The first-ever meeting of the newly constituted Textile Advisory Group for man-made fibre under the Ministry of Textiles has offered hope for changes in customs duty on knitted fabrics to reduce imports. R.K. Vij, secretary general of the Polyester Textile Apparel Industry Association, said he raised the issue of “illegal and undervalued import of Chinese knitted fabric”, which is mixed with woven fabric. Almost 1,000 tonnes of fabric is dumped in India daily due to the difference in customs duty for woven and knitted fabrics. Currently, the duty on woven fabric is 20% of the value of imports, or ₹115-₹150 per kg, whichever is higher, while the duty on knitted fabric is a flat 20%. The annual revenue loss to the government is approximately ₹6,000 crore due to lower customs duty, Mr. Vij claimed. Currently, knitted fabric is imported at $1.5/kg, which is even lower than the export price of yarn, when the finished product should cost about $4.5/kg, Mr. Vij reckoned, highlighting the extent of undervaluation. “The Minister has assured to resolve this anomaly within two months,” Mr. Vij said. Meanwhile, the Confederation of Indian Textile Industry (CITI) and other textile associations have demanded precautionary measures to ensure cotton prices do not shoot up later this cotton season. A memorandum by CITI said, “The Cotton Corporation of India should start selling cotton, which it procured at Minimum Support Price, from February to only textile mills. It should not sell at lower prices to bulk buyers. The CCI should sell cotton in multiples of 130 to 150 bales to benefit small spinning mills.”
Source: The Hindu
The Commerce Department, with the help of the Indian industry, is trying to precisely identify items where it can gain from tariff cuts by the ASEAN countries, as it prepares for the review of the ASEAN-India Free Trade Agreement (FTA) beginning next month. India hopes to bridge the growing trade imbalance against the country by gaining greater market access in various sectors. “The Commerce Department has circulated to various industry bodies a country-wise list of tariff lines for all ten ASEAN countries on which either concessions given under the existing FTA are minimal or excluded. Based on feedback from the industry, the negotiating team will shortlist the items and firm up its negotiating position. It wants to be precise in its demand,” a source tracking the matter told businessline. The ASEAN-India FTA, formally known as the ASEAN-India Trade in Goods Agreement (AITGA), which was implemented fourteen years back in January 2010, resulted in disproportionate gains for the ASEAN industry. Trade deficit In 2022-23, India exported goods worth $44 billion to the region while its imports were valued at $87.57 billion. Trade deficit in 2022-23 was $43.75 billion compared to $7.5 billion during the implementation of the agreement. India is hopeful that the long-pending review of the pact, to be initiated in New Delhi on February 18-19, will help in reducing some of the deficit with the ASEAN by addressing both tariff and non-tariff barriers. “Under the AITGA, both sides agreed to progressively eliminate duties on about 75 per cent of goods and reduce tariffs on around 15 per cent of goods, but the tariff elimination commitment made by the ten ASEAN nations varied considerably. While an open economy like Singapore committed to almost 100 per cent elimination, countries like Indonesia and Vietnam offered much less,” the source said. The 10-member ASEAN, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. Scope for tariff cuts “There are various sectors where there is a scope for more tariff cuts in individual ASEAN, which include chemicals, metals and alloys, machinery, plastic & rubber, textiles, leather and gems & jewellery. The Indian industry has to go through the tariff list and point out exactly where they believe that they are competitive and can gain from tariff cuts,” the source said. While the government had started collecting inputs from the industry, on both tariffs and non-tariff barriers, from late last year, it is now attempting to help the industry get more focussed so that precise demands can be made.
Source: Business Line
The country's exports of goods and services rose marginally by 0.4 per cent to USD 765.6 billion in 2023 despite global economic uncertainties, according to the commerce ministry data. Sectors which helped keep India's exports afloat include electronics, pharmaceuticals, cotton yarn, fabrics and made-ups; ceramic products, meat, dairy and poultry products, fruits and vegetables and information technology. Goods exports in the last calendar year, however, contracted by 4.71 per cent to USD 431.9 billion while services exports are estimated to have risen by 7.88 per cent to USD 333.8 billion, the data showed. The merchandise imports also dipped by 7 per cent to USD 667.73 billion last year as against USD 720.2 billion in 2022. The latest data for the services sector released by the RBI is for November 2023. The data for December 2023 is an estimation by the ministry. The main export destinations for India are the US, the UAE, the Netherlands, Bangladesh, the UK and Germany. Goods shipments are impacted due to the Russia-Ukraine war, the Israel-Hamas conflict and the Red Sea trade route crisis due to attacks by Yemen-based Houthis on cargo ships. According to international trade experts, if these challenges are prolonged, it will Economic think-tank Global Trade Research Initiative (GTRI) said that India's exports and imports have dipped by 2.6 per cent to USD 1609 billion in 2023 compared to USD 1651.9 billion in 2022. The negative trade balance - the difference between exports and imports - decreased from USD 141.3 billion in 2022 to USD 75.2 billion in 2023. The data for the current fiscal shows that the goods exports during AprilDecember 2023 dipped by 5.7 per cent to USD 317.12 billion. Imports contracted by 7.93 per cent to USD 505.15 billion, leaving a trade deficit of USD 188.02 billion in the first three quarters as against USD 212.34 billion in April-December 2022.
Source: Economic Times
New Delhi: India is drawing up a list of market access and non-tariff barriers(NTBs) hurting its goods and services exports and would take them up with the respective trade partners as it seeks to give a fillip to outbound shipments. The commerce department has begun the exercise with barriers such as registration requirements, higher pesticide levels and domestic standards, put up by Africa and 12 Central Asian countries, including Russia, and would then study the restrictions imposed by other trading partners. "We are doing this exercise because despite good relations with many countries, our exports to them haven't grown commensurately," said an official. Resolving NTBs is crucial as lower importtariffs sometimes do not benefit exporters because of technical barriers. In FY23, India's goods exports were $451.07 billion. In April-December FY24, exports fell 5.7% year-on-year to $317.12 billion. India may clock goods exports between $440 billion and $450 billion in FY24, as per industry estimates. "The US has raised concerns related to India's quality control orders, which it considers as non-tariff barriers. These issues came up at the recent Board of Trade meeting as well," said an industry representative. Indian exports of basmati rice, tea, poultry, bovine meat, fish and chemical products to the EU, garments to Japan, and meat, fish dairy and industrial products to China have been subject to NTBs in the past. The US and the EU have raised with India concerns related to technical barriers in the areas of toys, electronics & ICT, telecommunication and alcoholic beverages. While India has also raised EU's hazard-based approach to plant protection products and setting of import tolerances, the official said that more work needs to be done to reciprocate to such measures. commerce and industry minister Piyush Goyal said that India will impose NTBs on a reciprocal basis and asked industry for data on such measures to help improve the country's position in trade negotiations.
Source: Economic Times
The next round of negotiations between India and South American nation Peru for a free trade agreement is scheduled to start on February 12, an official said. The proposed agreement is aimed at promoting bilateral trade and investments between the two countries. In such pacts, two trading partners either significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services. "The sixth round of negotiations for a proposed trade agreement between India and the South American nation Peru is scheduled from February 12-15," the official said. Issues which are expected to figure in the negotiations include rules of origin, trade in goods, customs procedures and trade facilitation, technical barriers to trade, sanitary and phytosanitary measures. Negotiations for the agreement started in 2017 and the fifth round was concluded in August 2019. The negotiations were paused due to the coronavirus pandemic. During 2022-23, the bilateral trade between India and Peru stood at USD 3.12 billion. India exported goods worth USD 865.91 million to Peru and imported goods valued at USD 2.25 billion. Key Indian exports to Peru include motor vehicles/cars, cotton yarn and pharmaceuticals, while imports items include gold, copper ores and concentrates. Peruvian businesses are also looking to export agricultural products like avocados, fresh grapes and blueberries, and natural resources like calcium phosphates to India.
Source: Money Control
The interim Budget for 2024-25 could peg India’s nominal GDP growth for the next financial year at 10.7% or thereabouts, going by the median of a poll of 15 economists. The estimates for nominal GDP growth for the next fiscal range from 9.5% to 11.3%, with most economists expecting the figure at 10.5%. “With the base effect propping up wholesale inflation, nominal GDP growth could be higher in FY25,” said Sakshi Gupta, principal economist, HDFC Bank. Gupta sees real GDP growth at 6.3% in FY25, and CPI and WPI inflation, respectively, at 4.7% and 6.5%. The nominal GDP assumption holds significance as based on this estimate the Budget pegs its fiscal deficit target for a financial year. In the current year, the Budget had assumed nominal GDP growth at 10.5% and fiscal deficit at 5.9% as percentage of GDP. However, the first advance estimate, released earlier this month, projected nominal GDP to grow merely 8.9% – as a consequence, the fiscal deficit may come in at 6.0%, if it remains unchanged in absolute terms at Rs 17.87 trillion. However, given a higher-than-estimated growth in tax revenues, the deficit could be contained at the BE level as a fraction of GDP. WPI inflation carries dominant weight in the GDP deflator, which is a ratio of current price GDP to the constant price GDP, and is an indicator of the rate of inflation in the economy. Higher WPI inflation increases the deflator, and thereby the nominal GDP growth, and conversely, a lower value depresses growth. The lower than Budgeted nominal GDP growth in the current year is a direct result of WPI staying deflationary in the first nine months of FY24. In April-December, WPI inflation averaged (-)1.07% as against 11.69% in the comparable period of FY23. CPI inflation on the other hand, averaged 5.5% as against 6.8%. However, as the support from base effect wanes, WPI is expected to stay inflationary in the entire FY25. “Based on our forecast of 12% growth in total receipts in FY25, total spending could grow anywhere between 6-8% to achieve a fiscal deficit target of 5.2%- 5.4% of GDP, assuming nominal GDP growth of 10.5%,” said Nikhil Gupta, chief economist, Motilal Oswal Financial Services. “Since the economic growth is very strong at this point in time, we feel that this is the best opportunity for the government to consolidate faster and thus, recommend a fiscal deficit of 5.2% of GDP in FY25,” he said. Economists say that a target of 5.2% in FY25 would increase the possibility of the government meeting its fiscal deficit target of 4.5% as a percentage of GDP in FY26. Whereas, the target of 5.3-5.4% may push the target ahead by one more year.
Source: Fibre2fashion
UK consumer demand turning weaker could indicate a challenging period for the retail and industrial sectors, but as inflation continues to fall and real incomes rise along with lower debt burdens from reduced interest rates, consumers will recover their purchasing power, and this will create a resurgence in demand in both sectors, according to a report by US based commercial real estate services and investment provider CBRE. CBRE does not expect a full economic recovery in the United Kingdom in 2024, but it will sees a turning point. Lower inflation and interest rates will improve real incomes and reduce the debt burden. This will encourage spending and investment from consumers and businesses, the report noted. CBRE forecasts the country’s gross domestic product (GDP) will grow by 0.5 per cent this year and 1.6 per cent in 2025. Metrics suggest an interest rate cut may be imminent, with low headline inflation, weak economic growth and a softening labour market. Some tax cuts expected in the spring budget would add a fillip to economic growth with the reduced tax burden, encouraging consumer spending. However, higher spending levels might slow the decline of inflation and delay the cutting of interest rates, CBRE observed. Though the issue of lack of liquidity in the market persists, but refinancing throughout 2024 may see enhanced investment activity in commercial real estate at large discounts, according to the report. CBRE expects to see the UK economy begin to turn this year. Consumer demand was resilient throughout the first half last year, but weakened in the second half as reflected in lower retail sales.
Source: Fibre2fashion
Retailers are turning to air freight to protect supply chains and keep their products on shelves amid the ongoing crisis in the Red Sea and Suez Canal, according to Oslo-based ocean and air freight rate benchmarking platform Xeneta. Businesses across the consumer retail and apparel sector told the platform that delays and disruption caused by Houthi militia attacks on container ships in the Red Sea have forced them to take action. The latest data released by Xeneta show air cargo volumes from Vietnam to Europe—a major trade route for apparel—spiked by 62 per cent in the week ending January 14. This is also 6 per cent higher than last year’s peak week in October and a 16-per cent increase on the volumes recorded in the same week 12 months ago. “This is the first signal in Xeneta data that the Red Sea crisis is impacting air freight. This is typically a quieter time of year for air freight so to see increases of this magnitude, with higher volumes than at any point in 2023, is significant,” Xeneta chief airfreight officer Niall van de Wouw said. “Routes from Vietnam to Europe are used heavily for apparel, a sector we have been told is switching more goods from ocean to air due to the Red Sea crisis, so it is particularly noteworthy we are seeing volumes increase to such an extent on this trade,” he said in a company release. The upcoming Lunar New Year may also be contributing to the increase in volumes, he noted. Air freight rates from Vietnam to Europe have increased, but with increasing volumes putting pressure on capacity and load factor, costs could be set to rise further, Xeneta observed. “In the next two weeks we should know for sure if this represents a genuine and significant shift from ocean to air freight due to the Red Sea crisis,” Van de Wouw added.
Source: Fibre2fashion
Exports of readymade garments (RMG) from Bangladesh to the European Union (EU) dropped by 1.24 per cent year on year (YoY) to $11.36 billion in the first half of fiscal 2023-24 (FY24). The reason is a fall in overall imports by the EU, especially Germany, as the purchasing power of customers in the bloc has waned for various reasons, said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). After importing a decent amount of apparel in 2022, inventories still remain in the EU stock, and that is one reason why the EU is importing less from Bangladesh and other apparel exporters, including China and Vietnam, Hassan said. The country’s apparel exports to Spain, France, the Netherlands and Poland during the first half rose by 6.56 per cent, 2.15 per cent, 9.11 per cent and 19.14 per cent respectively, data from the Export Promotion Bureau show. But exports to Italy fell by nearly 3.9 per cent during the period. Germany imported the highest—apparel worth $2.86 billion, 17 per cent less YoY, domestic media outlets in Bangladesh reported. The country’s RMG exports to Canada also dropped by 4.16 per cent to around $742 million in the July-December period. Exports to the United States, however, rose by 5.7 per cent to over $4 billion. The United Kingdom imported garments from Bangladesh worth $2.71 billion—a 13.24 per cent YoY growth. The country’s exports to non-traditional markets in the July-December period grew by around 12.3 per cent to $4.53 billion, with a nearly 10 per cent YoY rise to Japan, 24.7 per cent YoY increase to Australia and over 19 per cent YoY rise to South Korea.
Source: Fibre2fashion
