banks tasked with lending for specific, government sanctioned purposes. Meantime, the government -- often by stealth fiscal stimulus -- has poured cash into infrastructure projects to prop up employment in some areas.
With growth in fixed-asset investment by the private sector -- arguably the best gauge of business confidence since it measures expansion plans -- slumping to 2.8 percent nationwide, the government sent officials to various parts of the nation to seek ways to boost such spending. The results can be seen in northwestern Qinghai, one of the poorest provinces, where private investment plunged 13.8 percent in the first half from a year earlier, local data show. Yet overall fixed-asset investment jumped 12 percent as the government and state-owned corporations stepped up spending.
Other provinces pursued a similar strategy, boosting the role of the state. Inner Mongolia and Shandong increased investment spending on infrastructure such as roads, railways, telecom networks and water treatment facilities to levels almost double the national pace. By contrast, China’s biggest regional economy Guangdong missed out on government largess, with a modest 3.4 percent gain in infrastructure investment even though property and private investment there outpaced other regions. Yet as the chart above illustrates, a recovery in property sales in the first half didn’t translate into an across-the-board pick up in real estate investment, with developers in Beijing proving especially cautious.
Authorities in the nation’s capital -- so large it constitutes one of the four provincial-level economies -- appear happy for it to continue down the post-industrial path. Factory output there rose a mere 1.7 percent in the first half from a year earlier, local data show. In Shanghai, industrial production shrank 4.4 percent. Both metropolises, whose service sectors account for about two thirds of their economies, are shutting polluting factories in an effort to get cleaner air. In the nation’s worst-performing economy, Liaoning, factory output declined 7.7 percent in the first six months, prompting an exodus of workers. Liaoning’s state television channel sought to look on the bright side: instead of bemoaning the province’s 1 percent contraction, it buried it in math by lauding the 3.2 percent services growth that was "4.2 percent faster than its GDP growth." At the other end of the spectrum, Chongqing, the inland city-province that’s another one of the four directly managed by the central government, posted an enviable 10.6 percent growth rate in the first half, with industrial output rising 10.2 percent as factories move there for cheaper land and labor. Some rust belt regions are bottoming out. Jilin, which borders Liaoning and North Korea, matched the national economic growth rate for the first time since 2013, thanks to a booming car manufacturing sector. It also attributes the jump in factory performance to aggressive reduction of overcapacity and better performance of state-owned enterprises. Heilongjiang, which also borders Liaoning, hasn’t released growth data yet -- a worrying sign since the worst performers tend to release their numbers last.
SOURCE: The Yahoo Finance
