The Australia-India Economic Cooperation and Trade Agreement (ECTA) has opened the minds of Australian companies, especially in Queensland, which accounts for about 75 per cent of Australia’s exports to India. The number of companies in the state with serious engagements and operations in India has nearly trebled in a short span of time, according to Stirling Hinchliffe, Minister for Sport, Innovation and Tourism, Queensland, Australia. “Only a short time ago, there were about 50 Queensland companies that had serious engagements and operations with India. On the back of the Free Trade Agreement (Australia-India ECTA) that is now 150 and counting. So, it has opened the minds of Australian companies [towards India], and also opened the minds of Indians looking at Australia and Queensland. In a short period of time there is an explosion of interest. It also coincides with the significant milestone of India becoming the most populous nation,” said Hinchliffe in an interaction with a small group of reporters in New Delhi. The Minister is currently on a five-day Mission to India, with a focus not only on the upcoming Brisbane 2032 Games and the accompanying opportunities, but also on longterm collaboration in education, innovation, and economic growth that benefits both India and Queensland. The visit marks a “significant step towards realising the QueenslandIndia Trade and Investment Strategy 2023–2027, underlining the immense importance of India to the state of Queensland”. ECTA impact The Queensland-India Trade and Investment Strategy, launched in August this year, is a well-researched strategy, based on what sectors have been positively impacted by the ECTA (implemented in December 2022), pointed out Abhinav Bhatia, Senior Trade & Investment Commissioner – South Asia at Trade and Investment Queensland. “For instance, avocados were earlier not permitted in India, but are now allowed under the ECTA. Similarly, cosmetics, which had a 20 per cent import tariff, are now allowed at zero tariffs. “There were several sectors positively impacted and we built a strategy for the 2023-27 period based on that. It gives companies on both sides the business case of why they should invest their time and energy in India and Queensland,” he said. India was Queensland’s fourth-largest two-way merchandise trading partner in 2022, per the state. Queensland’s goods exports to India totalled Australian $ 21.8 billion in 2022, representing 74.6 per cent of Australia’s goods exports to India. While the Australia-India ECTA, which was an interim pact, covered most of the goods traded between the two countries, there was scope of expanding opportunities in the Comprehensive Economic Cooperation Agreement (CECA) being negotiated, said Bhatia. “A lot of focus will now be on new energy sectors, green hydrogen, bio fuels..how we make the engagement deeper. Both India and Australia committed to net zero target and and moving towards that. Since Australia and [more specifically] Queensland are very rich in critical minerals, we hope the CEPA will make those partnerships become clearer and more evident,” he added.
Source: Business Standard
Negotiators from India and the UK returned to the negotiating table this week trying to work out compromises on difficult issues, including rules of origin, market access for vehicles (including EVs) and Scotch, easier work visas and liberalisation of financial services, but some areas remain tough to crack, sources said. “Negotiators from both countries tried their best this week to look for breakthroughs in tough areas. Undeterred by the passing of two Diwalis without a pact in place, the two sides focussed on speeding up talks. There is concern that once attention shifts to the general elections in India in early 2024, things may get indefinitely deferred,” sources said. Last year, former Prime Minister of UK Boris Johnson had set a Diwali deadline for conclusion of the India-UK FTA talks but it could not be met. Due to continuing differences in a handful of areas, efforts made by the Rishi Sunak-led government to complete the negotiations by October-end also did not materialise. IP rights In the area of Intellectual Property Rights, the UK wants India to agree to measures going beyond the WTO’s TRIPS Agreement, but New Delhi wants to protect its generic producers and is wary of any commitment that could result in extension of patents beyond their regular periods, the source added. To further interest of its workers, India has been insisting on liberal visa rules for IT and health professionals and a social security agreement that would protect contributions of short-term workers, but the UK is not “very enthusiastic” about it. The UK, on the other hand, wants more access for its financial services industry, including banks and insurance, that India is not very confident about extending because of the need to protect domestic players.
Source: Business Line
Finance Minister Nirmala Sitharaman has said that economic activity in the country has been good across sectors and all segments are growing significantly. Replying to a short duration discussion on the economic situation in the country in the Rajya Sabha on Thursday (7th December 2023), Ms Sitharaman said, India is the second most sought-after manufacturing destination in the world. She also listed India’s achievements across industries during her response at the discussion which started on Tuesday. The Finance Minister said, direct tax collection grew 21.82 per cent this year and monthly Goods and Services Tax collections stabilized at 1.6 lakh crore rupees, as sign of economic growth. She said, July to September GDP was high and India continuously maintained momentum of being the fastest growing major economy. Ms Sitharaman said, during the same quarter, the third and fourth largest economies of the world contracted. She said, for India to reach 7.6 per cent in the second quarter is a very significant number. The Minister said, in just last eight years, India has become the world's fifth largest economy. Ms Sitharaman informed that because of the Make In India programme and Prime Minister Narendra Modi's production-linked incentive (PLI) schemes, the manufacturing sector is also now significantly contributing to the economy. She said, unemployment rate has declined to 10 per cent from 17.8 per cent in 2017-18. The Minister said, the Government has taken several steps to check inflation. The Upper house on Thursday (7th December 2023) resumed the short-duration discussion on the economic situation in the country. Naresh Bansal, Dr Ashok Bajpai and Ram Chandra Jangra of BJP, V Shivadasan of CPI(M), L Hanumanthaiah of Congress, M Shanmugam of DMK participated in the discussion among others.
Source : News on Air
The Indian economy will grow at 6.5 per cent in the current fiscal ending March 31, 2024, Chief Economic Advisor V Anantha Nageswaran said on Thursday. This decade is going to be the decade of uncertainty. If the corporate sector delays its investment, then the virtuous cycle of employment generation and economic growth will not materialise, Nageswaran added. "When it comes to the finance ministry, our emphasis has been to plan conservatively, both with respect to nominal GDP growth assumptions, buoyancy assumptions for revenue growth, etc. "And I think, when I talk about being able to achieve six and a half per cent in real GDP growth on average, I am giving myself enough room to surprise on the upside," he said while addressing an event organised by industry body CII. The Indian economy grew 7.2 per cent in 2022-23. The Reserve Bank also expects growth to be 6.5 per cent in the current fiscal. India's economy grew 7.6 per cent in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors. The IMF, World Bank, ADB, and Fitch expect India's GDP to expand 6.3 per cent in the current fiscal. S&P Global Ratings expects India to record a 6.4 per cent growth this fiscal. Nageswaran said rebalancing towards investments and manufacturing will happen if the investment cycle gets into high gear as it did in the first decade of the millennium.
"So, the rebalancing is something that we are waiting for, as all the enabling conditions are in place," he added.
Source: Business Standard
MUMBAI: The Indian rupee is likely to open little changed on Friday ahead of the Reserve Bank of India’s monetary policy decision, even as the dollar index dipped, pressured by a rally in the Japanese yen. Non-deliverable forwards indicate the rupee will open at around 83.34-83.35 to the US dollar compared, barely changed compared to its close at 83.3525 in the previous session. The dollar index fell 0.4% overnight and edged lower in Asia to 103.56. The rupee’s Asian peers were mostly rangebound except for the Korean won, which was rose 1.4%. The Japanese yen extended its gains from Thursday and was up 0.4% amid expectations that the end to Japan’s ultra-low interest rates is nearing. A softer dollar should aid the rupee slightly on Friday but the local unit is likely to hover in a “very narrow range,” heading into the RBI’s monetary policy decision, a foreign exchange trader at a private bank said. The Indian central bank is widely expected to keep policy rates unchanged. India rupee to struggle as weak risk boosts safe-haven dollar
“We expect status quo on rates, whilst retaining the hawkish ‘withdrawal of accommodation’ stance,” DBS Bank stated in a Friday note. “Despite a resumption in strong inflows … rupee has been kept on the weaker end of the spectrum, reflecting the authorities’ strong intervention presence.” Overseas investors have bought $3.2 billion worth of Indian equities in December so far, pushing the month’s tally to the highest since July. The 10-year US Treasury yield ticked up in Asia after falling to 4.12% in New York overnight, its lowest level in 3 months, ahead of closely watched labour market data due in the US later Friday. While the US unemployment rate likely remained unchanged at 3.9% in November, non-farm payrolls are expected to have risen to 180,000 up from up 150,000 in October, according to Reuters’ polls.
Source: Brecorder
Financial Services Secretary in the Finance Ministry, Vivek Joshi, on Thursday chaired a meeting to review progress made in the investigation and resolution of large value fraud cases in the banking sector. The meeting was attended by senior officers of the Central Bureau of Investigation (CBI), Chief Vigilance Officers (CVOs) of Public Sector Banks (PSBs) and Financial Institutions (FIs), and officers from the Department of Financial Services (DFS). During the review meeting, it was emphasised that all measures should be taken to further improve coordination between the CBI and banks for expeditious investigation. “Large value bank fraud cases may be monitored by the Chairman/MD & CEO of banks more closely for enforcement and recovery purposes. Coordination meetings between the CBI and banks in respect of large value bank fraud cases can be organised on a periodic basis. The purpose of the meeting should be to ensure better coordination between the complainant and law enforcement agency, i.e., the CBI,” the Finance Ministry said in a statement listing the issues discussed in the meeting. The Finance Ministry said the need to protect bona fide credit decisions from investigation was discussed. “It was suggested that training sessions may be organised for CVOs / ‘officials involved in credit decisions’ to avoid common lapses that lead to investigation. A manual or guidance note may also be prepared to avoid lapses,” the statement said. It was suggested in the meeting that the use of digital technology may be made in sharing documents needed for investigation with the CBI. “Statutory changes as needed to be examined in facilitation of this,” the Finance Ministry said.
Source: Business Standard
DUBAI - A raft of textile industry organisations, NGOs and ecotextile certification standards have pledged their support to the United Nations’ International Trade Centre’s (ITC) ‘Uniting Sustainable Actions’ initiative, which champions the work of small- and medium-sized enterprises (SMEs) in global supply chains. The initiative works to highlight and reward the contributions of SMEs by collating and publicising their sustainability credentials on the UN’s Certified Business Registry, a centralised platform covering multiple parts of the textile supply chain.
Source: Eco Textile
ISLAMABAD: The textile and apparel exporters are hoping to get a strategic plan to increase their shipments to $50 billion in the next four years, as they meet with Commerce Minister Gohar Ejaz on Friday amid high power tariffs that are hurting their competitiveness. The Export Advisory Council for textiles, which was formed by the government last month to advise on ways to stimulate exports, will hold its first meeting in a consultative session with the minister and other stakeholders. The government on November 22 notified two Export Advisory Councils – one for textiles and the other for non-textiles products headed by Minister Ejaz as chairman of both bodies with the mandates to find out doable and practical ways out to stimulate the export of the country given the economic outlook of the country. The first-ever meeting of the export advisory council in its consultative session may today come up with a strategic plan based on energy availability at competitive prices, a fixed tax refund system, a transition to zero emissions energy for exports, and a robust track and trace System. The textile industry said the high power tariffs of 14 cents per unit (Rs43 per unit) are causing the closure of existing units and a halt to investment for expansion, upgradation, and the opening of new investments. "High power tariffs are crowding out the export sector, as firms find it financially unfeasible to compete in international markets. The threshold value of power tariffs, above which the export sector faces challenges, is estimated at 12.5 cents/kWh. Beyond this, existing units are increasingly shut down, and investment in expansion and upgradation and opening of new units is halted, causing an overall decline in production and exports," a senior official of the commerce ministry told The News. No doubt, the official said, Pakistan's textiles and apparel exports have witnessed dynamic shifts in recent years. Apparel and made-up textile articles account for over 70 percent of Pakistan’s textile exports. Around 70 percent of exports go to the EU, USA and UK. Textiles and apparel exports increased by 54 percent in two years, from $12.5 billion in FY20 to $19.3 billion in FY22 mainly because of the RCET (regionally competitive energy tariff). This growth was underpinned by the fresh investment of $5 billion in the upgradation and expansion of manufacturing facilities to add an additional $5 billion in annual exports and the creation of 0.3-0.5 million new jobs. However, FY23 brought challenges as textile exports dipped by 15 percent to $16.5 billion. The withdrawal of the RCET amid a broader macroeconomic crisis played a significant role. This has led to erosion of the profitability as Energy costs, at 9 cents/kWh, constitute 12-18 percent of total input costs across the textiles value chain. An increase in power tariffs to 14 cents/kWh slashes profitability from 8.61 percent to 1.00 percent, impacting major textile exporters. There has been a notable shift towards high value-added goods, indicating a positive move away from traditional exports like yarn and grey cloth. The country’s textile sector’s value-addition success story is evident, with every 1 unit of cotton input being converted to 3.9 units of value-added exports, up from 2.5 units of value-added exports 3-4 years ago. The textiles & apparel sector is currently contributing 60 percent to export earnings and employing 40 percent of the labor force, which holds a pivotal economic role. However, the exit of firms mainly because of high tariffs could reduce export earnings, risking the ability to meet import bills and external financing obligations. This may elevate the need for external borrowing, increasing future debt servicing and heightening the risk of Balance of Payments crises. The potential reduction in GDP, government revenue, and fiscal space for development expenditures might trigger a recession. Increased government borrowing and debt servicing could follow. This situation could also cause the loss of employment in the sector which would affect millions of households. Spillover effects on other sectors like cotton, retail, and power could not only result in further output, investment, and employment losses, but it could also lead to the collapse of publicly listed firms which may impact the stock market, resulting in the loss of public savings and reducing foreign and domestic investments. The look, he said, at the US trade with Pakistan shows only 48 percent of US apparel firms are sourcing from Pakistan, compared to 97 percent from China and Vietnam, and 83 percent from Bangladesh. "China currently dominates the international textiles and apparel market, followed by Bangladesh, Vietnam, and India, However, Pakistan’s share is marginal in the International market. However, China’s share of world textiles & apparel exports has been declining since 2014, while those of Bangladesh and Vietnam have increased. Pakistan has seen little growth. The consultative session of the export advisory council may ask the government to match regional incentives to incentivize investment in the country's textile sector."
Source: Pakistan News
With earnings of $8.31 billion, Bangladesh has surpassed China in exporting knitwear products to the European Union (EU) during July-September period of 2023. According to Eurostat data, the European Union, the block of 27 countries imported knitwear products of $31.94 billion during the first 9 month of the outgoing year. Of the total imports, Bangladesh supplied knit items of $8.31 billion, while China, the largest exporter of apparel goods, exported products worth $8.27 billion. Turkey holds the third position with an export earnings of $4.28 billion followed by India $1.58 billion. Meanwhile, in the January- September period, Bangladesh’s total apparel exports to the EU declined by 17.66 percent to $13.70 billion, which was $16.62 billion in the same period of last year. China recorded a 20.17 per cent negative growth to $17.12 billion against $21.45 billion in the same period of 2022. Turkey’s total apparel exports to the EU plunged by 12.67 percent to $7.57 billion. EU’s total apparel imports from the global markets also saw a 14.10 percent fall of $63.51 billion, which was $73.94 billion a year ago. Trade analysts and exporters credited the strong backward linkage industry for the performance. They also expressed concern over the down trend of exports earnings from the EU nations as about 60 percent earnings came from the block. “When we are facing severe problems in every area such as new wage structure, global crisis and higher utility service costs and political uncertainty, it is definitely good news,” said Mohammad Hatem, Executive chairman of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). However, this news shows hope as the overall export earnings recorded negative growth in the same period. If the situation does not improve, we have to pay for it as the lion share of our earnings are from the EU, said the business leader. “A strong backward linkage industry has played an important role in surpassing China as Bangladeshi textile producers are capable of supply about 80-90 per cent raw materials for the knitwear sector,” said Khondaker Golam Moazzem, Senior Research Director at Centre for Policy Dialogue (CPD). There are about 1780 mills in the Primary Textile Sector (PTS) with an investment of around $16 billion. Over 84% of the export earning comes from textiles and textile related products. Currently, around 85-90% yarn demand for knit RMG and 35-40% yarn demand for woven RMG are met by Primary Textile Sector (PTS). Backward and forward linkage industries provide employment around 4.5 million out of which 60% are female mostly from the rural areas.
Source: Textiles Today
On Wednesday clarified that a particular foreign buyer had mentioned a clause regarding trade sanction on a letter of credit and it should not be misinterpreted as a measure of trade enforcement or economic sanction on Bangladesh. BGMEA President Faruque Hassan's clarification is noted below. Dear Honorable Members, Colleagues, Friends, and well-wishers, You must be aware of a recent issue regarding a LC clause by a buyer to a particular factory creating confusion around sanction on Bangladesh, which is not correct. The issue brought significant media attention causing panic and confusion. Therefore, I am writing to share the correct information and facts to clear any confusion on this matter. The much discussed LC was transferred by the ZXY International against a master LC issued by a French buyer named ‘KARIBAN’. ZXY transferred the LC in favor of ‘Knit Concern’, a valued member of BGMEA. BGMEA collected copy of the LC. It was issued by Standard Chartered Bank Dubai. The LC contains the following text - “We will not process transactions involving any country, region or party sanctioned by the UN, US, EU, UK. We are not liable for any delay, non-performance or/ disclosure of information for Sanctions Reasons”. BGMEA sought clarification from ZXY on such clause. We received a formal clarification from ZXY, as well as got a clarification statement by the original buyer KARIBAN, which makes it clear that – a) KARIBAN did not insert this clause in its master LC in favor of ZXY International. b) The clause was inserted by SCB Dubai, which they have been doing in every LC since 30th November 2022. c) The clause does NOT state that there is any sanction against Bangladesh. d) ZXY International confirmed that they will remove the clause in the LC, and if required they will issue a fresh LC without that clause.
Source: Textiles Today
