INTERNATIONAL
Textile Raw Material Price 2016-11-03
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1053.72 |
USD/Ton |
-0.14% |
11/3/2016 |
|
VSF |
2351.45 |
USD/Ton |
-0.62% |
11/3/2016 |
|
ASF |
1892.99 |
USD/Ton |
0% |
11/3/2016 |
|
Polyester POY |
1101.78 |
USD/Ton |
0% |
11/3/2016 |
|
Nylon FDY |
2351.45 |
USD/Ton |
0% |
11/3/2016 |
|
40D Spandex |
4362.76 |
USD/Ton |
0% |
11/3/2016 |
|
Nylon DTY |
5575.45 |
USD/Ton |
0% |
11/3/2016 |
|
Viscose Long Filament |
1338.40 |
USD/Ton |
0% |
11/3/2016 |
|
Polyester DTY |
2159.19 |
USD/Ton |
0% |
11/3/2016 |
|
Nylon POY |
2055.67 |
USD/Ton |
1.09% |
11/3/2016 |
|
Acrylic Top 3D |
1308.83 |
USD/Ton |
0% |
11/3/2016 |
|
Polyester FDY |
2551.10 |
USD/Ton |
0% |
11/3/2016 |
|
30S Spun Rayon Yarn |
2943.01 |
USD/Ton |
-1.49% |
11/3/2016 |
|
32S Polyester Yarn |
1739.93 |
USD/Ton |
0% |
11/3/2016 |
|
45S T/C Yarn |
2588.08 |
USD/Ton |
0% |
11/3/2016 |
|
45S Polyester Yarn |
2233.14 |
USD/Ton |
0% |
11/3/2016 |
|
T/C Yarn 65/35 32S |
3120.48 |
USD/Ton |
-0.94% |
11/3/2016 |
|
40S Rayon Yarn |
2321.87 |
USD/Ton |
0% |
11/3/2016 |
|
T/R Yarn 65/35 32S |
1863.41 |
USD/Ton |
0% |
11/3/2016 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
11/3/2016 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
11/3/2016 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
11/3/2016 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
-0.22% |
11/3/2016 |
|
45S T/C Fabric |
0.66 |
USD/Meter |
-0.45% |
11/3/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14789USD dtd 03/11/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Southern India Mills Association today thanked Union Finance Minister Arun Jaitley for the marginal drawback rate increase benefiting textile industry. In an official statement here, SIMA Chairman M Senthilkumar said the Centre has revised all industry rates (AIRs) of duty drawback on October 31, which comes into force on November 15. These AIRs have taken into account all the Central levies and enable the exporters to get the refund of taxes so as to remain competitive in the global market. Though the GST is likely to be implemented during 2017, the Duty Drawback Committee headed by Dr Saumitra Chaudhuri has put in a lot of efforts as usual to get the inputs from the industry/ exporters and arrive at the reasonable drawback rates for all the export goods. He said SIMA has thanked Union Finance Minister and the members of the Committee for considering the inputs given by the Association for the different textile products and marginally increasing the duty drawback rates and value caps in general. The SIMA Chairman has also thanked Union Textile Minister Smriti Irani and the officials of the Ministry of Textiles for convincing the Ministry of Commerce and enabling fixation of reasonable drawback rate for all products.
The Indian textiles & clothing sector which has been under stress due to unhealthy competition in the global market and continuous drop in exports would now be in a position to improve its exports to a certain extent with the enhanced benefits and the special garment export package already announced by the government. Mr Senthil Kumar has stated that the industry has been appealing the government to consider refunding the electricity tax and also the cross-subsidy surcharge levied on electricity for purchase under open access system to make the Indian textiles and clothing products competitive in the global market. The duty drawback rates for cotton yarn during 2015-16 were 3% for counts less than 50s, 2.7% for counts 50s to 100s and 2.5% for counts 100s. For counts 50s to 100s, the rate has been increased to 2.8% while there is a marginal reduction in the value cap.
The duty drawback rate for grey fabric has been retained with a marginal increase in value cap and for dyed fabric there is a marginal increase in duty drawback rate up to Rs.7.00 per kg in the value cap. In the case of apparel though the rates have been retained at the same level (cotton garments 7.7%, blended 9.5%, man-made fibre 9.8%), the value cap for cotton garments has been increased from Rs.103/- per kg to Rs.146/- per kg while the same value caps of Rs.110/- per kg and Rs.150/- per kg have been retained for blended and man-made fibre garments. For made-up textiles, the drawback rate has been increased from 7.3% to 7.5% and the value cap per kilogram has been increased from Rs.70/- to Rs.75/-. The revised duty drawback rates encourage value addition.
SOURCE: The Web India 123
Riding high on the upsurge in demand for khadi products, KVIC expects to surpass the sales target of Rs 5,000 crore by the end of 2017-18. "The sale of khadi products has recorded a quantum jump. We are getting good orders from the government. We will achieve the sales target of Rs 5,000 crore by the end of 2017 -18," Khadi and Village Industries Commission (KVIC) Chairman Vinai Kumar Saxena told PTI. Sales of khadi goods shot up by about 29 per cent to Rs 1,510 crore in 2015-16. He said that the KVIC is also setting up export cells to promote overseas sales of the products. "There is a good demand in the countries like the US and UK. Currently, we are not doing direct exports but now we will start. It will help in making khadi an international brand," he said.
Further to improve the quality and sales of products, KVIC is regularly organising training programmes for spinners and weavers in areas like designing and marketing. Overall sales of both khadi and village industries have jumped over 14 per cent to Rs 37,935 crore in 2015-16. The khadi and village industries products are manufactured by about 7 lakh privately-owned household units. These units are funded through schemes such as Prime Minister's Employment Generation Programme.
SOURCE: The Economic Times
According to Rajendra Kumar Kapoor, President of the Silk Association of India, most of the manufacturers and exporters in this sector belong are most micro, small and medium enterprises (or MSMEs) and unless necessary exemptions are introduced, exports would suffer.
Cumbersome process
Kapoor, during an interactive session organised by the Bharat Chamber of Commerce, pointed out that exports shall be treated as ‘zero rated’ supply and hence there will be refund of input tax credit. But, the refund requires submission of at least 37 returns annually; it will be a cumbersome process that will lead to blockage of funds and impact working capital flows. Similarly, he maintained that the silk industry and sometimes the job workers are required to buy accessories like specific threads and miscellaneous items for value addition.
Job loss feared
“Considering the numerous and small transactions, it will not be possible to claim refund of GST by the job workers and small exporters. The association, therefore, suggests that there should be appropriate mechanism for neutralising the GST paid on the accessories,” he added. According to Kapoor, if the Model GST law is enacted as proposed, then, the fear is a large number of silk manufacturers and exporters in the MSME sector will have to close down. This will lead to unemployment of skilled workers, especially in the rural areas.
SOURCE: The Hindu Business Line
A 4-tier GST tax structure of 5, 12, 18 and 28 per cent, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess, was decided by the all- powerful GST Council. With a view to keeping inflation under check, essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate. The lowest rate of 5 per cent would be for common use items while there would be two standard rates of 12 and 18 per cent under the Goods and Services Tax (GST) regime targetted to be rolled out from April 1, 2017.
Announcing the decisions arrived at the first day of the two-day GST Council meeting, Finance Minister Arun Jaitley said highest tax slab will be applicable to items which are currently taxed at 30-31 per cent (excise duty plus VAT). Luxury cars, tobacco and aerated drinks would also be levied with an additional cess on top of the highest tax rate. The collection from this cess as well as that of the clean energy cess would create a revenue pool which would be used for compensating states for any loss of revenue during the first five years of implementation of GST. The cess, he said, would be lapsable after five years. Jaitley said about Rs 50,000 crore would be needed to compensate states for loss of revenue from rollout of GST, which is to subsume a host of central and state taxes like excise duty, service tax and VAT, in the first year. The 4-tier tax structure agreed to has slight modification to the 6, 12, 18 and 26 per cent slab that were under discussion at the GST Council last month. The structure to agreed is a compromise to accommodate demand for highest tax rate of 40 per cent by states like Kerala. While the Centre proposed to levy a 4 per cent GST on gold, a final decision was put off, Jaitley said.
SOURCE: The Economic Times
The finance ministry on Thursday said that the Goods and Services Tax (GST) Council's decision to impose five per cent tax on essential items would bring down inflation and levying a cess on luxury and sin goods over the peak rate would not burden the central kitty for compensation to states. Chief Economic Adviser Arvind Subramanian said the Council's decision "should bring prices down. I don't think there is any fear on inflation because six per cent goes to five per cent. A few products move from 26 to 28 per cent but many go from 26 per cent to 18 per cent. On average this should probably serve to lower inflation."If at all, the impact on inflation will be very small, he said. "Today's change should probably bring it down." He added the mood at the GST Council meeting was "very good" and the rate structure was unanimously decided.
Finance Secretary Ashok Lavasa said: "Now, you have a system by which additional burden of compensating the states is not being passed to consumers in a way it would have otherwise passed in terms of taxes. So, this is a very reasonable arrangement that has been agreed to, keeping in view the interest of the consumer and state governments." It also enables the central government to set apart a fund by which states will be compensated, he said.About Rs 50,000 crore will be needed to compensate states for the loss of revenue from the roll-out of GST, which is to subsume a host of central and state taxes such as excise duty, service tax and value added tax, in the financial year beginning April 1.The previous GST Council meeting headed by Finance Minister Arun Jaitley reached a consensus on the way states are to be compensated for any loss of revenue from implementation of the new indirect tax regime from April 1, 2017. The base year for calculating the revenue of a state will be 2015-16 and secular growth rate of 14 per cent will be taken for calculating the likely revenue of each state in the first five years of implementation of GST. States getting lower revenue than this will be compensated by the Centre fully for the first five years.
SOURCE: The Business Standard
Compensation of revenue loss due to implementation of the goods and services tax (GST) by states are not going to put a burden on central government finances, said Finance Secretary Ashok Lavasa. “Now, you have a system by which additional burden of compensating the states is not being passed to consumers in a way it would have otherwise passed on in terms of taxes. So, this is very reasonable arrangement that has been agreed to keeping in view the interest of consumer and state governments,” he said. It also enables the central government to set apart a fund by which states will be compensated, he said. About Rs 50,000 crore will be needed to compensate states for loss of revenue from rollout of GST, which is to subsume a host of central and state taxes like excise duty, service tax and VAT, in the first year beginning April 1.
The last GST Council meeting headed by Finance Minister Arun Jaitley reached a consensus on the way states are to be compensated for any loss of revenue from implementation of the new indirect tax regime from April 1, 2017. The base year for calculating the revenue of a state will be 2015-16 and secular growth rate of 14 per cent will be taken for calculating the likely revenue of each state in the first five years of implementation of GST. States getting lower revenue than this will be compensated by the Centre.
SOURCE: The Financial Express
In a chat with ET Now, Naushad Forbes, President, CII, says there should be a convergence to one or two rates over time. Edited excerpts
It has finally been decided that GST is going to be multilayered with -- 0, 5, 12, 18, and 28% -- five categories. There will be a cess but there will not be additional taxation. People have raised questions about whether cess is a transparent way or not but the burden on the common man has been minimised and so some people here are welcoming this move. What is your take on the rates that have been decided and the fact this going to be revenue neutral, it is not going to affect the common man so much and will perhaps bring down the cost of certain goods even though services could be a tad costlier at 18%?
First of all, the multiple rates is perhaps something that we have to accept, but what we would also like to hear is a commitment from the government that over time there will be fewer rates and these rates that we are starting with now will be the absolute maximum number of rates that will be in play at any point in time. Another rate can’t be brought in any future date.
Second, these rates must converge to one or two rates over time and there should be a commitment that as there is greater confidence and revenue buoyancy, as there are fewer concerns over the disritbutional impact of having a higher standard rates for certain essential goods and as one can make up for that distribution impact through say direct benefit transfers, there should be a convergence to one or two rates over time. We would like to hear a commitment that that is how it will be handled.
Third, on the cess, while it is being used as a temporary basis to take care of the additional revenue required by the centre to compensate states and if it is clear that the cess will indeed go away at the end of the five-year guarantee for state revenue, then we live with it but we should see that the cess is indeed limited only to demerit goods as indeed should be the demerit rate of 26%.
We should not have several standard rates, we should have one standard rate. If the standard rate is 18% then if it is going higher than 18%, that should be on the basis of demerits on the basis of luxury. My luxury goods are different from someone else’s luxury goods. So it should be clearly defined and there should be demerit rate. Anything below 18% again should be on the basis of exception, should be on the basis them being essential goods such as food stuffs.
You raised an important point that over time there should be convergence in rates and is that politically going to be possible so there are two questions coming your way. First a convergence in rates is desirable over time but is that going to be politically possible?, 50% of your CPI basket is actually in the zero percent category. Can you re-tweak that at all?
The second question is cess is temporary and the finance minister has said there will be a sunset clause for five years. but compensation cannot happen any other way. It was desirable for the government to cut its own expenditure and do it but the Union Government hands are also tied that 42% devolution is going to happen to the states. They cannot pluck money out of thin air and which is why cess has been brought in. Would you have much rather preferred tax or do you believe that could have been very telling on the common man and which is why cess perhaps is an easier way out?
First of all the point about convergence being politically possible, I think it can be politically possible. A Nobel laureate showed that fewer tax rates or one tax rate provides for much more efficient and robust tax system in the long run.
There is also good politics that one can needs to back this up because one should not see different tax, it is the only way one can address distributional issues, one can address distributional issues separate from the GST mechanism.
One can address distributional issues by direct benefit transfers and if one does that, then we will provide the direct benefit transfer instead of a low tax rate on a particular essential commodities and then provide for that commodity to have the standard rate prices.
SOURCE: The Economic Times
GST is likely to be a reality next year, if not from April then surely from September, a UBS report says. The assessment is based on its meeting with policymakers, tax/logistics experts and retailers as part of its two-day GST trip to Mumbai and Delhi, which showed that most are convinced GST will be a reality in 2017 - if not from April, then surely from September. According to the report, the proposed slabs of 6, 12, 18, 26 per cent will imply a uniform tax rate on a single product or service across India. "Passage of this law during the Winter Session of Parliament remains key to 2017 implementation, in our view, rather than preparedness of ecosystem (corporates, tax officials, IT network)," UBS said, adding that its meetings with the government and Maharashtra state officials suggest that "preparedness and confidence remain high". According to the report, bigger corporates have been preparing for GST, but smaller ones are not yet ready - "our discussions suggest three-month transition time". UBS further noted that the mood was "euphoric and unanimous" about GST, but near-term hurdles were also widely accepted.
Citing examples, the report said monthly filing of returns in multiple states will be a big change for some, and uploading of transaction-wise details can be intimidating initially. "The integrated IT network will be a key driver of the success of GST and its benefits - in our view, this will itself ensure GST is a game-changer reform," UBS said. The GST Council, which began 2-day deliberations today, is likely to finalise a 4-tier tax structure. The meeting will have to sort out the issues concerning tax rate to enable Parliament to approve the Central GST (CGST) and Integrated GST (IGST) legislations in the Winter Session beginning November 16 and pave the way for rollout of the new indirect tax regime from April 1 next year.
SOURCE: The Economic Times
The Goods and Services Tax is expected to increase compliance, resulting in a big revenue boost for the government from higher collections, which could help improve the fiscal situation. Greater compliance will also have a spill-over effect on higher direct taxes. The committee headed by Chief Economic Adviser Arvind Subramanian on possible tax rates under GST had estimated compliance gains of Rs 2 lakh crore in the best-case scenario, although it factored in only half that amount in its calculations. Experts are of the view that any immediate revenue gain for the government will become clear only once the formal list of items under tax categories is worked out. "But definitely there will be an increase in direct tax collection as it will become difficult to conceal revenue for all transactions at all levels," said Sachin Menon, partner and head of indirect tax at KPMG. The government budgeted collection of Rs 8.47 lakh crore from direct taxes and Rs 7.79 lakh crore from indirect taxes, including customs, excise and service tax in 2016-17.
The Reserve Bank of India had noted in a report that GST will broaden the tax base and result in better compliance, enabled by a robust IT infrastructure developed for the purpose. "Due to the seamless transfer of input tax credits from one stage to another in the value chain, there is an in-built mechanism that would incentivise tax compliance by traders," it had said. "The rates slabs look reasonable. However, only when the items under each slab are known, one can talk about the real impact of these rates on goods and services," added Menon of KPMG. According to a report by Motilal Oswal, implementation of GST would shift trade from the unorganised to the organised segment and improve efficiency in the system. "This would be achieved by ensuring better compliance and enforcement by reducing the threshold limit for exemption from indirect taxes, tracking the flow of GST credit in the entire value chain using technology platforms, ensuring availability of seamless input credit, and reducing the overall effective tax rates," it noted.
SOURCE: The Economic Times
With elections in five states — including Uttar Pradesh — on the anvil, several raging controversies from an alleged fake encounter in Madhya Pradesh and the suicide of an ex-serviceman, the forthcoming winter session of Parliament is set to be rocky. But government sources were on Thursday confident of ensuring the passage of the supporting goods and services tax (GST)-related Bills. Enthused by the consensus in reaching four-tiered GST tax structure, particularly the unanimity achieved with Congress-ruled states, senior government sources were confident that the Central GST (CGST) and Integrated GST (IGST) Bills will be passed by both the Houses. Even if the Opposition were to disrupt proceedings, the government has an ace up its sleeve. It could suggest to the Speaker of the Lok Sabha that the two Bills be designated ‘Money Bills’. The government has a comfortable majority in the Lok Sabha but is in a minority in the Rajya Sabha. The passage of the two Bills during the winter session and of the State GST Bill by state assemblies should help meet the GST roll-out date of April 1, 2017, government sources said. The government had advanced the winter session by a week so that the April 1 roll-out deadline could be met. It also plans to present the budget in the first week of February instead of February-end. The government anticipates the Opposition to raise issues ranging from ‘surgical strikes’, the alleged fake encounter of undertrials in Madhya Pradesh, the suicide of an ex-serviceman in protest of government not implementing ‘One Rank, One Pension’ scheme and farmer suicides.
Government sources indicated the government was willing to have discussions on all issues. The Bharatiya Janata Party is confident that any controversy around issues of ‘nationalism’ could only help its election campaign in Uttar Pradesh and other states.
The monsoon session of Parliament, despite heated debates on several issues and disruption of proceedings, was productive with both Houses passing nearly a dozen Bills and also managing to hold debates and discussions on burning issues. Government sources believe the same spirit of accommodation will be shown by both sides in the winter session.
SOURCE: The Business Standard
Much before the April deadline of the roll-out of the Goods and Services Tax (GST), the online filing portal is ready to throw itself open to the public from next week, enabling tax payers to warm up to the new system before it finally launches in April of next year.On Thursday, the GST Council finalised a four-tier tax structure of 5, 12, 18 and 28% for the new tax regime, with lower rates for essential items and the highest for luxury and de-merits goods.
According to a government official, the GST portal will be hosted at the domain:www.gst.gov.in, which will be launched on November 8, even as the mobile app is currently being developed. "The proposal was discussed in the GST panel meeting today (Thursday) and the date has been finalised. There was no adverse reaction to it," said the official who requested anonymity.
The portal will allow tax payers whose PAN numbers have been verified by the tax department to register themselves in advance and fill in their details and legacy data. "The idea is to avoid everyone trying to log-in at the same time before the roll-out in April," said the official adding that the government is looking at getting the tax payers to enter all the data about themselves in their system for it to work smoothly at the time of the launch without any "challenges".
ET had reported earlier that India's second-largest software company InfosysBSE 0.56 % has been mandated to develop and run the Goods and Services Tax Network (GSTN) -the entity tasked with providing the information technology infrastructure for it -in a project worth Rs 1,380 crore. The portal itself will be a one-stop destination for filing and processing of all taxes for almost 65 to 70 lakh tax payers in the country and is being designed by a specialised design unit of Infosys.
The GST portal will be a front for the tax payer where registration, return and payments will be filed.It will also provide help-desk support. The technology at the backend will have the power to analyse data for trends on sales, tax filings etc. The portal will allow businesses to register using their PAN and mobile number or Aadhaar number. All businesses will be given a GST identification number, which will be a 15-digit code, consisting of their state code and ten-digit PAN. GSTN has already validated the PAN of 58 lakh businesses from the tax department over the past two years.
The official added that GSTN has already generated the GST identification numbers for around 20 lakh tax payers in eight states and has sent the data to the states for further disbursal. The rest of the tax payers will be covered in batches over the coming weeks, said the official. "We are doing it right now for VAT which covers excise as well, since those paying excise are also registered for VAT. Registration for people paying service tax will begin in January," said the official. The entity is also in the process of developing a mobile app through which tax payers can also register themselves and at the same time allow them to file taxes or upload returns. "We are making the process really simple by allowing people to just take pictures from their phone cameras and then upload them," said the official, adding that the app is also expected to be ready over the next five to seven days.
SOURCE: The Economic Times
India Inc on Thursday suggested the government to gradually come down to "one or two" rates of the Goods and Services Tax (GST). "GST rates structure can be absolute limit of four rates as suggested by the government, and over time, the Government should commit to converge to one or two rates," CII said in a statement. It is also important that the bulk of goods and services should fall within the standard rate of 18 per cent and only as exception to go to the higher rate of 28 per cent and a lower rate for essential goods such as unprocessed food items, CII President Naushad Forbes said.
Ficci complimented the GST Council for reaching a consensus and finalising the four-tier rate structure. "The rate structure will achieve the twin objective of protecting the revenues of the central and the state governments and further containing the inflationary pressures that may arise consequent upon the change of the taxation system," Ficci President Harshavardhan Neotia said. GP Hinduja, Global Co-Chairman, Hinduja Group of Companies said: "We hope sufficient time is given to companies to comply with the tax after the rules are finalized and made public and that the levy of cess would not lead to inflationary pressures". Confederation of All India Traders (CAIT) demanded that that irrespective of rates, there should be one single return and single authority to control the taxation system and only then the tax net will be widen and revenue will be increased.
CII also said that it would be challenging for companies to meet the requirements of dual administration by both the central and state governments, while maintaining consistency across different filings. CII further suggested that the Cess needs to be levied only at the final product and total tax including cess on demerit goods should be kept within the present overall indirect tax incidence. A 4-tier GST tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess, was decided by the all-powerful GST Council today. Rajeev Jain, Director and CFO, Intex Technologies (India) Ltd said that for sectors like consumer durables, electronics and FMCG, tax rates at 12 per cent and 18 per cent will give a big boost to consumer sentiment and will boost the growth of the industry.
SOURCE: The Times of India
The commerce and industry ministry has convened a meeting of state representatives on November 16 to discuss new parameters for their ranking next year in terms of providing business-friendly environment. Last year, the Department of Industrial Policy and Promotion (DIPP) ranked the states based on a set of 340 development parameters. The parameters include time taken in giving power connections to manufacturing units, number of hours of power supply, land banks availability for industrial use, digitised land records at local municipality offices and provision for e-filing for commercial disputes at district courts, among others. "The meeting will be chaired by the DIPP secretary and the aim of the meeting is to discuss what new parameters can be added or deleted for ranking states in terms of ease of doing business next year," an official said. This year, Andhra Pradesh and Telangana have jointly topped the ease of doing business ranking while Gujarat has slipped to the third position in the list prepared by the World Bank and DIPP. The exercise of ranking states is aimed at promoting competition among them with a view to improving business climate of the country to attract domestic as well as foreign investments.
Further, another source said the department is expected to apprise the Prime Minister's office of the methodology of the World Bank in ranking countries. In the World Bank's latest 'Doing Business' report, India's place remained unchanged from last year's original ranking of 130 among the 190 economies that were assessed on various parameters. But the last year's ranking has been revised to 131 from which the country has improved its place by one spot. India has expressed disappointment over its low ranking and has asked the World Bank to modify its methodology. Currently, the Bank takes data only from Delhi and Mumbai for India's ranking. Prime Minister Narendra Modi has asked top officials in states and at the Centre to study the World Bank report and asked them to analyse areas requiring reforms and improvements.
SOURCE: The Business Standard
Services sector activity in the country gathered pace in October, driven by sharper increase in new business orders amid strong demand and improved market conditions, says a survey. The Nikkei India Services Purchasing Managers’ Index (PMI), which tracks services sector companies on a monthly basis, stood at 54.5 in October as against 52.0 in September. The Services PMI recorded above the no-change mark of 50.0 for the 16th straight month, highlighting sustained growth in the sector. A reading above 50 means the sector is expanding while below that points to contraction. “The service sector joined its manufacturing counterpart in offering a more upbeat level of performance this month, providing reassurance in the sustainability of the upturn of India’s economy,” Pollyanna De Lima, economist at IHS Markit, and author of the report, said.
According to Lima, new business order flow was the main driver of output growth with survey respondents highlighting strong demand and improved market conditions. Notwithstanding the uptrend in services sector activity, employment levels were unchanged during October. However, things are likely to change for the better in the coming months. “One underlying concern is the sustained stagnant trend in workforces with both manufacturers and service providers showing some reluctance to hire. Hopefully, the added pressure on capacity shown in the PMI surveys will translate into job creation as we move towards the end of 2016,” Lima said. On the prices front, the survey noted that input costs of providers rose but at a softer rate, and in turn selling prices remained broadly unchanged.
Meanwhile, manufacturing production also increased at a quicker rate. Subsequently, the seasonally adjusted Nikkei India Composite PMI Output Index rose to 55.4 in October from 52.4 in September, pointing to a marked pace of expansion in private sector activity that was the quickest in nearly four years, the survey said. “Nonetheless, a healthy level of overall positive sentiment regarding future business opportunities was seen and with competitive pressures offering just a minor bump in the road of confidence, the services economy looks set to maintain its strong performance in the near term,” Lima said.
SOURCE: The Financial Express
Standard & Poor’s (S&P) on Wednesday said an upgrade of India’s sovereign rating will need to wait for one to two years mainly due to the country’s “weak public finances”, prompting policymakers here to react strongly against the rating agency’s alleged failure to give due consideration to the reforms being undertaken by the government. S&P’s decision to retain India’s rating at the lowest investment grade (BBB-) with stable outlook followed Moody’s commentary in September suggesting India’s rating upgrade may take at least one to two years. In July, another global rating agency, Fitch, also retained its India rating at BBB- with stable outlook. The current India ratings of all three global agencies are a just a notch above junk grade.
Urging rating agencies to do some introspection, economic affairs secretary Shaktikanta Das said: “If the rating has not been improved, it’s a matter which doesn’t bother us so much… Global investors feel India is highly under-rated.” He added: “So far as the government is concerned, we have been saying repeatedly that we will continue to adhere to the path of economic reforms.” With the clutch of reforms undertaken by the Narendra Modi government including the easing of foreign investment regulations and use of the Aadhaar platform for delivery of subsidies and the ones that will be put in place soon (like the goods and services tax and an efficient insolvency regime), the government strongly feels the agencies must consider improving their ratings and outlooks for the country.
Of course, S&P has praised the government’s initiatives in passing the GST Bill, the progress made by the country in the areas of ease of doing business, labour market flexibility and energy sector reforms. However, weak public finance has been cited as one of the factors hindering a ratings upgrade. The combined fiscal deficit of the Centre and states averaged 7% of gross domestic product (GDP) in the past five years. S&P singled out inadequacy of capitalisation of stressed public sector banks. The government committed only $11 billion to these banks by 2019 against a required amount of $45 billion, it noted. “The stable outlook balances India’s sound external position and inclusive policy-making tradition against the vulnerabilities stemming from its low per capita income and weak public finances. The outlook indicates that we do not expect to change our rating on India this year or next, based on our current set of forecasts,” S&P said. The upward pressure on the credit ratings could emerge if the government reforms markedly improve India’s fiscal performance and pushes down the level of net general government debt below 60% of GDP, S&P said. Currently, government debt amounts to about 69% of GDP.
It cautioned that downward pressure on the rating could re-emerge if economic growth disappoints (perhaps as a result of stalling reforms) or the interest rate-setting monetary policy committee is not effective in achieving its targets; or the external liquidity position deteriorates more than expected. S&P projected India’s economy to grow 7.9% in FY17 with current account deficit at 1.4% of GDP. It also said that RBI will likely meet retail inflation target of 5% by March 2017.
SOURCE: The Financial Express
If the government was hoping credit-rating firm S&P would upgrade India from the current BBB-/A3 for the long- and short-terms, respectively, it was being optimistic. To be sure, India is better off than many emerging economies since it is growing faster and is therefore in a better position to address potential challenges on the fiscal and current account deficits. And it helps that commodity prices, the crash in which made the twin deficits look more attractive, are not looking like they will rise to earlier levels in a hurry. With forex reserves at close to $370 billion, there is enough of a cushion even if oil prices were to move up marginally—FY17 is expected to end with the CAD at 0.5% of GDP. And, despite a likely worsening in the country’s external liquidity metrics over the next three years, the gross external financing needs are expected to be lower than current account receipts plus usable reserves through 2018.
However, both the pace of growth of GDP and its sustainability are debatable, and could even stagnate, especially since the global economy remains sluggish. Economists at Bank of America have pointed out that, based on the old GDP series, the economy grew at an anaemic 4.2% in Q1FY17 and a modest 7.1% as per the new series. So far there is little evidence to show that lower interest rates are stimulating investments; in fact, the festive season has passed by without any serious pick up in the demand for products such as two-wheelers.
While the government is, no doubt, attempting to ease policies—which S&P has applauded—and is ushering in legislation like the bankruptcy code and GST, these measures will have an impact only over the longer term. In the next couple of years, the challenges will continue to outweigh any meaningful gains since the health of PSU banks remains precarious, the state electricity boards are still too cash-strapped to purchase either the existing power capacity or that which will be coming online soon, and the private sector still isn’t ready to invest in the absence of either local or global demand picking up meaningfully. Indeed, while the fiscal deficit looks in control, if the government was to recapitalise PSU banks at the pace required, it too would deteriorate—and, till the balance-sheet repair takes place, the banks’ inability to lend fast will act as a drag on growth. As a result, the government will remain torn between the need to recapitalise banks and increase public investment to replace private investment. That is why S&P has said “the government has little ability to undertake countercyclical fiscal policy given its current debt burden”. This limits growth in per capita income which, like it or not, is something any credit-rater needs to look at since only countries with high per capita incomes can raise taxes in a hurry—or draw down forex reserves—in order to meet impending crises; that is why, despite its current problems, China’s rating still remains high. The good news, though, is that while it will take a longer period for India’s ratings to rise, foreign investors are already seeing the potential and invested $55.5 billion in FY16, making India one of the top FDI destinations. Sustaining this, of course, will require the ratings change which the government is working towards with its reforms.
SOURCE: The Financial Express
Ending its two-day rally, the rupee today closed down by 4 paise at 66.75 per dollar due to fresh demand for the US currency from corporates and banks amid capital outflows from stock markets. Forex market sentiment remained cautious and witnessed lethargic trade as currency traders preferred to stay on the sidelines against the backdrop of pre-US election jitters alongside confusing signals from the Federal Reserve. Heavy capital outflows in the midst of an impending US central bank rate hike amid global volatility largely kept rupee momentum under check. Traders are nervous at this juncture ahead of the vote on November 8, particularly after recent polls showed Donald Trump gaining ground on Hillary Clinton and the rupee is expected to trade under pressure, a forex dealer commented. The rupee today resumed a tad lower at 66.72 from Wednesday’s closing value of 66.71 at the Inter-bank Foreign Exchange (forex) market. But, it staged a remarkable recovery in late morning deals to touch a high of 66.67 following adequate dollar supplies and also supported by weak dollar overseas. However, the home unit lost momentum in late afternoon trade and slipped to hit a low of 66.77 before settling at 66.75, showing a loss of 4 paise, or 0.06 per cent. It had appreciated by 16 paise in last two-day rally.
SOURCE: The Hindu Business Line
China sharply criticised calls for boycott of Chinese goods in India, saying it can only satisfy "personal vendettas" of some politicians at the cost of close bilateral ties and called on India to take measures to minimise any "repercussions". The products that China exports to India fulfill the needs of the local market, Shen Danyang, the spokeperson for China's Ministry of Commerce was quoted as saying by state-run People's Daily online. "Thus, a boycott of Chinese products would only satisfy some politicians' personal vendettas at the cost of close ties between the two countries," he said. As two rapidly growing economies, China and India must cooperate on economy and trade, he said. "China hopes India will take the necessary actions to minimise any repercussions of this incident for the mutual benefit of both nations," he said. Shen pointed out that China and India are each other's major trade partners.
By 2015, the total trade volume between the two countries had reached $71.62 billion, indicating that trade between China and India was increasing despite downward pressure from global trade. Bilateral trade added up to $52.31 billion between January and September 2016, which indicates that the momentum is being maintained, he said. Calls for boycotting Chinese goods in India were made following China's opposition to a UN ban on JeM chief Masood Azhar and India's entry into Nuclear Suppliers Group (NSG).
SOURCE: The Economic Times
A small-time exporter from Mumbai wanted to ship out engineering goods to China. He was told that a Chinese team was required to visit his factory and he would have to pay for it. He agreed, and spent some R10 lakh on the team’s visit. After six months he was told that another team would land up at his factory again before getting to the next stage of obtaining the permit. Assuming that this was going to be a long, arduous and expensive process, he decided to dump the idea and looked for another destination.
The list of such non-tariff barriers (NTBs) by China goes on and on. This reflected in trade between the two sides. While India’s goods exports to China stood at just $9 billion in 2015-16, imports from that country touched $61.7 billion, leaving an unprecedented trade deficit of $52.7 billion. So many here were nonplussed when, reacting to the call for boycott of Chinese goods by some private individuals for its “continued support” to Pakistan, the Chinese embassy in Delhi last week issued a statement stressing any such move would negatively impact India-bound investments from its enterprises and that the biggest losers will be Indian traders and consumers. For its part, the Indian government has made it clear that it hasn’t changed its policy towards China.
In a recent meeting with the Chinese ambassador-designate to India, commerce and industry minister Nirmala Sitharaman gave “examples after examples” on how non-tariff barriers are hurting India’s exports to that country. The ambassador is learnt to have said he would convey New Delhi’s concern to Beijing. A Chinese delegation that had come to see Indian labs for phytosanitary clearances hasn’t yet responded. Sitharaman is learnt to have told the ambassador that “China cannot consume so much time for these things”.
China’s exports to India were 1.8 times India’s outbound shipments to that country in 2000-01, showed official data. In 2015-16, what China exported to India was close to six times what India shipped out to China. “Non-tariff barriers imposed by China are a major concern. While India has been using the tariff route to discourage imports in certain areas (especially agriculture), China has been very effectively using non-tariff barriers to curb imports that it wants to avoid,” said Biswajit Dhar, professor at the Centre for Economic Studies in Jawaharlal Nehru University. So while India’s average tariff rate of 13.5% (it is the highest among Regional Comprehensive Economic Partnership nations of which China is a part) is criticised by some global analysts as a deterrent to greater trade flows, China’s restrictions on imports by stealth, through the application of NTBs, often remain invisible.
Already, analysts attribute the NTBs to China’s frosty political ties with India and acute self-centred trade policies. For instance, China is one of the largest buyers of non-Basmati rice from Pakistan, but it doesn’t allow such supplies from India. Certain oilseed exports require as many as 11 certificates stating the items are pest-free. Interestingly, 10 of the 11 pests are already present in China. The neighbour has also put restrictions on supplies of Indian buffalo meat, India’s second-largest farm export item, citing foot and mouth disease among cattle in this country. However, China has been the biggest buyer of Indian cotton and yarn for years now, as it needs the raw materials to keep its massive textile and garment industries running.
While half of India’s top 10 segments of items for exports to China in recent years are low-value primary goods, all the top 10 product categories that China ships to India are manufactured goods. In fact, a study by research body RIS punctured the conventional wisdom that China is flooding the Indian market because its products are cheaper. It said India imported “uncompetitive products that can easily be supplied by other competitors of China at cheaper prices to India” to the tune of $9.7 billion, or 19.5% of its total imports from the neighbour, in 2012.
“Many of the Chinese standards such as the CCC standard require certification by the Chinese authorities before a product can be put on the Chinese market,” said Engineering Export Promotion Council chairman TS Bhasin. He said the factory has often to be inspected at the expense of the exporter, which is a lengthy and costly procedure. “Many exporters, in particular SMEs, are discouraged to export in such a difficult environment,” he added.
The sanitary and phytosanitary certification requirements for items such as seeds, seafood products and fruit and vegetables exceed international standards. Worse, the international system of arbitration for trade disputes is not recognised there.
SOURCE: The Financial Express
Discussions on a free trade agreement between India and the Eurasian Economic Union are at an advanced stage and an agreement could be reached as early as the end of the year, a top official of Kazakhstan in India said here on Thursday. “Kazakhstan is part of the Eurasian Economic Union comprising Kazakhstan, Russia, Belarus, Armenia and Kyrgyzstan. Last year, India expressed interest in signing a free trade agreement with the Union. A special working group has been created and there are discussions. By the end of this year, hopefully, India will be ready to sign it,” Bulat Sarsenbayev, Ambassador of Kazakhstan in India, said.
According to him, the Kazakh National Railway Company was in discussion with the Adani Group to build or a buy a terminal at Mundra to connect Bandar Abbas in Iran with Mundra. “From Bandar Abbas, we have completed a railway project to Kazakhstan,” he said on the sidelines of a meeting with the Madras Chamber of Commerce and Industry (MCCI). The Ambassador said the setting up of the terminal would reduce freight movement time between India and Kazakhstan. “The MoU was signed last year when Prime Minister Modi visited our country. Now, they (companies) should finalise the agreement and take some real steps.” The country was also planning to increase the number of flights to India. “Currently, we have seven flights a week between Delhi and Almaty. We have received permission from air authorities to increase this to 24 flights per week.”
SOURCE: The Hindu
UK government is interested for a separate special economic zone (SEZ) in Bangladesh, said David Kennedy, director general for economic development of the department for international development (DFID). In a bid to improve its trade and investment relations with Bangladesh, UK government has shown interest to invest in the SEZs of Bangladesh. UK wants to invest directly in readymade garments, Bangladesh commerce minister Tofail Ahmed told media after the meet with five-member DFID delegation led by Kennedy. Ahmed added that Bangladesh government is willing to provide the essential infrastructure for investment in SEZs by UK companies. According to Kennedy, the United Kingdom is focusing on improving its business ties with key allies in the world and Bangladesh is its key partner. “I came from London to learn about the Bangladesh-UK trade partnership and about the work we are doing together as a whole range from SEZ to improve investment climate to attract investment,” Kennedy said. “If the British investors are interested in investing in the SEZs, we will allocate a separate zone for them, as UK has been Bangladesh's development partner for a long time now,” said Ahmed. He further told the delegation that Bangladesh has adopted a liberal policy where foreign investment firms can invest 100 per cent capital and take back their capital and profit.
Bangladesh government has taken initiative to establish 100 SEZs to boost its foreign direct investment. The Bangladesh Economic Zones Authority is allocating SEZs to private companies and different countries such as Japan, India and China. More than 200 UK companies currently operate in Bangladesh. UK is also the third largest export destination for Bangladesh. Last year, garment items accounted for around 80 per cent of Bangladesh's total exports to UK. Ahmed said that UK brands like Tesco and Marks and Spencer purchase garments from Bangladesh on the basis of trade relationship. “Since UK is a trusted trade partner of Bangladesh and also a close friend since the independence, I hope the trade benefits would remain unchanged even after the Brexit,” he added.
SOURCE: Fibre2fashion
The Zero Discharge of Hazardous Chemicals (ZDHC) has launched the new ZDHC Chemical Gateway tool for chemical management within the textile and footwear value chain, designed to indicate conformance to the ZDHC MRSL (Manufacturing Restricted Substances List), that addresses hazardous substances potentially used and discharged into the environment. ZDHC MRSL is a list of chemical substances banned from intentional use in facilities that process textile materials and trim parts in apparel and footwear. According to ZDHC's technical director Scott Echols, today, the focus at ZDHC is to ease regulatory confusion of chemical management standards and bring different actors together - brands, chemical companies, mills and manufacturers - to align on common standards and tools. While the creation of the ZDHC MRSL was hailed as an industry milestone, one of the challenges suppliers still face in working to conform to this standard is knowing where to go, and who to trust, when it comes to safer chemistry claims.
The ZDHC Chemical Gateway builds on the ZDHC MRSL by providing a “positive list” of safer chemical formulations. Conformance is determined by third-party product accreditation standards and options available in the market. ZDHC is set to showcase the new tool at the 4th ZDHC-CNTAC Conference on Hazardous Chemical Control & Sustainable Manufacturing, to be held on November 8, 2016 in Shanghai, China. The Chemical Gateway will be available to the public in early 2017.
SOURCE: Fibre2fashion
A panel of scientists and researchers presented various ways to ensure efficient use of water during cotton cultivation at the third open session - 'Reducing the Water Footprint of Cotton', of the International Cotton Advisory Committee's (ICAC) ongoing 75th plenary meeting. The meeting currently underway in Islamabad ends on November 4. Rising population and the growth in the economy are considered as the major reasons for the increase in the use of water in cotton cultivation. About 71 per cent of water withdrawals are used in agriculture globally. However, the figure reaches 94 per cent in Pakistan where cotton is the predominant crop, making it a pressing issue for the country, according to ICAC. Dr. S Hassan Ahmed from Sudan presented various methods for reducing the usage of water during irrigation. Ahmed was also of the opinion that water should be priced according to quantity used and not area. He said that free or nominal water prices do not encourage efficient use of water.
Arif Makhdum from World Wildlife Fund, Pakistan presented the sustainable agriculture programme, which is already implemented in seven regions in the country. The water footprint assessment held in Pakistan helped in identifying potential and important cotton production zones and indicating ways to increase water use efficiency, while reducing contaminants in water caused by fertilizer/pesticide applications. The assessment programmes resulted in 25 per cent reduction in water usage, 31 per cent reduction in pesticide use, 27 per cent less synthetic fertilizer use and an increase in net profit of 24 per cent.
Danilar Andakulov from Helvetas, Kyrgyzstan, reported on the implementation of six projects in four countries (India, Pakistan, Kyrgyzstan and Tajikistan) in rice and cotton. He said that improved methods of irrigation resulted in 33 per cent decrease in water use and 35 per cent better yield compared with traditional methods. Innovative methods of irrigation led to substantially higher income per hectare of production. Another challenge for the cotton sector of the country is energy shortage, which needs to be addressed for the growth of its textile industry, said Jose Sette, executive director, ICAC. He added that efforts adopted by the government to overcome this shortage can help revive the country's textile sector.
SOURCE: Fibre2fashion
With the current increase in trade between ASEAN and Korea, the goal of increasing it to US$200 billion is expected to be achieved before the 2020 deadline, according to the Vietnamese Ministry of Industry and Trade. Speaking at the ASEAN-Korea Economic Partnership Forum in HCM City yesterday, Nguyễn Sơn, deputy general director of the ministry’s Inter-agency Steering Committee for International Economic Integration, said ASEAN and Korea were key partners in many sectors, including trade, investment, tourism, culture, and construction. Trade between the two increased from $8.2 billion in 1989 to $138 billion in 2014. The bloc surpassed the US, EU and Japan to become Korea’s second largest trade partner after China, he said, adding that country was ASEAN’s fifth largest partner.
ASEAN is the leading investment destination for Korean firms. Last year Korea invested $5.7 billion in ASEAN member countries to rank fifth among investing countries and territories, though it was the largest in some, including Việt Nam. Jeong-in Suh, Korean Ambassador Extraordinary Plenipotentiary to ASEAN, said ASEAN was not only a market but also a production base for Korean firms. ASEAN offers opportunities but also challenges to Korean firms, he said, adding that Korean firms needed to have a long-term strategy for a market of 630 million people. Prof Bunsoon Park of Korea University said with its young population and rapid growth, ASEAN was a promising market for all investors. Since Japanese firms had begun investing in the region a long time ago, they have the upper hand over the Korean firms, which therefore need to make more efforts to penetrate the market, he said. Developing partnerships with local businesses is an important factor in penetrating in the ASEAN market, delegates said.
Việt Nam- Korea trade
Sơn said Việt Nam was one of Korea’s most important trade partners in the ASEAN bloc. Since the free trade agreement between South Korea and ASEAN came into effect in 2007, trade between Việt Nam and Korea has been growing at around 19 per cent a year, and this was sustained even during the global economic crisis, he said. The number of Korean firms investing in the high-tech and services sectors has increased consistently, which has helped change the economic structure in many localities, he said. “We expect that large projects by leading Korean groups like Samsung and LG will help develop Việt Nam’s part supply industries and enable Việt Nam to take part in the global value chain.” The Việt Nam-Korea FTA, which took effect this year, would boost bilateral trade, he said. Việt Nam has signed 12 FTAs, of which 10 have taken effect, with nearly 60 economies, he said.
Investors in the Vietnamese market would automatically enjoy the attendant benefits when doing business with Việt Nam’s FTA partners, he said. Phạm Khắc Tuyên of the Ministry of Industry and Trade said besides large groups many Korean SMEs were also exploring investment opportunities in Việt Nam. He urged Korean firms to invest in supporting industries and transfer technologies to Vietnamese firms. Agriculture and seafood are among the promising sectors for Korean firms, he said. Việt Nam and Korea target bilateral trade of $70 billion by 2020, up from $36.5 billion last year.
SOURCE: The Vietnam News
Researchers have urged that the legal framework on specialised checks on imports and exports be improved for compatibility with commitments to the EU-Vietnam Free Trade Agreement (EVFTA). Pham Thanh Binh, an expert of the Vietnam Chamber of Commerce and Industry's project on reviewing Vietnam's legal framework on specialised checks, at a consultation workshop on Thursday said that there are regulations which are incompatible or partly compatible with commitments to EVFTA, Vietnam News Agency (VNA) reports. For example, regarding regulations on customs simplification, if based on the targets of crating trade facilitation, it can be said that the specialised check procedures are in compatible with commitments to the trade deal, Binh said. "Several regulations are still complicated and burdening firms," he said.
Legal framework on specialised checks on imports and exports are the focus of the government's reform process raised in Resolution 19 on improving business climate and national competitiveness. Experts said greater efforts are required to speed up time taken for customs clearance and for facilitating trade flow. The Ministry of Planning and Investment recently said that very tightly controlled specialised checks are causing difficulties for firms, and is a waste of time and costs. A recent report by the Ministry of Finance revealed that the ratio of batches of goods on which specialised checks were carried out remained high, averaging 30 per cent of the total batches. The Government is pushing for the simplification of specialised check procedures and gradually abolishing unreasonable regulations, especially by the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade. On Oct 24, the agriculture ministry issued a circular allowing quarantine checks to be carried out after fisheries companies transport products to the warehouse. Previously, firms could only transport their fisheries products to the warehouse after quarantine checks were completed. The Ministry of Industry and Trade on Oct 12 also abolished the regulation on the inspection of formaldehyde content in textile and garment products.
SOURCE: The Bernama
