INTERNATIONAL
On June 22, the Narendra Modi government announced some crucial labour reforms for the garment sector, including the introduction of fixed-term employment, and offered a Rs 6,000-crore special package, aimed at creating one crore additional jobs over the next three years. More than three months after the announcement, the government has notified most of the measures, barring fixed-term employment and voluntary contribution to the EPFO by employees earning less than Rs 15,000 a month. Textiles secretary Rashmi Verma says the draft notification on fixed-term employment is being vetted by the labour ministry and will be notified within the next 7-10 days. In an interview with Banikinkar Pattanayak, she also says the optional contribution to EPFO will require an amendment to the EPF Act, and the process for that has already been initiated by the labour ministry. Excerpts:
When will the government implement the changes to fixed-term employment rules?
All formalities, including stakeholder consultations and approval by the Cabinet on fixed-term employment are done. The final draft notification has been sent by the labour ministry to the law ministry for vetting, after which it will be notified. We expect it to be notified in the next 7-10 days.
The government had announced a new scheme to refund the state levies under the duty drawback scheme to boost the competitiveness of garment exporters. What is the progress on that and how much of claims have been submitted under this new scheme?
The latest duty drawback scheme for the garment sector was rolled out in late September. Till date, claims worth around Rs 35 crore have been submitted with the government by the industry. Even certain benefits under the Section 80JJAA of the income tax Act have also been notified by the Department of Revenue.
Is there any fresh assessment of the cost to the exchequer due to the duty drawback scheme, or are you still going by the initial estimate of Rs 5,500 crore a year?
Well, it is expected to be a little less than the earlier estimate.
What about allowing voluntary contribution to the EPFO by employees earning less than Rs 15,000 a month?
Well, such a measure requires an amendment to the EPF Act. So it’s under the process of stakeholder consultations. But as far as the government’s decision to bear the entire (12%) employers’ contribution towards the Employers Provident Fund Scheme is concerned, that has been implemented. Currently, 8.33% of the employer’s contribution is being provided by the government under the Pradhan Mantri Rozgar Protsahan Yojana. With the latest changes, the ministry of textiles will provide the additional 3.67% of the employer’s contribution (with the expected outgo of Rs 1,170 crore, over the next three years). Already, claims from 91 garment units have come to the textile commissioner’s office and we are forwarding them to the labour ministry.
Also, we have notified the additional 10% output-linked subsidy for garment units under the amended Technology Upgradation Scheme. About 200 applications for claims under the new scheme have come.
Will the reforms in terms of fixed-term employment be extended to other sectors?
Not yet. The reason why it’s made applicable to only the garments sector as of now is due to the highly seasonal nature of such businesses. Orders flow in in specific seasons, so the requirement of the employer to keep the employees is for a limited period.
Are you going to suggest applying contractual employment rules to the textile sector as well?
The purpose of allowing fixed-term employment in garments was that it was seasonal in nature. But in textiles, spinning or weaving are not highly seasonal, as such activities go on throughout the year. So, there is no strong reason, as of now,make it applicable to other sectors.
SOURCE: The Financial Express
Yoga guru Baba Ramdev’s plans to venture into clothing and make khadi apparel has evoked positive response from the textile industry with teams from some prominent business houses approaching Patanjali with their products. Earlier this week, a team from the Raymond Group showed different samples of its products to Patanjali executives. Ahmedabad-based textile manufacturer Arvind, too, has contacted Patanjali to explore business opportunities, said people familiar with the developments. Refusing to take names, Ramdev said, “Some big names of the (textile) industry have approached us. Few meetings have already taken place. We will take the textile industry together and this will be a collective effort.” “Raymond has been pivotal in positioning India as a preferred supplier of high quality fine fabrics and apparel. Since our inception in 1925, we have always been on the forefront of Make in India. Our denim manufacturing is recognised for differentiated and innovative products that we supply to wellknown Indian and international brands and we keep evaluating various opportunities and partnerships to offer Indian consumers the very best of global fashion,” said Gautam Singhania, chairman and managing director, Raymond, in an email to ET. EThas reliably learnt that Singhania is set to meet Ramdev to take the talks forward later this month.
Ramdev has plans to go big on khadi and wants to make everything “from langot (nappies) to coat”. “If khadi products are being sold by foreign companies like Fabindia in our country, it is political murder of Mahatma Gandhi and his ideology,” he said. To be sure, Fabindia was founded by an American John Bissell in 1960 as an exporter of home furnishings, based out of New Delhi. Currently, it is headed by William Nanda Bissell, an American citizen resident in India. Insisting that Indians should become complete swadeshi, Ramdev said, “Unlike big business groups, my advertising work is handed by Vermillion, an Indian advertising agency.” Patanjali is also exploring all options to manufacture unique organic clothes for people suffering from diabetes, obesity and other diseases.
SOURCE: The Economic Times
State-owned Fertilisers and Chemicals Travancore (FACT) is set to resume caprolactam production after a gap of four years, Jaiveer Srivastava, chairman and managing director, said on Thursday. Caprolactam is produced in FACT using the available intermediate products, namely, Hyam and Anone. Phase 1 start-up of caprolactam has begun and production of other petro-plants associated with it will commence in due course, he added.
Addressing a press conference, Srivastava said that the caprolactam plant has the capacity to produce 50,000 tonne and the revenues from it would help improve the company’s financials and achieve operating profits by the end of this fiscal.Currently, the caprolactam demand in the country is 1,30,000 tonne and the supply gap is met from Chinese imports. Caprolactam is an intermediate primarily used in the production of nylon 6 fibres, tyre cord, textile fibres and resins. There are also plans to go for value addition in the plant to produce nylon chips, which is in huge demand for textile units. Gujarat State Fertilizer Company is the other company, which produces caprolactam in the country with a production capacity of 70,000 tonne. FACT could tide over its serious working capital constraints largely through the R1,000 crore loan extended by the Centre and could resume fertilizer production to full capacity with all the eight plants of the company working to full capacity, he said. The PSU recorded a loss of R452 crore in the last financial year against a loss of nearly R400 crore during 2014-15. Company sources said that the heavy losses were due to high finance charges, low production due to the shortage of working capital, interruption in the production of ammonia and the stoppage of caprolactam production. Srivastava said that the excellent physical performance is not an indication that FACT has overcome all its problems.
“There are issues to be sorted out regarding the relief package as the loan from the government has to be repaid. Fund has to be mobilised for expansion of capacity which is crucial for long term survival of the company. A new production stream of FACTAMFOS at Cochin Division, with 1,000 tonne per day capacity, is the immediate expansion project of the company which is at an advanced stage of consideration, “ he said. FACT has benefited from the sharp fall in feedstock LNG prices in the global market. The company had converted to LNG instead of naphtha as feedstock some years back, but the high landed cost of the fuel had lead the company to shut down its plants.
SOURCE: The Financial Express
Rajvir Industries has determined to halt production at Tandur, Telangana, with immediate effect due to shortage in the availability of the variety of quality cotton used in the manufacture of the yarn in the said Plant. The company would be commencing the production as soon as the variety of cotton is available and procured. However, all the other Plants of the Company will continue to be operational. Rajvir Industries is an integrated producer of cotton, melange, synthetics, modal, dyed products, compact yarn, flame-retardant, supima, silk, wool, cashmere and angora blends.
SOURCE: Yarns&Fibers
Commerce Minister Nirmala Sitharaman today said she was open to the idea of setting up a Board of Trade to focus on issues of domestic trade. “So many ministries are involved in anything to do with domestic trade and that requires a bit of a focus. That is why the idea of setting up a Board of Trade with traders giving inputs helping the government anticipate and identify potential problem areas, I will definitely have the ministry look into it,” Sitharaman said. She further observed that internal dimension of trade has a lot of strands which need special attention.
Highlighting the significance of the domestic market, the minister said: “Exports have now stopped dropping further. It is slowly rising. But even when our export situation can become worrisome, it is our domestic market which is keeping it up”. Talking about the Goods and Services Tax (GST), she said the simplification in taxation regime after introduction of GST will result in greater compliance, help contain blackmoney and check harassment of businessmen. The minister pointed out that India was a “shining star” among economies globally at a time when the demand situation worldwide is discouraging. The minister said the present government had to “make enormous efforts” to improve upon the GST and get the state governments on board. “State government’s confidence on the Centre had evaporated … Even after promising (the GST roll out from 2010) states were not given compensation. So states did not have the confidence that the Centre will honour its commitment,” she said.
Questioning why the country was unable to move forward in the last 10-15 years, Sitharaman held corruption and lack of decision making responsible. She described the present government as responsive towards the needs of the people, capable of taking “tough decisions” and one which takes decisions not by brute force but through consultation. The minister launched ‘Alliance for Digital Bharat’ website, an initiative of the Confederation of All India Traders (CAIT) here. The Alliance for Digital Bharat is a forum consisting of national organisations of traders, transporters, farmers, truck operators, SMEs, consumers, self employed groups, women entrepreneurs & other verticals of non corporate sector. The mandate of the Alliance has been set for development of a conducive atmosphere for digitalisation in non-corporate sector including trading community and launch a nationwide campaign to motivate & encourage the people to adopt technology in their existing business format.
SOURCE: The Financial Express
Asserting that India has shown that progress on reforms could “ignite” business investment, the IMF today said the adoption of goods and services tax is poised to boost the country’s medium-term growth. “India’s strong reform push in 2016 is welcome and should continue apace. Adoption of the goods and services tax is poised to boost India’s medium-term growth,” the IMF said in its latest Asia Pacific regional economic update. Greater labour market flexibility and product market competition remain essential to create jobs and raise growth. Priorities also include effective implementation of the new corporate debt restructuring mechanisms, it said. “As shown by India, progress on reforms could ignite business investment (including already strong FDI inflows), further boosting domestic demand,” the IMF said.
Over the medium term, a number of Asian economies stand to benefit from a demographic dividend, as the working-age population in some economies like India and Indonesia continues to grow, potentially helping sustain strong potential growth. In its report, the IMF said India’s GDP growth is projected at 7.6 per cent in both 2016/17 fiscal year (ending in March 2017) and 2017/18 fiscal year, up 0.1 percentage point relative to the April 2016 World Economic Outlook, a survey conducted and published by the IMF. The ongoing growth recovery remains braced by private consumption, it said. “Monsoon rainfall coming in at normal levels bodes well for agriculture and, along with a decennial rise in government employee salaries, will underpin the ongoing recovery in domestic demand,” the IMF report said. “Further progress on reforms will boost sentiment, and the incipient recovery of private investment is expected to help broaden the sources of growth amid gradual fiscal consolidation and broadly neutral monetary policy,” it said. “Medium-term growth has also been revised upward reflecting continued progress on structural reforms (constitutional amendment enabling implementation of the national goods and services tax, adoption of inflation targets, and removal of foreign direct investment (FDI) ceilings),” the report said.
The IMF said India’s growth has continued to benefit from the large improvement in the terms of trade, positive policy actions, including implementation of key structural reforms, gradual reduction of supply-side constraints, and a rebound in confidence. Consumption growth has remained strong and activity in core industrial sectors has picked up. Government consumption is set to continue to support growth in 2016, it noted. According to the report, in China, GDP growth is projected to remain relatively strong in the near term, helped by the fiscal stimulus on infrastructure spending. Overall, growth is projected to be 6.6 per cent in 2016 and 6.2 per cent in 2017 (0.1 percentage point higher for 2016 relative to the April 2016 WEO), reflecting fiscal stimulus and credit support. Both consumption and investment growth have been revised upward, while the contribution of net exports has been revised downward, as import growth is expected to accelerate amid stronger domestic demand. Medium-term growth has been revised down to 5.8 per cent from 6.2 per cent, reflecting rising vulnerabilities and slower progress on reining in credit growth and on state- owned-enterprise reform, it said.
SOURCE: The Financial Express
Use of technology, transparent processes and ease of doing business will help India pull off 8 per cent growth over the next couple of decades, the government said. Commerce and Industry Minister Nirmala Sitharaman said states are also working in concert with the Centre in this regard. “It (8 per cent growth) is achievable and with this commitment, the government is working. And across the states, we find that urge now that they want to get out of the rigmarole and see brighter ways,” she said here at the India Economic Summit jointly organised by CII and WEF here. According to the minister, awareness about the issues and difficulties on which the Centre and the states need to work is helping politically too. “… the kind of issues on which we have to come together and get over the difficulties are actually helping politics. If only you succeed in removing these obstructions and if you are committed to moving forward on using technologies, making sure transparent processes are established, I can see that 8 per cent growth is moving. So, it is achievable,” she asserted.
She further said the government is working on three important pillars, including the goods and services tax, JAM (Jan Dhan, Aadhaar and Mobile) and ease of doing business to promote growth and investments. The government is using technology to remove corruption and bring in transparency, the minister said, adding that “we need to work harder and we need to take the states on board and we are working together”. In the next 4-5 months, “our attention would be to work together with them, take out all those which are obstructionists and ensure businesses feel far more assured that the ease is actually coming in”. FDI is coming in, “but we have to translate that into meaningful investments and rapidly get them on to translate into job creation… so, these are things on which we are working,” Nirmala Sitharaman said. “There is a comprehensive agenda of work which is pending, which is ongoing but more to achieve. So, there are going to be an inter-ministerial work assessment and also ensuring work moves fast. The inter-ministerial will also be happening just to ensure this goal is achieved.” She added that South and South-East Asia are going to be the engine of growth for the world.
SOURCE: The Financial Express
In a bid to give tax payers more choice to file their returns once the much-awaited tax reform is rolled out, the Goods and Services Tax Network (GSTN) is inviting private companies to build third-party interfaces. Open for technology, accounting and financial services firms, it will allow businesses to file taxes from various platforms such as mobile apps or portals instead of applying only through the GSTN portal. According to a top official of the agency, which is building the technology back-bone for the country's largest tax reform ever, the idea is to fuel "innovation" and have multiple solutions for different sectors such as FMCG or manufacturing since they may have different needs and also for corporations of different size. "The approach is similar to what the income tax department follows. Individuals are free to file their returns from multiple sources," said the official. The person added that GSTN is inviting applications till October 15, post which an independent jury will select the companies that fit the bill. The companies will be given a month or so to build their applications. "They will go through a tough screening process and will be certified by the government of India's Standardisation Testing and Quality Certification agency (STQC) to ensure they meet quality standards and taxpayers do not have to worry about a bad interface," the official added. The government has set a deadline of implementing the new taxation regime by April 1, 2017 and GSTN is hopeful of readying its technology systems before the deadline. The not-for-profit entity owned by the Centre, states and non-government financial institutions, has released the policy paper and the APIs for IT companies to develop applications which will enable taxpayers to upload invoices and file returns directly.
While India's second-largest software company Infosys has been assigned the mandate to develop and run the GSTN in a project worth Rs 1,380 crore, GSTN has held workshops for the industry to gauge their interest in developing apps and interfaces for the tax administration. Accounting software firms like SAP and Tally Solutions and several financial online portals have evinced interest in it so far. Sumeet Sharma, vice-president and head — industries and value engineering at SAP India said, "SAP is working in close collaboration with its customers, across industries, to provide solutions for a smooth transition to GST. SAP is also working with GSTN in understanding the data flows and providing seamless connectivity from enterprise to GSTN." The GSTN portal itself will be a one-stop destination for filing and processing of all taxes for almost 65 to 70 lakh taxpayers in the country and is being designed by a specialised design unit of Infosys.
SOURCE: The Economic Times
Clearing the ambiguity over the funding of operating costs of the Goods and Services Tax Network (GSTN), the government has decided that an ‘assessee-based user fee’ would make up for the bill. GSTN, a not-for-profit, non-government firm, would provide IT infrastructure and services to the central and state governments, taxpayers and other stakeholders for implementation of the Goods and Services Tax (GST). “The Centre and states will pay user fees based on the number of assessees registered with each of them to meet the running expenses of the GSTN. It will work on a no-profit-no-loss basis,” a senior finance ministry official told FE. Currently, the Centre has over 16 lakh indirect tax assessees, while states such as Gujarat, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh and Delhi have more than one lakh assessees. With the implementation of GST, the government expects the number of taxpayers under indirect tax laws to increase from 36 lakh currently to about 65 lakh.
The Narendra Modi government’s plans to roll out GST from April 1, 2017. The GST Council, chaired by Union finance minister Arun Jaitley, is already working towards finalising the structure of the new tax law and two rounds of meetings are already concluded. GSTN has hired Bengaluru-based Infosys on a project worth Rs 1,380 crore to buy and instal the IT infrastructure required for the network to function and to maintain it for five years. Of this, Rs 550 crore is towards capital cost. GSTN will reportedly subscribe to a loan to fund the expenses, and the repayment liability will be synced with the user charge. GSTN was incorporated on March 28, 2013. At present, the central government holds 24.5% equity in GSTN and all states hold another 24.5%. Balance 51% equity is with non-government financial institutions, including LIC Housing Finance, ICICI Bank, HDFC, HDFC Bank and NSE Strategic Investment Corporation.
GSTN has been initially funded through a one-time non-recurring grant in-aid of Rs 315 crore from the Centre towards expenditure for the initial setting up and functioning of the SPV for a three-year period after incorporation. After rolling out of GST, the revenue model of GSTN shall consist of user charge to be paid by stakeholders who will use the system and thus, it will be a self-sustaining organisation.
SOURCE: The Financial Express
Most of the world clearly sees India as an economic bright spot, but the country’s policymakers and industrialists at India Economic Summit of World Economic Forum say there’s a lot of room to improve and lift growth to over 8%. "We need to work harder with states to remove all regulatory hurdles still prevailing at the lower level," commerce minister Nirmala Sitharaman said at opening session of the 32nd edition of India Economic Summit, jointly organised by World Economic Forum (WEF) and industry chamber CII, on Thursday. There is near unanimity on the reforms undertaken by the Narendra Modi government, and India has recently improved its ranking in WEF’s World Competitiveness Index by 16 places for the second year in a row to join the top 40 nations.
Sitharaman, who is working towards improving the ease of doing business in the country, said there is much scope for further improvement in ranking and to boost economic growth. She said the government needs to ensure that whatever investment is coming into the country actually translates into rapid productions, exports and lead to creation of good jobs to help the country achiever higher growth rates. Indian economy is forecast to growth 7.6% according to the latest assessment by the IMF. India’s policymakers expect growth at near 8%. Sri Lankan Prime Minister Ranil Wickramasinghe, meanwhile, marked out India and China as the only countries that can drive economic growth across the globe and said manufacturing companies have no other place to go. "Asia will bail out the world (from the economic crisis), if it is allowed to frame the rules (policies)," he said.
Speaking on India's inflection point and what the country needs to do to transform the state of its economy and people, NITI Aayog CEO Amitabh Kant said the only way India can catch up with the developed world is through use of digital technology to leapfrog. "India needs to bring about radical restructuring of its health and education system if it were to grow at a sustainable rate of 8% for the next three decades," Kant said. He identified digital revolution, a strong demographic dividend, a growing entrepreneurial ecosystem, and a larger domestic market as key India strengths.
Pawan Munjal of Hero Motors said the government should take on land and labour reforms head on to help push manufacturing in the country. John Rice, vice chairman of GE, said, "India's missions should be to ensure sustainable and inclusive growth. To achieve this, India will have to ensure to invest in right things, including creation of basic infrastructure and skilling a million of its workforce every month." Responding to the question of where India is heading after 25 years of economic liberalisation and what needs to be done, Gita Gopinath, economics professor at Harvard University, emphasised that the pace of reforms should continue. "Reforms should continue in the areas of improving competitiveness, ease of doing business and infrastructure, with focus on outcomes in education and health. Also the pace of reforms should not trip around elections if India were to grow at a sustainable rate of 8% and more," she said, adding major emphasis has to be on skilling.
SOURCE: The Economic Times
The government has asked industry to help reduce India’s widening trade deficit with Japan by making more effective use of the Comprehensive Economic Partnership Agreement (CEPA) with the country. "There are opportunities for Indian companies to utilise this agreement much more as trade deficit is a matter of concern,” commerce and industry minister Nirmala Sitharaman said on Thursday. The minister was addressing a seminar organised by the external affairs ministry’s think tank Research and Information Systems for Developing Countries. Although trade between India and Japan has grown to $14.5 billion from $10.4 billion in 2010, the minister pointed out that the trade deficit has widened to $5.2 billion from $3.1 billion before the pact was signed in 2011.
SOURCE: The Economic Times
The rising Japanese Official Development Assistance (ODA) into India for several projects including high-speed railway could widen trade deficit between the two countries, says a report. “With increase in Japanese ODA for several projects including for the Shinkasen bullet train project and expected further FDI from Japan in the coming years, imports from Japan could see a rise that can widen the trade deficit,” said the report — ‘India-Japan CEPA: An Appraisal’. The report by Research and Information System for Developing Countries, released today, is authored by V S Seshadri. The Rs 98,000 crore Mumbai-Ahmedabad high-speed rail project is being financed by Japan International Cooperation Agency (JICA), which is providing a soft loan of about Rs 79,380 crore, amounting to 81 per cent of the project cost.
Sustained increase in India’s export to Japan, the report said, will come about only if greater attention is given to increasing competitiveness, strengthening compliance with standards, enhancing export capacity, and moving beyond traditional areas of export. It pointed out that the utilisation of India-Japan Comprehensive Economic Partnership Agreement (CEPA) for trade in goods is steadily increasing in both directions. “While CEPA concessions are not relevant for about 75 per cent of India’s export to Japan, since duties on them are zero even on MFN basis, India has benefited from CEPA concessions towards increasing exports in the seafood pharma, garments, leather, dyes and pigments and a few other sectors and products,” the report said. According to the report, Japan’s utilisation has also been rising judging from the number of certificates of origin issued annually by the authorized agency from Japan. “It would be very important to ensure immediate ratification of the Totalisation Agreement signed by the two countries in 2012,” it noted.
Referring to Japanese FDI trend in India, the report pointed out that India presents a mixed picture post CEPA with significant fresh investment inflows but also with two large investments, Daiichi Sankyo’s investment in Ranbaxy and NTT Docomo’s investment in Tata Teleservices, seeking to exit their investments. It further said the ‘Japan Plus’ arrangement to fast track investments from that country and regular engagements between the Japan Chambers of Commerce and Industry in India and DIPP of the government are positive features. Japan and India are the second and third largest economies in Asia. The economic engagement witnessed significant rise after both countries signed a Comprehensive Economic Partnership Agreement (CEPA) in 2011. The trade between the two countries pre-CEPA in 2010 was USD 10.4 billion and currently it stands at USD 14.5 billion. Trade deficit with respect to Japan was USD 3.1 billion pre-CEPA, and now it is USD 5.2 billion.
SOURCE: The Financial Express
China should put more pressure on India and the US to "force them" not to take trade protectionist measures against Chinese goods by imposing anti- dumping duties, state-run media here said. "India has initiated 15 trade remedy investigations against Chinese products in the first eight months of the year, with observers forecasting even more probes in the foreseeable future," the Global Times reported.
Referring to reports that India's commerce ministry has recommended imposition of anti-dumping duties on imports of Chinese steel wire rods, the daily said in a recent article "it seems trade protectionism is rising in India as New Delhi looks to significantly expand its domestic steel sector, making China one of the biggest victims". "The gradually increasing homogeneity of the two countries' economic structures has pushed up competition and economic friction, which has placed pressure on New Delhi to turn to protectionism in a bid to safeguard its nascent domestic industries," the article said. "The US and India are the largest and second-largest source of trade remedy probes against Chinese goods, respectively. The Chinese authorities should put more pressure on Washington and New Delhi to force them to refrain from the rise of trade protectionist measures," it said. China, the world's largest trader of goods, is an influential economic partner with both the US and India, it said. "This position should give Beijing enough weight to carry out resolute countermeasures against any unfair treatment. China, one of those most impacted by trade protectionism, has no reason to keep itself out of the business," it said. "As China faces rising trade remedy probes, work needs to be done to improve the country's quick-response ability. The authorities should strengthen communication between various government departments and shorten the decision-making process. "Additionally, the government may need to consider providing subsidies to Chinese companies which suffer losses in trade remedy cases, in a bid to help increase their ability to make appropriate responses in the cases," it said.
SOURCE: The Economic Times
Sri Lanka expects the Economic and Technology Co-operation Agreement (ETCA) with India to be signed by the end of this year, which will help strengthen economic ties, Sri Lankan Prime Minister Ranil Wickremesinghe today said. "The proposed ETCA will be signed by the end of this year... Prime Minister Modi and I have decided that we must conclude it by the end of this year," he said here at the India Economic Summit. He impressed upon the audience the importance of this pact for Sri Lanka and South IndianBSE 1.21 % states. The five states -- Karnataka, Tamil Nadu, Andhra Pradesh, Kerala and Telangana -- have a population of 250 million and a combined GDP of nearly USD 450 billion and with the addition of Sri Lanka of 22 million people and USD 80 billion economy, the GDP "in the sub-region will be USD 500 billion", he said. "Just imagine if we work together," the Prime Minister said, adding that ETCA has the potential to promote growth of USD 500 billion sub-regional economy.
ETCA is expected to help Sri Lanka gain better access to India's rapidly growing market. Wickremesinghe also said the economic asymmetry between the countries is going to increase in future when the "latter (India) emerges as the major global player in an increasingly multi-polar world". He added that India and Sri Lanka FTA will be further expanded and deepened to go beyond trading in goods to cover trade in services, investments and technology co-operation.
SOURCE: The Economic Times
India and Switzerland on Thursday signed three agreements on mutual visa exemption, return of illegal migrants and arrangement for dependent persons of diplomatic and consular mission to perform gainful employment. The agreements were signed during a meeting between Union Home Minister Rajnath Singh and Swiss Confederation’s visiting Minister for Justice and Police Simonetta Sommaruga. The agreements involve mutual visa exemption for holders of diplomatic passports, identification and return of illegal migrants and arrangement for dependent person of diplomatic, consular, technical and administrative staff of diplomatic and consular mission to perform gainful employment. During the meeting, Rajnath Singh proposed setting up of training facilities for Indian police officers in Switzerland police academies/other training institutes in the fields of anti-hijacking and cyber forensic, etc. He also said India was looking forward for cooperation with Switzerland on the issue of exchange of tax information since the black money is the main corruption issue which needs to be tackled.
Rajnath Singh also sought a more liberal visa regime for Indian business people, contending that India has been offering multi-year, multiple entry visas to Swiss businesses in a bid to enhance bilateral trade and investment. Among the other subjects discussed in the meeting were cooperation in transfer of convicted, sentenced persons and mutual legal assistance treaty in criminal matters that would help in combating terrorism, transnational organised crimes and corruption, including money laundering.
SOURCE: The Financial Express
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$ 49.27 per barrel (bbl) on 06.10.2016. This was higher than the price of US$ 49.15 per bbl on previous publishing day of 05.10.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3282.71 per bbl on 06.10.2016 as compared to Rs. 3271.76 per bbl on 05.10.2016. Rupee closed weaker at Rs. 66.63 per US$ on 06.10.2016 as against Rs. 66.57 per US$ on 05.10.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on October 06, 2016 (Previous trading day i.e. 05.09.2016) |
Pricing Fortnight for 01.10.2016 (Sep 14, 2016 to Sep 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
49.27 (49.15) |
43.95 |
|
(Rs/bbl |
3282.71 (3271.76) |
2936.30 |
|
|
Exchange Rate |
(Rs/$) |
66.63 (66.57) |
66.81 |
SOURCE: PIB
The Ministry of Industry and Trade has submitted a proposal to Prime Minister Nguyễn Xuân Phúc suggesting solutions to issues raised by the Việt Nam Textile and Apparel Association (VITAS). This includes a proposition to abolish inspections of formaldehyde content in textiles and garments. VITAS said the current regulation on this inspection has no legal grounds, and is costly and time-consuming. The ministry has recommended that the directive be abolished and instead, a national technical standard for garments and textile products be put in place. The standard is to be promulgated by the beginning of 2017.
Responding to VITAS’ demand for modifications in the garment and textile industry’s planning and strategy, the ministry has scheduled changes next year in keeping with market realities. The ministry said the sector’s ability in dyeing has been limited due to shortage of capital for investment in modern technologies and waste water management. To encourage growth, it has proposed that the Government conduct specific studies to grant licences for the establishment of 500- to 1,000-hectare garment and textile industrial parks (IPs), as well as give them preferential interest rates. Deputy minister Trần Quốc Khánh recently told Vietnam News that the ministry has tried to solve the sector’s business problems and that legal documents under the ministry’s authority that are causing problems would be abolished in the shortest possible time.
SOURCE: The Vietnam News
AATCC, the Association of Textile, Apparel & Materials Professionals, and SGIA, Specialty Graphic Imaging Association for digital imaging companies, have partnered together to offer a unique educational conference named 'Digital Textile Printing: The Future is Now', to be held from December 6 to 7, 2016, at the Sheraton Imperial Hotel in Durham, NC, US. The program will feature the textile industries most well-known and respected experts presenting topics essential for those involved in digital textiles. The two-day event will deliver unprecedented content to conference registrants who will leave with a wealth of understanding and inspiration to take back to their respective jobs. The first day includes a manufacturer's panel, colour management for digital textiles, finishing, meeting your customer's sustainability objectives, product testing for quality assurance, and research findings from North Carolina State University College of Textiles. The second day includes designing for digital printing of textiles, fabric factors impacting digital printing, digital print inspiration and design, web-to-print, and digital manufacturing.
Some of the topics to be discussed at the event include Digital Textile Printing Technology Overview by Johnny Shell from SGIA, Which Ink Do I Use? By David Clark, Huntsman, Manufacturer's Panel Discussion by Durst, Expand/MS, Mimaki, Arioli, Kornit, EFI Reggiani, and SPG, Fabric Printing: Colour 101 by Dave Brewer, Image Options, Now that You've Printed the Fabric, What Next? Digital Finishing Pitfalls and Opportunities by Steve Aranoff, Mikkelsen Converting Technologies, etc. Johnny Shell, SGIA vice president of technical services said, “The partnership between AATCC and SGIA for this conference dovetails nicely with both organisation's mission and purpose. Each organisation compliments the other and I'm very excited to have this opportunity.”
SOURCE: Fibre2fashion
VF Corp. and the International Finance Corporation (IFC) are working together to make Bangladesh’s textile wet processing sector more sustainable. The apparel giant and the financial institution will reduce energy use and excessive groundwater extraction, as well as minimize surface water pollution, through IFC’s Bangladesh Partnership for Cleaner Textile (PaCT) program, Dhaka Tribune reported. “Water is a key input in the textile sector and large quantities are consumed in the direct operations and supply chain,” said Mohan Seneviratne, IFC Program Manager for PaCT . “Current groundwater abstraction rates in Bangladesh are close to their limit and growth projection of $50 billion by 2021 can only be achieved with the development of sustainable water supplies, effluent treatment facilities and resource efficient practices.”
VF will be the 13th brand to join PaCT’s family. Since its establishment, the program has contributed 14.4 billion liters and 1.23 million megawatt hours annually to water and energy conservation, reduced greenhouse gas emissions by 188,000 tonnes per year and also facilitated yearly savings worth $10 million in 162 partner factories. “Resource efficiency is a core facet of VF’s responsible sourcing program,” said Brad van Voorhees, senior manager of VF’s environmental practices and sustainable operations. “Through investments and continuous support from VF, we aim to assist our strategic suppliers in reducing their water, energy, waste, and chemical use, while simultaneously reducing the cost of production.” Currently, IFC is providing advisory assistance and collaborating with other stakeholders in Bangladesh, to help the nation’s garment sector become more competitive and safer for all employees. To further both goals, PaCT will work with VF’s supplier factories in awareness building, basic cleaner production (CP) assessment and in-depth CP assessment. The partnership will also provide factory-level assistance with CP measures, assessment of resource efficient textile processing and bring new sustainable water technologies to textile facilities in Bangladesh. To date, IFC has contributed greatly to a greener textile sector in Bangladesh. For the fiscal year ended June 30, IFC invested $635 million in Bangladesh across 13 projects, to enhance the nation’s sustainable growth and private sector development.
SOURCE: The Sourcing Journal Online
Pakistan government has taken many steps to boost cotton exports which has witnessed negative trends during the fiscal year 2015-16 as compared to the last fiscal year 2014-15. Cotton exports have declined from $11,983 million in the fiscal year 2014-15 to $11,020 during the fiscal year 2015-16. Due to inconsistency in yield of cotton crop, rising cost of business and shrinking global demand resulted in decrease of cotton prices in the market and consequently, this affected the exports. The initiatives taken by the government to enhance cotton exports include a sector specific international exhibitions of textile products, as one such show TEMPO- 2016, has been organized by Trade Development Authority of Pakistan (TDAP) for the first time in April this year.
In order to reduce cost of doing, business, government has reduced the electricity tariff by Rs. 3 for the industrial. In addition, the availability of affordable finance for the export sector has considerably improved, while the State Bank of Pakistan (SBP) has further reduced the discount rate. The Export Finance Rate currently at 3.5% is the lowest in a decade especially for textile sector, the sources said adding that under Textile Policy 2015-19, an amount of Rs. 64.15 billion will be spent on the textile sector to double the exports of textiles and clothing sector from the existing US$ 13 billion to US$ 26 billion by the year 2019. Giving details about the cotton exports of past five fiscal years, the sources said that the cotton exports during the fiscal year 2014-15 were recorded at $11,984 million, while during the FY 2013-14 the cotton exports stood at $12,165 million and in 2012-13, the exports were recorded at $11,617.
SOURCE: Yarns&Fibers
At a time of declining global growth and trade, South Asia can become the next manufacturing and export powerhouse through the right mix of reforms and investments, the World Bank said. However, given that countries in the region have not been particularly successful in integrating with each other, challenge to the region’s competitiveness remain, it said. “South Asia is at a turning point. The region is benefiting from a confluence of positive internal and external forces. South Asian countries are starting to receive the competitiveness dividends from the economic reforms and public investments in infrastructure and education carried over the last 25 years,” said the World Bank in its report. With around one million people entering the workforce each month and a growing urban population, South Asia can seize the opportunity to become the next manufacturing and export powerhouse through the right mix of reforms and investments, the bank said. South Asia it argued will be home to more than a quarter of the world’s working adults by 2030 and should take advantage of a confluence of positive forces, such as favorable demographics, increasing education levels, growing cities, and rising labor costs in East Asia. “To realise this potential, countries should work diligently to increase regional and global integration, take advantage of agglomeration economies, strengthen firm capabilities, and improve the business environment. The region’s great competitiveness potential can be shown by the success of its leading firms,” the Bank said. “South Asia’s leading firms have risen to standards of global excellence, demonstrating that world class levels of operational performance, efficiency, and innovation can be achieved with the right management, technology and worker training,” said Anabel Gonzalez, the World Bank Group’s Senior Director for Trade & Competitiveness. “These flashes of brilliance across a growing number of areas, locations, and leading firms can provide inspiration for reforms and serve as examples for millions of rising firms in the region,” the bank official said. The Bank said overall South Asian countries have underperformed in terms of both the quantity and quality of their exports – fundamentally because most firms in South Asia have low productivity which is the main driver of sustained competitiveness.
According to the new report, entitled ‘South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse’, the four main policy levers to boost the productivity and thus the competitiveness of firms are to improve the business environment, connect firms to global value chains, leverage agglomeration benefits, and strengthen the capabilities of managers and workers. “South Asia has tremendous potential to increase incomes and gain market share in exports through policies that enhance productivity and investment,” said Annette Dixon, World Bank South Asia Vice President. “If the region harnesses its productivity potential, it could be the fastest growing exporting region, for instance, tripling its share in global exports of electronics and motor vehicles by 2030.” To better connect and expose South Asian firms to international good practices, governments should deepen reforms to improve the capabilities of firms to participate in global value chains, which will require making it much easier for exporters to import what they need, gradually reducing tariffs, while improving trade logistics, the Bank argued. Policymakers can encourage the flow of resources to more productive firms by actively managing urbanization and reducing congestion constraints, as well as fostering productive agglomerations of firms next to pools of qualified workers with easy access to key domestic and export markets, it said.
SOURCE: The Financial Express
Expressing disappointment over the “persistent underperformance” of world economy, IMF chief Christine Lagarde today called for greater trade integration and warned against retreat from globalisation and multilateralism. “A retreat from globalisation and multilateralism is a serious risk at a time when international cooperation and coordination are as critical as ever,” the Managing Director said in her global policy agenda as the annual fall meeting of the IMF and the World bank kicked off here. Finance Minister Arun Jaitley is leading the Indian delegation to the IMF and World Bank meetings.
Despite signs of recovery and resilience in some economies, global growth continues to disappoint, with the expected pick-up driven primarily by emerging markets, Lagarde said in her policy paper. “This persistent underperformance has exposed complex underlying trends in many countries — including the difficulty for some groups to adjust to rapid changes in the global economy,” she noted. Lagarde said that policymakers should therefore act and use a balanced mix of all policy levers to revive demand and raise productivity, and ensure the gains from technology and globalisation — which have led to unprecedented global welfare gains in recent decades — are shared more broadly. Lagarde said in many advanced economies, demand is low with the post-crisis recovery being uneven across countries, and output gaps are still negative.
Productivity growth has not recovered, and while the reasons are not fully understood, it is likely owing to several factors that hinder investment, including debt overhangs, and low and uncertain prospects of future demand. “Emerging economy growth improved overall, driven by robust activity in emerging Asia and large stressed economies showing some signs of improvement. Yet vulnerabilities, especially in the corporate sector of some large countries, have persisted,” she said. The IMF chief argued that global economy has benefited tremendously from globalisation and technological change, particularly with regard to expanding consumers’ access to goods and services and helping to lift millions out of poverty in EMDCs (Emerging Markets and Developing Countries). With hindsight, not enough has been done to address the concerns of those who have been adversely affected, creating social tensions and political backlash, she said, adding that this has added to a political climate that favours inward-looking policies, makes reforms more difficult to enact, and puts at risk the well-established overall gains in productivity from globalisation and technological change. Lagarde said she felt that multilateral agreements with broad participation are difficult in an increasingly multi- polar world, but the gains from them are large.
Comprehensive and coordinated policy actions exploit synergies so that the whole is greater than the sum of parts — the effects of individual policy actions are amplified through positive cross-border spillovers, Lagarde said. The G20 stimulus package put together after the financial crisis and the growth strategies agreed at the G20 Brisbane Summit in 2014 provide recent good examples, she noted. “Policymakers should continue efforts toward greater trade integration. Better coordinated actions to reduce external imbalances and manage spillovers, including by clearly communicating policy stances, also remain essential,” Lagarde said. She said policymakers should consistently implement and complete the global financial regulatory reform agenda to enhance financial sector resilience. They should also implement a level-playing field regarding international taxation. “Finally, it is crucial that progress is made toward building a stronger international monetary system, including an adequately-resourced Fund,” she said.
SOURCE: The Financial Express
