The incentive outgo for the ambitious production-linked incentive (PLI) scheme during 2023-24 (FY24) is likely to fall behind the government’s estimate of over Rs 11,000 crore, according to people aware of the matter. This is because companies are not able to claim incentives due to obligations set by the government being unfulfilled, insufficient applications, and slower than expected progress in some of the 14 schemes. While the PLI scheme for textiles and steel has not shown much progress, incentives in some cases can be claimed starting FY25, after the gestation period ends this financial year.
Source: Business Standard
New Delhi: Hit by two anti-subsidy actions in the US and the European Union, government is looking to revamp the system for Remission of Duties and Taxes on Exported Products (RoDTEP), attempting to build a verification system for the refunds. The two cases are seen to be due to the fault of the exporter, who told authorities that the scheme was an “incentive”, something that the government has dismissed. Officials told TOI that the scheme put in place three years ago is simply to refund the taxes and levies that exporters pay and is completely in line with the global practice of shipping goods without duties. It had replaced Merchandise Exports from India Scheme (MEIS), which was found to be non-compliant with the World Trade Organization (WTO) regime. The rate for refund, which varies according to a product, is based on the recommendations of a committee and the same payment is made to all beneficiaries. During their exchange with European and American authorities, the Indian government has been told that exporters in some cases may be getting more duty than they would have paid and ideally the payment should be in line with the actual payment of taxes. As a result, the government is discussing ways to verify the claims of the exporters and the payments made, while it is acutely aware of the need to ensure that the system does not turn into an exercise that puts burden on businesses and makes life difficult. Separately, officials have ruled out the introduction of a similar scheme for services, at least immediately, something that was discussed when RoDTEP was announced by government. The scheme would have replaced Service Exports from India Scheme, which was deemed WTO-compliant. In addition, government’s assessment was that the benefit was cornered by a handful of service providers, such as large consulting firms, which outsource work to India. There were several other misuses that were reported by service providers, which prompted the commerce department to work on a plan that ensures a fool proof system. Officials, however, said that given the nature of the services business, especially where overseas outfits of the same company or related parties are involved, it may be tough to administer it.
Source: Times of India
Synopsis India is set to adopt a firm approach in dealing with non-tariff barriers imposed on Indian exports by other nations, and will reciprocate with similar measures, according to Commerce and Industry Minister Piyush Goyal. During a recent address, he urged the industry to provide a comprehensive list of these barriers, allowing India to raise the issue with the respective countries. New Delhi: India will impose non-tariff barriers (NTB) on a reciprocal basis, commerce and industry minister Piyush Goyal said Tuesday, and asked industry to get out of the subsidy mindset. “I’ve categorically told other countries if you impose one NTB, we will impose two. Ye reciprocal hoga abhi (It will be reciprocal),” Goyal said while chairing the second meeting of the reconstituted Board of Trade.
Source: Economic Times
Videos Synopsis EY in its Budget expectations report also said that in the interim Budget, the government would continue its focus on ease of paying taxes, while legislative reforms will stay work-in-progress. To encourage more investment in the manufacturing sector and exports, the interim Budget may extend the sunset date for commencing manufacturing from March 31, 2024, till March 31, 2025, for companies availing 15 per cent concessional income tax rate, EY said. New Delhi: The government may extend the concessional 15 per cent income tax rate for corporates to set up new manufacturing units by one year till March 31, 2025, to encourage private investments, EY said in its 2024 Budget expectation report. Finance Minister Nirmala Sitharaman is scheduled to present the interim Budget for 2024-25 on February 1. EY in its Budget expectations report also said that in the interim Budget, the government would continue its focus on ease of paying taxes, while legislative reforms will stay work-in-progress. To encourage more investment in the manufacturing sector and exports, the interim Budget may extend the sunset date for commencing manufacturing from March 31, 2024, till March 31, 2025, for companies availing 15 per cent concessional income tax rate, EY said The government in 2019 announced that any new domestic company incorporated on or after October 1, 2019, making fresh investment in manufacturing, will have the option to pay income tax at the rate of 15 per cent if they commenced their production on or before March 31, 2023. In the Budget presented on February 1, 2023, the government extended the concessional 15 per cent corporate tax rate for new manufacturing units by one more year till March 2024. The EY report also said that while global growth prospects remain subdued, India is expected to clock a 7 per cent growth in the current fiscal, led by its resilient domestic demand. In the medium term, India's growth is critically dependent on its saving and investment rates. It is the household sector financial savings that become available for investment by the public and the private corporate sectors, EY said.
Source: Economic Times
India’s exports rose to seven of the country’s top 10 destinations — United Arab Emirates, Saudi Arabia, China, the UK, Australia, Singapore, and the Netherlands – in the first nine months of the current financial year (FY24). Overall exports, meanwhile, increased 0.9 per cent, according to the data compiled by the commerce department. Of India’s top 10 import partners, inbound shipments from Russia, Switzerland, China, and South Korea saw growth during April-December, at a time when the country’s overall inbound shipments dipped by 4 per cent compared to a year earlier.
Source: Business Standard
Union minister Hardeep Singh Puri on Tuesday asserted that India can become a five trillion-dollar economy much before 2028 and said the country's energy transition needs to be done in an orderly manner to safeguard the interests of its large population. Puri, the minister for petroleum and natural gas as well as housing and urban affairs, said India is aware of its commitments towards sustainability goals and will meet all the targets in time while meeting the requirements of a growing economy. He was speaking at a CII-EY breakfast session on 'accelerating India's energy transition towards sustainable economic growth' on the sidelines of the World Economic Forum Annual Meeting 2024. "I don't think we need to wait till 2028 to become a five trillion dollar economy, and if you look at what is happening, it should happen much before 2028," he said while listing various macroeconomic parameters. "I also think that the transition has to be orderly because transition by nature has to have both a clear roadmap and it must have in place all the safeguards that will ensure that there are no knee-jerk decisions taken," he noted. Puri said it is even more so important for a country like India, which is also now the world's most populous country. "When it comes to energy, the relationship between economic growth and energy is very important. Because we are now close to a 4 trillion dollar economy, but the fact is, we need to take care of a very large part of our population. "It's one thing to be theorising about the need for the transition without having to take care of domestic compulsions. As far as India is concerned, availability and energy resources are important because we import a key portion of our crude oil requirements," he said. "Given the multiple crises the world is facing, a democratically elected government like we have in India has to ensure affordability also. Then comes sustainability, and we are fully committed to that also," the minister said. He said the traditional market, which was dependent for energy on a defined number of suppliers, who could at will decide price etc, that dynamic doesn't seem to be working. "I am confident that all the targets we have for 2030 on the energy transition, we will meet them. Our green hydrogen policy will succeed in a big way. "We are on our way to meet our targets on aviation fuel. India today presents a fantastic potential for biofuel blending. We are meeting all our targets ahead of time. The establishment of the Global Biofuel Alliance is another example of our successes," he added.
Source: Business Standard
Commerce and Industry minister Piyush Goyal on Tuesday chaired the second meeting of the reconstituted Board of Trade (BoT) that focused on reviewing India’s export performance to achieve the $2 trillion export target by 2030. The minister urged the industry to leverage the free trade agreements (FTAs) signed by India to its benefit. There were also discussions on the priorities identified in the Foreign Trade Policy (FTP) 2023 and the strategies and measures to be adopted in order to take forward the export growth. “The reconstituted BoT provides an opportunity to have regular discussions and consultations with trade and industry and advises the Government on policy measures connected with the Foreign Trade Policy in order to achieve the objectives of boosting India’s trade,” an official statement said. The meeting that saw participants from the Centre, states, and industry, took place at a time when global trade has been witnessing challenges over last four years, starting with the Covid 19 pandemic, Russia Ukraine conflict, recessionary trends in major economies, followed by Israel-Hamas conflict and Red Sea crisis. Over the next three-four months, the government will launch an intermediary platform–Trade Connect ePlatform–to help Indian exporters and entrepreneurs get information on various regulations to access markets, sectors, export trends, as well as easy access of benefits under FTAs, the minister said. He also asked the industry to share data on non-tariff trade barriers faced by them in other countries.
During the meeting, presentations were made on India's import/export performance and state export performance, Gati Shakti national master plan leveraging FTAs for boosting export growth, intervention to boost pharma exports, among others. During the meeting, Federation of Indian Export Organisations (FIEO) urged the government to launch a planned scheme to address the infrastructure gaps through centre-state funding, which will help in exponential growth in exports from the districts. EEPC India said that the government could consider connecting waterways with sea ports as it will significantly reduce transportation costs for moving cargo locally.
Source: Business Standard
Indore: Pinning hopes on a surge in demand for industrial land in Neemuch, Madhya Pradesh Industrial Development Corporation and department of micro, small and medium enterprises (MSMEs) are mulling over increasing undeveloped land banks in the district. Industries from Bhilwada, especially textile and garments industries, have floated investment proposals for Neemuch as it shares its northeastern border with Rajasthan. The MSME department in Neemuch has estimated a footfall of close to 100 industries in the fiscal 2023-24. In the district, 23 SME units have become operational, and these industries have proposed an investment of more than Rs 200 crore. These industries have taken up private land, clusters, and government owned industrial areas for setting up units. District Industries Trade Centre, Neemuch general manager Amar Singh More said, "We are expecting around 100 industries to come up in Neemuch district this fiscal. There is high interest in textiles and garment industries in Neemuch." The MSME department is also developing four clusters in Neemuch district at Kesharpura and Sagrana village on 5.6 hectare and 9.9 hectare, respectively. Another two clusters are likely to come up in Daru and Dudhawa villages. MPIDC has recently allotted land to an industry for setting up a state-of-the-art factory at Neemuch for producing semi-refined morphine from poppy seeds. The corporation has received more than Rs 200 crore investment proposals from textile and garment industries in Jhanjharwada in Neemuch of which more than 20 per cent are from industries of Rajasthan. Eyeing investments from the neighbouring states, MPIDC has proposed expanding industrial areas at Mandsaur, Neemuch, Burhanpur, and Agar-Malwa. We also published the following articles recently The textile industry in Ludhiana is benefiting from the first common facility centre (CFC) for ready-made manufacturing. The CFC provides access to latest technology and upgraded machinery for micro, small and medium-sized manufacturers. The centre is helping improve productivity and competitiveness in the sector, providing a big infrastructural push for the industry. Lieutenant governor VK Saxena approved the notification of 147 acres of land in northwest Delhis Ranikhera for developing as an eco-friendly industrial area. The industrial hub will focus on service industries such as IT, ITES, media, biotechnology, and research. Welspun One plans to invest Rs 2,000 crore in Tamil Nadu to develop industrial and logistics parks, generating employment opportunities for 5,000 people. This is the second MoU signed with the state government, following the Rs 2,500 crore investments announced in 2021.
Source: Times of India
The rupee depreciated 3 paise to 83.15 against the US dollar on Wednesday, tracking a strong greenback against major rivals overseas and massive selling in domestic equity markets. However, inflow of foreign funds in domestic equity markets and softening crude oil prices in the international markets resisted a steep fall in the domestic currency, forex traders said. At the interbank foreign exchange, the domestic currency opened at 83.13 and slipped further to 83.15 against the dollar, registering a loss of 3 paise from its previous close. On Tuesday, the rupee declined 26 paise to settle at 83.12 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.08 per cent higher at 103.19 on Wednesday. Analysts attributed unabated gains in the US dollar to safe-haven demands amid concern over disruption in global trade through the Red Sea route. Brent crude futures, the global oil benchmark, declined 0.47 per cent to $ 77.92 per barrel. In the domestic equity market, the 30-share BSE Sensex was trading 719.37 points, or 0.98 per cent, lower at 72,409.40. The broader NSE Nifty declined 233.10 points, or 1.06 per cent, to 21,799.20. Foreign Institutional Investors (FIIs) were net buyers in the equity market on Tuesday as they bought shares worth Rs 656.57 crore, according to exchange data.
Source: Business Standard
AMSTERDAM – Traceability solutions specialist Aware says it is poised for further growth in Asia's textile sector after launching a new funding round. The Dutch startup, which operates an immutable blockchain platform capable of logging product data as it moves throughout the supply chain, has so far secured a fresh tranche of funds from Singapore-based investor Presstar Capital through a SAFE (simple agreement for future equity) investment.
Source: Eco Textile
Ludhiana, Jan 16 (KNN) The local textile industries, adversely impacted by the India-Bangladesh Free Trade Agreement (FTA), are urgently seeking government intervention to curb the imports of garment and knitwear fabric from Bangladesh. Simultaneously, the industry is urging the government to facilitate opportunities for exporting goods to European countries without imposing custom duties, reported TOI. Describing the surge in imports as a "serious threat" to the survival of local and domestic businesses, industry representatives highlight the need for immediate action. The industry representative emphasises that affordable and high-quality clothing from Bangladesh has dominated the domestic market for over a decade due to the absence of custom duties. The rise in imports from Bangladesh, as per an industry association, has resulted in a sustained decline in domestic production, leading to substantial revenue losses over the years. The situation is deemed critical, with the industry facing an escalating crisis. Vinod Thapar, President, Knitwear Club, underscores the challenges posed by the significantly lower labour costs in Bangladesh and the superior quality of their products compared to the domestic industry. “Despite that the local industry has the strength to compete with them. But we need the intervention of the Union government,” Thapar stated. Thapar stresses the necessity of government intervention to enhance competitiveness and calls for initiatives to improve the production quality of the domestic industry and the establishment of mechanisms to restrict imports from Bangladesh, ultimately safeguarding the interests of the Indian textile sector.
Source: KNN India
