INTERNATIONAL
Indian Textiles Industry has a vast presence in the economic life of the country and contributes substantially to its exports earnings. Textiles exports represent almost 14 per cent of the country’s total exports. Globally, India has the 2nd largest textile manufacturing capacity after China; the Indian textiles industry accounts for about 24 per cent of the world's spindle capacity and eight per cent of global rotor capacity. It is the world’s third largest producer of cotton-after China and the USA-and the second largest cotton consumer after China.
The textile industry can be broadly classified into two categories, the organized mill sector and the unorganized mill sector. Considering the significance and contribution of textile sector in national economy, initiative and efforts are being made to take urgent and adequate steps to attract investment and encourage wide spread development and growth in this sector. The sector provides direct employment to over 15 million persons in the mill, powerloom and handloom sectors.
Industry performance
The Indian textiles industry, currently estimated at around $108 billion, is expected to reach $223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s gross domestic product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).
India has its own textile raw materials; in fact, the country has a surplus of textile raw materials whether it is cotton or man-made fibres. The spinning/weaving capacity built over the years has resulted in low cost of production per unit in India’s textile industry. This has given a strong competitive advantage to the country’s textile exporters in comparison to key global competitors.
The sector has also witnessed increasing outsourcing over the years, as Indian players adjusted themselves up in the value chain from being mere converters to brand partners of global retail giants. The same is getting reflected in increasing value of exports. The Indian textile industry has enjoyed parity between international and domestic cotton prices.
Exports
India’s textiles and clothing industry is one of the mainstays of the national economy. It comprises almost than 14 per cent share in total Indian export. The export of textiles and its allied products have declined by 3.20 per cent in FY16 to $35,952.65 million as compared to $37,140.74 million in FY15. The fall was mainly due to slump in export of manmade yarn, fabrics, madeups and cotton yarn. Manmade yarn, fabrics, madeups exports reported a negative growth of 12.39 per cent as exports reached $4,621.63 million in FY16 as against $5,275.03 million in FY15, while export of cotton textiles declined 8.36 per cent to $3,608.12 million in FY16 as against $3,937.41 million in previous year. The textile exports are expected to grow at $4000 million in FY17, on expectations of growth in the apparel segment and higher fibre prices. Export of raw-cotton is likely to see decline in FY17, while other segments, especially apparels may witness positive volume growth, especially due to improved export competitiveness supported by the recent financial package for the textile industry.
Imports
India is major exporting country as far as textile sector is concerned and not dependent on import. Majority of import takes place for re-export or special requirement. The import of textiles and its allied products have declined by 3.26 per cent in FY16 to $5,332.57 million as compared to $5,512.44 million in previous year. The fall in import of textile is mainly on the back of 22.54 percent fall in Cotton import and over 8 per cent fall in Manmade Yarn, Fabrics, Madeups.
FDI in textile
The industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth $42.31 million or Rs 285.40 crore during in January- march 2016, as compared to $65.32 million and Rs 406.67 crore in corresponding quarter previous year. In previous quarter i.e. October-December 2015 the sector has attracted FDI worth $39.10 million or Rs 255.72 crore.
Financial performance of top companies
The textile industry has performed significantly well in FY16, as Profit after tax (PAT) (top twenty companies according to market cap) grew 28 percent to Rs 3021.08 crore as compared to Rs 2365.30 crore in FY15 on the back of spurt in domestic as well as international cotton prices. Among the top performers were, Vardhman Textiles with a net profit of Rs 653.06 crore, followed by Welspun India Rs 601.74 crore and Arvind Rs 318.85 crore. However, Bombay Dyeing & Manufacturing Company reported a net loss of Rs 85.24 crore in FY16.
The industry’s top-line (top twenty companies according to market cap) improved modestly by around 4.27 percent to Rs 37793.70 crore in FY16 as compared to Rs 36245.66 crore in FY15 on the back of volume growth in most of the segments. Further, the industry’s EBIT surged almost 13 percent to Rs 7076.11 crore in FY16 as compared to Rs 6267.56 crore in previous year.
Impact of GST on Textile sector
Indian government is taking all steps to bring in much needed tax-reforms which will facilitate industrial sector the required competitiveness internationally. Textile industry, so far for many decades enjoyed an excise exemption, comes into the spotlight with the government’s agenda of implementing GST. There is no tax on natural fibers and cotton, but due to duties at the petrochemical level synthetic ones are taxed. However, with the execution of the GST, an input credit will lead to lower input costs and reduce prices of the finished synthetic textile at the consumer level. On the contrary, for the natural fibers which are tax-exempt, much-awaited bill will be an extra cost to the companies and the consumers.
Since exports under GST would be zero rated, this would give a competitive edge to textile exports in India which is facing strong competition from Bangladesh, Pakistan etc. Hence, integrated companies should see this as an opportunity, as the advent of GST will spur the textile sector with major capital investments bringing the cost of capital goods down. Further, ease of compliance will provide sigh of relief to the textile units as most of them are covered in Micro, Small Medium Enterprise (MSME) segment. Textile manufacturers will be encouraged to setup integrated facilities with tax consideration not becoming a hindrance in their decision making process.
Government initiatives
The government has approved a special package for employment generation and promotion of exports in Textile and Apparel sector. The move comes in the backdrop of the package of reforms announced by the Government for generation of one crore jobs in the textile and apparel industry over next 3 years. The package includes a slew of measures which are labour friendly and would promote employment generation, economies of scale and boost exports. The steps will lead to a cumulative increase of $30 billion in exports and investment of Rs 74,000 crore over next 3 years. The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce. Thus, the package would help in social transformation through women empowerment.
Salient features of the package:
Employee Provident Fund Scheme Reforms: Govt. of India shall bear the entire 12% of the employers’ contribution of the Employers Provident Fund Scheme for new employees of garment industry for first 3 years who are earning less than Rs 15,000 per month. At present, 8.33% of employer’s contribution is already being provided by Government under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). Ministry of Textiles shall provide additional 3.67% of the employer’s contribution amounting to Rs. 1,170 crores over next 3 years.
Increasing overtime caps: Overtime hours for workers not to exceed 8 hours per week in line with ILO norms and this shall lead to increased earnings for the workers.
Introduction of fixed term employment: Looking to the seasonal nature of the industry, fixed term employment shall be introduced for the garment sector and a fixed term workman will be considered at par with permanent workman in terms of working hours, wages, allowanced and other statutory dues.
Additional incentives under ATUFS: The package breaks new ground in moving from input to outcome based incentives by increasing subsidy under Amended-TUFS from 15% to 25% for the garment sector as a boost to employment generation. And a unique feature of the scheme will be to disburse the subsidy only after the expected jobs are created.
Enhanced duty drawback coverage: In a first of its kind move, a new scheme will be introduced to refund the state levies which were not refunded so far. This move is expected to cost the exchequer Rs 5500 crore but will greatly boost the competitiveness of Indian exports in foreign markets.
Enhancing scope of Section 80JJAA of Income Tax Act: Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be relaxed to 150 days for garment industry.
Recent developments
Textile Ministry plans policy intervention for jute sector
The Union Textile Ministry is considering policy intervention, both long-term and short- term, to address the issues impeding the growth of the jute industry upon which the economy of West Bengal is highly dependent. The company will find out what can be done through long-term policy intervention to promote the sector and the separate brainstorming sessions will be held with mill owners and farmer. The government would also try to devise solutions for short-term issues affecting the sector. Earlier, jute mills raised issues like intense competition and cheap Bangladeshi import while jute balers said they were receiving late payments from mills and in turn farmers’ compensation was also being delayed.
Lok Sabha clears Taxation Laws (Amendment) Bill, 2016
The Lok Sabha has passed the Taxation Laws (Amendment) Bill, 2016 paving way for employers in the textile sector to avail of the income tax benefit on additional employment provided the employee has worked for 150 days and not 240 days as mandated earlier. The bill will now be taken up by Rajya Sabha following which the changes will be notified. Union Cabinet had on June 22 approved a special package for employment generation and promotion of exports in textile and apparel sector, in line with its commitment to generate one crore jobs in the textile and apparel industry over next three years. One of six incentives announced included enhancing the scope of Section 80JJAA of Income Tax Act. Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be relaxed to 150 days for garment industry. Section 80JJAA of the Income-tax Act, 1961, was substituted by the Finance Act, 2016, so as to provide that in the case of certain assessees, in computing profits and gains derived from business, deduction shall be allowed of an amount equal to 30% of additional employee cost incurred in the course of such business in the previous year for the specified period, subject to the fulfillment of certain specified conditions.
Outlook
Outlook for the Indian textiles industry is looking positive in the coming time, as the textile exports has increased rapidly in recent years supported by higher fibre prices and currency depreciation, making textile sector one of the important sector for Indian economy, having almost 14 percent of market share in total exports. The sector will get some support with implementation of GST, as Zero rating on exports under the GST will facilitate the textile exports to increase without the need for explicit subsidy schemes and India can essentially increase its share of the export market as far as textiles are concerned. Government approval of a special package for employment generation and promotion of exports in the Textile and Apparel sector too will provide much needed support to the sector. The focus of package mainly on employment generation in garment sector has given it a high labour strength, while increased overtime cap of 8 hours per week will improve flexibility of units to increase production with same labour count as well increase earnings of labour.
SOURCE: The Live Mint
The District administration showcased to a group of entrepreneurs engaged in handlooms and textiles business, the subsidy available for creating infrastructure facilities if they came forward to set up ‘Mini Textile Parks’ (MTP) in the district. Addressing a group of about 20 entrepreneurs here on Thursday, Collector S. Natarajan said the State government has offered to bear 50 per cent of the total cost for creating infrastructure facilities such as laying of roads, sewage treatment plant, captive power plant and telecommunication, if they came forward to establish the parks. After Chief Minister J. Jayalalithaa made an announcement to this effect in the State Assembly in September last year, the governmentpassed a GO on December 30, 2015 to bear 50 per cent of the total infrastructure cost or Rs. 2.50 crore, whichever was low, he said. Ten entrepreneurs could form a cluster and set up a MTP in 10 acres of land after registering a Special Purpose Vehicle (SPV). They should buy the land on their own and establish minimum 10 worksheds in the park to avail the subsidy for the infrastructure, he said. The total investment on buildings and machineries should be more than two times the amount spent for creating infrastructure facilities, he said, quoting the GO. The entrepreneurs from Chamber of Commerce and Industry and Master Weavers’ Associations evinced interest in setting up the parks but expressed difficulties in purchasing lands. The Collector said establishment of MTPs would help to improve the standard of living of handloom and powerloom weavers in the district. There were more than 12,000 handloom and powerloom weavers in the district and they mostly lived in Paramakudi and Emaneswaram areas. Assistant Director of Handlooms K. Manoharan, District Co-optex Director V. G. Ayyaan, Lead Bank Manager K. S. Suresh Babu and District Industrial Centre, Assistant Director Maideen Basha were present at the meeting.
SOURCE: The Hindu Business Line
Displaying an innovative portfolio of fabrics, yarns, embellishments and accessories from across the globe, the ninth edition of three-day ‘Yarnex’ expo got off to a colourful start here on Friday. A total of 92 firms from India and abroad are displaying their products at the exhibition, organised by S. S. Textile Media. The show is acting as an one-stop destination for the manufacturers of textile products to source latest range of raw materials such as yarn, accessories and fabrics that could give value-addition to the end products. “Of the 92 participants, 50 firms have participated in earlier editions which is an indicator of repeated interest in participating in the event,” said P. Krishnamurthy, chief executive officer of S.S. Textile Media. Harpreet Singh, senior manager of a North India-based textile unit, who is taking part for the third year, said that the participation in the fair had helped fetch some good orders in the previous years and hence, came back. For first timers like Hong Chen, an International Sales Director for her Chinese firm based at Fujian, the fair was seen as a platform to explore new markets. “Our company is into knitting and production of yarn. Though we have knitting orders from India, we are yet to tap the business from yarn,” said Ms. Chen. Earlier, Tirupur Exporters Association president-elect Raja M. Shanmugam inaugurated the fair.
SOURCE: The Hindu
The Union government is making every effort to implement the Goods and Services Tax (GST) from the beginning of the next financial year. Prime minister Narendra Modi held a meeting this week to review the preparedness for GST rollout. It was attended by finance minister Arun Jaitley, both ministers of state for finance, and senior officers. The prime minister reviewed the progress made on various steps needed for the rollout of GST relating to preparation of Model GST laws and rules to be framed, establishment of IT infrastructure for both Centre and states, training of officers of Central and state governments and outreach for awareness of trade and industry, an official statement said. Modi directed that all steps must be completed much before April 1, 2017. He observed that GST Council would need to have intensive meetings to be able to make timely recommendations relating to its mandate provided in Article 279A, including making recommendations relating to Model GST laws, GST rates, goods and services that may be subjected to or exempted from GST. The Cabinet has already approved creation of the GST Council which will hold its first meeting next week. The Council is a joint forum of the Centre and the states, and consists of the Union finance minister as its chairperson, the Union minister of state, in-charge of revenue of finance as its member, and the minister in-charge of finance or taxation or any other minister nominated by each state government as its members.
SOURCE: Fibre2fashion
The government is reportedly looking at a goods and services tax band of 8 per cent to 26 per cent with four slabs. Multiple rates are fine, but rates individually tailored for specific commodities or sectors are not. Non-uniform rates have worked in the EU where value-added tax rates vary across member states, and there is no reason why they cannot work in India. It will obviate the need to have too many zero-rated products under GST. The proposal is broadly in sync with the Arvind Subramanian panel that recommended four rates — including a standard rate of 16-18 per cent — after excluding real estate, electricity, alcohol and petroleum products. However, exemptions break the GST chain and should be kept minimal. It is feasible to have a moderate standard GST as the levy creates audit trails that will help widen the tax base, reduce evasion, including of direct taxes. The current tax/GDP ratio — combined of the Centre and states — is about a modest 16.5 per cent, of which about 5.6 per cent comes from direct taxes. The maximum revenue to be replaced is about 6.1 per cent of GDP for GST to be revenueneutral. The Subramanian panel estimates that this can be achieved with rates that range from 9.1 per cent to 11 per cent, depending on what proportion of GDP remains as the available tax base, after assorted exemptions and transactions below taxable thresholds. A GST rate of about 12 per cent would enable the government recoup more than the current revenues.
Provided the tax base is no longer riddled with evasion and exemptions are kept to the minimum. Including large chunks of the economy in the tax base can help lower GST. It makes the case to bring petroleum products under GST compelling. States should agree as they have been guaranteed compensation for any revenue loss during transition to the new tax system. A combination of GST at the standard rate and a sin tax component not eligible for tax credit makes sense for non-merit goods. The point is to keep the GST chain intact. The broader the base of the tax, the lower its rate can be, and more comprehensive the database for direct taxes as well. Low, multiple rates would help achieve this goal.
SOURCE: The Economic Times
Mauritius, the island nation that accounts for the second-largest FDI, has sought a line of credit and more investments from India as it gets ready for implementation of the revised tax treaty from April 2017. Mauritian Minister of Finance and Economic Development Pravind Kumar Jugnauth yesterday met Finance Minister Arun Jaitley to discuss economic ties between the two countries and avenues to deepen co-operation. "Now that the tax treaty is revised, Mauritius is seeking a package in the form of line of credit and more investments from India to boost its economy and generate employment," an official told PTI. Following the decade-long negotiations, India in May reworked its tax agreement with Mauritius to introduce a levy to prevent investors using the island nation as a shelter to avoid taxes. The 1983 Double Taxation Avoidance Convention (DTAC), which helped channelise a third of the India's foreign direct investment in the past 15 years, was revised on May 10 to impose short-term capital gains tax at half the rate during the two-year transition from April 1, 2017. The levy is currently at 15 per cent. The full rate will kick in from April 1, 2019. This is the first visit of Mauritian Finance Minister after the revised treaty was signed between the two countries. The official said after the revised DTAC kicks in, lesser number of companies are likely to route their funds into India using the Indian Ocean island nation and some could shut shop as well. The LoC as well as strengthening of ties is a political call to be taken at the highest level, he said. "It is a call to be taken on how well we want to manage our neighbours. One of the deciding factors will be China's growing influence in the region, particularly among the nations that were considered friendly to India," the official added.
India and Mauritius had been in negotiations about revising the three-decade-old tax treaty since 2006 to check misuse by some investors. More than a third of the USD 278 billion India has received in foreign direct investment in the past 15 years came via Mauritius. The two nations in 1983 had signed the treaty seeking to eliminate double taxation of income and capital gains to encourage mutual trade and investment. Mauritius, which has 43 double taxation treaties with different nations that allow companies registered in the two countries to pay taxes in only one, is seeking to reinvent itself as an investment destination and a financial services hub.
SOURCE: The Economic Times
China has permitted setting up of a new trade body to promote and coordinate Chinese investments and businesses with India, a first such official initiative taken by the Communist trading giant. The council was set up by China Council for the Promotion of International Trade (CCPIT) and will be based in China's Hunan province. CCPIT has approved the formation of the Council under its Hunan provincial unit for a period of two years. Announcing formation of the council, He Jian, Chairman of Hunan Sub-Council of CCPIT in a communication to the media said "My first important job on arriving at my new post is to establish China India Business Council". The Council will be based in the office of the CCPIT in Changsha, provincial capital of the Hunan province, he said. The Council also plans to open offices in New Delhi and Hyderabad to promote and coordinate Chinese investments in India which are on the rise in recent years. The bilateral trade between India and China stood at USD 70,71 billion in 2015-16. The total import and export volume of China, the world's biggest trader, stood at 24.59 trillion yuan in 2015. Chinese Vice Minister for Finance Shi Yaobin said during India-China Financial Dialogue last month that Chinese investments in India amounted to USD 4.07 billion till last year. More Chinese firms have evinced interest to invest in India. For its part the Indian government in coordination with the various state governments is also conducting campaigns to attract Chinese investments. In view of the growing trade deficit, India has been asking China to promote investments.
SOURCE: The Economic Times
Prime Minister Narendra Modi and visiting Nepalese PM Pushpa Kamala Dahal ‘Prachanda’ on Friday took pains to convey that India-Nepal ties were on the mend following the recent stress in the bilateral relations between the two neighbours. India and Nepal also signed three agreements, including one where New Delhi will provide a new line of credit of $750 million for post-earthquake reconstruction in Nepal. This is in addition to the $250 billion that New Delhi had committed after the earthquake that had struck Nepal on 25 April. India also offered another line of credit, modalities of which are to be worked out, to assist in development projects in Nepal, including a polytechnic in Dahal’s birthplace in Kaski district. A key decision after the restricted talks between Modi and Dahal, followed by delegation-level talks, was setting up an oversight committee to speed up the long-delayed road and hydel power projects that India is constructing in Nepal.
Foreign Secretary S Jaishankar said the discussion between Modi and Dahal focused on how to speed up development projects in Nepal. Referring to the impact of the Madhesi protests and blockade of India-Nepal transit points, he said in recent months not much could be done to complete the projects, particularly the Pancheshwar dam project and the first phase of the Terai road project. The oversight panel will also look into expediting the work on two rail links. These are the Jayanagar-Janakpur-Bardibas and Jogbani-Viratnagar links, where work is hampered by land acquisition and shifting of transmission lines. Three other rail links are also being worked upon, including Kapilvastu-Kusinagar Buddhist circuit link. The two sides also decided to market their Buddhist circuit together to attract more visitors. Dahal sought more transmission lines as well as power from India to tide over Nepal’s short-term power scarcity. Nepalese PM Dahal had arrived in India on Thursday on a four-day state visit. After their talks, Modi noted the significance of Dahal choosing New Delhi as his first destination for his maiden foreign visit after assuming office last month. Dahal said he was “overwhelmed by the warm welcome and hospitality” in India. The Indian PM said Dahal has been a “catalytic force of peace in Nepal”. On the contentious issue of implementation of the Constitution, Modi said he hoped Nepal would accomplish it “through inclusive dialogue accommodating the aspirations of all sections of your diverse society”. The Nepalese PM briefed Modi about the process of implementation of the Constitution. Dahal said his government was making a “serious effort” to bring everyone on board in the interest of all sections of society. The implementation of the new Constitution in Nepal last year was marked by protests in the Terai region by Madhesis who complained they had been discriminated against and reduced to second-class citizens. The violence had killed 50 protesters and had led to a prolonged blockade of India-Nepal transit routes causing scarcity of essential commodities in Nepal.
SOURCE: The Business Standard
The commerce ministry's demand for a weak rupee may have its merits as far as promoting exports are concerned, but those benefits are questionable for the country as at least 50 per cent of India's exports are those that involve raw materials to be imported from other countries. Clearly, the benefit of a strong rupee outweighs the advantages of a weak currency, say economists.
Merchandise exports had contracted for a record 19 consecutive months till May this year, before rising marginally by 1.27 per cent in June. Thereafter, it has again continued to fall over the last two months. While the govt believes the worst has been left behind, trade experts warn against expectations of sudden positive hike with global demand still sluggish. Also, a decline in global commodity prices and sluggishness in the Chinese economy may still slowdown the path to export revival.
Advantages of a devalued rupee
Disadvantages of rupee devaluation
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$ 43.39 per barrel (bbl) on 15.09.2016. This was lower than the price of US$ 44.44 per bbl on previous publishing day of 14.09.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2907.96 per bbl on 15.09.2016 as compared to Rs. 2975.88 per bbl on 14.09.2016. Rupee closed weaker at Rs. 67.02 per US$ on 15.09.2016 as against Rs.66.96 per US$ on 14.09.2016.. The table below gives details in this regard:
|
Particulars |
Unit |
Price on September 15, 2016 (Previous trading day i.e. 14.09.2016) |
Pricing Fortnight for 16.09.2016 (Aug 30, 2016 to Sept 13, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
43.39 (44.44) |
45.03 |
|
(Rs/bbl |
2907.96 (2975.88) |
3005.30 |
|
|
Exchange Rate |
(Rs/$) |
67.02 (66.96) |
66.74 |
SOURCE: PIB
A business delegation from France would be visiting Pakistan in the first half of next year to build new partnerships in Pakistan and to strengthen the already existing business relations in various sectors of economy. Thierry Pflimlin, President Pakistan-France Business Council, who is also Vice President, Asia Pacific Region, TOTAL informed Finance Minister Senator Mohammad Ishaq Dar during a call on meeting The Finance Minister welcomed the decision of the Business Council to visit Pakistan and assured him of full support of the Pakistan government in arranging the visit. Pflimlin informed the Finance Minister that infrastructure development, oil and gas, food processing, mining and railways were identified as prospective areas for future cooperation, according to statement received here fron Paris on Friday. The Finance Minister offered French companies facilitation for setting up Special Economic Zone in Pakistan, to cater for local markets but also for exports to neighboring countries in the region. Later, the Finance Minister also held meetings with senior executives of the French company Veolia, which specializes in solid waste management and environment services and Vetigraph, which has expertise in latest IT and software technologies for textile and fashion industry. These companies evinced interest in doing business in Pakistan. Senator Ishaq Dar also visited the headquarters of French Federation of Energy Producers in Paris, and briefed them about various ongoing energy projects in Pakistan and scope for future investment in this important sector.
SOURCE: Yarns&Fibers
At the 39th Edition of four-day Texworld Exhibition held in Paris, Pakistan’s high end textile products, Cotton and cotton based high end products, including apparels, garments and finished and unfinished associated products, displayed artistically by over 33 renowned Pakistani companies were one of the main attractions as they were viewed and appreciated by thousands of participants, visitors and business persons. The businessmen, who attended the exhibitions from over 26 countries, visited the Pakistani stalls and showed keen interest in the high quality textile products. Ambassador of Pakistan in Paris Moin ul Haque visited the exhibition and met the organizers of the Pakistani exhibitors. He appreciated the businessmen and Pakistani companies which had participated in the exhibition in Paris which was world’s top fashion and apparel hub. He said that the current government of Pakistan had taken a number of steps to give impetus to industry and trade and commence in the country. The introduction of the Pakistani high end and top quality textile products in Paris would certainly help Pakistan in boosting its exports of textile and associated products not only to France but also to rest of Europe.
SOURCE: Yarns&Fibers
Development of trade and investment cooperation between India and the Eurasian Economic Union is a key factor in their bilateral cooperation, said Alexander Tsybulski, Russian Deputy Minister of Economic Development. "In particular, we have prepared the first consolidated edition of the draft report by the joint research group on the conclusion of a free trade agreement (FTA) between the Eurasian Economic Union (EAEU) and its member states and the Republic of India. By the end of this year we plan to hold the group’s second meeting to resolve any outstanding issues and to discuss draft conclusions and recommendations," said Tsybulski. He said this way, work on the development of the relevant agreement can be launched next year. Tsybulski was part of the Russian delegation for the 22nd session of the Russian-Indian Intergovernmental Commission in New Delhi, on trade-economic, scientific-technical and cultural cooperation. The Russian delegation was headed by Deputy Prime Minister Dmitry Rogozin. The Indian delegation was headed by the Indian Foreign Minister Sushma Swaraj. The delegations discussed issues of bilateral trade-economic and scientific-technical cooperation, and investment cooperation, said the press service of the Russian Economic Development Ministry.
Speaking about Russia-India trade, Tsyybulski said the volume has decreased by 11.8% this year and amounted to $ 3.4 billion. Exports from Russia fell by 17.9% ($ 2.2 billion), while Russia’s imports from India increased by 3.2% to $ 1.2 billion. According to analysts, the volume of investment cooperation between the two countries is $ 12 billion, of which Indian investments in Russia amount to $ 8 billion and Russian investments in India amount to $4 billion. "Today's figures for Russian-Indian investment cooperation indicate that we have work to do," said Tsybulski. “In order to improve these indicators we have established a Working Group on the priority investment projects, whose objective is to increase the accumulated mutual investments made by each party to $15 billion by 2025. Currently, the list includes 20 priority projects,” he said. The Working Group held its 4th meeting before the IRIGC, led by Tsybulsky along with India’s Deputy Minister of Commerce and Industry, Ramesh Abhishek. The manufacture of lighting equipment for general and special purpose with a capacity of 60 thousand lamps per month, the plant for the production of butyl rubber with a capacity of 100,000 tons per year at the Reliance Industries industrial site, scheduled for launch in 2018, and the possibility of organizing the production of KAMAZ vehicles and products of the "Tractor plants" concern at India's industrial sites, were key issues discussed and commended by the delegations.
In addition, work to advance the "Safe bus" project in the Indian market is continuing under the concept of "Smart City". "It is encouraging that the majority of our projects are joint ventures in the field of high technology, production of goods with high added value, and infrastructure construction, which indicates the quality of our partnership," said Tsybulski. He said the Ministry of Economic Development is working on the harmonization of the memorandum projects of cooperation with the Indian Ministry of Commerce and Industry and a Memorandum of Cooperation with the Indian Ministry of Small and Medium Enterprises. "We plan to sign the document during the Russian-Indian summit, coming up in October," he concluded.
SOURCE: The Russia India Report
What are new-generation bilateral free trade agreements? What should be done for domestic enterprises to truly benefit from FTAs? Can Vietnam make the most of preferential tariffs brought about by new-generation FTAs?
New-generation FTAs, opportunities and challenges, FTA markets, Vietnam economy, Vietnamnet bridge, English news about Vietnam, Vietnam news, news about Vietnam, English news, Vietnamnet news, latest news on Vietnam, Vietnam. These are the issues the Vietnamese government, relevant agencies, domestic businesses, and especially overseas representative missions of Vietnam have paid great attention in improving the competitiveness of domestic companies in the new business environment. To date, Vietnam has completed negotiations for 12 bilateral and multilateral free trade agreements, eight of which have become effective and been put into operation. The new-generation FTAs include the Vietnam-European Free Trade Agreement (Vietnam-EU FTA) and the Trans-Pacific Partnership (TPP) Agreement. Foreign partners have spoken highly of Vietnam’s efforts to integrate more fully into the global economy.
Danish Ambassador to Vietnam Charlotte Laursen who participated in the negotiations of the Vietnam-EU FTA said, “What has really impressed me is that determination by the Vietnamese government to accomplish or to conclude the very ambitious trade agreement with the EU and with specific nations." "And they are very ambitious plan and I think Vietnam would gain much from this or benefit much from this. And I think what is impressive is that the Vietnamese government aware that to benefit from those agreements it will require many reforms at home for Vietnam," he added. The biggest difference of new-generation FTAs is they will eliminate most tariffs imposed on Vietnamese goods by trading partners, particularly big and important partners like the European Union and the US. They are expected to create great opportunities for Vietnam to increase its price competitiveness. In comparison with WTO whose members states only commit to reducing but not eliminating tariffs for “some” but not “most” tariffs, new-generation FTAs bring about great preferential tariffs. But the preferential tariffs also pose a number of challenges. Vietnamese Ambassador to the US Pham Quang Vinh said Vietnam can only optimize preferential tariffs if its export products satisfy conditions in the origin, technical barriers, and hygiene of importing countries. He added, “Only by improving the competitiveness of our products can Vietnamese businesses avoid high tariff and technical barriers. Our main export items are apparel, leather shoes, and seafood. So if we prepare properly before the TPP comes into force, the Vietnamese economy can become more attractive to foreign investors.”
Technical barriers and strict quarantine systems are the challenges for Vietnamese goods to enter FTA markets. In addition, since FTAs are reciprocal agreements, Vietnam will no longer enjoy its “home ground” advantages. Local enterprises will have to compete with high quality products and services provided by TPP member countries right at the domestic market. Nguyen Anh Thu, Vice Rector of the University of Economics and Business under the Vietnam National University Hanoi, said that Vietnam has been taking drastic measures to improve the business environment. Vietnam should focus more on infrastructure and institution reforms. Moreover, enterprises themselves need to become more proactive and the government need to increase coordination with associations to help businesses better understand the FTAs to take full advantage of opportunities, and overcome challenges posed by the integration process. Among twelve signatories to the TPP, Vietnam is said to benefit most from the deal with its gross domestic product (GDP) forecast to increase by US$23.5 billion by 2020 and export value to increase to US$68 billion by 2025. Vietnam enjoys a stable political and economic climate, and has abundant natural resources and manpower. With these strengths, new generation FTAs will likely create opportunities for cooperation in capital and more advanced and effective management modes and models for Vietnamese enterprises. After a decade as a member of the World Trade Organisation (WTO) - a milestone that marks the first investment wave in Vietnam – a series of new-generation FTAs are expected to bring a second wave of investment and motivate institutional and administrative reforms in Vietnam.
SOURCE: The Vietnam Net
