Government recognises the significance of signing the free-trade agreement with EU and the advantages it holds for the country, a top official said on Thursday. Textiles Secretary Rashmi Verma said her Ministry "is in constant touch with the Ministry of Commerce to pursue an FTA with EU to boost international trade especially in the textile sector". Verma pointed out that while Bangladesh enjoys preferential treatment and tax benefits for textile exports, India has greater competitive advantage in terms of environmental compliances. As countries of the European Union lay huge importance to environmental compliances, India stands to gain over Bangladesh, she said, laying out the benefits for the country arising post the free trade agreement. Observing that India's textile industry was at a turning point, Verma said: "On one hand, China's export growth in textiles is decreasing, India, riding on cost advantage, has a huge potential to play a prominent role in international textile trade". She further said that roll out of the Goods and Services Tax will greatly help in streamlining the tax structure and improve compliance. The Textiles Secretary appealed to industry to take full advantage of the special package announced by the government for the textile sector, stressing that it needs to focus on innovation, modernisation and technological advancement to become world-leaders in the textile sector. Stressing on the importance of skilling the workforce to become globally competitive, Verma said that at least 10 lakh workers need to be skilled every year to meet the demands of the industry and create employment in the textile sector.
Source: Business Times
India and Russia may sign at least 18 pacts during Russian President Vladimir Putin's Goa visit for the 17th India-Russia annual summit meet later this weekend Kudankulam nuclear power plant. Energy sphere played a vital role role in Russian-Indian trade and economic cooperation, says Putin. Energy sphere played a vital role role in Russian-Indian trade and economic cooperation, says Putin.India and Russia may sign at least 18 pacts during Russian President Vladimir Putin’s Goa visit for the 17th India-Russia annual summit meet later this weekend Kudankulam nuclear power plant. Among the highlights for pacts will be nuclear and defence cooperations, with Putin likely to inaugurate the third and fourth units of the Kudankulam nuclear power plant. Cooperation in nuclear energy will be one of the central themes of the engagement, a Putin’s aide was quoted as saying by news agencies in Moscow. The annual summit between India and Russia will be held on the sidelines of the BRICS summit. Recently India has raised with Russia on the latter’s participation in a military drill with Pakistan days after the Uri attack in which terrorists killed nineteen Indian soldiers. India may insist on strong condemnation of international terrorism, if not cross-border terrorism during the summit. The Russian president had recently said that BRICS is “determined” to fight the terror menace. The meeting between five countries will be a good opportunity to strengthen positions on important issues on international agenda. BRICS nations are determined to fight drug trafficking, terrorism and cooperation, he said. While speaking on the nuclear cooperation, Vladimir Putin said the energy sphere played a vital role in Russian-Indian trade and economic cooperation and that Kudankulam is a major long-term nuclear power plant project. Vladimir Putin in scheduled to reach India today for the summit.
Source: Financial Express
Cross border logistics has become faster in the subcontinent with the implementation of the Motor Vehicles Agreement between Bangladesh, Bhutan, India and Nepal (BBIN). The agreement ensures a smooth transition of cargo and passenger vehicles between the four countries. It will help reduce logistics costs by up to 20 per cent and transit time by 3 days. A Marks & Spencer shipment of Expo Freight (EFL), Sri Lanka's leading forwarder, recently entered India from Bangladesh, making it the first truck to make the cross-border transition without unloading the consignment and transferring it to another truck at the border. EFL's truck arrived in Delhi from Dhaka via Magura, Jessore, the Benapole-Petrapole border, and Kolkata. Global brands as well as the domestic companies of the apparel-centric economies in the subcontinent will benefit from this agreement. It could increase intraregional trade in the region by up to 60 per cent and global trade by more than 30 per cent, according to Sri Lankan media reports. Under BBIN framework, a new customs inspection and verification procedure has been introduced that is carried out using E-Seal. GPS will also be installed in the trucks to allow customers to keep a check on their cargo's exact location. (KD)
Source: Fibre2fashion
Expressing concern over the growing clamour for protectionism in the developed world such as in the United States, Finance minister Arun Jaitley, on Thursday, said the spill-over impact of such policies on other countries would be ‘extremely adverse’. Mr. Jaitley, however, also said he hoped that such concerns would abate once the elections in the U.S. were over. “I do believe that there are trends in the world today which on the surface do indicate that the world, at least a part of the developed world, is moving towards protectionism,” Mr. Jaitley said at BRICS seminar on Investment Flows. “These worries are real because of the fact that if developed countries see a trend of protectionism, the spillover impact of those policies on other parts of the world could be extremely adverse,” he said. The finance minister, however, refrained from taking any specific names, such as U.S. Presidential candidate Donald Trump, who has been vocal about protectionism. Like the post-Brexit British who want to remain an open economy, such threats in the U.S. would also die down once the poll heat is over, he said. The U.S. presidential elections are slated for November 8. “My own experience has been that (despite) some statement made during the elections, the burden of governance subsequently brings about a change. It’s happened in elections the world over including in the United States,” Mr. Jaitley said. “The tenor of the debate is protectionist during the elections and after that you get back to business as usual. So we have to keep our fingers crossed this time and hope that the tenor of free trade returns once the heat of the elections itself is over,” he added.
Source: The Hindu
Promising continued policy push to boost economic activities and investment flows, Finance Minister Arun Jaitley today said domestic reforms will "neutralise" any adverse impact of the global slowdown. Addressing the BRICS investment seminar here ahead of the 5-nation Summit beginning in Goa tomorrow, he said the government has put FDI on automatic route in almost 90 per cent of the areas that are eligible for foreign direct capital. "Over the last two-and-a-half years most of the sectors have been reviewed and we now have probably the most open FDI policy in the world with 90 per cent of FDI coming in through the automatic route," he said. Stating that the ease of doing business has improved massively since the Modi government came to power, Jaitley said many sectors have been brought into the automatic route and now we don't have any instance of cases pending indefinitely before the Foreign Investment Promotion Board. "We have learnt that notwithstanding the fact that there is a contraction as far as global growth is concerned, at least by domestic reforms we can neutralise the impact of the ongoing global slowdown," he said. On India's global competitiveness ranking, which has improved to 39 this year, he said many policy changes in the recent past have added to the ease of doing business. Jaitley said various policy measures and "every significant decisions of the government are aimed in one direction -- that is to promote economic activities and make India more investment friendly". "Our ranking both in the ease of doing business and also in global competitiveness index has moved up significantly in the last few years. And this has been aided by a large number of policy initiatives which have been taken by the government," Jaitley said. Lauding the states for their competitive spirit in making themselves business-friendly, he said "the other silver lining is the states have also become extremely competitive and more investment-friendly". On the need for more cooperation between the BRICS nations (Brazil, Russia, India, China and South Africa), he noted that even though it has improved in the past there is still room for more periodic meetings to expand the areas of cooperation within the five-nation bloc. "We now have a BRICS institution in the form of the New Development Bank and in a remarkably short period of time it has initiated its own projects which it is funding. A contingency reserves arrangement is in place now and there is going to be increased cooperation in the area of customs and taxation," Jaitley said. He also said the grouping has on its agenda many more proposals such as a rating agency and a research institution. The BRICS nations also are facing many challenges, he said, adding that together they represent over 40 per cent of the global population, a large portion of global GDP and a significant part of FDI flows from each other.
Source: Business
With an eye on job creation, the government is going all out to make the textile sector more competitive by pursuing a lower Goods and Services Tax rate and is even willing to allow automobile and wine imports from the European Union in return for market access for Indian apparel. “We are at a critical juncture for Indian textiles as China is moving out of global markets due to increase in labour costs and higher domestic demand. It’s the right time for us to occupy the space, especially in countries where China was exporting, besides the EU and the U.S.,” Textiles Secretary Rashmi Verma said in the capital on Thursday.
Other contenders
Conceding that Bangladesh is poised to overtake India on garment exports and others like Vietnam, Kenya and Ethiopia are catching up, Ms. Verma said the government was seeking to nullify the competitive disadvantage that arises due to these countries getting duty-free access to the EU and U.S. Indian products attract a 9.5 per cent duty in the EU. Finance Minister Arun Jaitley has chaired about six meetings on India’s strategy towards free trade agreements (FTAs) with the textiles and commerce ministries, with a view to offset this disadvantage, she said, adding that the entire cabinet is on board with a proposal to trade-off access to automobiles and wine imports under an India-EU FTA in return for access to Indian textiles.
Seeking trade-off
“It was recognised by the cabinet that the trade-off from allowing automobile and wines from the EU (may be worth it) as the loss is much bigger if we don’t do an FTA and lose jobs in the textile sector,” Ms. Verma said at a conference hosted by the Confederation of Indian Industry. “The commerce ministry is trying but these negotiations take time and the EU has to respond,” she added.
“A one crore rupees investment in most sectors creates ten to twelve jobs, but in textiles it creates 100 jobs. The government realises the need to incentivise the sector for its job-generation potential, especially for women who form 70-80 per cent of its workforce,” Ms. Verma said.
Recent package
Asking the industry to take advantage of the recently announced 3-year package for the sector, Ms. Verma said that the upcoming GST regime will make Indian textiles more competitive. “It will solve many problems, the tax on tax will go away, input tax credits will be given and the differential tax rate on man-made fibres could be fixed in line with the long-standing demand for fibre neutrality,” she pointed out. The textiles secretary said that the industry should engage with a committee in the revenue department on its concerns about GST so that it got a fair deal. “Most probably, the sector is likely to get a lower tax rate. That’s been our discussion with the finance ministry. But the final view will be taken by the GST Council,” she said. The GST Council, chaired by the finance minister, is slated to meet next week to start determining the tax rates for the new indirect tax regime.
Source: The Hindu Business
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$ 49.37 per barrel (bbl) on 13.10.2016. This was lower than the price of US$ 50.00 per bbl on previous publishing day of 12.10.2016. In rupee terms, the price of Indian Basket decreased to Rs. 3300.36 per bbl on 13.10.2016 as compared to Rs. 3329.49 per bbl on 12.10.2016. Rupee closed weaker at Rs. 66.85 per US$ on 13.10.2016 as against Rs. 66.59 per US$ on 12.10.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on October 13, 2016 (Previous trading day i.e. 12.09.2016) |
Pricing Fortnight for 01.10.2016 (Sep 14, 2016 to Sep 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
49.37 (50.00) |
43.95 |
|
(Rs/bbl |
3300.36 (3329.49) |
2936.30 |
|
|
Exchange Rate |
(Rs/$) |
66.85 (66.59) |
66.81 |
Source: PIB
The rupee appreciated by 11 paise to 66.83 against the dollar in early trade on Friday at the Interbank Foreign Exchange on fresh selling of the American currency by exporters. Besides, the retail inflation in September dropping to 13-month low of 4.31 per cent and a higher opening of the domestic equity market also supported the rupee, but dollar’s strength against some currencies overseas capped the gains, forex dealers said. The rupee had lost 41 paise, its biggest one-day fall in over three months, to close at fresh three-week low of 66.94 against the dollar on Wednesday on renewed concerns over potential interest rate hike by the U.S. Federal Reserve. Meanwhile, the benchmark BSE Sensex recovered by 69.68 points, or 0.25 per cent, to 27,712.79 points in early trade.
Source: The Hindu
Customs spokesman says headwinds still present in foreign trade development; world growth is still slow. CHINA'S exports fell by a sharp 10 per cent last month, raising concerns about the strength of the recent rebound of the world's second largest economy. Imports also under-performed, falling by 1.9 per cent. The disappointing figures come after a string of positive data metrics, such as purchasing managers' indices (PMIs), auto sales and a rebound of both imports and exports over the past two months. In August, the country's imports beat expectations, breaking a two-year losing streak to post a 1.5 per cent annual increase. Customs spokesman Huang Songping said on Thursday in Beijing: "There remain obvious obstacles facing China's foreign trade development. World growth remains sluggish and global trade lacks effective support." The country's trade surplus fell to US$42 billion, down by around US$10 billion month on month. Julian Evans-Pritchard, an economist with Capital Economics, said: "China's exports weakened last month on the back of subdued external demand. Still-sluggish global demand appears to blame. Overall, today's data is a reminder that China faces a challenging external environment, which is likely to keep export growth subdued in the coming quarters". China's economy had shown signs of stabilising in the past two months as government-led stimulus measures kicked in. This week, an industry group said auto sales grew at their fastest rate in three years last month. But Thursday's trade numbers were a reminder that the economy remained vulnerable and hobbled by issues such as debt, over-capacity and the overhaul of state-owned enterprises still unaddressed. Looking ahead, analysts said they expect the Chinese government to pursue loose fiscal and monetary policies to further support growth. Broken down, the export numbers were dragged down by demand for lower value-added goods (such as clothing and shoes) from European and American markets. Global demand has also been affected by the upcoming US elections and the Brexit vote in the middle of the year. Julia Wang, an economist with HSBC, said: "There are still a number of headwinds to global growth and, in particular, business investment, which may spell further weakness for China's export sector." Imports are proving more stable, analysts say, with imports of commodities such as coal, copper and iron ore on the rise. These points to strong domestic demand. The weak export data will make a stronger case for the central bank to further devalue the yuan, analysts say. The Chinese currency has been under pressure with billions of yuan leaving the country as investors seek to diversify investment options. This week, the yuan hit a six-year low against the dollar, with the rate expected to fall further this year. So far this year, the Chinese currency has depreciated by about 3 per cent against the dollar and 6 per cent against a broader basket of currencies.Mr Evans-Pritchard said: "The continued underwhelming performance of Chinese exports adds weight to our view that the People's Bank will maintain its recent policy of gradual trade-weighted renminbi depreciation in coming quarters." The Hong Kong stock market closed down 1.61 per cent on the news, but Shanghai rebounded, recovering earlier losses to end the day up 0.09 per cent.
Source: Business Times
Singapore and Australia have signed an upgraded Singapore-Australia Free Trade Agreement (SAFTA) that will see an increase in the flow of goods, services, and investment between the two countries, according to Singapore’s Ministry of Trade and Industry (MTI). The upgraded SAFTA was signed October 13 in Australia by Singapore’s Minister for Trade and Industry Lim Hng Kiang and Australia’s Minister for Trade, Tourism and Investment Steven Ciobo. It was reviewed under the ambit of the Singapore-Australia Comprehensive Strategic Partnership (CSP) agreement adopted by Prime Minister Lee Hsien Loong and Australia’s then-Prime Minister Tony Abbott in June 2015. “Under the CSP, Singapore and Australia will open a new, dynamic chapter in our bilateral partnership by deepening existing areas of cooperation and catalysing new ones, including in the area of economic cooperation and integration,” said MTI in a statement. The perks of the deal include updated trade rules in goods, increased opportunities for businesses to bid for government procurement contracts, enhanced access to each other’s services sectors, and greater facilitation for investments. Other enhancements include improved mobility for business persons, and rules to facilitate trade in the digital economy. Negotiations for this third review of the SAFTA were launched in September 2015 and concluded in September 2016. The upgraded SAFTA is expected to enter into force in 2017. Once effective, Singapore and Australian companies will enjoy greater access to each other’s markets across many sectors. One of these benefits is improved and more flexible rules of origin to make it easier for Singapore exports to Australia to qualify for tariff-free treatment. To enhance trade facilitation, the FTA has also been updated to reflect current customs procedures. Non-tariff barriers that impede trade in goods, such as wine and distilled spirits, cosmetics, medical devices, and pharmaceutical products, will also be reduced. Singapore and Australian companies will likewise benefit from improved access to the partner country’s government procurement market. Singapore investors will see greater facilitation of investments into Australia, in particular through higher thresholds for investments screened by Australia’s Foreign Investment Review Board (FIRB). For example, investors will not need to seek approval from FIRB for investments below AUD1.094 billion (non-sensitive sectors) into Australia. Singapore and Australia commit to grant better access to each other’s services markets, such as by recognizing professional qualifications in areas like engineering and accountancy. They agree as well to improve mobility and length of stay for their business people, including for intra-corporate transferees. Singapore ranks as Australia’s fifth largest trade and investment partner, and Australia’s largest trading partner among the ASEAN countries. Bilateral trade has grown steadily over the years and reached SGD20 billion in 2015.
Source: The Business Times
Customs spokesman says headwinds still present in foreign trade development; world growth is still slow. CHINA'S exports fell by a sharp 10 per cent last month, raising concerns about the strength of the recent rebound of the world's second largest economy. Imports also under-performed, falling by 1.9 per cent. The disappointing figures come after a string of positive data metrics, such as purchasing managers' indices (PMIs), auto sales and a rebound of both imports and exports over the past two months. In August, the country's imports beat expectations, breaking a two-year losing streak to post a 1.5 per cent annual increase. Customs spokesman Huang Songping said on Thursday in Beijing: "There remain obvious obstacles facing China's foreign trade development. World growth remains sluggish and global trade lacks effective support." The country's trade surplus fell to US$42 billion, down by around US$10 billion month on month. Julian Evans-Pritchard, an economist with Capital Economics, said: "China's exports weakened last month on the back of subdued external demand. Still-sluggish global demand appears to blame. Overall, today's data is a reminder that China faces a challenging external environment, which is likely to keep export growth subdued in the coming quarters". China's economy had shown signs of stabilising in the past two months as government-led stimulus measures kicked in. This week, an industry group said auto sales grew at their fastest rate in three years last month. But Thursday's trade numbers were a reminder that the economy remained vulnerable and hobbled by issues such as debt, over-capacity and the overhaul of state-owned enterprises still unaddressed. Looking ahead, analysts said they expect the Chinese government to pursue loose fiscal and monetary policies to further support growth. Broken down, the export numbers were dragged down by demand for lower value-added goods (such as clothing and shoes) from European and American markets. Global demand has also been affected by the upcoming US elections and the Brexit vote in the middle of the year. Julia Wang, an economist with HSBC, said: "There are still a number of headwinds to global growth and, in particular, business investment, which may spell further weakness for China's export sector." Imports are proving more stable, analysts say, with imports of commodities such as coal, copper and iron ore on the rise. These points to strong domestic demand. The weak export data will make a stronger case for the central bank to further devalue the yuan, analysts say. The Chinese currency has been under pressure with billions of yuan leaving the country as investors seek to diversify investment options. This week, the yuan hit a six-year low against the dollar, with the rate expected to fall further this year. So far this year, the Chinese currency has depreciated by about 3 per cent against the dollar and 6 per cent against a broader basket of currencies.Mr Evans-Pritchard said: "The continued underwhelming performance of Chinese exports adds weight to our view that the People's Bank will maintain its recent policy of gradual trade-weighted renminbi depreciation in coming quarters." The Hong Kong stock market closed down 1.61 per cent on the news, but Shanghai rebounded, recovering earlier losses to end the day up 0.09 per cent.
Source: Business Times
