INTERNATIONAL
FDI flows into the textile sector have been “far from satisfactory” due to factors like lack of trade agreements with key markets, underdeveloped infrastructure and complex labour laws, a study has claimed. “Despite India offering a large domestic market, competitive labour costs and a well working democracy, its performance in attracting FDI flows has been far from satisfactory,” the study commissioned by the Textile Ministry has observed. “The country’s weakness lies in underdeveloped infrastructure and restrictive operative environment and lack of trade agreement with key markets,” it noted.
Pointing out the complex labour laws in the country, the study cited restriction on women from working in night shifts, saying it “creates a lot of problems to garment manufacturers as women constitute majority of the garment workforce”, arguing that the restriction should be removed. The report highlighted that several large textile and apparel exporting nations like Bangladesh, Vietnam, Turkey, Cambodia, Pakistan have duty advantage in the US and/or EU markets. These countries enjoy duty advantage ranging from 10 per cent to as high as 30 per cent, depending on product and market. This has given them competitive advantage over India in achieving high exports growth rate. The cumulative FDI in Indian textile sector from 2000-01 to 2014-15 was approximately USD 1.5 billion, the report pointed out.
Africa is the largest investor in Indian textile sector with nearly one-third of the total FDI inflows since 2000-01. Out of the investment of USD 462 million from Africa, Mauritius accounts for about 99 per cent of investment. Mauritius is ranked as the single largest foreign investor constituting one-third of cumulative FDI investments so far. Belgium ranks second which is followed by the US and Singapore, having a share of 7 per cent and 6 per cent respectively. As per consolidated FDI Policy, 100 per cent FDI is allowed in the textile sector under the automatic route.
SOURCE: The Indian Express
Close on the heels of a leadership change in Tiruppur's textile cluster comes the revival of an action plan to jump-start business to Rs 1 lakh crore in three years, an ambitious plan being proposed to Textile minister Smriti Irani from the country's largest knitwear cluster. Total business, including exports and imports done by Tiruppur, in the fiscal gone by was around Rs 36,000 crore. After nearly 27 years, A Sakthivel, a seasoned textile entrepreneur, hangs up his boots as president of the Tiruppur Exporters Association. During his time the industry has been through booms and lulls and prolonged slackness in export orders, besides troubles closer home with the state pollution controller shutting down hundreds of dyeing units found to have improper effluent treatment mechanisms.
While Sakthivel is said to have deftly handled industry-government relations, the closure orders had nearly "killed" the industry three years back. Limping back on a slow-but-promising western order recovery and robust domestic consumption, the Tiruppur cluster is pursuing another growth cycle. Raja M Shanmugham, the son of a farmer and a first-generation entrepreneur running a Rs 300-crore apparel manufacturer and exporter Warsaw international, will push further the plan for a knitwear board in Tiruppur as the new president.
Entrepreneurs believe Tiruppur deserves a knitwear board with central government and industry representatives along the lines of the Coir Board in Kochi and the one for jute in Kolkata so that policies are framed to favour the largest cluster in the country with its 2.25-crore spindle capacity. He has also sought a one time intervention from the central government for sponsoring training programmes. "All along, the textile industries have been let to perish on their own lacunae.Our task is to change that. The first step is to enhance the skill of our labour and raise the quality of their delivery," Shanmugham told ET.
Tiruppur's entrepreneurs want to wean themselves away from the fickle western apparel market to focus more on avenues of sustainable business. Technical textiles -specialised products such as mate rial for car upholstery, defence-related clothing or in medical applications -appear to be untapped, potential markets. "Protective wear, sports garments and defence-related businesses are a natural fit for Tiruppur, given our huge spinning capacities. If we can start now, the market our cluster can capture in about 3-4 years will be as high as Rs 1,500 crore in global exports," said Prabhu Damodharan, secretary of Indian Texpreneurs Federation.While the new guard takes over, it was during the tenure of the outgoing president Sakthivel that exports from Tiruppur grew from Rs 15 crore in 1985 to Rs 24,000 crore through exports alone in the fiscal gone by. He said the recent Rs 6,000-crore Union government textile package, the manufacturing parks, and a plan executed with the assistance of the state for private water supply for entrepreneurs count among his top contributions to the cluster.
SOURCE: The Economic Times
The 42nd edition of IHGF Delhi Fair Autumn 2016 will be held from October 14 - 18, 2016 at India Expo Centre & Mart, Greater Noida, NCR Delhi. More than 2,900 exhibitors, including permanent marts, drawn from all over India will be exhibiting their products at the Expo, spread over fourteen halls covering 1,90,000 sq. metre space with 2000 designs and styles. For smooth functioning of the mega event, one of the member exporters Mr. Naved Ur Rehman of M/s Zed Sons, Moradabad has been nominated as President – IHGF Delhi Fair Autumn 2016 (Reception Committee). A stalwart in the business of houseware, decoratives and gifts items for the last 36 years, he has made remarkable achievements, informed Shri Rakesh Kumar, Executive Director – EPCH.
Shri Kishore Kumar Bhansali of M/s Makers Mart from Jodhpur and Mrs. Leela Bordia of M/s Neerja International Inc. from Jaipur have been nominated as Vice Presidents – IHGF Delhi Fair Autumn 2016 (Reception Committee). More than 5,000 buyers are expected to source their requirement at this fair. Buyers from countries like USA, UK, Japan, France, Italy, Canada, Switzerland, Norway, Sweden, China, Australia, Philippines, Hong Kong and many more have already confirmed their visit. Buyers from Latin American region particularly Argentina, Colombia, Brazil, Chile, Central Asia, Africa and Middle East too will be sourcing their requirements.
Apart from the presence of a large number of overseas buyers, a sizeable number of domestic volume retail buyers such as Westside, Shoppers Stop, Hometown, Lifestyle and renowned e-commerce companies like eBay, Flipkart, Bed Bath More, Pepper Fry, Urban Ladder, Fab Furnish, and many more have confirmed their participation at the fair, said Shri Kumar, ED -EPCH. Export Promotion Council for Handicrafts [EPCH] is a nodal agency for promotion and development of handicrafts and has been organizing the IHGF-DELHI FAIR for the last 22 years. IHGF Delhi Fair Autumn 2016 is expected to generate huge amount of enquiries and orders.
SOURCE: PIB
The Union Textiles Minister Smt. Smriti Zubin Irani today said that a programme is on the anvil, which would enable international academicians to come and teach at NIFT, New Delhi, at no extra cost to the institute or the student. She said that this would be on the lines of Global Initiative of Academic Networks (GIAN) in Higher Education, a programme of the Ministry of Human Resource Development, Government of India.
The Minister was speaking at the 22nd Convocation of National Institute of Fashion Technology (NIFT) – New Delhi. The Union Textiles Minister Smt. Smriti Zubin Irani said that NIFT has been a small revolution that began thirty years ago. Congratulating the graduating students, she highlighted the achievement of two differently abled students – one of them, a girl student with hearing impairment who sat at the back of the class, lip-read and graduated with honours, and the other a boy student who graduated in flying colours, despite having locomotor disability and having to travel a long distance to the institute by metro every day.
The Minister encouraged the students to reflect on what they can leverage from the textile industry. She reminded the graduating students that like doctors, fashion professionals also deal with the lives of common people every day. Citing some recent research papers of the faculty members of NIFT, the Minister told the students that only they can decide as to whether they would like to contribute to sub-sectors such as technical textiles, which are of strategic significance to national development. Smt. Irani said that as a nation that prides in self-sufficiency, textile machinery is another area that needs strengthening and support.
Earlier, welcoming the audience, Director General, NIFT Shri Sudhir Tripathi, spoke of the contributions of NIFT to the development of fashion education and industry and said that the institute provides students an intellectually stimulating environment. Chairperson, Board of Governors – NIFT, Shri Chetan Chauhan, exhorted the graduating students to take their learning to the real world and create a globally relevant fashion environment in India. In all, 325 graduating students received their degrees today; this includes four doctoral degrees, 92 postgraduate degrees & 229 undergraduate degrees. Distinguished members from Board of Governors, NIFT, leaders from the Indian fashion industry such as Shri Sunil Sethi, President, Fashion Design Council of India, and faculty members of NIFT were present on the occasion.
SOURCE: PIB
The Doha Round of multilateral trade negotiations at WTO provides a unique opportunity to strengthen the rules on anti-dumping so that its application becomes fairer, objective and transparent, said Commerce Secretary Ms. Rita Teotia. Inaugurating the Delhi Regional Anti-Dumping Workshop for Asian Investigating Authorities, she noted that it was time for active users of anti-dumping measures to share their best practices with each other and learn from each other's experiences. The Workshop organised by the World Trade Organisation and the Centre for WTO Studies, Indian Institute of Foreign Trade brings together 37 senior officials from 18 investigating authority systems. Senior experts from developing countries in the Asian region, along with select developed countries like Australia, Canada, the EU, Japan and the United States are participating in the workshop.
This Workshop is a unique and the only event of its kind globally, Mr. Johann Human, Director, Rules Division of the WTO Secretariat, noted. The Workshop aims to assist Asian developing WTO Members' investigating authorities to further enhance their technical capacity to conduct anti-dumping investigations in a fair and efficient manner, in conformity with WTO rules.
Dr. Surajit Mitra, Director, Indian Institute of Foreign Trade pointed that the conduct of sunset reviews by different countries and the extension of anti-dumping and countervailing duties after such reviews is a matter of grave concern which the participants of the Workshop should dwell upon. In addition to sunset reviews, the Workshop will also discuss transparency and rights of defence, Questionnaires, information-gathering and verification, use of facts available, standing and domestic industry definitions etc.
Mr. A. K. Bhalla, Additional Secretary and Designated Authority observed that anti-dumping rules helps countries to ensure free and fair trade within its domestic market and is an important tool available with India, considering its stage of industrial development. Mr. Bhalla also informed that steps are being taken to make the Indian anti-dumping investigation process ISO compliant and the government will also soon launch an interactive website to keep all the stakeholders in the process informed.
SOURCE: PIB
With less than six months being left for GST rollout, the revenue department has decided to hire professional bodies to impart training to trade, industry, and stake holders on the new indirect tax regime. The government plans to roll out the Goods and Services Tax (GST) regime from April next year. The training for stakeholders would be in addition to the exercise for 60,000 revenue officials. The National Academy of Customs, Excise and Narcotics (NACEN), the apex indirect tax training institute of government, has been tasked with the mammoth training of officials of both the Centre and the state governments. As per the latest data (up to September 23) of NACEN, 3,074 field officers have been trained as against the target of 60,000. NACEN has now invited Expression of Interest (EOI) for Approved Training Partners (ATPs) to impart GST training. It said that as GST is proposed to be rolled out by April 2017, it is important to plan for training of trade and other stake holders. “Considering the scale of task, it has been decided to involve training institutes and professional bodies of repute in this process,” it said.
The EOI said the objective is “quality GST training at reasonable cost to trade, industry and other stake holders, as a part of the Government of India’s Trade Outreach Programme for successful rollout of GST”. Preference will be given to training institutes/ professional bodies in the public sector or those associated with industry associations with proven track record of training. The GST training programmes would be based on the Model GST Law, rules, systems and procedures.
SOURCE: The Financial Express
An association representing nearly 15,000 central excise and customs officials today said it will launch a nation-wide protest and go on a mass casual leave on ‘budget day’ if its various demands related to implementation of Goods and Service Tax (GST) are not addressed. The All India Association of Central Excise Gazetted Executive Officers has strongly demanded that all assessees of central excise and service tax with the annual turnover of Rs 20 lakh per annum should only be controlled by the Centre for the purpose of levy and collection of Central GST (CGST) and Integrated GST (IGST). “It has come to notice of the association that the states and their employees have now started demanding control over service tax assessees also falling within the annual turnover limit of Rs 20 lakh per annum to Rs 1.50 crore per annum due to a liberal stand shown by the Centre, it said. “The Centre appears to be showing leniency towards states to implement GST at any cost with effect from April 1, 2017,” the association said in a memorandum to Finance Minister Arun Jaitley. The association demanded that none of the assessees of central excise (to be levied CGST on the supply of goods) and service tax (to be levied CGST on the supply of services) should be transferred to states for the purpose of levy and collection of CGST by the officers of states. “All central excise and service tax assessees falling above the annual turnover of Rs 20 lakh should necessarily be controlled by the Centre and its officers only. No need to say that we require a strong and powerful Centre in our federal system,” the memorandum said. The association said if its demands are ignored then it “would be compelled to initiate non co-operation movement”.
To start with, it plans peaceful lunch hour gathering in front of the residence of the Finance Minister here on October 14 and the similar protest on November 9 in all headquarters. The officers of the association will also wear black badge in all offices on December 7, throughout the country besides a day-long protest programme on January 5, 2017. There will be mass casual leave on budget day by all officers, it said. The association said that Central Board of Excise and Customs (CBEC), its officers and employees are smoothly, hassle-freely and effectively collecting central excise duty from 1944 and service tax from 1994. These officers and employees have always contributed the indirect taxes collection to the Union government over and above the budgetary targets. “The CBEC and its officers should only be allowed to collect CGST and IGST under the forthcoming concerned statutes of CGST Act and IGST Act. On the other hand, the state government officials should be allowed to collect only SGST on intra-state supply of goods and services. “Any cross utilisation of powers may lead to serious implications on collection of revenue to the Centre,” the body said.
SOURCE: The Financial Express
States have started scouting for tax consultants to advise them on technical aspects of the goods and services tax (GST), which is planned to be rolled out from April next year. With the Centre moving on to the fast track to meet the April 2017 deadline, the Punjab government has initiated the process of appointing consultant to help it successfully implement the new tax regime, which will subsume various state levies like octroi and sales tax. According to sources, other states may also go in for consultants to assist the administration in the preparatory work for GST. While the Punjab government is looking to appoint a consultant for two years, sources said other states too would be looking at a similar timeline as the hurdles in implementation of GST are expected to come down in 1-2 years.
Among other things, the consultants will be required to suggest organisation structure of the department in the GST regime, strategy for transition period and ways to mitigate risks and checklist of tasks that need to be completed before introduction of GST. Also, the consultant will be required to frame a communication strategy for administration vis-a-vis stakeholders such as industry and traders. He will be imparting training on provisions of the GST Act/Rules and processes to officers of the department. Besides, the entity will calculate the impact of GST implementation on state revenues keeping in view the present rate of tax in the state and the proposed rate of tax under GST. Touted as the biggest tax reform since Independence, the GST will subsume excise, service tax, cess, VAT and other local levies and create a uniform market for seamless transfer of goods and services. The GST draft rules on payment, returns and refund have been finalised and the all-powerful GST Council will decide on the tax rate by October 20.
SOURCE: The Financial Express
The government is likely to overhaul the central board of excise and customs’ (CBEC) organisational structure to administer the Central GST (CGST) and Integrated-GST (IGST) from April 1, the appointed date for rolling out the goods and service tax (GST) regime. Under the CBEC, it is proposed to create one GST commissionerate each for 15,000-20,000 assessees and R5,000-crore revenue. In all, it is proposed, there would be 24 zones, 107 commissionerates, 53 audit commissionerates, 53 commissioner (appeals) and 535 GST divisions across the country.
Currently, there are separate structures for the central excise and service tax administration, with 23 excise zones and 4 service tax zones. The distinctions would cease to exist when GST comes into force next year. Even though no additional posts need to be created now, it has proposed to match the existing manpower with the future requirement. While GST Commisionerates would look after CGST and IGST work, they will also handle the exclusive central excise work as well as legacy issues. A directorate general for dispute resolution has been proposed too, while specialised adjudication verticals have been suggested in seven major cities. The Board of the CBEC will also undergo changes to include a member GST while carrying out other rationalisations. The extant large taxpayer units will be dispensed with.
SOURCE: The Financial Express
The annual India Economic Summit, which will begin here from tomorrow, is expected to hold discussions on every aspect of the Indian economy. With over 500 business and political leaders, including top policymakers and CEOs, being a part of the two-day summit, it will have a special focus on ‘Fostering an Inclusive India through Digital Transformation’. Also, the co-chairs of this year’s Summit are Chief Executive Officer National Institution for Transforming India (NITI) Aayog, Amitabh Kant; Vice-Chairman GE USA, John Rice and Chief Executive Officer One 97 Communications, Vijay Shekhar Sharma. According to Chandrajit Banerjee, Director-General of the CII, “India’s economy is widely expected to grow at around eight percent in the medium term. Identifying the right policies so that we sustain this growth rate for a generation would be the key to achieving the development expectations of our country.” “All the successive governments have followed the path shown by him and the result has been positive so far. It has been huge journey from reaching to million dollar economy to two trillion dollar economy in over the one and half decade,” added Banerjee. Three key topics for the programme are mastering the fourth industrial revolution; driving sustainable and equitable growth and improving the ease of doing business. The India Economic Summit will also explore issues while engaging the global multi-stakeholder community of the World Economic Forum (WEF) for action and impact. Minister of State for Commerce and Industry Nirmala Sitharamnan and Sri Lankan Prime Minister Ranil Wickremesinghe will be addressing the Summit on the first day. The two-day annual event will take up all key issues and look for solutions and measures to be taken up in the next few years.
SOURCE: The Financial Express
Recognising the important role played by the micro, small and medium enterprises in generating employment, spurring manufacturing growth, industrialisation of backward areas, and increasing exports, the Centre is focussing on a number of schemes to give the MSME sector a boost. While the key programmes for the sector such as the Prime Minister’s Employment Generation Programme (PMEGP), the scheme for promotion of innovation, Rural Industry and Entrepreneurship (ASPIRE), and the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) are executed by the Ministry of Small and Medium Enterprises MSMEs, other Ministries and Departments such as Textiles and Industrial Policy & Promotion also run schemes that benefit small enterprises such as the Weaver Mudra Card scheme and the Start-Up India scheme.
Given the problems small enterprises have in accessing credit, many of the schemes dedicated to the sector are focussed on addressing this issue. PMEGP, a flagship scheme of the government run by the Khadi and Village Industries Commission, offers credit linked subsidy to set up new enterprises for generating continuous and sustainable employment in rural and urban areas. The primary aim is to generate jobs by way of self-employment ventures, micro-enterprises, and other eligible projects. It also aims at bringing back the tradition of village artisanship and helping urban youth who are unable to get a job due to one reason or the other.
For people belonging to the general category, the beneficiary needs to be able to contribute at least 10 per cent of the project cost. The Union government, in this case, provides 15 per cent of the funding for projects in urban areas and 25 per cent for those in rural areas. The government has also set up a Credit Guarantee Trust for MSMEs (CGTMSE) to strengthen credit delivery system and facilitate flow of credit to the MSME sector. The credit guarantee under CGTMSE seeks to reassure the lender that, in the event of a unit that has availed itself of collateral-free credit failing to discharge its liabilities to the lender, the CGMSE would make good the loss incurred by the lender up to 85 per cent of the credit facility. A scheme to improve credit availability for small artisans and weavers, called the Weaver Mudra Scheme, has been introduced by the Textiles Ministry. One of the aims of the scheme is to make timely and ample credit available to small weavers so that they can function independent of master weavers. The maximum credit available to weavers under the scheme has been increased to Rs. 5 lakh from Rs. 2 lakh (the old scheme has now been discontinued) and weavers can draw credit up to Rs. 50,000 from ATMs using RuPay debit cards. To promote start-ups in rural areas, the MSME Ministry launched the ASPIRE scheme in March last year with a corpus of Rs. 210 crore. It seeks to set up a network of technology and incubation centres to accelerate entrepreneurship and also to promote start-ups for innovation and entrepreneurship in rural and agriculture based industry. According to the Centre, the planned outcomes of ASPIRE are setting up Technology Business Incubators , Livelihood Business Incubators and creation of a Fund of Funds for such initiatives with SIDBI.
The Department of Industrial Policy & Promotion’s Start-Up India scheme, too, is aimed at promoting entrepreneurship and innovation among mostly small players. Start-ups that meet the norms get income-tax exemption for three years and various other incentives such as guidance for filing for patents and reduced fees. The improve ease-of-doing-business amongst MSMEs, the Ministry last year notified that every MSME unit shall file an Udyog Aadhaar Memorandum (UAM). The UAM replaces the filing of Entrepreneurs’ Memorandum with the respective States/UTs which continued to be filed manually in many places. The cumbersome filing of EM has now been dispensed with and the entrepreneurs in the MSME sector just need to file online, a simple one-page UAM on a given official website and instantly get a unique Udyog Aadhaar Number (UAN). The information sought is on self-certification basis and no supporting documents are required at the time of online filing of UAM.
The Centre is also working towards improving the existing mechanism for addressing revival, rehabilitation and exit of small enterprises is very weak in the country. In the World Bank’s Doing Business Report, India is ranked 137 out of the 189 economies for resolving insolvencies. Resolving insolvency in the country takes 4.3 years on average and costs 9 per cent of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale, as per the report. To address this problem, the government notified the Framework for Revival and Rehabilitation of MSMEs in May last year. The features of the framework include identification of incipient stress, setting up committees for distressed MSMEs, a Corrective Action Plan (CAP) by the committee with various options, a restructuring process, prudential norms on asset classification and provisioning and identification of willful defaulters and non-cooperative borrowers. The MSME Ministry has introduced the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2015 in the Lok Sabha seeking to enhance the existing limit for investment in plant and machinery considering changes in price index and cost of inputs consistent with the emerging role of the MSMEs in various Global Value Chains. It also proposes to include medium enterprises apart from small enterprises in Section 7(9) to enable them to get the benefits reserved for the category and become competitive. The Bill, once it becomes a law, will also empower the Centre to revise the existing limit for investment by notification, considering inflation and the market situation. There are, however, some concerns that by widening the definition of MSMEs, smaller units may lose some of the advantages they have over the relatively larger units. Many of the Union Government schemes are focussed on addressing the key problems small enterprises face in accessing credit
BROAD-BASE
SOURCE: The Hindu Business Line
World Economic Forum (WEF) and Confederation of Indian Industry (CII), hosts of the two-day India Economic Summit from Thursday, say the geopolitical tension with Islamabad will not have an adverse impact. They also said the Reserve Bank has been doing a good job but the country also needs to tackle its structural problems, to move to the next level of development. Many corporate seniors —Vedanta chief Anil Agarwal, Paytm India founder Vijay Shekhar Sharma, JSW Group head Sajjan Jindal, Hero MotoCorp head Pawan Munjal and Bharti Enterprises chairman Sunil Mittal — will attend. So will several Union ministers —Suresh Prabhu, Dharmendra Pradhan, Nitin Gadkari, Ravi Shankar Prasad, Smriti Irani — at different sessions. At least 600 participants from a little over 30 countries will take part. The meet will focus on issues like financial inclusion through digital transformation and regional economic integration.
At a press conference, CII director-general Chandrajit Banerjee said, “The clarity with which the government has been responding to the geopolitical scenario (regarding Pakistan) which has emerged recently is extremely encouraging. Business or the economy will not get affected.” Jennifer Blanke, member, executive committee of the WEF, said the region would continue to have “quite rapid growth”. On her earlier comment that “economies need to be competitive for monetary policy to be effective” and the 0.25 per cent repo rate cut on Tuesday by RBI, she said the central bank “is seen as having done a really good job”. However, she added, developing and advanced economies alike had depended “too much” on monetary policies. “To really have sustainable growth, you cannot count on things like extra bursts of extra money in the system. What you need to do is to tackle those underlying structural impediments... RBI needs to keep making sure that everyone has confidence in the system.” The meet will not be opened by finance minister Arun Jaitley, unlike the previous two times since CII and WEF joined hands to host it. Commerce and industry minister Nirmala Sitharaman would. Banerjee said Jaitley was travelling, “the only reason for his absence”. He also played down the absence of anyone from the finance ministry.
THE BIG PLATFORM
SOURCE: The Business Standard
ITPO has signed a MoU with Hong Kong Trade Development Council to strengthen the economic partnership and increase bilateral commerce, especially for small and medium-sized enterprises. The MoU was signed in Hong Kong yesterday. “This MoU reflects the growing desire for deeper business links between India and Hong Kong, with our city serving as the gateway to the Chinese mainland and Asia for Indian companies. At the same time, Hong Kong enterprises see huge opportunities in India,” Hong Kong Trade Development Council executive director Margaret Fong said in a release. The agreement fosters cooperation in areas of mutual interest, including providing each other with information related to trade promotion activities, encouraging businesses to join events organised by the HKTDC and ITPO and identifying potential products and markets. “Both organisations reaffirmed their resolve to identify and promote key sectors under the ambitious ‘Make In India’ flagship initiative of the Government of India,” ITPO Chairman and Managing Director LC Goyal said. “The partnership will also open new areas of growth for trade with ASEAN countries.”
SOURCE: The Financial Express
India is not as open for business as investors expect, says Singapore’s Prime Minister Lee Hsien Loong, citing land acquisition, over-regulation and legal hassles among the biggest bottlenecks. “For trade to grow, India must make a strategic decision that you want to encourage interdependence and more openness and more trade-based economy,” PM Lee, who is on a five-day visit to India told The Hindu in an exclusive interview. “Your growth rate increased because India was prepared to open up the economy, loosen government control ,enable investments and free up the “animal spirits” or entrepreneurship. So Tata, Infosys, Mahindra went all over the world. But you have to allow other countries to operate in India too. It cannot be a one-way exercise,” Lee, said in a sharp critique of the operating difficulties he said businessmen face when trying to set up industry in India.
While India and Singapore have stepped up contacts as a part of the Modi government’s “Look East Act East” policy, bilateral trade between India and Singapore has declined year on year, with Indian exports dropping 21.2 per cent between 2014-15 and 2105-16, according to the Ministry of External Affairs. In a reference to the court case that has now put on hold a Singapore consortium’s plans to build Andhra Pradesh’s showcase capital Amaravati, Lee said that Singapore was still hopeful of the project to develop 6.84 sq km of the capital’s core area as a “smart city”, going through. Prime Minister Modi had laid the foundation stone for the city project in 2015.
Amaravati project
“We are working on Amaravati... We did the master plan and we are bidding for the master developer contract. There is a (legal) process going on right now. We hope we get the contract and we will be able to help and show what we can do,” Lee said, ahead of the next AP High Court hearing set for October 31; a local builder has challenged the appointment of Singapore companies Ascendas-Singbridge and Sembcorp Development Ltd. A similar plan to build an industrial park in Gujarat was abandoned some months ago over land acquisition wrangles, officials said. “I think if you look at the Singapore projects, we wanted to do industrial parks... they have taken very long to clear the issues of land and these become politicised and you can’t settle it, and eventually the project languishes and nothing happens,” Lee said, calling them important “issues that must be addressed” . Lee said that the bureaucracy had changed in terms of “will” and “direction” in the past few years. “I think Modi is trying very hard to change the ethos of the bureaucracy, and I wish him all success with that,” he added, indicating that redtape remains another big concern for his government.
The Singapore Prime Minister’s words are significant as the city-state is the biggest origin of foreign direct investment (FDI) into India. In the last financial year, it overtook Mauritius on FDI inflows, accounting for $13.7 billion, which was more than one third of all FDI coming into India. Lee said that Singapore must not be treated on a par with other countries when it comes to negotiating tax regulations. In May 2016, India renegotiated its double-taxation avoidance agreement (DTAA) with Mauritius to end “round-tripping” of black money from India, leading to speculation that the 2006 tax treaty with Singapore would also be amended so investors would no longer be able to avoid capital gains tax. The possible move has faced opposition from investors in Singapore, and Lee said that given the nature of investments, Singapore should be given special treatment. “You have to understand that Singapore is quite different from Mauritius,” Lee said in his most direct comments on the tax treaty so far. “We know that India is very focused on the question of black money... And we have been very careful in Singapore to make sure that the investments into India are legitimate ones and there is no round-tripping and there is no hot money which is being funnelled through Singapore,” he added.
SOURCE: The Hindu Business Line
As part of India’s ‘Act East’ policy, enhancing connectivity will be top agenda for the leaders of the BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal) grouping during a meeting later this month. India has invited leaders of the Bay of Bengal Initiative for an outreach session with the leaders of Brazil, Russia, China and South Africa at the eighth BRICS summit in Goa, October 15-16. Officials told FE that such an outreach session will help in enhancing ties between two groupings — BRICS and BIMSTEC. This will also give an opportunity to the leaders of the two groups to discuss visa facilitation. While BIMSTEC countries are looking at a Schengen type visa for a certain group of travellers, particularly tourists, business people and patients in the region, India is considering offering visa-free travel or the opportunity to obtain a visa on arrival to business visitors and tourists from its fellow BRICS countries.
In July this year, replying to a question in Parliament, Kiren Rijiju, minister of state, home affairs, said: “A proposal in this regard (visa waiver/visa on arrival) received from the Department of Commerce is under consideration.” Since connectivity in the region is a major component of PM Narendra Modi’s ‘Act east’ policy, it would also help in transforming North-Eastern states by opening up fresh avenues of win-win opportunities. India has been promoting railways, roadways and dialogue on maritime and multi-modal transport. Some of the BIMSTEC countries like India and Thailand have taken steps to build cross-border infrastructure unilaterally in the region. At the recently concluded Asean Summit, Prime Minister Modi had announced India’s decision to extend the Trilateral Highway to Lao PDR, Cambodia and Vietnam, and a new highway project connecting India, Myanmar, Lao PDR, Vietnam and Cambodia.
India is also involved in the development of the Mekong-India Economic Corridor (MIEC) connecting Southeast Asia to South Asia on the eastern part of India in order to add greater momentum to the growing trade and investment linkages between ASEAN and India. Prof Prabir De, Research and Information System for Developing Countries (RIS), Coordinator, ASEAN-India Centre, in a report states, “Myanmar is setting-up quite a few port-based SEZs at Dawei, Kyaukphyu, Thilawa and Dawei, which upon completion would not only strengthen BIMSTEC connectivity but also generate employment and reduce poverty. India is also setting-up Kaladan project at Sittwe.” Adding, “Airlines can connect the inland parts of BIMSTEC. India may allow smaller flight (ATR type) to operate between Guwahati, Dhaka and Yangon; Imphal, Mandalay and Yangon; Delhi, Yangon and Bangkok; Mumbai, Colombo and Yangon.” Talks are in an advance stage to implement an Asian Development Bank (ADB) promoted project to start a regular bus service between India and Thailand. The service would be part of a transport agreement being negotiated by India, Thailand and Myanmar for completion of the historic 1,400-km highway currently under renovation.
SOURCE: The Financial Express
Germany hopes that the Free Trade Agreement talks between India and the European Union will resume by the end of the year. German Ambassador to India Martin Ney said there is a movement in the direction of talks between the two parties. The Ambassador was in the city for the appointment of BVR Mohan Reddy, Executive Chairman of Cyient Limited, as the Honorary Consul of Germany. Mohan Reddy, former Chairman of the National Association of Software and Services Companies (Nasscom), will be the German Consul for the States of Telangana and Andhra Pradesh. Later replying to a question on the status of Free Trade Talks between India and the EU, he said both sides had recognised the importance of resuming the talks and having an agreement. The European Union had written to the Indian Government in this regard. “I hear favourable responses when I talked to the government officials here,” he said. Responding to a question on the surgical strikes recently made by India along the LoC, he said every country has the right to defend itself from terrorism. Also, countries must ensure that terrorism is not emanated from their territories.
Huge market
He wanted the Indian industry to eye the huge opportunities in the global markets. “If you produce only for the domestic market, you might not follow (international) standards. There is a whole big market out there to tap,” he said. He said Germany was India’s biggest development partner with a support of about Rs. 11,100 crore in the areas of energy, environment and sustainable economic development. Also, Germany has invested about Rs. 8,500 crore in the construction of new transmission lines and substations. Responding to his appointment, Mohan Reddy said there were three important areas for collaboration between the two countries. “We can collaborate in science and technology, vocational training for skill development and strengthening the SME ecosystem,” he said.
SOURCE: The Hindu Business Line
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 48.28 per barrel (bbl) on 04.10.2016. This was higher than the price of US$ 48.10 per bbl on previous publishing day of 03.10.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3213.55 per bbl on 04.10.2016 as compared to Rs. 3200.41 per bbl on 03.10.2016. Rupee closed weaker at Rs. 66.56 per US$ on 04.10.2016 as against Rs. 66.53 per US$ on 03.10.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on October 04, 2016 (Previous trading day i.e. 03.09.2016) |
Pricing Fortnight for 01.10.2016 (Sep 14, 2016 to Sep 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
48.28 (48.10) |
43.95 |
|
(Rs/bbl |
3213.55 (3200.41) |
2936.30 |
|
|
Exchange Rate |
(Rs/$) |
66.56 (66.53) |
66.81 |
SOURCE: PIB
As Vietnamese clothing companies rapidly expand exports, Vietnam National Textile and Garment Group is becoming their standard-bearer by taking advantage of the Southeast Asian country's trade policies as well as a partnership with Japanese trading house Itochu. The state-owned textile company, also known as Vinatex, invested roughly $30 million to set up a fabric factory outside the central Vietnamese city of Danang. The plant began operating in 2014, producing fabrics using more than 100 Belgium looms and also dyeing the fabrics on-site. The facility, which the company regards as a strategic production base, ships fabrics to a nearby sewing plant belonging to a Vinatex group company. There, about 2,000 workers churn out more than 5 million articles of clothing annually, such as chino pants and jeans. Some 90% of the plant's output is exported to the U.S. and Europe. In the U.S., these garments are sold at J.C. Penney department stores, the Express casual clothing chain and other retailers."Thanks to integrated production, we can export a product as quickly as 25 days after receiving the order," said Nguyen Thi Thu Trang, a branch director at the sewing plant. The textile plant intends to add more looms in October, after which its production capacity will rise to 1.7 million meters a month, nearly two and a half times the current figure.
The Vinatex group consists of more than 80 companies and increased exports 11% to $2.38 billion last year. That accounted for a little more than 10% of Vietnam's overall textile exports, which doubled over the five preceding years. The group's biggest strength is sewing, with a nationwide network capable of producing 240 million articles of clothing a year. It is less strong in upstream operations, such as production of yarns and fabrics. The Vinatex group procures less than 60% of its garment materials from local suppliers, importing the rest from China and elsewhere. The group thus has difficulty responding quickly to changing fashion trends, although efforts are underway to bolster upstream operations. One of those efforts is a yarn factory in the northern province of Nam Dinh. "It's an important yarn production base, a first in the northern region," Vinatex CEO Le Tien Truong said at the opening ceremony for the factory in July. The facility has bolstered the group's monthly yarn capacity by 240 tons. The group plans to spend 3.8 trillion dong ($170 million), or 70% of its investment budget for the 2015-17 period, on yarn and textile production facilities, including the Nam Dinh plant.
FREE TRADE Vinatex's drive to expand operations fits with the government's strategy of boosting exports via free trade agreements. The fate of the Trans-Pacific Partnership deal looks increasingly uncertain, but Vietnam has signed bilateral agreements with the European Union, Japan and South Korea. Vinatex executives have accompanied government officials to trade talks and worked with them to tailor trade strategies.
SOURCE: The Asian Nikkei
The exports of readymade garments from the country during first two months of current financial year registered an increase of 3.76 percent, as compared to the exports of the corresponding period of last financial year. During the period from July-August this year, about 5,109, 000 dozen readymade garments worth of $ 364.072 million were exported, as compared to the exports of 4,944, 000 dozen worth of $350.867 million of same period of last year. According to the data of Pakistan Bureau of Statistics (PBS), bed wear exports grew by 5.28 percent, as about 58,365 metric tonnes of bed wear worth $355.799 million exported in last two months of current financial year. The exports of bed wear were recorded at 52,151 metric tonnes with a total cost of $337.955 million in July-August, 2015-16.
Meanwhile, the exports of tents, canvas and tarpaulin increased by 82.55 percent, as 5,226 metric tonnes of the above mentioned commodities worth $16.807 million were exported, as compared to the exports of 3,651 metric tonnes worth of $9.207 million of same period of last year, it said. The made-up particles' exports also witnessed 11.83 percent increase, as these articles worth of $102.44 million were exported, as it was recorded at $91.61 million in same period of last financial year, the data added. According to the PBS data, during the period under review, other textile material exports posted 9.35 percent and textile materials worth of $69.288 million were exported, as compared to the exports of $63.361 million of same period of last year.
It may be recalled that textile group exports reduced by 2.64 percent in first two months of current fiscal year and was recorded at $2.71 billion, as compared to the exports of $2.127 billion of same period of last year. The exports of raw cotton, cotton yarn and cotton cloth were decreased by 55.67 percent, 16.64 percent and 4.12 percent respectively. However, the exports of cotton carded or combed registered 537.04 percent increase in first two months of current financial year.
SOURCE: The Daily Times
Although world cotton area is expected to fall by 1 per cent to 30 million hectares in 2016-17, the lowest acreage since 2009/10, world production in 2016/17 is expected to rise 7 per cent to 22.6 million tons. The increase in global output is driven by an expansion of average yield, which is projected to improve by 9 per cent to 753 kg per hectare. In 2016/17, world cotton usage is projected to remain unchanged from 2015/16 at 23.8 million tons, but is forecast to exceed production by 1.3 million tons. As a result, world stocks are projected to drop 7 per cent to 18.1 million tons. Exports from the US are expected to rise 26 per cent to 2.5 million tons while exports from India, the second largest exporter, are forecast to decline massively by 35 per cent to 820,000 tons.
SOURCE: Fibre2fashion
According to reports, Bangladesh is expected to remain the world’s largest consumer of cotton during the current year 2016-17, a growth of 10% in terms of volume to 1.2 million tons. After Bangladesh, Vietnam is the second largest consumer of cotton at 1.1 million tons with 15% increase in growth. In 2016/17, global cotton consumption is forecast to remain unchanged from 2015/16 at 23.8 million tonnes, but is projected to exceed production by 1.3 million tonnes. The consumption was 23.78 million tonnes in 2015/16 and 24.20 million tonnes in 2014/15. The production was 21.10 million tonnes in 2015/16 and 26.20 million tonnes in 2014/15. As a result, world stocks are projected to decline by 7.0 per cent to 18.1 million tons which was 19.37 million in 2015/16 and 22.31 million tonnes in 2014/15. Although China's consumption is forecast to decline for the seventh consecutive season by 2.0 per cent to 7.2 million tonnes, it will continue to be the world's largest consumer of cotton, the release said.
Domestic cotton prices have fallen since China implemented its direct production subsidy policy, they remain above levels on the international market and well above polyester prices. India's cotton consumption is projected to remain stable at 5.2 million tonnes as mills increase the share of other fibers in cotton-blended yarns. Pakistan's mill use is expected to increase by 23,000 tonnes to 2.3 million tonnes, assuming that the energy situation improves. Exports from the United States are projected to increase by 26 percent to 2.5 million tonnes while exports from India, the second largest exporter, are forecast to fall by 35 per cent to 820,000 tonnes. In 2016/17, the world cotton area is forecast to fall by 1 per cent to 30 million hectares, which is the smallest amount of area under cotton since 2009/10, when the planted area reached 29.7 million hectares. The average yield is projected to improve by 9.0 per cent to 753 kg/ha, and world production in 2016/17 is expected to increase by 7.0 per cent to 22.6 million tonnes. Cotton area in India contracted by 8 per cent, to just under 11 million hectares, due to competition from other crops such as maize. However, a 9.0 per cent increase in the average yield to 526 kg/ha will likely offset the losses in area and production is expected to remain stable at 5.8 million tonnes. China's cotton production is projected down 4.0 per cent to 4.6 million tonnes despite a 3 per cent gain in the average yield to 1,600 kg/ha. The total area brought under cotton in China shrank by 7.0 per cent to 2.8 million hectares, the lowest in more than 30 years. Higher cotton prices compared to competing crops at the time of planting led to a 20 per cent increase in cotton area in the United States, estimated at 3.9 million hectares.
Beneficial weather during the growing season is expected to lead to a 5.0 per cent improvement in the average yield to 899 kg/ha. As a result, cotton production in the United States is forecast to increase by 25 per cent to 3.5 million tonnes. Although the cotton area in Pakistan declined by 12 per cent to 2.5 million hectares, its production in 2016/17 is projected to rise by 26 per cent to 1.9 million tonnes as the national average yield increases by 43 per cent to 756 kg/ha due to the success of the preventative measures taken against pink bollworm. Improved yields in Brazil could increase its cotton production by 7 per cent to 1.4 million tonnes, the ICAC said.
SOURCE: Yarns&Fibers
Google has filed a patent with the US Patent & Trademark Office for its gesture control system developed under the Project Jacquard. This system works with smart-garments which make use of interactive textiles. These textiles can sense touch-based hand gestures to send out commands to devices kept in pockets or purses for carrying out pre-defined functions. The interactive textile comprises two layers woven using conductive threads, says the patent application published on the US Patent & Trademark Office website. The conductive threads used in both the layers are configured to form a capacitive touch sensor which is coupled with a textile controller that can detect touch-input on the sensor. This input provides touch data which is used to control the computing device wirelessly coupled with the interactive textile.
This new technologically-advanced fabric can be used for making garments such as jackets, jeans, caps, shirts, jerseys, purses and much more. The incorporation of this technology into garments will allow users to answer calls, control volume levels of music or change song tracks without even touching their smartphones or media players. They will simply need to tap their fingers or use the swiping gesture on their clothing items to carry out specific functions on the devices.
Google has partnered with Levi’s for its Project Jacquard and integrated the gesture-sensing technology into the brand’s Commuter Trucker jacket which is meant for urban bike commuters. Jacquard allows users to control their mobile experience and connect to a variety of services, such as music or maps, directly from the jacket. This is especially useful when it might be difficult to use the smartphone, like when users are riding on their bikes, says the Google website.
SOURCE: Fibre2fashion
Why lug around a portable battery pack when you could generate that power with your own clothing? That's the idea behind new "smart" fibers that can be tailored and woven like cotton — but also produce and store solar energy, like tiny clean power plants. The early-stage textile device could eventually be used for on-the-go charging of smartphones and tablet computers, according to the Chinese researchers who developed the technology. "We expect it can be a product for the everyday consumer in the future," two of the researchers, Wenjie Mai of Jinan University and Xing Fan of Chongqing University, told Mashable by email. The researchers published their results Wednesday in ACS Nano, a scientific journal of the American Chemical Society. Their invention adds to a growing field of research and projects that aims to make garments more than just fabrics that keep us warm, comfortable and presentable. Several shirts are already on the market promising to measure heart rates, track fitness activities and even measure babies' sleeping patterns. That's not including the panoply of wristbands, buttons, headsets and sensors that can turn our bodies into walking data centers.
The solar-producing fibers wouldn't collect biometric information, but they could potentially address two big challenges facing modern society: How to keep all our devices fully charged, and how to satisfy our energy appetite without burning fossil fuels and emitting planet-warming greenhouse gases. "Energy harvesting in general is significant," Paul Weiss, editor-in-chief of ACS Nano and the presidential chair at University of California, Los Angeles, said about the new textile device. "Will clothing be a significant contributor to the power we acquire and use? We do not know yet," he told Mashable. "But as a field, we are exploring these ideas in addition to addressing the question of 'how' energy harvesting might work."
Solar threads
The textile device combines two main components: the dye-sensitized solar cell, which generates solar energy, and a fiber supercapacitor that can charge, store and discharge the electrical energy. Woven together, the components form a cloth that can be cut, sewn and tailored to the designer's specifications — an important advantage over other types of smart textiles, which function more like one singular device and therefore are harder to shape into something you might actually wear. The palm-size textile device can be fully charged to 1.2 volts by self-harvesting solar energy. An iPhone charger, by comparison, delivers 5 volts.
It's not yet shelf-ready
The material still has a long way to go before it can hit store shelves, as it must first prove to be cost-effective, energy efficient and durable, said Rigoberto Advincula, a professor of macromolecular science at Case Western Reserve University in Cleveland and a fellow of the American Chemical Society. Still, "the elements are there to demonstrate that it actually works," he told Mashable. He estimated that the first commercial product using this textile device could become available in about the next five years. Early demand will likely come from members of the military, emergency service crews or outdoorsmen, all of whom need lightweight power sources to move with them.
Mai and Fan, the co-authors of Wednesday's paper, said they had not yet used their textile device in an actual garment. They said that while they made the device with a homemade machine, engineers would need to build a more complex operation to automatically fabricate the smart garments at a larger scale. The device faces a handful of other barriers to reaching mass production. The dye used in the solar cell component is "environmentally unfriendly," the two researchers said, because it contains volatile organic compounds that can be hazardous to human health and natural ecosystems if released. Newly developed dyes, however, could prove to be safer alternatives. In addtion, the textile is not waterproof, so Mai and Fan cautioned against wearing it in the rain. But they said threads won't get overheated or explode, as they don't contain lithium-ion batteries. "We still need some time to solve some technical problems," they added, but "it is possible for the fiber devices and textile devices to be fabricated at a large scale."
SOURCE: The Mashable
In August 2016, Turkey has imported around 12,938 metric tons of paraxylene, rose by 116% as compared to the corresponding period last year. As compared to last month imports declined by 6%. Turkey has imported around 13721 metric tons. The increase was largely due to volumes inflow of 7,739 mt from Israel in August, whereas it had shipped none in the same month last year. Israel also retained the leading position among exporters in August, although it was largely unchanged from 7,732 mt in July. Turkey's other PX supplier, the Netherlands, however had a monthly decrease in exports of around 13% to 5,199 mt in August, compared to 5,989 mt in July. August exports were also down from 5,984 mt twelve months ago. Turkey is a net importer of xylenes, with negligible export volumes across all xylene isomers throughout the year, according to Turkstat.
SOURCE: Yarns&Fibers
One of the most important annual events in the Asian yarn and fibre industry, Yarn Expo Autumn is set to return this week from 11th – 13th October 2016, with a record number of exhibitors and exhibition space. “Following on from the strong business sentiment about the yarn and fibre industry at the spring fair in March, we are just as optimistic for this edition as well given the exhibitor number has risen once again to a new record for the fair,” Ms Wendy Wen, Senior General Manager, Messe Frankfurt (HK) Ltd, said. That exhibitor number rises from 258 in 2015 to over 270 this year, and in order to accommodate the increase in participants from 12 countries and regions – including Mainland China, Hong Kong, Bangladesh, India, Indonesia, Korea, Pakistan, Singapore, Thailand, the US, Uzbekistan and Vietnam – the exhibition area has expanded by 35% to 11,500 sqm.
Yarn Expo has long been renowned for its product diversity, with a wide range of exhibitors from both established yarn and fibre producing countries as well as emerging producers. Among these are the India Pavilion and Pakistan Zone, with the former consisting of over 50 companies and the latter more than 20 exhibitors showcasing competitively priced, high quality cotton yarns. One up-and-coming country is Uzbekistan, whose exhibitors have proved popular in recent editions and are bringing their cotton yarns to the Chinese market this edition. Apart from cotton yarns, there also exists a strong demand for synthetic yarn and fibre products in China that overseas suppliers from Indonesia, Korea, Taiwan and Thailand are looking to take advantage of. The Birla Pavilion will also make its debut in Yarn Expo in which fourteen well known manufacturers specialising in Birla Modal, Birla Spunshades and Birla Viscose fibres will showcase their latest collections at the show.
SOURCE: Yarns&Fibers
Euro zone business growth fell last month to its weakest since the beginning of 2015, according to surveys providing the latest evidence the bloc’s economy is losing momentum. Businesses have reined in spending amid growing caution about the economic outlook and political uncertainty as Britain gears up to start divorce proceedings from the European Union and Germany and France face elections. What growth existed last month was once again lopsided, which may concern policymakers, with only France showing signs of its upturn gaining momentum while growth trended lower in Germany, Italy and Spain. “Anecdotal evidence suggests that economic and political uncertainty is weighing on euro area confidence, and we expect sentiment to be further dampened in the coming month as Brexit negotiations kick in,” noted Apolline Menut at Barclays. “Increasing uncertainty and falling confidence underpin our forecast of deteriorating growth in Q4 2016 and Q1 2017.”
Markit’s final composite Purchasing Managers’ Index for the euro zone was 52.6 in September, matching a flash estimate but below August’s 52.9 and marking a low since January 2015. It has been above the 50 mark that divides growth from contraction since mid-2013. The PMI points to third quarter economic growth of 0.3 percent, Markit said, in line with a prediction from a Reuters poll last month which highlighted the need for fiscal stimulus rather than more aggressive monetary policy easing.
Despite years of ultra-loose monetary policy the European Central Bank has so far failed to get inflation anywhere close to its near 2 percent target. Policymakers may take some cheer from data in the survey indicating firms held prices steady last month instead of cutting them. The output price index, which has held stubbornly below the 50 mark for most of the past five years, came in on the dividing line for the first time since September 2015. Inflation in the 19 countries sharing the euro doubled to 0.4 percent in September from 0.2 percent in August, the EU’s statistics agency Eurostat said on Friday. Retail sales across the bloc dipped 0.1 percent in August after a rise in July was revised down to much weaker than initially estimated, official data showed on Wednesday. It was a possible sign that Britain’s vote to leave the EU may be having a greater impact on the euro zone than previously thought.
FRANCE OUT FRONT
Of the biggest four economies in the bloc only France showed improvement, where services activity expanded in September at the fastest pace in 15 months as demand improved, although business was not as brisk as initially thought. In Germany, near-stagnation in services put the brakes on overall private sector growth, highlighting the risk of a slowdown in Europe’s biggest economy in the second half of the year. Services PMIs for both Spain and Italy also slipped. That meant overall growth in the bloc’s dominant service industry dwindled. The PMI fell to 52.2 from 52.8, just above the flash 52.1 reading but its lowest level since late 2014.
In contrast, manufacturing activity in the euro zone picked up last month as demand increased from both within and outside the currency bloc, a sister survey showed on Monday, driving factories to increase headcount. However, with growth rates falling, services firms took on fewer new workers than they did in August. The employment sub-index fell to a five-month low of 52.0 from 52.4. Unemployment held steady in August at 10.1 percent, the joint lowest level since 2011.
SOURCE: The Financial Express
Britain’s shock decision to leave the European Union will not be as damaging to developing Asia’s economies as feared, the World Bank said today as it increased its growth forecast for the region this year. Countries in the Mekong region led by Myanmar are projected to expand at the fastest pace in the next three years, the bank said in an updated report on East Asia and the Pacific, though Thailand was projected to be a laggard. World Bank chief Asia economist Sudhir Shetty said the upgrade for the regional economy came after the group noticed positive early results from the June 23 vote by Britain to leave the EU. “That has translated also into relative stability in terms of exchange rates and in terms of capital flows, so that has been helpful for this region,” he told Asia-based journalists in a video conference from Washington.
Global markets went into freefall immediately after the vote as dealers feared a recession in Britain that could hit the global economy. But since then, world markets have rallied and Britain’s economy is picking up. Shetty said based on the bank’s initial analysis “the bottom line right now is that there’s likely to be very little impact of Brexit” over the short term as the region is “not very connected” to Britain in terms of trade and financial links. The region’s developing economies will grow 5.8 per cent this year, the Washington-based institution said, up 0.1 percentage point from its forecast made in April. It also tipped 5.7 per cent growth in 2017 and 2018. The bank, however, warned a hike in US interest rates, widely expected in December, and a potential sharp slowdown in China could impact its forecast. Myanmar, which has embraced democracy following decades of military rule, will grow 7.8 per cent this year, 8.4 per cent in 2017 and 8.3 per cent in 2018. Once isolated Myanmar has rapidly transformed itself into one of the world’s fastest growing economies since its once brutal junta handed power to a reformist government in 2010, sparking the lifting of most international sanctions and a flood of foreign investment. The impoverished nation has boasted average growth rates above eight percent the past five years. However, while the World Bank report noted stronger-than-expected growth in Thailand during the first half of 2016 it added that “a broad-based and self-sustaining recovery has yet to take hold.” It projected 3.1 per cent expansion for 2016, up from 2.8 per cent last year. Thailand’s economy has struggled with years of political instability since the military seized power in 2014.
SOURCE: The Financial Express
