The commerce department and the finance ministry on Wednesday discussed maintaining credit flow to Indian exporters grappling with higher trade costs due to the crisis in the Red Sea, said a senior government official. The discussion took place during an inter-ministerial meeting chaired by the Commerce Secretary Sunil Barthwal and aimed at finding measures to tackle the impact on trade due to the crisis. “There were discussions on how things can be improved in this area. We have told DFS (finance ministry’s department of financial services) to monitor to ease bank credit and credit flow is maintained to the exporters,” said the official. That apart, the shipping ministry was asked to monitor the volume of trade at major ports. “We are closely monitoring the situation. We are closely monitoring the inputs from relevant ministries,” the official said. While the defence ministry will focus on improving surveillance in the Red Sea region, the external affairs ministry is holding diplomatic negotiations with Iran on the crisis. Indian officials believe that the situation isn’t “alarming” as of now, although ships taking a longer route than the Red Sea has escalated freight costs. The commerce department on Monday said that attacks by Houthi rebels, who have previously been linked to Iran, on commercial shipping vessels in the lower Red Sea has resulted in a combined impact of higher freight costs, insurance premiums, and longer transit times. The impact can make imported goods "significantly more expensive”. The Red Sea is vital for 30 per cent of global container traffic and 12 per cent of global trade. As much as 80 per cent of India's merchandise trade with Europe passes through the strait. Almost 95 per cent of vessels have rerouted around the Cape of Good Hope in recent weeks, adding 4000 to 6000 nautical miles and 14 to 20 days to journeys.
Source: Business Standard
The government's production linked incentive (PLI) scheme has led to an investment of Rs 1.03 trillion till November, with exports surpassing Rs 3.20 trillion since the scheme's implementation. This investment resulted in production worth Rs 8.61 trillion and direct and indirect employment generation of over 678,000, according to Rajeev Singh Thakur, additional secretary, Department for Promotion of Industry and Internal Trade (DPIIT). While the incentive disbursement to companies participating in the scheme was Rs 4,415 crore as of now, the payout as of September was Rs 1,541 crore. The incentive has been disbursed under eight PLI schemes—Large-Scale Electronics Manufacturing (LSEM), IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing, and Drones. However, the incentive disbursement has fallen substantially short of the government's estimate of Rs 11,000 crore for the current financial year. The scheme's total incentive outlay is Rs 1.97 trillion. During the last financial year, the first set of payouts worth Rs 2,874 crore was made. Government officials believe more clarity on the incentives claimed will emerge by March, as most of the claims were filed by the end of December, and are expected to be verified and paid by March. Individual ministries responsible for the scheme's implementation, along with Project Monitoring Agencies (PMAs), scrutinise the claim applications and sometimes visit the plants. According to Thakur, there has been observed delay in processing due to back-and-forth communication between PMAs and companies. "It has been directed to ministries and PMAs to create a Standard Operating Procedure (SOP) and reduce the processing time," he said, adding that PMAs and departments have been asked to approve the claim and not raise unnecessary objections. Thakur further stated that the government is hopeful that disbursements will pick up, as investment is on track. While progress in some schemes has been slower than expected, the most progress has been seen in mobile phone and pharmaceutical PLI schemes. The scheme's implementation has led to local manufacturing of various electronic components such as batteries, chargers, PCBA, PCB, camera modules, passive components, and certain mechanics.
Source: Business Standard
More and more districts need to be integrated with export initiatives to help boost the country's outbound shipments, a senior official said on Wednesday. Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi also said that an increase in exports helps in enhancing per capita income. He said that four states - Gujarat, Maharashtra, Karnataka and Tamil Nadu - account for 65 per cent of India's exports and they also have a high per capita income. The DGFT also noted that only 62 districts out of over 760 in the country contribute about 80 per cent of India's exports. "So there is a need to integrate more and more districts in our export initiatives. Imagine if another 700 districts get involved in export activities, then our export potential will multiply," Sarangi said here while inaugurating the Federation of Indian Export Organisations' (FIEO) 'Sourcex India' exhibition. “There is a very positive correlation between exports and increase in per capita income. It's not only exporters who get benefited but the whole value chain associated with exports get benefits," he said. Speaking at the event, FIEO President (Officiate) Israr Ahmed said that this event is a testament to our commitment to showcasing Indian brands on the global stage. "It is not merely an exhibition, but a platform designed to facilitate the global launch of Indian brands. Sourcex India 2024 transcends being just an exhibition. In the upcoming three days, B2B meetings, knowledge-sharing sessions and interactive workshops will unfold, providing invaluable insights into global market trends and enabling Indian companies to better understand the preferences of international buyers," Ahmed said.
Source: Business Standard
Polyester fabric production almost came to a standstill in the textile hub of Sircilla with most of the powerloom units in the town remaining shut due to lack of orders and accumulated stocks of unsold cloth in warehouses. An overwhelming majority of the nearly 30,000 powerloom units in Sircilla have suspended operations from Monday following the decision of the Sircilla Polyester Cloth Manufacturing Welfare Association to close down the units under “unavoidable circumstances.” The Association representing the polyester cloth manufacturing units attributed the current grim situation to lack of private orders mainly from Hyderabad, slump in prices due to weakened demand and piled up stock of unsold cloth. The distressed owners of the units and thousands of powerloom workers are pinning their hopes on the fresh government orders such as RVM uniform clothes and Bathukamma sarees to the Sircilla-based powerloom units for resumption of operation of the closed units at the earliest. Official sources said that the government agencies concerned are likely to place bulk orders for supply of school uniform cloth in a couple of days. Meanwhile, former minister and Sircilla MLA K T Rama Rao took to X (formerly Twitter) saying the homegrown talented powerloom weavers of Sircilla have seen great growth and expansion since the formation of Telangana with the active support of the State government. “My request to the Congress government to continue and strengthen the sector more as it has the potential to grow and compete with Tirupur cluster in Tamil Nadu. Hearing stories of distress setting in yet again which can be disastrous for the sector,” he added.
Source: The Hindu
The government must focus on developing an Indian shipping line of global repute that could reduce “arm twisting” by foreign shipping lines at the time of crisis and result in big savings, some exporters proposed at the Board of Trade meeting chaired by Commerce & Industry Minister Piyush Goyal on Tuesday. The suggestion, made on many occasions before, is especially important in the present context of sky-rocketing shipping charges due to the on-going Red Sea crisis, which has affected India’s trade with Europe, US east coast and parts of West Asia and Africa. Freight rate hike “Because Indian exporters are almost completely at the mercy of foreign shipping lines, they indiscriminately increase freight at the slightest opportunity. Right now, freight rate increase is not just confined to the Red Sea route or the detour that has to be taken through the Cape of Good Hope, but on all routes. This was pointed out to the government,” a person tracking the matter told businessline. In its presentation, exporters’ body FIEO pointed out that as the government had taken the laudable initiative for facilitating container manufacturing in the country to become ‘Atma Nirbhar’, a similar focus for developing an Indian shipping line of global repute was called for. “India remitted over $80 billion as transport service charge in 2021. As the country moves towards the goal of $1 trillion exports, this will touch $200 billion by 2030. A 25 per cent share by the Indian shipping line can save $50 billion annually,” it said. The Indian private sector may be engaged to develop such shipping lines. This will also reduce arm twisting by foreign shipping lines particularly of our MSMEs, the presentation added. Red Sea crisis India’s exports could decline by an estimated $30 billion in the on-going financial year if the Houthis continue their attacks on cargo ships in the Red Sea, according to some calculations made by think-tanks. Not only have shipping charges more than doubled on several routes, all kinds of steep surcharges are being applied such as peak season surcharge, Red Sea surcharge and contingency surcharge, exporters complained. Insurance costs have also gone up several fold. The Commerce & Industry Minister pointed out that the Board of Trade meeting was an opportunity to deliberate on the key issues including how to leverage the free trade agreements (FTAs) for the country’s benefit, how to encourage the startups/MSMEs to go beyond the borders and start exporting and boost exports from the services sector which remains a key driver of export growth. The Board of Trade meeting focused on reviewing the export performance to achieve the $2 trillion export target for year 2030, the priorities identified in the new Foreign Trade Policy 2023 and the strategies and measures to be adopted in order to take forward the export growth, per an official release. The reconstituted Board of Trade provides an opportunity to have regular discussions and consultations with trade and industry and advises the government on policy measures connected with the FTP in order to achieve the objectives of boosting India’s trade. It also provides a platform to the State governments and UTs for sharing State-oriented perspectives on exports.
Source: Business Line
The government can consider giving refunds to exporters in cash instead of scrips for tax remission schemes, as it would immediately improve cash flow for them, economic think tank GTRI said on Tuesday. At present, the refund under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and the Rebate of State and Central Taxes and Levies (RoSCTL) scheme is issued as a scrip, which can be used to pay basic customs duties at the time of import. The scrip can be sold to other importers, who can later use the scrip instead of cash for payment of basic customs duty. These schemes refund select central and state levies to Indian exporters. "Refund RODTEP and ROSCTL dues to exporters in cash and not in the form of scrips. This will immediately improve the cash flow of thousands of exporters facing a weak export outlook for 2024," the Global Trade Research Initiative (GTRI) said. The RoSCTL refunds taxes for apparel and made-up sectors. RoDTEP covers most of the remaining products covered under about 8,500 tariff lines or product categories. It said that since the average RoDTEP rate is low at about 2.5 per cent, it is suggested that the refund amount can be transferred in cash to exporters' bank accounts post-export, as done in the case of the duty drawback scheme. Both the RoDTEP and duty drawback schemes refund unrefunded duties and are similar. Also, most small exporters do not import and have to sell the scrips to large importers who buy the scrips at varying discounts of up to 10 per cent of the scrip value, it added. "Many small value scrips remain unutilised also. The small exporter thus gets less than the announced incentive," GTRI Co-Founder Ajay Srivastava said. He added that the cash refund will help thousands of exporters in employment oriented sectors like marine, leather, gems and jewellery, agriculture, and other sectors like electrical/electronics, automobiles, machinery, and plastics. "Cash refunds would immediately improve the financial stability of exporters. Direct cash disbursements would eliminate the need for discounted scrip sales, ensuring that exporters receive the full value of their refunds," Srivastava added. Small firms, which form a significant part of India's export economy, would be particularly advantaged by this, helping them to compete more effectively on a global scale, he said.
Source: Economic Times
Synopsis Highlighting the focus on tangible implementation, Eknath Shinde emphasised the acceleration of growth compared to last year. He said the state's image has been spotlighted as people-oriented with a strong emphasis on industrialisation, skilled manpower, and quick decision-making, the statement said. Maharashtra Chief Minister Eknath Shinde has said that the state has inked memorandums of undertaking (MoUs) worth Rs 3,53,675 crore at the World Economic Forum 2024 in Davos, Switzerland. Shinde thanked investors, noting the increased confidence of global industries that showed interest in investing Rs 1 lakh crore in Maharashtra. These MoUs have the potential to create more than 2 lakh jobs in the state, said a statement from the CM's office late on Wednesday night. Highlighting the focus on tangible implementation, Shinde emphasised the acceleration of growth compared to last year. He said the state's image has been spotlighted as people-oriented with a strong emphasis on industrialisation, skilled manpower, and quick decision-making, the statement said. The first day of the Davos conference saw investment agreements worth Rs 1,02,000 crore with six industries, with the potential to create 26,000 jobs. On January 17, the second day, agreements worth Rs 2,08,850 crore were signed with eight industries, projecting 1,51,900 job opportunities, it said. The CM said that MoUs worth Rs 42,825 crore will be signed with six industries on January 18, which can create an additional 13,000 jobs. According to the statement, Shinde engaged in fruitful discussions with various industry groups at the Maharashtra Hall in Davos. Gautam Adani, founder and chairman of the Adani Group also met Shinde and they talked about the infrastructure sector in Maharashtra and potential investment opportunities. A meeting was convened with senior industrialist Lakshmi Mittal to explore future investment cooperation. Simultaneously, discussions were held with Liechtenstein's prince over industrial investments, the statement said. The CM also met with the chief policy officer, Thomas Coutaudier, and chief financial officer, Patrick Treuer, of French trading company Louis Dreyfus. They discussed industrial expansion in Maharashtra, it said. During a meeting with Shinde, South Korea's Gyogni Province Governor Kim Dong Yeon I emphasised the importance of building a robust foundation in Maharashtra. The discussion highlighted the synergy between South Korea's expertise in manufacturing and technology and India's strength in skilled manpower, according to the statement. David Krobok, chairman of Czech Republic-based Witkowitz Atomica Company, met with the CM to explore investment opportunities in small modular nuclear reactor technology. Industries minister Uday Samant was also present during these discussions, the statement added.
Source: Economic Times
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
Pakistan's Foreign Minister Jalil Abbas Jilani has told his Iranian counterpart that the unprecedented attack by Iran seriously damaged the ties between the two nations. Iranian missiles and drones on Tuesday night targeted two bases of the Balochi militant group Jaish al Adl in Pakistan's border town of Panjgur in Balochistan province. Jilani, who is currently leading the Pakistan delegation to the Ministerial Meeting of the Non-Aligned Movement in Kampala, Uganda, on Wednesday in a telephonic conversation with Iranian Foreign Minister Hossein Amir Abdollahian stressed that the attack conducted by Iran inside the Pakistani territory on January 16 was not only a serious breach of Islamabad's sovereignty but also an egregious violation of international law and the spirit of bilateral relations between Pakistan and Iran, the Foreign Office said in an overnight statement. Expressing Pakistan's unreserved condemnation of the attack, the foreign minister added that the incident has caused serious damage to bilateral ties between Pakistan and Iran, the statement said. The Foreign Minister added that Pakistan reserved the right to respond to this provocative act. Stressing that terrorism was a common threat to the region and required concerted and coordinated efforts to combat this menace, Jilani underlined that unilateral actions could seriously undermine regional peace and stability. "No country in the region should tread this perilous path," the minister told his Iranian counterpart. Traditional warm ties between the two neighbours nose-dived to the lowest ebb after the unprecedented attack by the Iranian forces in the country's southwest. Pakistan in retaliation expelled the Iranian ambassador while calling back his envoy from Tehran.
Source: Business Standard
China's economy for the October-December quarter grew at a quicker rate, allowing the Chinese government to hit its target of about 5 per cent annual growth for 2023 even though trade data and the economic recovery remain uneven. Official data released on Wednesday showed that the Chinese economy grew 5.2 per cent for 2023, surpassing the target of about 5 per cent that the government had set. The growth for 2023 is likely helped by 2022's GDP of just 3 per cent as China's economy slowed due to COVID-19 and nationwide lockdowns during the pandemic. For the fourth quarter, China's gross domestic product also grew at 5.2 per cent compared to the same time last year. On a quarterly basis, the economy rose 1 per cent in Q4, slowing from the expansion of 1.3 per cent in July-September. Officials from China's National Bureau of Statistics said that measures including strengthened macro regulation, and redoubled efforts to expand domestic demand, optimize structure, boost confidence and prevent and defuse risks had helped improve the momentum of recovery, supply and demand. Industrial output, which measures activity in the manufacturing, mining and utilities sectors, rose 4.6 per cent in 2023 compared to a year earlier, while retail sales of consumer goods grew 7.2 per cent. Fixed-asset investment spending on factory equipment, construction and other infrastructure projects to drive growth grew 3 per cent year on year in 2023. However, indicators point to a largely uneven recovery for China. Trade data for December, released earlier this month, showed a slight growth in exports for a second straight month as well as a slight increase in imports. Consumer prices however fell for a third consecutive month as deflationary pressures persisted. Chinese premier Li Qiang said at the World Economic Forum on Tuesday that China had achieved its economic target without resorting to massive stimulus. He said that China had good and solid fundamentals in its long-term development and despite some setbacks, the positive trend for the economy will not change.
Source: Business Standard
A new study with board directors and senior executives who work for fashion brands and retailers reveals 12% expect their business to be fully circular within two years, 34% within three years and 31% within four years. The study by Aquapak Polymers also shows that 20% of respondents expect to achieve circularity this goal within five years. 32% rated their strategy for making their business fully circular as excellent, 54% said it was good and 14% described it as average. 37% said that reducing the use of polyethene plastic in packaging is a “highly important” part of their sustainability strategy, and a further 63% said it was quite important. The research, conducted by PureProfile, surveyed 100 board and senior executives, including CEOs, Retail Directors, Chief Operating Officers, Sustainability Directors and Finance Directors, in the UK, US and Australia in November 2023. Our study shows that the circular economy and sustainability are priorities for boards and senior executives in the fashion industry. 54% of respondents described their business as a “market leader and innovator”, 39% said that their business was average and “following the leaders” and 7% described their business as “playing catchup”. The findings also show that while 49% said sustainability is regarded as highly important to the success of their business, only 21% described the quality of their sustainability strategy and programme as excellent. Mark Lapping, CEO of Aquapak, commented: “Our study shows that the circular economy and sustainability are priorities for boards and senior executives in the fashion industry, although only half think that their business is at the vanguard of change when it comes to innovation and market leadership. “There has been an acceleration in new technologies in the sector, so the opportunity for brands to step up and lead the industry is there for the taking. Aquapak is already working with several early-adopter fashion companies who are determined to drive a significant change in the industry by embracing upstream innovation in packaging.”
Source: Circular Online
