The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 18 OCTOBER, 2016

NATIONAL

 

INTERNATIONAL

 

Textile Raw Material Price 2016-10-17

Item

Price

Unit

Fluctuation

Date

PSF

1035.67

USD/Ton

0%

10/17/2016

VSF

2505.23

USD/Ton

0%

10/17/2016

ASF

1872.23

USD/Ton

0%

10/17/2016

Polyester POY

1054.99

USD/Ton

0%

10/17/2016

Nylon FDY

2377.44

USD/Ton

0%

10/17/2016

40D Spandex

4383.41

USD/Ton

0%

10/17/2016

Nylon DTY

2040.14

USD/Ton

0%

10/17/2016

Viscose Long Filament

1255.59

USD/Ton

0%

10/17/2016

Polyester DTY

2570.61

USD/Ton

0%

10/17/2016

Nylon POY

5594.41

USD/Ton

0%

10/17/2016

Acrylic Top 3D

1292.73

USD/Ton

0%

10/17/2016

Polyester FDY

2184.27

USD/Ton

-0.34%

10/17/2016

10S OE Cotton Yarn

2080.26

USD/Ton

0.21%

10/17/2016

32S Cotton Carded Yarn

3414.60

USD/Ton

0.52%

10/17/2016

40S Cotton Combed Yarn

3878.20

USD/Ton

0.38%

10/17/2016

30S Spun Rayon Yarn

3075.81

USD/Ton

0%

10/17/2016

32S Polyester Yarn

1731.07

USD/Ton

-0.85%

10/17/2016

45S T/C Yarn

2585.47

USD/Ton

0%

10/17/2016

45S Polyester Yarn

1857.38

USD/Ton

0%

10/17/2016

T/C Yarn 65/35 32S

2243.71

USD/Ton

0%

10/17/2016

40S Rayon Yarn

3209.54

USD/Ton

0%

10/17/2016

T/R Yarn 65/35 32S

2347.72

USD/Ton

0%

10/17/2016

10S Denim Fabric

1.36

USD/Meter

0.22%

10/17/2016

32S Twill Fabric

0.84

USD/Meter

0.53%

10/17/2016

40S Combed Poplin

1.18

USD/Meter

0.13%

10/17/2016

30S Rayon Fabric

0.69

USD/Meter

0%

10/17/2016

45S T/C Fabric

0.66

USD/Meter

0%

10/17/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14859 USD dtd. 17/10/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

High cotton prices to affect apparel company margins

Cotton prices increased by 30 per cent year-on-year in Q2FY17 and it is likely to have a negative impact on margins of apparel companies, says a recent report. Prices of cotton went from Rs 95/kg in March-April 2016 to Rs 125-130/kg in September 2016. Vardhman Textiles is the only company in the coverage universe that is likely to report a margin expansion. Unlike the other apparel companies, Vardhman Textiles buys its yearly cotton requirement in March-April every year. Thus, the company will report a margin expansion of 16 basis point (bps) YoY, says the ICICIdirect.com research. However, EBDITA margins of Arvind, Page Industries, Kewal Kiran and Rupa are likely to decline 70 bps, 108 bps, 84 bps and 100 bps YoY, respectively. The report predicts EBDITA of its coverage universe to remain flat with a growth of merely 0.2 per cent YoY to Rs 735 crore. Coverage universe profit after tax (PAT) growth including exceptional income would be around 70 per cent YoY. Excluding exceptional income, it will grow by 6 per cent YoY. Coverage universe PAT growth (including exceptional income) is expected to be driven by higher net profit of Vardhman Textiles owing to extraordinary income of Rs 210 crore on stake sale of Vardhman Yarns and Threads.

Cotton Association of India has predicted that cotton output in the country will decrease by close to 10 per cent due to the white-fly attack on the crop in the northern states. However, cotton prices will reduce gradually as the new crop arrives in Q3FY17, says the report. The new report also states that the revenue growth of apparel companies is likely to be moderate due to subdued consumer behaviour at the retail level. Except for Page Industries and Kewal Kiran, all other companies in the coverage universe are likely to register single digit growth. Page’s revenue growth is expected to be driven by 17.2 per cent YoY volume growth and 5.4 per cent YoY realisation growth. Kewal Kiran, Arvind and Rupa are likely to register YoY revenue growth of 10 per cent, 9 per cent and 7 per cent, respectively. “In the last two years, Arvind’s brands business has been growing in excess of 20 per cent. We expect the momentum to continue and the brands and retail business to grow 25 per cent YoY due to new store addition and product basket extension. Vardhman Textiles is expected to register a revenue decline of 8.8 per cent YoY on account of sale of stake in Vardhman Yarns and Threads. We expect our overall apparel coverage universe to post YoY revenue growth of 4.2 per cent,” says the report. India’s textile exports to USA continued their disappointing performance with YTD CY16 textile exports to US declining by about 1 per cent YoY compared to a growth of 8.2 per cent YoY in CY15. However, with government focus on boosting employment generation, it recently provided a financial assistance package for supporting the exports in garmenting sector.

SOURCE: Fibre2fashion

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Indian cotton exports drop 11.58% in April-June quarter

Indian cotton yarn exports dropped 11.58 per cent in value and 4.44 per cent in volume during the first quarter of fiscal 2017 ended June, as against the same period last fiscal. Average cotton yarn exports from India which used to stand at 140 million kg per month have declined to around 100 million kg currently, driven by lower exports to China. “China, India's biggest cotton yarn importer, bought 99.09 million kg of yarn in the April-June 2017 quarter as compared to 149.66 million kg in the corresponding quarter of prior fiscal, down a massive 33.78 per cent, a leading daily quoted M. Senthil Kumar, chairman of Southern India Mills' Association (SIMA) as saying. This has also led to lower utilisation in mills. India has capacity to produce 500 million kg of yarn vis-à-vis which, capacity utilisation is only 470 million kg currently. However, exports to Bangladesh, which is the second biggest buyer of Indian cotton yarn, witnessed exports shooting up by 38.87 per cent year over year in value and 52.1 per cent in volume during the same period.

SOURCE: Fibre2fashion

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Powerloom industry sees a ray of hope in new district

State Government’s proposal to develop the Sircilla textile town on the lines of Tirupur, in Tamil Nadu, has rekindled hopes among the distressed powerloom weavers of Sircilla in the new Rajanna-Sircilla district. The textile town of Sircilla, which always hits the headlines due to crisis in the powerloom industry and suicides by the powerloom weavers in the integrated Karimnagar district, is seeing a ray of hope in the proposal to replicate the Tirupur, capital of knitwear industry in the country, model.

Faith in KTR

The residents have confidence in Sircilla MLA and Minister for Municipal Administration and IT K Taraka Rama Rao, and hope that the proposal would take root soon. The powerloom weavers suggest that the government take up rapid modernization of the powerlooms in Sircilla town to produce value added fabric as part of implementing Tirupur model. Sircilla town has the highest number of powerlooms in the State. It accounts for 33,000 of the total 42,000 powerlooms in entire Telangana State. The weavers feel that the State Government in association with the Centre should replace the existing the powerlooms with the jet looms to produce value added fabric for good marketing.

Easy redressal

President of AITUC affiliated Sircilla Powerloom Workers Union Samalla Mallesham said that the new district would help the residents easier access to district officials for redressal of long pending woes. “On Monday, we submitted a petition urging Collector Krishna Bhaskar to take measures for the increase of wages of the powerloom weavers,” he said pointing out that the powerloom owners had not increased wages of Rs 0.20 paise for weaving 10 pieces of fabric on the looms since last one year. “It is the right time for the state government to replicate the Tirupur model in Sircilla textile town,” he said and urged the government to set up a powerloom corporation for the supply of yarn and purchase of fabric from the weavers to provide round the year employment to the weavers. CITU trade union leader P Ravi wanted the government to take steps to ensure that the powerloom weavers work for only eight hours a day on the looms instead of existing 12 hours per day. He hoped that the formation of new district would help the powerloom industry rid all crisis.

SOURCE: The Hindu

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Rupee level not responsible for slowdown in exports

Slowdown in Indian exports have more than the global economy to blame. In fact, India is underperforming in global trade more due to the bottlenecks in its economy rather than global slowdown. And a currency depreciation is not a must for revival, says HSBC. An analysis by HSBC suggests that removing sector-specific bottlenecks is likely to spur job creating low technology exports. Besides, improving the business environment to attract FDI inflows can be hugely beneficial for the more sophisticated high technology exports. Trade negotiations and lower tariff rates can benefit both. The British bank has called for sector specific approach to spur exports as the factors affecting exports in different sectors are different. “Weakening the rupee is not a cure. In fact too much exchange rate volatility could be counterproductive by hurting FDI inflows” said Pranjul Bhandari, chief India economist, HSBC. “Obsessing about the rupee misses the woods for the trees”. The rupee seems to be explaining under 20% of India's exports slowdown. While domestic bottlenecks is most important, explains the remaining 50%, the report said HSBC also notes that there may be substantial divergence between goods and services exports. For instance, goods exports tend to use a higher proportion of imported inputs than do services exports. The loss arising from a stronger rupee in goods exports is to some extent offset by gains from cheaper imports.

Acknowledging that India's exports are slowing, HSBC report says that growth in both services and goods exports is moderating, implying it’s a system wide problem. Exports have been slowing both in terms of value and volume of exports. This means that it’s not just due to falling global commodity prices. Of the three main export drivers, domestic bottlenecks matter the most, followed by exchange rates. World growth matters relatively less, perhaps given the inelastic demand for these products. Additionally, sector specific factors also play an important role.

SOURCE: The Economic Times

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India to set up logistic hubs near sea ports

The Indian government is setting up logistic hubs near sea ports with private sector participation to address several challenges related to receiving shipments and also inland transportation of goods. The government is also trying to make electronic data interchanges at major ports that are completely under the control of the central government. This was informed by union commerce minister Nirmala Sitharaman while inaugurating an ASSOCHAM conference on 'Strategies for double digit growth in exports' held in New Delhi. “We are establishing logistic hubs nearer the sea ports, which would address immediate concerns that would be sustainable in the long term,” Sitharaman said.

Highlighting that a complete, comprehensive picture is being handled on the logistics front, she added that her ministry was engaging with railways to cut down costs. She also informed that a review of Foreign Trade Policy (FTP) is underway and that the government was identifying more and more hurdles each year, without which exporters or manufacturers would be better off.

SOURCE: Fibre2fashion

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Centre proposes 26% peak rate for GST

The Centre is likely to propose a four-tier tax structure under the goods and services tax (GST), with a peak slab of 26 per cent. Almost 20-25 per cent of all taxable goods, including those consumed by the middle class, could come under the peak rate. The idea is to arrive at a common ground with the states that are concerned over revenue loss. A discussion paper to be presented at the three-day GST Council meet that begins on Tuesday is believed to have proposed a standard rate of 18 per cent. “We are currently looking at four tax slabs, with the highest incidence of tax at 26 per cent. It is lower than the 40-per cent rate proposed for very limited demerit items (by a committee led by the Chief Economic Adviser, Arvind Subramanian). A lower rate of 26 per cent can be imposed on more items. This will address concerns of the states, too,” said a government official. The states are pitching for a standard rate of 22 per cent, while the Centre has pressed for one of 18 per cent. The lowering of the top slab by incorporating more items may act as a middle-ground for the Centre and the states.

Centre proposes 26% peak rate for GST This will be the third GST Council meeting since its incorporation in September. The Council is chaired by Finance Minister Arun Jaitley, with state finance ministers or other representatives as members. The GST panel, chaired by Subramanian, had proposed a “sin tax” of 40 per cent on limited demerit items such as aerated drinks, luxury cars, pan masala, tobacco and tobacco products. This sparked protest from the aerated drinks sector with Coca-Cola arguing that the 40 per cent tax would leave the company with no option but to shut down certain factories. 

Currently, aerated drinks with added sugar draws a central excise duty of 18 per cent and a state value added tax of 12.5 per cent, making the total indirect tax 30.5 per cent. The Subramanian panel recommended a low rate of 12 per cent for certain items, a standard rate of 17-18 per cent for a majority of items. According to official sources, the 26-per cent rate might be imposed on big cars, besides other premium or luxury items. Sources also did not rule out the possibility of another slab over 26 per cent for luxury cars.

Discussions were still on whether the 40-per cent rate should remain for luxury cars as proposed by the Subramanian panel. “The multiple tax slabs will open a Pandora’s box under the GST regime. More the tax rates, more the classification issue. There will be confusion in terms of how these will work,” said Bipin Sapra of EY. Praveen Khandelwal, secretary general, Confederation of All India Traders, said too many tax slabs would not only distort the single-tax GST fabric but will also lead to complications, making voluntary compliance a difficult task. Besides GST rates, the three-day GST meeting would likely discuss service tax administration and central registration issues. Although states had agreed to the dual control mechanism initially, which involved the Centre administering all 11 lakh service tax assesses till the time states develop competence, in the last meeting they raised concerns about the agreed mechanism. The states did not want to lose administrative control over service tax imposed by them on restaurants and entertainment. They also said it was hard to distinguish between goods and services in sectors such as construction. The Centre is also likely to pitch for central registration for telecommunication and the banking sector in the meeting, as opposed to multiple registrations in each state.

SOURCE: The Business Standard

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‘Include traders in GST Council’

Trade and industry sources have voiced concern over exclusion of traders in the GST Council. Stressing the need for formation of a GST Trade Committee under the GST Council, the Senior President of Tamilnadu Chamber of Commerce and Industry S Rethinavelu said that the association has appealed to the Centre to consider forming an internal committee. “Representatives of leading chambers of commerce from all states could be members of this trade committee and decisions on all crucial matters relating to GST be taken only after discussion and in consultation with this,” he said. “The model GST law, which is in the public domain, will be corrected by the GST Council.

SOURCE: The Hindu Business Line

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'Job-worked goods can be counted in discharge of export obligation'

We are an Export Oriented Unit (EOU). When we supply our manufactured goods to advance authorisation holders in a Domestic Tariff Area (DTA), we do not charge duty as per S.No. 22 of Notification No. 23/2003-C.E., dated March 31, 2003. Our excise authorities permitted this but now the audit team says that we have to surrender the exemption availed on the inputs used in the manufacture of the goods supplied at "nil" duty, in accordance with the second proviso to para 6 of Notification No. 22/2003-C.E., dated March 31, 2003, and proviso under para 3 of Notification 52/2003-Cus., dated March 31, 2003. Is there any argument we can put before them to avoid this unexpected liability?

In fact, the recent CBEC Circular no. 1046/34/2016-CX., dated September 16, 2016 covers this issue specifically and says that the said provisos (mentioned above) will not apply in case of supply of manufactured goods by EOU to Advance Authorisation holder in DTA, without payment of Central Excise duty. You can show the circular to the audit party and avoid any arguments.

In your Q&A of October 4, 2016, you have said that as per Para 5.04 (d) of FTP, "Shipments under Advance Authorisation, DFIA, Drawback scheme or reward schemes under Chapter 3 of FTP would also count for fulfilment of EO under EPCG Scheme". Now we are using imported raw materials supplied free of charge by the buyer, cleared under notification 32/97-Cus dated April 1, 1997. Can we count the export of job-worked goods also towards discharge of export obligation against EPCG authorisation?

Conceptually, I see no problem for that, as the advance authorisation and imports for jobbing are covered under the same duty exemption scheme. However, as Para 5.04 (d) of the FTP does not specifically mention imports for jobbing under the said notification 32/97-Cus, I suggest that you write to DGFT for suitable clarification or amendment to the FTP.

We are an EOU. We have procured some inputs from DTA. After carrying out some processes on these inputs in our EOU, we want to send the semi-finished goods to a SEZ unit for carrying out a special process and then bring them back to our unit for further processing for completion of the finished product. Can we sell such finished product in DTA on payment of normal excise duty under S.No. 3 of the notification 23/22003-CE dated March 31, 2003?

No. As per Rule 43 of the SEZ Rules, 2006, SEZ can carry out job-work for EOU or DTA units, but the goods have to be exported from a SEZ. In case of EOUs, there is an option to bring back the goods to the EOU and export from there.

Is threshold exemption under notification No. 33/2012-S.T. available to Resident Welfare Associations?

Yes. Under this notification, taxable services of aggregate value not exceeding Rs10 lakh in any financial year is exempted from service tax. The definition of "aggregate value" at Explanation B of the notification does not include the value of services that are exempt from service tax.

SOURCE: The Business Standard

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India, US trade ministers to meet on October 20 as part of Trade Policy Forum

Visa, customs cooperation, greater market access for goods and intellectual property rights are the key issues that will be discussed during the trade policy forum (TPF) meeting between India and the US on October 20. As part of the TPF, Commerce and Industry Minister Nirmala Sitharaman and US Trade Representative Michael Froman will meet on October 20. Before the ministerial level meeting, Commerce Secretary Rita Teaotia and Deputy US Trade Representative Robert Holleyman will deliberate upon the issues on October 19. “IPR issues like evergreening of patents, compulsory licensing; ways to promote trade and investments between the countries; trade secrets, market access for agri products will figure in both the meetings,” an official said. After the ministerial level meeting, a joint statement will be issued. The meetings assumes significance as the TPF is the premier bilateral forum for discussion and resolution of trade and investment issues between the two countries. It has five focus groups: Agriculture, Investment, Innovation and Creativity (intellectual property rights), Services, and Tariff and Non-Tariff Barriers.

India has consistently maintained its stand that its IPR laws are compliant with global and WTO norms, but the US has raised concerns over the patent regime, particularly in the pharmaceutical sector. On trade secrets, the US wants a separate law to protect this. Besides, the official said, both the sides would discuss the proposed social security agreement, reduction of non-trade barriers and high visa costs in the US which is impacting Indian IT professionals working there. In its meeting in July last year, India had pressed for setting up a high level group to discuss India’s concerns on US Totalisation and Social Security Act. According to India, this law discriminates Indian worker’s in the US who ended up losing their social security contributions due to discrepancy in the visa and social security regimes.

India wants early conclusion of the totalisation agreement or Social Security Agreement with the US. It aims to protect interests of professionals of Indian-origin who contribute more than USD 1 billion each year to the US social security. Under this pact, professionals of both the countries would be exempted from social security taxes when they go to work for a short period in the other country. The current bilateral trade between the countries is around USD 100 billion. Both the sides have agreed to take it to USD 500 billion in the coming years. India received USD 17.95 billion in FDI from the US companies between April 2000 and March 2016.

SOURCE: The Financial Express

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BRICS summit: How India failed to convince other nations on Pakistan

The Indian side, led by Prime Minister Narendra Modi and his officials, pushed for the BRICS Summit Goa Declaration to specifically mention “cross-border terrorism” that India was faced with and also the names of Pakistani-based terror outfits. However, it failed to convince the other member states. The Goa Declaration didn’t refer either to the Jaish-e-Mohammed, which is headed by Masood Azhar, the man India believes was behind the Pathankot terrorist attack, or the Hafiz Saeed-led Jamaat-ud-Dawa. Saeed is considered to be the mastermind of the 26/11 Mumbai terrorist attacks. It did, however, name such groups as the Islamic State, Jabat-al-Nasra, the Syrian Islamist rebel group, and other UN designated groups. Amar Sinha, India’s chief negotiator in the BRICS, said that India couldn’t get a consensus on naming Pakistan-based terrorist outfits since it doesn’t concern all the BRICS countries.

Later, Islamabad criticised Prime Minister Narendra Modi’s statement where he called Pakistan “the mothership of terrorism”. Sartaj Aziz, foreign affairs advisor to Pakistan Prime Minister Nawaz Sharif, said that Modi’s statement was misleading and a desperate attempt to hide India’s brutalities in Kashmir. “Pakistan joins all the members of BRICS and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) in condemning terrorism and reaffirms its full commitment to fight the menace of terrorism,” Aziz said. Other BRICS leaders, particularly Russia’s Vladimir Putin and China’s Xi Jinping, focused their speeches on strengthening the BRICS economic integration. All other leaders sidestepped the Indian PM’s push for criticism of Pakistan as a sponsor of terrorism. Putin called for more cooperation among BRICS members in the energy sector by instituting a BRICS Energy Agency. Both India and China are key partners of Russia in the sector. On Saturday, Putin and Modi had signed an agreement to construct a Russia-India gas pipeline. Xi cautioned against protectionism and said openness held the key to overcome sluggish economic growth. The Chinese side had initially also proposed that the grouping study a BRICS Free Trade Agreement (FTA). However, other members, particularly South Africa, are apprehensive about cheaper Chinese goods flooding their market. Sinha clarified that a BRICS FTA was never on the agenda. Sources said it was just a trial balloon floated by the Chinese.

Another agreement that eluded the BRICS summit was on setting up a credit ratings agency. However, it was felt that such institutions needed to have credibility and there was a need for experts to study the proposal in greater detail. The agreement to set up a BRICS Agriculture Research Platform is likely to be helpful for an agrarian country like India, as would the intent to have greater cooperation in railway research. The members also strongly supported strengthening of the New Development Bank (NDB), or the BRICS Bank, which aims to double its lending to $2.5 billion by next year and increase its staff strength from existing 60 to 350 by the third year of its operation. The other achievements of the Goa summit were the decision to set up a BRICS Institute for Economic Research and Analysis, agreement on cooperation among national banks of BRICS member countries and the NDB.

HITS OF THE SUMMIT

  • Agreement on setting up an Agriculture Research Platform
  • Discussions to set up a Railway Research Network
  • All members committed to support NDB, popularly known as BRICS Bank

MISSES FOR INDIA

  • Despite Modi’s urgings to fellow BRICS leaders, Goa Declaration has no mention of “cross-border” terrorism
  • Goa Declaration doesn’t mention Pak-based terror outfits, like JeM or JuD
  • Agreement on BRICS credit rating agency postponed

SOURCE: The Business Standard

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New Zealand to boost ties with India

New Zealand Prime Minister John Key is aiming to strengthen political and economic links with India during his visit to New Delhi next week. Key, who is leading a business and education delegation from October 24 to 28, will hold talks in New Delhi with President Pranab Mukherjee, who visited New Zealand earlier this year, and Prime Minister Narendra Modi.

SOURCE: The Hindu Business Line

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BRICS Summit: India, Brazil finalise text of bilateral investment pact

Seeking to scale up their economic engagement, India and Brazil today finalised text of a bilateral investment deal and decided to expand overall ties even as the two countries sought united global action without “distinction” or “discrimination” to deal with terrorism. After holding wide-ranging talks with Brazilian President Michel Temer, Prime Minister Narendra Modi said India deeply appreciated Brazil’s support to its actions in combating terror, noting both countries will work for early adoption of the Comprehensive Convention Against International Terrorism (CCIT) by the UN. In the talks, Temer supported New Delhi’s bid for membership of the Nuclear Suppliers Group and conveyed to Modi that Brazil will work with other member countries of the elite bloc to facilitate India’s entry into it.

In a statement to the media after the talks, Modi said both countries have finalised the text of the bilateral investment agreement which will provide “much needed momentum” to increased bilateral business and investment linkages. Modi said he has sought greater market access and investment opportunities for Indian products and companies in Brazil and was “thankful” for Temer’s “positive consideration”. Temer was here to attend the annual summit of BRICS which took place yesterday. It is his first bilateral visit outside Latin America after assuming charge of the high office in August. “President Temer and I have reviewed the full range of bilateral cooperation. Noting the potential for much more, we have agreed to scale up our engagement. Also Read: BRICS 2016: India, Brazil ink 4 MoUs in Goa; Narendra Modi lauds Brazil’s support for India’s actions against terrorism

This is in line with our mutual desire for a reinforced strategic partnership,” Modi said in presence of Temer. On NSG issue, Modi thank Brazil for understanding India’s aspiration for membership of the group. Referring to the threat of terrorism, Modi said “We deeply appreciate Brazil’s support for India’s actions in combating terrorism. We agreed that the world must come together to fight this menace without distinction or discrimination.” Talking about Brazil’s priority to reviving the domestic economy, Modi said India can be a valuable partner in it. “I welcome Brazilian companies to come and invest in India and to forge long term commercial partnerships,” he said.

The two leaders met a group of CEOs of top companies from both countries to explore ways to deepen economic engagement. “We have also made progress in opening new areas of cooperation during this visit in drug regulation, agricultural research and on cyber security issues. “President Temer and I also agreed to intensify and strengthen our coordination in important international fora. There is much that is common in our approach and positions. We will work closely at the United Nations, the G-20, G-4, WTO, BRICS, IBSA and other important platforms,” Modi said.

SOURCE: The India

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Global Crude oil price of Indian Basket was US$ 49.57 per bbl on 17.10.2016

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$ 49.57 per barrel (bbl) on 17.10.2016. This was lower than the price of US$ 49.94 per bbl on previous publishing day of 14.10.2016.

In rupee terms, the price of Indian Basket decreased to Rs. 3310.03 per bbl on 17.10.2016 as compared to Rs. 3338.72 per bbl on 14.10.2016. Rupee closed stronger at Rs. 66.78 per US$ on 17.10.2016 as against Rs. 66.85 per US$ on 14.10.2016. The table below gives details in this regard:

Particulars

Unit

Price on October 17, 2016 (Previous trading day i.e. 14.09.2016)

Pricing Fortnight for 16.10.2016

(Sep 29, 2016 to Oct 12, 2016)

Crude Oil (Indian Basket)

($/bbl)

49.57               (49.94)

48.69

(Rs/bbl

3310.03         (3338.72)

3243.24

Exchange Rate

(Rs/$)

66.78                (66.85)

66.61

SOURCE: PIB 

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Sindh govt to launch textile city at Port Qasim

The Sindh government has decided to launch Pakistan Textile City at Port Qasim from its resources in case the federal government decides to wind up the project. This decision was taken by Sindh Chief Minister Syed Murad Ali Shah while presiding over a meeting here at the CM House. The meeting was attended by Minister Industries Manzoor Wassan, Chief Secretary Siddique Memon, Secretary Industries Rahim Soomro, Principal Secretary Naveed Kamran Baloch and others.

Briefing the chief minister Minister Industries Manzoor Wassan said that Pakistan Textile City Ltd (PTCL) is a public-private joint venture company. It was initiated in 2004 but the actual development work was started in 2007 with initial equity of Rs1.1 billion. Wassan said that the Sindh government contributed Rs127 to KWSB for dedicated water pipelines as its commitment to share 50 percent of cost with federal government which contributed only Rs199 million. Wassan said that the objective of the project was to boost export potential of value added textile products and it would create around 80,000 direct jobs and another 80,000 indirect jobs.

Talking about the shares in the company the Industries minister said that Sindh government owns 16 percent shares. He added that PQA issued allotment letter on August 27, 2006 on 50 years lease at the cost of Rs1 million percent. Secretary Industries Rahim Soomro said the company availed a loan of Rs2.4 billion which was subsequently. The federal government has decided to wind up the project for which a number of meetings have been held in Islamabad. The chief minister directed the chief secretary to talk to federal government. The Sindh government was ready to launch the project from its own resources. This is most important project which has vast potential to for employment and value addition. The chief minister directed minister Industries to coordinate with the PTCL members and make necessary working to start the project.

Meanwhile, Sindh Chief Minister Syed Murad Ali Shah has said that he was well aware that there some issues have developed in the public sector universities for certain reasons. “I am trying to resolve them and onward the process of appointing a new vice chancellor would be started at least six months before the retirement of the outgoing vice chancellor.” This he said while talking to a delegation of federal Higher Education Commission led by its chairman Professor Dr. Mukhtar Ahmed. The other delegation members include Dr Raza Bhatti and Syed Naveed Hussain Shah. Secretary Education Fazal Pechuho, Secretary U&B Naveed Shaikh and principal secretary to CM Naveed Kamran Baloch. The HEC chairman said that there were some duplications of the functions of provincial HEC and federal HEC. On this the chief minister said that he would convene a meeting of provincial HEC to discuss the law. The chairman said that the federal HEC was giving grants to the universities working in public sector in Sindh. He added that they were opening some campuses of different universities in TM Khan, Ghotki, Qambar Shahdadkot, Kashmore and Shikarpur. The chief minister said that he was going to improve university education by taking drastic steps. “I have declared emergency in education sector so that education right from primary to university level could be improved,” he said. He said that in the universities not only their faculties needed to be improved but their administration and financial issues are to be rationalised,” he said. “I would not allow any kind of politics in the educational institutions,” he said.

The chief minister said that the federal HEC has Rs91 billion for universities but the provincial universities have some complaints that they were not being given funds according to their strength and ratio. The chairman assured the chief minister that the provincial universities were being looked after properly but even then he would address their grievances. It was pointed out in the meeting that 41000 PhDs are required all over Pakistan but hardly 11000 PhDs are teaching in different universities. The chief minister said that he had given special incentives for scholarships for PhD and also gives special allowance for those who posses PHD degree. The chairman HEC said that he would give detailed briefing to the chief minister on the working of HEC shortly.

SOURCE: The Nation

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Pakistan textile exporters must take maximum benefit out of zero-rating

The Minister of Commerce, Engr. Khurram Dastgir Khan here Monday called upon Textile exporters for taking maximum benefit out of Zero-Rating. He said this while chairing a meeting with a delegation of Pakistan Towel Manufacturers Association. The delegation highlighted in the meeting the main domestic and international issues that they are facing and which are adversely affecting their exports. The delegation informed the minister that there has been a significant increase in the export of towels in recent years and to further boost exports the exporters must be given relief from indirect taxes that are levied under different heads. The minister assured them that every step will be taken to resolve all the issues that are encumbering exports. The minister urged them to take full benefit out of the zero-rating and also assured them that as per the commitment of the honorable Prime Minister the remaining funds willalso be issued to them.

The minister informed the delegation that the UK government has principally agreed of entering into a GSP Plus like agreement to continue duty concessions to Pakistani exports, on top of the GSP Plus agreement facility for next two years and likewise advance level deliberations underway with Turkey and Thailand which will ultimately provide concessions to export towel related products in the markets at competitive rates. The minister further appraised the delegation that Prime Minister Nawaz Sharif is seriously considering the demands of the exporters and to facilitate them a special package will be soon announced for them.

SOURCE: The Business Recorder

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Foreign fashion brands outdo local apparel in Vietnam market

While domestic fashion brands are still struggling to gain ground in their home market, the recent arrival of international brands in Vietnam has quickly received a heartened welcome from customers. Fashion brands that were once only available to Vietnamese customers via ‘carry-on’ sellers, those who re-sell items they had bought overseas and brought into Vietnam as hand luggage, are now having their share in the US$3 billion fashion market of the Southeast Asian country. It was at lunch break on a weekday, but the Zara store inside Vincom Center in District 1, Ho Chi Minh City, was already packed with customers from all walks of life: foreign tourists, white-collar workers, and even a handful of customers who had flown over 1,000 kilometers from Hanoi just to visit the outlet. To buy a piece of fashion at the store, customers must queue their way through every stage of the purchase, from picking, fitting, to paying.

The Spanish budget clothing and accessory retailer opened its first and only store to date in Vietnam in September, but the initial hype for the brand has not seemed to die down just yet even more than a month after their arrival. Trang, a customer from Hanoi, said she was buying clothes not only for herself but also for her friends and colleagues, so she had been spending a lot of time and energy picking the right style and size. Prior to Zara, many other moderate and budget fashion brands such as Mango, GAP, and Topshop had already landed in Vietnam and are opening new stores on a regular basis. In contrast, many stores of domestic designers are struggling to attract and retain customers despite affordable prices and regular promotions.

Nhung, an experienced ‘carry-on’ seller, said there is clear segmentation of consumers’ fashion in Vietnam, as a younger generation of Vietnamese with an interest in fashion and a good income are more inclined to opt for international brands. At VND500,000 (US$22) to VND2 million (US$89) per item including tax and shipping fees, clothes of such budget brands as Zara, H&M, or GAP are reasonably priced considering their trendy designs, Nhung said. According to Sean T. Ngo, CEO at VF Franchise Consulting, most international brands are opening stores in Vietnam through franchising, or granting the right to use a firm’s business model and brand to a local partner. However, apparel franchising requires much higher standards than its food and drink counterpart, according to the CEO.

Apart from experience, franchisees are required to have a zero-loss business record and must be able to convincingly present their business development plan to the franchisor during the bidding process, which explains the success of international brands in Vietnam, Ngo said. Swedish budget apparel retailer H&M has also finished the paperwork to open their first store in Vietnam in 2017, according to insiders’ knowledge. Meanwhile, Japanese casual wear designer, manufacturer and retailer Uniqlo is also looking for a local franchisee to enter the Vietnamese market in the near future. With apparel products targeting all ranges of customers, men, women, teenagers and children alike, gathering at one single retailing area spanning thousands of square meters, such brands are posing tough competition against local retailers, the director of a local fashion brand remarked. “These brands introduce between 5,000 and 10,000 new designs every year on average so they appeal to a very wide base of customers. This has pushed Vietnamese brands to the outskirts of Ho Chi Minh City and other provinces to find customers,” the director said. Tatsu Yano, director at the Singapore branch of Japanese department store chain Takashimaya, asserted that customers’ demand for high-end fashion in Vietnam is still high, considering the young population and the rise of the country’s middle class. A stable economy and government incentives to attract foreign investors are also playing a part in the big picture, the director said.

SOURCE: Vietnam Net.

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Bangladesh-Alliance: 55% high-priority repairs done in garment factories

Alliance for Bangladesh Worker Safety said yesterday 55% of high-priority repairs and 63% of all required repairs in its affiliated RMG factories have been completed. However in forth year, the Alliance will focus on Critical Safety Repairs, which are most important for life safety and Establishment of Worker Safety Committees. Alliance, the retailers’ platform of North American buyers, made the disclosure in its third annual report launched yesterday. The report reflects significant progress toward its goal of leaving the industry substantially safer as a result of the initiative.

According to the report, 55% high-priority items have been completed, 41% in progress while 4% yet to start. While the remediation of 43% factories is on track, 30% need intervention, 6% completed Corrective Action Plans (CAPs), 1% in critical situation and 20% shared factories are being remediated by the Accord. “Ongoing assessments continue in our factories in the form of multiple on-site remediation verification visits (RVVs), during which Alliance engineers assess progress against factory Corrective Action Plans (CAPs) and confirm adherence to our remediation requirements,” said the report. To date, 55% of high-priority repairs across all Alliance-affiliated factories have been completed, it added. “By July 2018, all Alliance factories will have either completed their high-priority repairs or have been suspended from the Alliance’s list of suppliers,” said Ellen Tauscher, independent chair of the Alliance.

Progress toward this goal has been significant and addressing the rest of the issues most critical to life safety remains the primary focus, she said. “Achieving safety in factories is about more than completing repairs. It must be accompanied by comprehensive efforts to inform, engage and empower the women and men who earn their living in garment factories,” said Alliance Country Director James F Moriarty. “By approaching remediation and empowerment hand in hand, we are working to set the gold standard for garment factories throughout Bangladesh,” said Moriarty, also former ambassador to Bangladesh. In the report, the Alliance stated that it is working with factories to prioritise the most critical repairs—most important for life safety. It also said those issues including the import and installation of fire doors, the reinforcement of structural beams and columns, and the installation of sprinkler systems are often costly and time-consuming for factories to achieve. The critical repairs include lightning protection system on the building, exit enclosures are provided with rated, fire-resistant barriers, means of egress are free from impediments, structural columns are calculated as strong enough to support the weight of the factory structure, machinery, and workers, structural system is free of distress, settlement, shifting, or cracking in columns or walls.

Warning to cut relationship with those factories which failed to make progress on repairs that address safety concerns, Alliance said: “Significant remediation is now underway in all active Alliance factories—and those unwilling or unable to comply are suspended and removed from our compliant factory list.” As of yesterday, the Alliance has suspended 97 factories for failure to make progress on repairs that address safety concerns. The issue of workers’ safety came under spotlight following the collapse of Rana Plaza, which raised question on workplace safety killing over 1,135 workers and injuring over 2,500 others.

SOURCE: The Global Textiles

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Tsai opens textile trade show

The 2016 Taipei Innovative Textile Application Show , with a focus on environmentally friendly and functional products, was opened yesterday by President Tsai Ing-wen at the Taipei World Trade Center’s Nangang Exhibition Hall. The government will work with textile manufacturers seeking to build their own brands and develop functional textiles, Tsai said in her opening speech. She also urged local firms to cooperate with information technology companies to upgrade their industry and make it more competitive globally. A total of 376 local and foreign exhibitors are displaying their products in 800 booths, making this year’s three-day show the biggest in its 20-year history, said the Taiwan Textile Federation, the show’s organizer.

With the Paris Agreement under the UN Framework Convention on Climate Change to take effect on Nov. 4, Taiwan’s textile sector is determined to support the global trend of eco-friendly practices by exhibiting “green” products, the federation said. The show highlights the fabrics that Taiwan’s textile sector has developed from recycled materials and the depth of the sector’s commitment to environmental sustainability, it said. That is important because major overseas buyers are particularly keen to purchase products that are not harmful to the environment, the federation said.

Functional fabrics are also being showcased at this year’s show, reflecting the efforts by Taiwanese vendors to work closely with the high-tech sector to introduce “smart” clothing that takes healthcare, exercise and personal protection into consideration, it said. The market for “smart” clothing could reach US$2.9 billion by 2020, it said. Local exhibitors include Formosa Chemicals & Fibre Corp , Formosa Taffeta Co , Nan Ya Plastics Corp , Far Esatern New Century Corp  and Eclat Textile Co .

Representatives of about 100 international brands from 21 nations are taking part, including Michael Kors, Woolrich, Exxel Outdoors and Under Armour from the US; Sweden’s Polygiene and IC Group-Tiger; Germany’s Emtec Electronic and Ion Bike; Switzerland’s Archroma Management; Japan’s Toyobo; South Korea’s Ducksan; One Planet and Vigilante from Australia and Cragshoppers from the UK. The federation has arranged more than 1,000 one-on-one meetings between local vendors and potential buyers during the show.

SOURCE: The Taipei Times

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Oil declines as Opec members boost output

Oil declined as Opec members added supply and US producers increased drilling, threatening to compound a global surplus. Futures fell by as much as 1.8 per cent. Libyan output expanded to 560,000 barrels a day, according to the National Oil Corp, up from 540,000 last week. Iran repeated plans to boost production to 4 million barrels a day. Nigeria aims to raise output by 400,000 barrels a day to 2.2 million, Oil Minister Emmanuel Ibe Kachikwu said in New Delhi. Rigs targeting crude in the US rose for a seventh week to the highest since February, Baker Hughes said.

Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organization of Petroleum Exporting Countries will implement an agreement to reduce supply. An Opec committee will meet later this month to try and resolve differences over how much individual members should pump. The details of how supply will be reduced needs to be finalised by the group's next meeting in Vienna on November 30.

SOURCE: The Business Standard

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U.S. Industrial Production Up 0.1% on Better Factory Output

U.S. industrial output improved slightly in September, suggesting struggling manufacturers and oil producers may be finding their footing in the second half of the year. Industrial production—a measure of output at factories, mines and utilities—rose a seasonally adjusted 0.1% in September from August, the Federal Reserve said Monday. Overall manufacturing output, which accounts for more than three-quarters of all industrial production, rose 0.2% last month. Total factory production has increased in three of the past four months, but was flat in September from a year earlier.

Mining production rose 0.4%, its fourth rise in the past five months. The segment, which includes oil drilling, had been battered by a sustained drop in commodity prices. The latest figures suggest the energy sector has stabilized. Still, overall mining output remains 9.4% below its level from a year earlier. “Through the volatility, the trend in manufacturing is probably slightly better than flat and the plunge in mining seems to have ended,” said Jim O’Sullivan, economist at High Frequency Economics. Utilities output was down 1% from the prior month in August. Capacity utilization, a measure of how much industries are making as a share of potential output, rose 0.1 percentage point to 75.4%. Last month’s rate was 4.6 percentage points below the long-run average, suggesting there is still ample slack across the economy.

Overall August output was revised to a steeper 0.5% decline from an initial estimate of down 0.4%. Capacity use was revised down to 75.3% from an initial estimate of 75.5% for the month. The factory sector has struggled through much of the year amid weak business spending and an uncertain global outlook. The retrenching energy industry removed a key source of domestic demand for steel, equipment and other manufactured products. Meanwhile, a relatively strong dollar made U.S. goods more expensive overseas. Other recent data also suggests those effects are fading. A separate gauge, the Institute for Supply Management’s manufacturing index, increased to 51.5 in September from 49.4 in August. The figure indicates the sector snapped back into expansion mode last month.

Improving industrial output could aid acceleration in broader economic growth. Weak business investment has held back economic gains the first half of the year. Better manufacturing production could help offset a slowdown in spending growth from consumers. During the second quarter, GDP expanded at a 1.4% annual rate. Following Monday’s report, Barclays upgraded its projection for third-quarter growth to a 2.7% pace from 2.6%. Last week, the Federal Reserve Bank of Atlanta’s GDPNow model projected a somewhat higher third-quarter growth rate of 1.9%. A separate model produced by the New York Fed predicted growth at a 2.3% pace in the third quarter. The Commerce Department will release its first official estimate for third-quarter GDP on Oct. 28.

SOURCE: The Wall Street Journal

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