No longer looking at import duties as revenue source in FTA negotiations: Official India is likely to lower tariffs on a range of items including high tariff products such as cars, whiskey and machinery items for the first time under the free trade agreements (FTAs) with developed economies and is moving away from looking at tariffs as a source of revenue during negotiations, a government official said. This comes amid internal consultations between the finance ministry and the commerce ministry to assess the impact of the major duty reductions that could be announced as part of the FTAs. India is currently negotiating FTAs with the UK, the European Union(EU), Australia and Oman, and India could lower duties on goods and services sharply. “Things are moving in the direction where tariffs cannot be a source of revenue. Tariffs contribute to revenue but a free trade agreement cannot be accessed on the basis of tariffs because when free movement of goods and services happen, the overall economic growth is immense. Revenue will be a minor part of the whole story,” the official said on the condition of anonymity. Tariffs are customs duties on goods imported into a country. New Delhi has the highest import duty compared to most major economies with an average Most Favored Nation (MFN) rate of 18 per cent, about twice the global average, according to the World Trade Organization (WTO) Tariff Profile database. In trade parlance, the most-favored-nation clause requires WTO members to offer the same trade terms to all trading partners. The union government estimates to receive Rs 2.3 lakh crore in revenue from custom duty in 2023-24, about 11 per cent higher compared to the 2022-23 revised estimates of Rs 2.1 lakh crore according to the official figures. Customs duties contribute about 8 per cent of the gross tax revenue. The total import tax collection in 2021-22 stood at Rs 1.99 lakh crore. “India is a high tariff economy. Even if you see the major South Asean countries or the global landscape, the average tariff has gone pretty down. There is a tendency to remove tariff barriers across the globe. It is because of global value chain integration and India is also doing that with the help of free trade agreements, the official said. As part of the UK FTA, India is contemplating a reduction in duty for the imports of Scotch whisky from the UK that attracts a 150 per cent and slash tariffs on automobiles that stands at 100 per cent. Under the partial trade deal signed with Australia, India had lowered duty for Australian wines for the first time. The official said that the opening up of the economy will be undertaken in a calibrated manner and that the commerce ministry is consulting with the finance ministry over the revenue implications. “We are looking for more competition, quality and consumer benefits in the economy are moving away from protectionism,” the official added. High tariffs are among the key concerns raised by trade partners India is negotiating FTA with. The simple average tariff on goods imported into the UK from India is 4.2 per cent but the simple average tariffs on UK exports to India was 14.6 per cent, UK’s department of international trade said in a report on India. India has raised duty even on intermediate and capital goods that are used in the manufacturing process which is higher than competitors such as Vietnam and Indonesia. In the last decade, India’s trade-weighted average MFN rate jumped from 7.7 per cent to 11.4 per cent, while the global average decreased from 7.5 per cent to 6.9 per cent, MVIRDC World Trade Center said in a report. The report added that duties imposed on capital goods such as electrical machinery, non-electrical machinery and transport equipment are also higher compared to the global average. High tariffs have also been flagged by the US trade ministry saying that India’s tariff regime has large disparities between bound rates and the most favored nation (MFN) applied rates charged at the border. US exporters face “tremendous uncertainty because India has considerable flexibility to change tariff rates at any time”, the US Trade Representative said. “India’s trade regime and regulatory environment remains relatively restrictive. Technical barriers to trade (TBT), sanitary and phyto-sanitary (SPS) measures, deviation from internationally-agreed standards, as well as discrimination based on legislative or administrative measures by India, affect a wide range of sectors, including goods, services, public procurement and investment,” European Union said on trade with India.
Source: Indian Express
The Commerce and Industry Ministry has asked export promotion councils and other industry bodies to give specific inputs on measures to reduce regulatory compliances and streamline processes further and also share recommendations on decriminalisation, sources have said. This is in line with the government’s stated policy of improving ease of doing business and working continuously to reduce compliance burden for a conducive business environment, a source tracking the matter told businessline. “Inputs have been sought from export bodies on matters related to the Directorate General of Foreign Trade, Customs authorities, the RBI, the CBIC (Central Board of Indirect Taxes and Customs) and on the GST regime, sources tracking the matter told businessline. Once the government receives inputs and processes them, the policies and the procedures will be modified accordingly, the source added. “We are giving our suggestions on what processes can be further simplified. We are identifying areas where you can go for self-certification and where you can go for lesser documentation,” an official from an exporters’ body said. Changes can also be made to the Foreign Trade Policy 2023 based on inputs as amending the policy is now a continuous process and not an annual one. Key focus The key focus of the government’s drive is simplification of procedures related to applications, renewals, inspections, filing records, etc; rationalisation by repealing, amending or subsuming redundant laws; digitisation by creating online interfaces eliminating manual forms and records; and decriminalisation of minor technical or procedural defaults, Minister of State for Commerce Som Prakash recently said in a Parliament reply. DPIIT, the industry arm of the Commerce and Industry Ministry, started an exercise some time back to assess the cost of regulations in states to provide insight into reforms that can be carried out to improve the business climate. A number of obsolete provisions have already been removed or simplified by DPIIT. “Exporter bodies and other industry players have also been asked to give inputs for decriminalisation of provisions to be incorporated in the second edition of the Jan Vishwas Bill that the government is working on,” the official said. The Jan Vishwas (Amendment of Provisions) Bill, 2023 was passed in the Lok Sabha on June 27 and in the Rajya Sabha on August 2. The Bill sought to decriminalise about 180 minor offences in 42 legislations including some colonial era laws.
Source: The Hindu
The government hiked the windfall tax on petroleum crude oil to Rs 2,300 ($27.63) a tonne from Rs 1,300, it said. A tax on diesel of Rs 0.5 per litre was eliminated, it said as was a Re 1 per litre windfall tax on aviation fuel. India imposed a windfall tax on crude oil producers in July 2022 and extended the levy on exports of gasoline, diesel and aviation fuel as private refiners wanted to sell fuel overseas to make gains from robust refining margins instead of selling locally
Source: Business Standard
The government is quite optimistic regarding the Production Linked Incentive (PLI) Scheme for 14 key sectors it announced in April 2021 with an outlay of Rs. 1.97 lakh crore. Over Rs. 95,000 crore of investment was reported till September 2023, which has led to production and sale of Rs. 7.8 lakh crore and employment generation (direct and indirect) of over 6.4 lakh, says an official release. The picture may not be as rosy as the Narendra Modi regime wants us to believe, but the industry views that it was a successful scheme.The PLI Scheme has been very successful in a few areas like mobile manufacturing but not everywhere, said a representative of a premier business chamber. On a scale from zero to 10, he gives between 7 and 7.5 marks, which is a thumbs-up from the industry. “It’s a well-thought out scheme, preceded with a lot of consultations,” he said. “The idea was to boost manufacturing in a targeted manner. The choice of sectors was good, with focus on augmenting production volumes, exports and employment generation. The results have been good in sectors like food processing, telecom equipment, and mobiles.”Others representing industry also have a favourable opinion about PLIs. PHD Chamber of Commerce & Industry assistant secretary general Shalini S. Sharma said, “The immediate impact has been good, and is likely to improve in the future.” The share of manufacturing in the country’s GDP has not gone up share has not gone up but that is because it’s too early to see the impact of the PLI Scheme, opine industry representatives. Federation of Indian Micro and Small & Medium Enterprises (Fisme) secretary general Anil Bhardwaj said that the scheme has been successful in a few sectors, but it is too early to pass a judgment on its performance. “After the general election, it may get a boost, for an investor thinks of several factors, not just PLIs.” He is not convinced with the argument that investors would put in money in manufacturing in India just because it is a large market. “One can do business by trading too,” as he puts it. The government did not consider its job done just by announcing the PLI Scheme. It has been proactive and responsive in addressing the issues raised by industrialists, he said, while adding, “We had an internal discussion in August, involving businesspersons. The feeling is good about the scheme and the government’s attitude.” He went on to highlight some lacunae and shortcomings. For instance, the textiles sector involves a lot of job work, but that is not included in investment. But, he added, the government listens to the concerns of industry. Exports have increased by Rs. 3.2 lakh crore, the official release said, adding that incentives worth around Rs. 2,900 crore were disbursed in 2022-23. Of the $101-billion total electronics production in 2022-23, smartphones constituted $44 billion, including $11.1 billion as exports. It is generally believed that success can be made bigger and more widespread.
Source: Bizzbuzz.news
Rising demand for ethylene glycol from the textile and Polyethylene Terephthalate (PET) resin product industries and increasing adoption of bio-based ethylene glycols and ethylene glycol in industrial applications are key factors driving ethylene glycol market revenue growth.
The global ethylene glycol market size was USD 16.74 Billion in 2022 and is expected to register a rapid revenue CAGR of 5.2% during the forecast period. Key drivers include the escalating demand from textile and Polyethylene Terephthalate (PET) resin industries, coupled with the growing adoption of bio-based ethylene glycols and ethylene glycol in diverse industrial applications. Ethylene glycol, a high-productive volume chemical, plays a vital role in various high-tech industries such as textile, packaging, automotive, Oil & Gas, transportation, medical, and more. Recognized for its exceptional density and low volatility properties, ethylene glycol finds extensive use, particularly in the production of PET components.The rising demand for textile and PET resin industries, driven by the popularity of packaging materials and the need for prolonged food product storage, is a significant growth factor. The demand for PET resin is expected to grow at approximately 2.1% year on year until 2030, creating opportunities for manufacturers to meet the burgeoning demand. Despite the positive outlook, challenges such as fluctuating raw material costs and high manufacturing expenses pose potential constraints. Ethylene glycol's toxic nature necessitates careful handling, and its resource-intensive manufacturing process contributes to elevated operational expenses. This, in turn, may impact the competitiveness of ethylene glycol in the market.In 2022, the monoethylene glycol segment held the largest revenue share in the global ethylene glycol market. Monoethylene glycol's dominance is attributed to its increasing demand in the production of polyester resins and textile fibers. Its versatility is evident in applications ranging from engine coolants to latex-based paint formulations. The ethylene oxide segment is anticipated to witness steady and fast revenue growth in the global ethylene glycol market. Ethylene oxide, a colorless and flammable gas, plays a crucial role in ethylene glycol production due to its high reactivity and stability. Manufacturers are investing in Research & Development (R&D) to provide tailored products aligned with specific application needs. The polyester fibers segment is expected to contribute significantly to the global ethylene glycol market's revenue share. The rising adoption of polyester fibers in textiles and automotive industries is driving the demand for ethylene glycol. Its properties, including resistance to chemicals and moisture-wicking, make it an ideal material for sportswear and outdoor clothing. The textile segment is projected to experience moderately fast revenue growth, fueled by the increasing demand for polyester fibers in the clothing industry. Ethylene glycol's low toxicity and corrosion resistance contribute to enhanced lifespan and improved production of PET resins and textiles. The Asia Pacific emerged as the leading revenue contributor in 2022, driven by the growing adoption of glycol in automotive industries, particularly in countries like China, Japan, South Korea, and India. North America is expected to register the fastest revenue growth, supported by the rising demand for PET resins in packaging industries, notably in the U.S. and Canada. Meanwhile, the European market is poised for considerable growth due to the expanding textile industries in countries like the UK, Germany, and France.The global ethylene glycol market is on a trajectory of significant growth, fueled by diverse applications across industries. While challenges such as raw material costs and manufacturing expenses persist, the market's resilience and adaptability are evident in the continued innovation and strategic partnerships among key players. The forecast period presents opportunities for manufacturers to capitalize on the rising demand for ethylene glycol, particularly in the dynamic textile and PET resin sectors.
Source: Yahoo Finance
Surat: Textile goods supply came to a halt in the city as truck drivers protested on highways. According to the transporters, the majority of the trucks carrying textile goods did not leave the city on Monday. Over 200 trucks with textile goods leave the city every day. “We are not allowing the trucks to leave due to the risk of damage to goods. There are protests at multiple locations in different states and over 200 trucks that used to leave the city daily did not leave today,” said Nehal Budhhadev, secretary, Surat Textile Good Transport Association (STGTA).
Source: Times of India
As a part of its efforts to take Indian brands to the international markets, CMAI had recen organised its first Brands of India exhibition in the UAE. According to CMAI, India exports about 1.1 billion USD of apparel to the UAE per year, which is expected to grow by about 1 15% per annum. The UAE-based retail chain like Lulu Group expects that the apparel segm would benefit the most from the CEPA agreement. Indian apparel exporters, known for white label manufacturing for the global brands, now want to take Indian national and local brands to the international markets. The growing strength of home-grown brands, their capacity to offer international standards at reasonable rates than the international brands can help the Indian apparel industry achieve a higher share of the global apparel trade, thinks the Clothing Manufacturers' Association of India (CMAI). As a part of its efforts to take Indian brands to the international markets, CMAI had recently organised its first Brands of India exhibition in the UAE. "We could showcase close to 350 Indian brands to the buyers in the Middle East and North Africa (MENA) region," said Rajesh Masand, President of CMAI, adding, "We wanted to begin from a place which has a large number of Indian diasporas. According to CMAI, India exports about 1.1 billion USD of apparel to the UAE per year, which is expected to grow by about 10-15% per annum. "The Comprehensive Economic Partnership Agreement (CEPA) is expected to give a boost to India's apparel exports to the region," said Jayesh Shah, Vice President of CMAI. CEPA, signed in May 2023, has removed the import duty on goods exported from India to the UAE. This move will also give a boost to the Indian apparel exports. Bangladesh, which is a competitor of the Indian apparel exporters, gets an advantage of duty waiver under the Least Developed Country (LDC) category. “The Brands of India exhibition helped Indian manufacturers establish trade relationships with buyers who cater to UAE, north Africa and parts of Europe,” said Shah. India is the second largest exporter of apparel to the UAE after China. The Indian apparel exporters told ET that the strength of Indian exporters against China or Bangladesh lies in their ability to take orders of smaller numbers of pieces, which can be customised according to the needs of the buyers. Countries like China and Bangladesh do mass production. The order must be of at least a few thousand pieces of one colour of any garment. Whereas Indian exporters said that they can take an order of as low as 150 pieces of a garment, they said. “We can customise the orders according to the prints, designs and show our creativity,” said Shah. CMAI expects that the exhibition like the Brands of India would help the Indian manufacturers of branded clothes to understand the emerging international requirements of sustainability, design etc.
Source: Indian Express
The world needs India to become a reliable challenger to China's supply-chain dominance, which will provide a great opportunity in 2024 and investment will flow into the country in unprecedented volumes, according to Mahindra Group Chairman Anand Mahindra. In his New Year message, Mahindra also said all signs point to the Indian economy achieving "the mythical lift-off that we have been awaiting, for decades" and predicted that in 2024 "companies that are able to create a portfolio of desirable products both in features and price will face the happy challenge of raising their production to meet demand". Stressing that "a New Year is special because it always symbolises a new beginning", he said, "No matter how dark the year has gone by, the human spirit has an abiding capacity for hope. 2023 was a year characterised by conflict, climate change and a sluggish postCovid recovery. The year ended with the world crying out for renewal." The first day of the new year opens a new chapter, a fresh opportunity for optimism and renewal, he added. "Globally, the world needs India to become a reliable challenger to China's supply-chain dominance. That is the great opportunity of 2024. That is what will fuel the lift-off. Investment is going to flow into India in unprecedented volumes," Mahindra said. He further said, "The opportunity for India's manufacturing to achieve a quantum leap is within our grasp or ours to lose. Let's seize it with both hands because growth in manufacturing and exports will, in turn, enhance the consumption story, setting into motion a virtuous cycle that could endure for years." In the long run, however, what will keep India's economy on the ascent is a capacity for disruptive innovation, Mahindra said adding "that aspiration is showing up in many of the newer startups. More power to this tribe!" In 2023, he said the Mahindra group also faced the challenges first-hand in the communities its work with around the world being a transnational business. "We also experienced the joy of overcoming those challenges, and in most situations, achieved extraordinary success. Our great advantage and opportunity in 2024 comes from our deeply embedded Indian roots. Because all signs point to the Indian economy achieving the mythical 'lift-off' that we have been awaiting, for decades!," he said. While the rest of the world faced increasing turbulence over the last few years, India kept the engine of the economy chugging along through doses of government capital and infrastructure investment, Mahindra noted. "Now, the good news is that the consumption story is about to kick in. Companies that are able to create a portfolio of desirable products both in features and price will face the happy challenge of raising their production to meet demand," he said. As the sun rises in 2024, Mahindra asserted. "It's time for Carpe Diem - it's time to seize the day. Our destiny lies in our own hands."
Source: Zee Business
New Delhi: India's goods and services tax (GST) collections rose 10% year-on-year to ₹1.64 lakh crore in December, official data released Monday showed. That's down from ₹1.68 lakh crore in November and up from ₹1.49 lakh crore in the same month the year before. Experts said the double-digit growth in collections reflected the underlying economic momentum and the monthly moderation was attributable to holidays and the base effect. "The sequential dip in the headline GST collections between November and December reflects the impact of the holidays related to the festive season, as GST is remitted in the subsequent month," said Aditi Nayar, chief economist, ICRA. "The moderation in the pace of growth of GST collections reflects the base effect Gross GST revenue crossed ₹1.60 lakh crore for the seventh month in a row with the average monthly mopup at ₹1.66 lakh crore for the fiscal year.
Source: Economic Times
The textile and garment sector witnessed a very dry investment season in 2023 as demand for clothing items fell globally while an energy crisis on the domestic front led to higher costs of production. Moreover, higher costs of production due to increased prices of raw materials, transport cost, the volatile exchange rate of the local currency against the US dollar, and the government's restriction on imports in order to save US dollars were other reasons for the slowdown in investment in the sector. The year 2023 was one of the toughest for global textile and garment industries as the major consumer markets like Europe and the USA reduced import of clothing items substantially due to historic inflationary pressure. For instance, the USA's overall garment imports declined by 22.71 percent in January-October of 2023 to $67.26 billion. The lower demand from the major consumer markets also affected investment in the domestic market. The US saw garment imports from Bangladesh decline by 24.75 percent to $6.35 billion in the January-October period of 2023, according to data from the Office of Textiles and Apparel (OTEXA) of the US government. Meanwhile, garment shipments from Bangladesh to the European Union (EU) grew by merely 2.28 percent in January-November of 2023 compared to the corresponding period of 2022. In January-November of the outgoing year, garment shipments from Bangladesh grew an unusually low rate of 4.35 percent year-on-year to $42.83 billion. In 2022, the global export market for garment items was worth $576 billion, shrinking from more than $700 billion. The export of garment items globally was even lower than $576 billion in 2023. The worst-hit sector was Bangladesh's primary textile sector, worth nearly $25 billion, as it witnessed almost zero investment in 2023, with no new units being established. Even in 2022, the year Russia launched its invasion of Ukraine, 14 new units were established in the primary textile sector at an investment of Tk 4,148.14 crore, mainly in non-cotton fibre production, according to data from the Bangladesh Textile Mills Association (BTMA). In 2023, only one unit of a spinning mill in Narsingdi reported that they would invest Tk 700 crore to to produce cotton and man-made fibre, but that factory will be set up this year, said Monsoor Ahmed, chief executive officer of the BTMA. Ahmed also said the import of four core raw materials for the primary textile sector, including capital machinery, fabrics, yarn and cotton, declined by 28 percent on average in 2023 compared to 2022 because of low investment inflow in the sector. Very few textile millers expanded their capacity despite it being very much required, the BTMA CEO added. A similar slowdown in investment was also seen in the garment sector, worth more than $30 billion, in the past year. In 2023, 134 new garment units came into operation compared to 182 in 2022, according to data from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The main reason for lower investment in that sector was because of a slowing in the inflow of work orders from international clothing retailers and brands alongside other causes like the volatile dollar market, low prices from the buyers, rising costs of production, and low pressure of gas and electricity in factories, said BGMEA President Faruque Hassan. Some factory owners expanded necessary technologies as many exporters are focusing more on high valued added garment items like apparels made from man-made fibre, Hassan told The Daily Star over phone. However, the situation is expected to improve from the second half of this year as the global economic situation is improving, evidenced by the easing of the interest rate by the US Federal Reserve and major banks in the European countries, Hassan also said. In 2022, nearly 50 new units came into operation in the knitwear sector, but in 2023, that number was reduced to less than 10, said Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). The knitwear sector also witnessed some very required expansion which was mandatory for the exporters. Otherwise, the sector saw dry investment, he said. He added that the low inflow of work orders and inadequate gas pressure meant industry owners could not run their factories at full capacity, with most units running at 50-60 percent capacity. He also said the volatile dollar market was responsible for low investment inflow in the sector.
Source: Daily Star
Rabat - Morocco has slashed its spending on energy imports by 21.4%, amounting to a staggering -30.193 million Moroccan Dirhams, according to the latest data released by the Office des changes.
According to the report, this downturn is primarily attributed to a substantial reduction in the procurement of gas-oils and fuel-oils, totaling MAD 17.867 million. The decline is the result of a 17.6% drop in prices, coupled with a 9.7% reduction in imported quantities. The country’s fiscal responsibility is further highlighted by the broader economic landscape, as indicated by the Office des changes’ latest monthly indicators on external trade.The energy bill has witnessed a commendable 20.9% decrease, reaching 69.38 billion Moroccan dirhams by the end of July 2023, compared to 87.71 billion dirhams in July 2022. Amidst these financial maneuvers, Morocco’s merchandise exports exhibit a remarkable stability, hovering at MAD 392.449 million as of November 2023. This steadfastness is not without nuance, however. The decline in exports of phosphates and derivatives is offset by a surge in sales within the automotive, electronics and electricity, and textile and leather sectors. Notably, phosphates and derivatives exports stand at MAD 67.221 million by November 2023, reflecting a stark decrease from the MAD 108.394 million recorded in November 2022. The decline is particularly noticeable in sales of natural and chemical fertilizers (-35.3% or - MAD 26.338 million), phosphoric acid (-44.2%), and phosphates (-43.6%). While the agriculture and agro-food sector experiences a marginal dip in sales by the end of November 2023, attributed to a simultaneous decrease in the food industry (-0.8%) and agriculture, forestry, and hunting (-0.7%), other mining extractions see a slight decline of 1.7% or - MAD 86 million. In stark contrast, the automotive sector’s sales surged by an impressive 30.2%, reaching +30.267 million Moroccan dirhams and totaling 130.642 million by the end of November 2023. This surge is driven by increased sales in construction (+12.643 million), wiring (+10.426 million), and interior vehicles and seats (+2.192 million). Similarly, the sales of the electronics and electricity sector witnessed a 27.3% increase, amounting to + MAD 4.569 million and totaling 21.298 million by the end of November 2023, compared to 16.729 million in the same period of 2022. Turning to investments, Moroccan Direct Investments Abroad (IDME) stood at 23.641 MAD million for the first eleven months of 2023, with divestitures reaching 15.000 million—an increase from the previous year. Net participation, excluding intra group debt instruments and reinvested profits, remains nearly stable, with a minimal decrease of 0.7% or -16 million. As of November 2023, Foreign Direct Investment (FDI) revenues witnessed an 18.8% decline (MAD 29.333 million in November 2023 compared to 36.124 million in November 2022), while expenditures surged by 73.5% or +9.072 million. Consequently, the net FDI flow dwindled from MAD 23.777 million in November 2022 to MAD 7.914 million in November 2023, marking a substantial 66.7% decrease or -15.863 MDH.
Source: Morocco World News
On Monday, the Free Trade Agreement (FTA) between China and Nicaragua came into effect, two years after both countries reestablished diplomatic relations and two weeks after elevating them to a "strategic partnership" level. Signed on August 31, 2023, the FTA begins to take effect today, providing immediate access to that market for 60 percent of the products currently exported by Nicaragua with a 0 percent tariff such as beef, sugar, seafood, honey, harnesses, and textiles.In terms of goods trade, the two parties will eventually implement zero tariffs on 95 percent of products in their tariff lines, of which 60 percent will receive zero tariffs immediately. The remaining 35 percent will be gradually exempt from tariffs. The parties will achieve a high-level mutual opening in the fields of goods trade, trade in services, and market access for investment. Additionally, the agreement will foster economic and technical cooperation between the two parties in the areas of agriculture, textiles, logistics, tourism, and small and medium-sized enterprises, it underscored.Nicaragua hopes that China will become one of the main suppliers of raw materials, inputs, capital goods, consumer goods, machinery, equipment, among others, and a buyer of Nicaraguan agricultural exports, investing in the establishment of free zone companies. Nicaragua’s agricultural sector represents 16.5 percent of the country's gross domestic product (GDP) and drives 35 percent of total exports. On Dec. 20, Nicaraguan President Daniel Ortega hailed the entry into force of this FTA as the "best Christmas gift." Previously, China and Nicaragua elevated their diplomatic relations to the level of a "strategic partnership." Additionally, the agreement will foster economic and technical cooperation between the two parties in the areas of agriculture, textiles, logistics, tourism, and small and medium-sized enterprises, it underscored. Nicaragua hopes that China will become one of the main suppliers of raw materials, inputs, capital goods, consumer goods, machinery, equipment, among others, and a buyer of Nicaraguan agricultural exports, investing in the establishment of free zone companies. Nicaragua's agricultural sector represents 16.5 percent of the country's gross domestic product (GDP) and drives 35 percent of total exports. On Dec. 20, Nicaraguan President Daniel Ortega hailed the entry into force of this FTA as the "best Christmas gift." Previously, China and Nicaragua elevated their diplomatic relations to the level of a "strategic partnership."
Source: Telesure
At the beginning of the outgoing year, the situation took a turn for the worse in the midst of entrepreneurs’ worries about the export growth of the ready-made garment sector. Labor unrest began around the garment workers’ new wage structure, which at one point spiraled out of control. 4 workers died. This incident has affected this sector more than 85 percent of the export income. Besides, there were various kinds of apprehensions. Among them, after the United States, the European Council has warned about labor laws, working environment and human rights. Entrepreneurs are worried. They said that there has been a huge change in the last few years. But complete relief is not coming. At present, these issues are the main challenges of the clothing sector for the new year. Experts say the apparel sector will have to face challenges in the new year on labor related and wage issues. There are complications with grades. Many labor leaders are still in jail. For this, concern is being expressed from abroad. If the government can take positive steps on the labor issue, the situation will improve. Meanwhile, Foreign Secretary Masood Bin Momen said that the new policy of imposing trade sanctions in violation of labor rights may create a negative situation in Bangladesh’s garment exports. But he thinks that no such situation has been created in Bangladesh. He said this at the Bangladesh Institute of International and Strategic Studies (BIISS) auditorium in Eskaton of the capital during a discussion on Global Challenges, RMG and Decent Work. It is known that since the beginning of the outgoing year, the entrepreneurs of the readymade garment sector were worried due to relatively low export income. In addition to this, the government increased the price of gas and electricity again in the midst of crisis. This increases the cost of doing business for traders. At the end of the year, the garment workers waged a movement. The situation takes a different form. The workers of various factories in Gazipur, Ashulia, Savar and the capital’s Mirpur, which are dominated by the garment industry, first abstained from work and at one point got involved in attacks and vandalism. Law and order forces were also beaten. 3 workers lost their lives in police firing. Another worker died of suffocation after being trapped by the fumes of the fire in the factory. 43 cases were registered against the workers during the two-week agitation. 20 thousand workers were accused. 115 of them were arrested. The movement started around the proposal of the representatives of the owners in the Minimum Wage Board. In the last October 22nd meeting of the wage board constituted by the government, the representative of the labor side proposed a wage of Tk 20,393. The representative of the owner proposed to make half of it Tk 10,400. After that, the movement started in various factories from the next day on October 23, demanding a minimum wage of Tk 23,000. 4 garment workers named Russell Howladar, Imran, Jalal Uddin and Anjuara Khatun died in the three-week agitation of workers over wages. If the situation goes out of control, the owner decides to make a new offer. On 7th November, the owner proposed an increase of Tk 2,100 to Tk 12,500 as compared to the previous proposal. That was finalized later. The new wage structure came into effect from 1st December. In the face of various pressures, the labor leaders were forced to stop the agitation for wages within a short period of time. However, everything did not stop. 8 members of the US Congress believe that the minimum wage set for garment workers is not enough. They consider it not only sad but also shameful that the workers’ demand of minimum wage of Tk 23,000 per month is not met. In such a situation, the 8 members of the US Congress wrote to the American Apparels and Footwear Association (AAFA) to pressurize the government and the manufacturers of the ready-made clothing sector to accept the demand for a minimum wage of Tk 23 thousand or $208. On December 15, these members of the US Congress sent a letter to AAFA President and CEO Steven Lammer. Meanwhile, after the wage movement stopped, the entrepreneurs of the garment industry were worried again because of the announced labor policy of the United States. The United States is the largest export market for Bangladesh’s manufactured garments. In this situation, on November 16, the United States announced a presidential memorandum on the protection of workers’ rights worldwide. It is said that the United States will hold accountable the leaders of labor unions around the world, workers in favor of labor rights, those who show threats and intimidation against labor organizations. Various restrictions including trade, visa restrictions will be applied against those responsible for this. However, international concerns over wages have not yet subsided. Meanwhile, the European Council has raised new concerns in the letter. So, questions have been raised about the country’s labor standards, human rights and working environment. Experts feel that when Bangladesh is preparing for the GSP plus benefit, such precautions should be taken seriously. The United States has implemented a visa policy to ensure free and fair elections in Bangladesh. For that reason, there is no opportunity to take the labor policy of the United States easily, even though the labor leaders expressed their concerns in this way, the owners were silent. However, the government postponed an initiative to amend the labor law at the last minute. Although there is potential, the country’s top export revenue garment sector is going to start the new year with several challenges. According to the Export Promotion Bureau (EPB), apparel exports grew by 3.5 per cent in the first five months of the current financial year 2023-24 but declined again in the last two months. Meanwhile, apparel exports to Germany, the EU’s main market, have steadily declined over the past few months. From January to September 2023, exports to Germany fell by 12.58 percent compared to the same period in 2022. Export earnings to the US, one of the country’s main markets for ready-made garments, fell last year. According to the latest information provided by the International Trade Commission under the US Department of Commerce, Bangladesh’s garment exports to the United States dropped by 24.75 percent to $6.35 billion in the first 10 months from January to October this year. However, during the same period of the previous year, US made apparel exports earned $8.44 billion. However, in 2023, exports to non-traditional markets are increasing more than the United States and the European Union. As a result, export earnings have been spared from a sharp decline. BGMEA president Farooq Hasan said that Bangladeshi garment traders export products to the United States without any duty-free facilities. Then there is concern about the country’s garment export earnings. The Secretary of State said, the newly announced US labor policy and the emphasis on collaborative efforts between the government, entrepreneurs and workers to face future challenges in the garment sector. As a result of this policy of theirs, the import of raw materials and export of garments may create a negative situation. Any restrictive measures against the industry will lead to factory closures and loss of jobs for women workers. Secretary of the Ministry of Labor and Employment. Ehsan-e-Elahi said, the prerequisite for ensuring labor rights is the improvement of the legal framework. Bangladesh has ratified several international labor conventions. The country has amended its labor laws from time to time following the requirements of the International Labor Organization (ILO). There is danger if workers are not careful about their rights.
Source: The Daily Industry
