Synopsis India and Peru are set to begin the next round of negotiations for a free trade agreement in April. The proposed agreement aims to boost bilateral trade and investments by reducing or eliminating customs duties on goods and promoting trade in services. The negotiations, which started in 2017 and were paused due to the pandemic, resumed with a virtual round in October 2023. The most challenging issue for India in the agreement is duty concessions on gold, which accounts for 80% of its imports from Peru. New Delhi, The next round of negotiations between India and South American nation Peru for a free trade agreement is expected to start in April, an official statement said on Thursday. The officials of the two countries concluded the sixth round of talks in Lima on February 14. 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 6th round of India-Peru negotiations for a trade agreement was held from February 12 to 14, 2024, in Lima, Peru, to continue the work that started in 2017 when the negotiation process was formally announced," the commerce ministry said. In this round, nine working groups held in-person meetings on trade in goods, rules of origin, trade in services, movement of natural persons, customs procedures and trade facilitation, and dispute settlement. "Additionally, during this week and the following, other working groups such as Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Trade Remedies and Cooperation will continue to hold virtual meetings. The next round is expected to be held in April 2024," it added. Negotiations for the agreement started in 2017. They were paused due to the coronavirus pandemic and later resumed with the special virtual round in October 2023. 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 imported 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. accounts for 80 per cent of India's imports from Peru, is the most challenging issue for New Delhi under the proposed free trade agreement with the South American nation. "Tariff concessions on gold, accounting for USD 1.8 billion or 80 per cent of India's imports from Peru in FY23, is the most challenging issue for India," GTRI said.
Source: Economic Times
Negotiations between India and the United Kingdom for the proposed free trade agreement are at an advanced stage but India is keen to safeguard its interests. Commerce Secretary Sunil Barthwal on Thursday said the negotiations are taking time because “we want” to safeguard India’s interest. “India should commercially gain out of it and we should also be able to safeguard the interest of our farmers, PLI (production linked incentive) scheme goods. So, we are there to see that the deal is a fair deal,” he told reporters at a press briefing. According to senior commerce ministry officials, the negotiations are on at a senior level with efforts on to iron out remaining differences. The officials however, declined to give a timeline for the completion of the talks. The 14th round of talks between the two countries started on January 10 and both countries have been keen on concluding the negotiations and signing the agreement ahead of national elections in both countries. Meanwhile, the commerce ministry is also in the midst of trade negotiations with other countries. The seventh round of talks on the India- European Union FTA is scheduled to take place in New Delhi from February 19 to 23. In June 2022, India and the EU restarted the negotiations for the long-pending trade and investment agreement on Friday after a gap of over eight years. On the India-Pacific Economic Framework for Prosperity (IPEF), Rajesh Agrawal, Additional Secretary in the commerce ministry said that legal scrubbing of text on clean and fair economy agreements is underway. The supply chain resilience pact will come into force from February 24 this year. Talks between India and Peru for a trade pact are also underway with the next round of negotiations likely to take place from April. “The sixth round of India -Peru negotiations for a Trade Agreement was held from February 12 to 14, 2024, in Lima, Peru, to continue the work that started in 2017 when the negotiation process was formally announced,” said an official statement by the commerce ministry. In the last two decades, the trade between India and Peru has increased significantly, from US$ 66 million in 2003 to around US$ 3.68 billion in 2023.
Source: Business Today
In response to a question of journalists Jahangir Kabir Nanak, Minister of Textiles and Jute said that the government will try its best to keep the power supply normal. There is a gas shortage and gas consumption is also high, he added. The Minister said this while replying to the questions of the journalists during a viewexchange with the Board of Directors of BGMEA on various issues related to the garment industry at the Secretariat on Wednesday (February 14). Textiles and Jute Secretary Md. Abdur Rouf and BGMEA President Faruque Hassan, among others, were present at this time. The minister also said that the textile sector of Bangladesh is no longer dependent on anyone. We are creating markets by competing in the global market, we are taking over the world market. Before the election, it was being said that the apparel industry market is shrinking. When attention was drawn to this, the minister said, "The BGMEA president has highlighted the issues. Today I am convinced by the report of that market you are referring to. We are not dependent on anyone. Regarding labor unrest, the minister said, there is an association of garment owners. I want to say in front of them, how much was the salary of garment workers, and how much is their salary today? I wouldn't say their salary is much. But some people want to use the garment industry as part of the conspiracy. Some create discontent by disrupting our country's production of goods, conspiring to divert the industrial market elsewhere. The government remains alert to their conspiracy. The minister said that the successful statesman Prime Minister Sheikh Hasina has already made Bangladesh successful in establishing digital Bangladesh and we will all work together as warriors in this new journey with the goal of establishing Smart Bangladesh. All of us were united in past days, we are and will remain united to face any national and international environment and situation. Regarding BGMEA, Nanak said, "Our relationship with BGMEA is excellent, so we will work together during any crisis of the country." In the meeting, BGMEA President Faruque Hassan said, to meet the growing demand of the global market, we must emphasis on value-added garments production using manmade fibers. The gradual shift towards non-cotton products has increased the demand for yarns and fabrics and local textile factories can meet this demand through capacity building. This will thereby contribute to higher value addition to apparel items.
Source: Textile Today
Growth in merchandise exports in January was at a three-month high of 3.2 per cent year on-year despite the ongoing Red Sea crisis, subdued demand in advanced countries, and falling commodity prices. The trade deficit -- the gap between imports and exports -- inched up to $17.49 billion in the month as against $16.03 billion in December. Imports grew faster than exports, the data released by the commerce department on Thursday showed. Shipments worth $54.41 billion, up 4.17 per cent, entered India in January. India exported goods worth $36.92 billion as compared to $35.78 billion during the same month a year ago. Had it not been for the challenges in the Red Sea region, the value of exports would have been higher, government officials said. Commerce Secretary Sunil Barthwal told reporters the government was initially “apprehensive” that exports might contract due to the Red Sea crisis. Growth in exports can also be attributed to meetings chaired by the commerce department, along with other relevant ministries, on how exporters could navigate the difficult situation. “We tried to tell banks that whatever maximum credit that can be given during the period to our exporters should be extended. EXIM Bank and Export Credit Guarantee Corporation have been told insurance rates should not be increased. I think this overall positive atmosphere, which we created for them along with their own positive mindset, has helped export growth,” Barthwal said, adding he was hopeful of exports increasing next year as well. 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 it. Iran-backed Houthi rebels of Yemen have been repeatedly attacking ships in the Red Sea, and this has forced commercial vessels to take a longer route to avoid the region. This has resulted in higher freight. Insurance premiums too have risen. India exported good worth $38.45 billion in December. On a cumulative basis, exports contracted 4.89 per cent to $351.92 billion during April-January this financial year while imports dipped by 6.71 per cent to $561.12 billion. Exports of non-petroleum and non-gems and jewellery, also known as core exports, grew 2.5 per cent in January to $26.12 billion. On the other hand, non-petroleum and non-gems and jewellery imports declined 5.18 per cent to $33.72 per cent. India’s merchandise exports shrank in 12 of the 30 sectors in January. The key export items that dipped in January include gems and jewellery (1.26 per cent), readymade garments (3.46 per cent), manmade yarn (4.33 per cent), and jute (19.45 per cent). Among the key sectors that increased include petroleum products (6.57 per cent), drugs and pharmaceuticals (6.84 per cent), electronic goods (9.3 per cent), and engineering goods (4.2 per cent). Merchandise imports contracted in 17 of the 30 items. They include transport equipment (20.6 per cent), project goods (43.94 per cent), and iron and steel (7.47 per cent). Gold imports witnessed a 173.63 per cent jump in January at $1.91 billion. Engineering Export Promotion Council India Chairman Arun Kumar Garodia said that while this financial year saw ups and downs in exports, the second half would be better. “Two major conflicts remain, and uncertainties cloud the global growth prospects. A shortage of containers and high shipping costs have been impacting the profit margins of exporters. We therefore remain cautiously optimistic about short- and medium-term growth in engineering goods exports,” Garodia said. Services exports saw 17 per cent growth at $32.8 billion in January while services imports grew 8.3 per cent to $16.05 billion, resulting in a surplus of $16.75 billion. The services trade data for January, however, is an “estimate”, which will be revised based on the Reserve Bank of India’s subsequent release.
Source: Business Standard
KOLKATA: Central bankers may have to junk their historical economic models to handle crises in the future after they were found deficient during the pandemic, with the global economy undergoing a paradigm shift spawned by rapidly altering labour dynamics and advancements in artificial intelligence, said the governor of Emerging market economies are on a stronger footing now, warding off the spillovers of monetary tightening in the West, he said, showcasing India's synchronised monetary and fiscal policymaking that helped overcome supply-side bottlenecks. "Macroeconomic models used by central banks so far have mainly focused on the demand side of the economy,'' Governor Shaktikanta Das told the 59th South East Asian Central Banks Governors' Conference held in Mumbai. "Enough emphasis was not given on supply side factors. A better understanding of the supply side of the economy has become very important for conducting monetary policy more effectively." For decades, emerging economies were just aping the developed ones when it came to monetary policies. But when inflation accelerated post the weakening of the spread of pandemic, emerging market central banks, especially India, broke from the rest to chart their own course. Even during the early days of the pandemic, EMs did not spend their way to recovery pushing up the fiscal deficit. "The resilience of emerging market economies (EMEs), in particular, stands out unlike previous episodes of volatility which saw EMEs at the receiving end," said Das. "EMEs have probably learnt from their past experience and played it well this time."
Source: Economic Times
Apparel exporters body AEPC on Thursday urged the government to suspend an order which allows the trans-shipment of Bangladesh export cargo to third countries through the Delhi Air Cargo complex. The Apparel Export Promotion Council (AEPC) has sent a communication to the Central Board of Excise and Customs (CBIC) in this regard. It said that the Red Sea crisis has already increased transportation costs of domestic exporters and it has led to a shift of export shipments from sea to air mode. At this crucial time, allowing Bangladeshi export cargo from Delhi Air Cargo Terminal will further increase the logistical challenges and increase the transportation cost for apparel exporters, it added. AEPC Chairman Sudhir Sekhri said that almost 20-30 loaded trucks arrive in Delhi every day which slows down smooth movement of cargo and airlines are taking undue advantage of this. This has led to an excessive increase in air freight rates, delay in handling and processing of export cargo, and severe congestion at the Cargo Terminal at the IGI Airport, Delhi, resulting in exports of Indian apparel exports through the Delhi air cargo complex becoming uncompetitive, Sekhri added. "AEPC therefore, has written to the Chairman CBIC requesting suspension of implementation of a circular dated February 7 which has allowed the trans-shipment of Bangladesh export cargo to third countries through Delhi air cargo complex also," the council said. Earlier, such trans-shipment of Bangladesh export cargo was allowed only through the Kolkata Air Cargo complex, it added. Bangladesh is a big competitor of India in the textile sector.
Source: Financial Express
The challenge to global trade due to the disruption in key shipping routes in the Red Sea region failed to dent the merchandise exports performance. Exports registered a 3.12% year-on-year growth in January, lifting hopes for the coming months. Merchandise exports have grown for the fourth month in January in the first 10 months of FY24. Shipments in January stood at $36.92 billion while imports rose 3% on year to $54.41 billion. The trade deficit stood at $17.49 billion — the lowest since April last year. The data confirms that while ships might be taking longer routes and charging more, there has been no impact on trade volumes. Commerce secretary Sunil Barthwal said the government was very apprehensive about the Red Sea crisis but timely interventions have ensured that exports did not slump.He said meetings were held with exporters, shipping companies, container companies and relevant ministries to navigate the Red Sea crisis. The direction to the banks to ensure maximum possible credit to exporters and to Export Credit Guarantee Corporation and EXIM Bank to increase their insurance premiums and receipts helped.“I assure that we will be continuing these efforts by working with them (exporters) so that we are able to see positive growth in exports in the coming year too,” Barthwal said. He said that long-term focussed initiatives like addressing non-tariff and technical barriers to trade with key markets is also helping. “We took up the issue of our exporters not being listed in some countries after they said that the list is big enough already. We have asked them to delist those who are not exporting and enlist those who have the capacity to export now. These efforts also helped us in pushing our exports.” “We have also looked at what can be the new territories and new products where we can export. We are happy to say there are a huge number of products we have been able to push in our exports for the first time. We are trying to create a much larger basket,” Barthwal added. Under merchandise exports, 18 of the 30 key sectors exhibited positive growth in January. Electronics exports grew 9.3% to $2.3 billion. Engineering products exports were up 4.2% to $8.7 billion. Petroleum product exports went up by 6.5% to $8.2 billion while drug and pharma exports were up 6.8% to $2.1 billion. Under imports, 17 out of 30 key sectors exhibited negative growth in January. Services exports were up 17.1% on year at $32.8 billion. Services imports were up 8.2% at $16.5 billion. Overall exports were up 9.2% on year to $69.72 billion while imports were up 4.1% to $70.46 billion. In April-January, merchandise exports were down 4.89% on year to $353.92 billion while imports declined 6.71% to $561.12 billion. Overall exports in the first ten months of FY24 were down 0.19% to $638.37 billion while imports fell 5.69% to $708.79 billion. Overall imports in April-January were down by $42.79 billion. Merchandise trade deficit has also fallen to $207.2 billion from $ 229.30 billion.
Source: Financial Express
To protect trade with the Red Sea, over 105 industry trade associations from the apparel, retail, energy, agricultural, electronics, and medical sectors have united. Three of Bangladesh's principal trade associations have joined then international campaign for countries to work together to guarantee commercial ships' safe passage across the Red Sea and prevent a recurrence of the attacks that occurred in December of last year. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) have been associated with the global campaign. The American Apparel & Footwear Association (AAFA) and International Apparel Federation (IAF) on February 8 began this initiative. Iran-backed Houthis, who control much of Yemen but are not recognized internationally, had launched the attacks, prompted major shipping lines to suspend travel across the Red Sea and adjoining Suez Canal, which basically connects Africa and Asia, and divert to a much longer route, around Africa's Cape of Good Hope. Shipments that were originally scheduled to travel via the Suez Canal have been rerouted to alternative trade routes by carriers ever since the rebel attacks started in October. According to International Apparel Federation secretary general Matthijs Crietee, more than $80 billion in cargo has been rerouted around Africa's Cape of Good Hope, resulting in two to three weeks' more journey time as well as hundreds of thousands of dollars' worth of additional fuel and labor expenditures. During the winter months in the Southern Hemisphere, this workaround becomes increasingly difficult. The diversion has added at least 2-3 weeks of travel and hundreds of thousands of US dollars in additional fuel and labour costs. Bangladesh uses the Red Sea route to mainly export garment items to Europe and the US. It is common for international retailers and brands to bear the carrying cost under a freight on board method and there are very few local suppliers who pay the transportation cost under a cost and freight method. The letter urgently calls on countries to join, support, or align with wider cooperation to support safe and secure maritime commerce in the Red Sea and across the globe, according to an AAFA statement. The initiative could be similar to Operation Prosperity Guardian, a multinational security initiative with at least 23 participating countries to date, said the statement. As businessmen alone cannot bring any solution to the Red Sea crisis and it requires a combined effort of governments of countries, that’s why Bangladesh’s three associations joined the global campaign to ensure safety and security for business and trade, the association’s leaders said. It is imperative that governments unite behind a zero-tolerance approach to deter attacks on commercial vessels and seafarers in the Red Sea, and anywhere in the world. The prosperity of millions of people who are employed in our industries and in the global maritime industry depends on safe and secure freedom of navigation. The consequences of these attacks extend beyond immediate financial losses. Route changes are causing port congestion, equipment shortages, and soaring shipping rates across the globe, all of which create inflationary impacts, said a press release regarding the campaign. Even shipping lanes on the other side of the world from the Red Sea are beginning to be adversely affected. Moreover, the alternative route becomes even more challenging during the Southern Hemisphere winter months, read the statement.
Source: Textile Today
Credit growth in India is expected to moderate to 14 per cent in FY25 from the existing 16 per cent as deposit growth is unable to keep pace with loans, a global rating agency said in a report. "Deposit tightness will remain a system overhang. Our base case is for loan growth to slightly moderate, leading to manageable competition for deposits. Indian banks will have to strike a fine balance between maintaining strong loan growth and paying more for deposits to fund that growth," S&P Global Ratings said. If the clash for deposits gets fiercer, Indian banks will take a hit, either with slimmer margins or slower growth, it said. "Credit demand is strong. The economic backdrop is highly conducive to growth. Asset quality is improving, buoyed by a confluence of supportive structural and cyclical factors. All that India's banks are missing is a boom in deposits," it said. As per the report, system-level credit growth to moderate to 14 per cent in 2024-25 from about 16 per cent year-on-year growth in the first three quarters of FY24. "If credit and deposit growth rates remain steady, a period of deposit competition looms, squeezing bank margins to 2.9 per cent from 3 per cent. Private-sector banks are likely to bear the brunt of the situation, as they are already operating at much higher Loan-toDeposit Ratio (LDR)," said S&P Global Ratings credit analyst Deepali V Seth Chhabria. Adding to the stress on the private-sector banks, the lenders are growing at a much faster pace than public sector banks, she added. Deposit competition could get fiercer than what the base case assumes, if lenders don't pull back on credit growth, it said. A surge in credit growth has pushed Indian banks' ratio of loans to deposits to a two decade high; growth beyond this level will either come more slowly or be more expensive, it said. With regard to capital adequacy ratio, the report said, most of India's banks can support loan growth as high as 15-20 per cent for the next three years without need for large capital raising. Banks have bolstered their capitalization in the past few years following several stints of fund raising and government infusions into the public sector banks (PSBs). Improved profitability has also supported banks' capital formation. Meanwhile, S&P Global announced the launch of the India Research Chapter,' an initiative to fuel India-oriented research and reports. This initiative brings together experts from across divisions and functions of S&P Global and CRISIL (An S&P Global company). The India Research Chapter will develop insights focusing on the opportunities, risks and potential for India to strengthen its claim towards becoming the third largest economy in the world by 2030, it said in separate statement. As part of the S&P Global India Leadership Council, the newly unveiled India Research Chapter will be guided by a team of experts covering a wide array of themes including economics, technology, generative AI, banking, finance, automotive, country risk, capital markets, supply chain, energy transition, infrastructure, and sustainability, among others.
Source: Business Standard
Germany and Bangladesh recently signed five agreements under which the former will offer the latter €22.17 million for five projects in textiles, solar energy, energy solutions, digital skills and higher education. Mohammad Shahriar Kader Siddiky, secretary in Bangladesh’s economic relations division, and Andreas Kuck, country director of GIZ Bangladesh, signed the memoranda of understanding. The available fund for the ‘Higher Education and Leadership Development for Sustainable Textiles’ project is €7 million. The University Grants Commission (UGC) under the ministry of education will implement the projects. With funding worth €5 million, the ‘Skills Development for Sustainable Energy Solutions’ project aims at enhancing the technical and vocational education opportunities for the sustainable energy sector, media outlets in Bangladesh reported.The funds allocated for the ‘Skills for Self-monitoring and Compliance with Clean and Fair Production in the Textile Industry in Bangladesh’ project are worth €7 million. It seeks to improve the monitoring of safety, labour and environmental standards in the textile and garment industry by the Readymade Garment Sustainability Council (RSC). GIZ will provide €382,526 for ‘The Digital Skills to Succeed in Asia’ project to enhance the capacities of higher education institutions, fostering the sustainable implementation of improved study programmes.
Source: Fibre2fashion
