INTERNATIONAL
The exporters of man-made fabrics (MMF) in Surat are unhappy with the central government retaining the duty drawback rate for grey and dyed fabrics with a marginal increase. In a notification dated November 1, the Central Board of Excise and Customs (CBEC) extended the duty drawback benefits for textile exporters to overcome the barriers they face in exports. CBEC revises drawback rates every year on November 1 for next one year. 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 per kg in the value cap. In 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 respectively. However, the textile MMF exporters in the city believe that the government should allow some increase in duty drawback to boost export of polyester fabrics.
Duty Drawback is the rebate of duty chargeable on imported material or excisable material used in the manufacturing of goods. The exporter may claim drawback or refund of excise and customs duties being paid by his suppliers. The final exporter can claim the drawback on material used for the manufacture of export products. In case of re-import of goods the drawback can be claimed.
As per the Synthetic Rayon Textile Export Promotion Council (SRTEPC), the annual export of fabrics from city is pegged at over Rs 1,300 crore. However, the marginal increase in duty drawback rates is not going to give a level playing-field to the exporters of MMF fabrics in comparison to those exporting cotton fabrics. At present, the country's textile exports is pegged at $42 billion. "The government has revised drawback rates to boost exports of cotton textiles, while the MMF textile is left in the lurch. There should be a win-win situation for both the sector," claimed a textile exporter. "We strongly demand a handsome increase in duty drawback in the export of polyester fabrics from India. Further, un-rebated state levies should also be refunded through the drawback route for fabrics as in case of apparels. We also want the government to promote investments in weaving sector, which is the backbone of the MMF textile sector" said secretary of Man-Made Textile Research Association (MANTRA), secretary, Dinesh Zaveri.
SOURCE: The Times of India
India has the key resources essential to make Government of India's 'Make in India' programme a success, said Sanjay Jain, president of Northern India Textile Mills' Association in a note. However, the Make in India initiative will be successful when the crucial role of manufacturing sector in the development of the country is identified by the citizens. When it comes to ease of doing business, India's ranking is at 130 out of 190 nations. India has ample resources such as availability of labour at reasonable cost, a huge domestic market, ample opportunity for import substitution, rich reserves of raw materials and a proactive government, said Jain, who is also the managing director of TT Ltd. According to him, a proper layout is required to transform the dream of Make in India into a reality.
Stressing on the significance of developing India's manufacturing sector, Jain said, “Unless we don't understand the importance of manufacturing sector by generating employment, revenue, self-reliance, earning foreign exchange by exports and import substitution, reducing cost of products for the common man – we shall never ever see the dream of India becoming a manufacturing hub and factory of the world like other nations.”
Various issues are to be brought in limelight and worked upon for the improvement of manufacturing industry of India. Jain suggests that there are areas where improvements can be made such as interest rates, government policies and labour wages among others.
SOURCE: Fibre2fashion
Though the government has finalised a four-tier GST rate structure (ranging between 5% and 28%) to be implemented from April 1 next year, the industry and traders of Punjab have sought clarity on the issue and demanded that certain category of items be exempted in the GST regime. The textile and shawl industry wants exemption from the purview of GST. The traders have urged the Finance Minister to bind manufacturers to declare prices of their products for pre and post-GST regime to ensure if at all the cost of production will be reduced by virtue of different categories of tax rates under the GST. The bottlers of aerated drinks are of the view that the proposed 28% tax and cess will be disheartening for the industry. “The textile sector in India is the second largest employment provider and is currently not under the purview of VAT and Central excise. It is an unorganised sector, which mostly represents MSME units and is not equipped with IT system. Also, job work in the textile sector is exempted from service tax. So, there is a need to exempt it under the GST regime otherwise lakhs of weavers and related workers will be jobless,” said Piara Lal Seth, an Amritsar-based industrialist. He said, “At present, the Rs 3,000-crore shawl industry does not come under the purview of VAT and Central excise. Moreover, shawls are of local importance, being manufactured only in Amritsar and Ludhiana in Punjab and in the Kashmir Valley. We have written to the Finance Minister to exempt shawls and textile sector from the purview of GST.”
Members of the Confederation of All India Traders (CAIT) in Punjab have also urged Finance Minister Arun Jaitley to bind manufacturers to declare prices of their products for pre and post-GST regime to ensure if at all cost of their production will be reduced by virtue of different categories of tax rates under the GST regime or not. The move will be beneficial to end consumers. Tax experts are of the view that commodities used by the common man and of mass consumption will be taxed at 5%, which is likely to curtail inflation.
SOURCE: The Tribune India
Finance Ministry is gearing up to present the Budget for next fiscal around February 1, advancing the scheduled date by a month so as to complete the entire process by March 31, and preparations for it are “very much under control”, says a top official. “There are three major changes that we are undertaking for the next year (Budget). First presentation of Budget is advanced by about a month. We expect Budget to be presented around February 1,” Economic Affairs Secretary Shaktikanta Das said in an interview to DD News. Besides, doing away with the plan and non-plan expenditure and replacing it with the new classification would be revenue and expenditure, he said, adding that the third is merger of Railway Budget with the General Budget. The pre-Budget meetings for the current year’s for revised expenditure estimates as well as for the next Budget’s estimates have already started, he said. “Revenue Department has also started the pre-budget consultations with the various stakeholders and Finance Minister’s consultation with major stakeholders are also planned to be held in advance,” Das said. “So, all the preparation has been roughly advanced by about a month. Preparations are very much under control and we will be able to present the Budget around February 1,” he said. The idea, he added, is to get the Budget passed by Parliament along with Appropriation Bill and the Finance Bill by the end of March as this would ensure implementation of the Budget proposals from April 1.
On fiscal deficit hitting 20-year high of 83.9 per cent of the Budget estimate, Das said, typically it looks very high in the first half of the year because revenues start coming in the second half of the year. “Expenditures are evenly paced all through the year. So there is a mismatch between revenues and expenditure in the first. As we proceed in the second half revenue starts coming in and expenditure gets evened out. Therefore, fiscal deficit target of 3.5 per cent for the current fiscal will be met,” he said. For the current fiscal, he said, the growth would be upwards of 7.6 per cent as agriculture sector has shown improvement.
SOURCE: The Financial Express
A day after reaching a consensus on tax rates, the GST Council on Friday failed to arrive at an agreement over the crucial issue of administrative control over assessees under the new indirect tax regime. “No decision was taken,” Finance Minister Arun Jaitley told reporters after the meeting. He said clear guidelines on complex and contentious issue will be required. Therefore, further discussion is required on the matter. The finance ministers will have an informal meeting on November 20 to discuss it and have a political solution on the matter. The November 20 meeting will not be of the GST Council and will be held without officials. Jaitley said, “We can’t have two competing assessing authorities for the same assessees.” He said two models were discussed to divide the administrative control between the Union and state governments. One of these was horizontal model, whereby states will have sole control over entities earning up to Rs 1.5 crore a year and dual control of the Centre and states over this level.
The other was vertical model whereby both the Centre and states will have control over assessees right from the beginning. This model is called “cross empowerment” too. The assessees for scrutiny and audit will be divided in a pre-decided ratio between the Centre and states, be it a 50:50 or some other ratio, 75:25. The earlier agreement reached between the Centre and states over horizontal model had fallen apart after states expressed keenness to have control over service tax assessees in certain areas such as entertainment tax. According to an earlier proposal, states were to assess businesses with an annual turnover Rs 1.5 crore, while both the Centre and states were to do so for businesses with higher turnover. The Centre and states had earlier agreed that the Centre will have exclusive power over assessees in the services sector, till the state officials were trained to do so. But some states raised objection to this.
The GST Council meetings, which were supposed to happen on November 9 and 10, have been put off till November 24 and 25. Those meetings will discuss model GST Bills. When asked whether the government will be able to meet the April one, 2017 target to roll out GST under this scenario, Jaitley said,"We hope so. We will try and approve the GST drafts on November 25." He said efforts are on to pass IGST, CGST Bills in the winter session of the parliament.The draft GST legislation and the compensation Bill will be decided by November 15 and states could consider it, he said.
SOURCE: The Business Standard
India has backed a multi-tier national tax regime that even in its not-so-perfect form will be a game-changer for Prime Minister Narendra Modi, who is trying to revive manufacturing and boost foreign investment in the world’s fastest growing major economy. Moving away from the ‘one market, one rate’ tax model, the Goods and Services Tax Council decided on standard rates of 12 percent and 18 percent and two more rates of five percent and 28 percent for the tax’s implementation. Officials are still meeting to finalize details of which goods and services will fall into each bracket. Finance Minister Arun Jaitley said a zero tax rate would apply to 50 percent of items in the retail inflation basket to protect consumers from price rises on goods such as food grains. Tobacco products will continue to be taxed at 65 percent, he said, adding luxury goods will also be taxed at a higher rate. The taxes will replace a welter of state levies that imposed heavy burdens on commerce that crossed domestic borders, creating a single market of 1.3 billion people.
And while the ideal single tax rate system is a long way off, a multiple-rate GST was the only way a complex, politically diverse country like India could proceed, Pratik Jain, Indirect Tax Leader, PricewaterhouseCoopers, said by phone. “It will appear that the Indian government is serious about reforms and that gives confidence to investors,” he said, noting many companies had put investment decisions on hold until the path of the GST was clarified. “While it’s not perfect, the government should attempt over a period of time to consolidate those four slabs into two.” The progressive nature of the GST structure should temper any adverse short-term inflationary and growth impacts, said Tamara Henderson, an economist with Bloomberg Intelligence. “Excluding half of the items in the CPI calculation will protect the spending power of lower income households, which tend to have a higher propensity to consume disposable income than wealthier groups,” she said.
Given Modi’s earlier promises to reform India’s land and labor laws had failed, the success of the GST was even more of a priority, said Michael Kugelman, a senior associate at the Washington, D.C.-based Woodrow Wilson International Center for Scholars. “This is a big achievement for Modi’s economic reform plan,” Kugelman said. “Now that it’s gone through, it’s an important for the government to get it right. And that entails being appropriately pro-business while not penalizing the poor. The stakes are quite high.” The government confirmed it was intent on meeting its self-imposed April 1 deadline for the tax’s implementation, close to the crucial elections in the state of Uttar Pradesh. “Next year, we’re going to see elections. At the moment, they made sure that the inflation basket –- one of the key worries –- would be impacted minimally with the implementation of the GST,” said Tirthankar Patnaik, India Strategist with Mizuho Bank Ltd. “Political exigencies have forced the divergence between essential goods and so-called ‘sin’ goods,” he said, adding luxury and ‘sin’ products such as tobacco subsidize the tax exemptions on basic food, such as grains, for the poor. However until the government releases the rate structure for the proposed list of goods it will be difficult to say who will gain and who won’t, Krishan Arora, Partner, Grant Thornton India LLP, said by phone.
Ultimately, it is a significant reform that will allow India to form one common market, Arora said. “Indirect taxes today lead to multiple administrative burdens. A GST will make India a competitive market for exports globally.” Political bickering had held up the constitutional amendment in India’s upper house of parliament for more than a year until it was approved in August. The GST, initially proposed by the main opposition Congress party a decade ago, is expected to lower the cost of doing business in India. There will inevitably be teething problems, Patnaik said. “The first two years, you’ll have mighty chaos. Once those basic troubles are ironed out, I think we should see a significantly easier flow of goods between states.”
SOURCE: The Business Standard
The Goods and Services Tax (GST) Council has done well to set four rates: ranging from 5% to 28%, with a cess for ultra-luxury and demerit goods. Multiple rates will not lead to systemic inefficiencies as GST allows manufacturers to claim credit for all input taxes paid across the value chain. Zero rating for essential items will not break the credit chain and is, therefore, welcome. The council should now focus on remedying flaws in the model GST law to make compliance simple. Border check posts must go to have one market. This is eminently feasible with an Integrated GST levied by the Centre rather than the states on inter-state supplies.
The model law proposes to tax intra-firm supplies of goods and services, without any payment attached. That’s a nightmare not just for IT and financial services that span multiple states, but for exporters too. A country does not export its taxes and exporters can claim a refund on the input taxes paid by them. But goods that move from one factory to another within the same legal ownership need to be tracked, identified, valued, invoiced and tax payments made. All movements have be recorded for tax purposes and truckers must carry invoices. All this raises the compliance burden for exporters, blocks their working capital, and yields no revenue to the government. The answer is to scrap the tax on intra-firm supplies of both goods and services.
The GST Network will provide taxmen and taxpayers the needed IT infrastructure. Will it have the server capacity to handle the crores of invoices that will need to be uploaded every minute? How many tax authorities will each taxpayer interface with, even if electronically? Will GST rules be notified well in time for companies to tweak their ERP software and other systems to be compliant when GST kicks off ? The GST Council must focus on the vital issues in compliance and not be consumed by the question of rates. Whatever the rates, if compliance becomes too complex, taxpayer resistance will end up subverting the new tax.
SOURCE: The Economic Times
The proposed model of goods and services tax (GST), which has included ‘securities’ in the definition of goods, has raised serious concerns on whether transactions in securities would attract GST or would be subject to an additional tax. According to tax experts, the government needs to improve the proposed definition and exclude securities from the definition of ‘goods’. Currently, share transaction attracts securities transaction tax (STT) and Krishi Kalyan cess and Swachh Bharat cess, apart from exchange transaction charges, stamp duty, clearing member charges and Securities and Exchange Board of India turnover charges. While the current model gives no clarity that securities would come under the ambit of the GST, the government’s intent might not be to introduce yet another tax over and above STT of 0.1 per cent on delivery-based trades. “Technically, the government cannot tax transaction in securities as it falls under direct tax but if it does happen, the whole stock market will crash down. Meanwhile, if you see the range of proposed tax rate which is up to 28 per cent — it’s impossible to implement it on securities,” said Sumit Lunker, executive director (tax and regulatory services) at PwC. He added that in the indirect tax legislation scenario, securities being considered as activity of sale and purchase and has never been subjected to any service tax and value added tax. So, one cannot treat securities at par with normal goods and services used in the normal course.
Another controversy that might rise is on central and state governments’ revenue. “Let us assume certain securities traded at the stock exchange in Mumbai. But, sellers and buyers are in different states while the servers are at various locations. Under such circumstance, which state will get revenue is an issue that needs to be addressed,” he added. Other section of experts, though, agree with the current interpretation of law. “From state governments’ perspective, they would want direct access to taxpayers’ data as opposed to waiting for the Centre to perform assessments and verifications and trust the Centre to allocate funds to the state. If securities are taxed as goods, it allows the government to track its trading more efficiently under GST. Else, they would have to build a complex place of supply rules for capturing all the various activities around trade in securities,” said Amit Kumar Sarkar, partner, Grant Thornton India.
SOURCE: The Business Standard
Haseeb Drabu, Finance Minister of Jammu and Kashmir, expects that eventually there would be three rates for Goods & Services Tax (GST). Though the GST Council has finalised a four-tier rate structure as well as a cess for the indirect tax levy, he expressed hope that eventually these would be merged into three rates. “This is a phase of transition,” he said, adding that no one is happy with the proposal of the cess. “We want GST to do three things – it should be revenue neutral for the governments, it should be inflation neutral for the poor and it should be distribution neutral,” he told BusinessLine in an interview. Excerpts:
There have been concerns over the four-tier rate structure? Are you satisfied with it?
It may not be ideal, but it is a very good start. We can’t move from a multiplicity of regimes to one single rate, it has to be evolved. This is a phase of transition. The two standard rates of 12 per cent and 18 per cent will eventually morph into one rate. There are two low rates – 0 per cent and 5 per cent and two high rates of 28 per cent and 28 per cent plus cess. The latter will go away after five years. Then we will be left with one genuine demerit rate, one standard rate and one low rate. My only issue is that had GST not been used as a mode of compensation, the rates would have been lower at 5 per cent, 10 per cent, 15 per cent and 20 per cent. But we have to recognise that the Centre also is under various pressures such as the devolution formula of the Finance Commission. The more important issue is the fitment of commodities into rates and I have asked the GST Council to have a more realistic structure that reflects the new social realities of India and also removes the distortionary impact of taxes.
Industry is not happy with the cess…
Nobody is happy with the cess. Even the Centre is not happy. But we have had to levy a cess because of the shortfall. It is not ideal, but we have now included provisions of a sunset clause, and sharing any surplus with States. I have also raised the issue with the GST Council that the cess is an open ended insurance to States.
Another concern is that services will become more expensive under GST?
That is a genuine issue and services will cost more. But the real worry in services is the financial services sector. Who will control it? Assessees such as fund managers, insurers all want to comply but where will they pay the tax? The issue of dual control is important. If they have to file in 29 different rates, then it will be unmanageable. In some ways the GST Council is India’s first federal institution and we should look at creating a federal tax bureaucracy, which is both of the Centre and States. That’s the only long term situation.
Is there still any trust deficit between the Centre and the States?
There is no such issue. I think the Union Finance Minister has done a remarkable job of building trust and consensus. GST is not a small matter and there will be issues. But one is beginning to think that it is not the loss of sovereignty but the pooling of sovereignty of Centre and States.
Will GST meet its roll-out date of April 1, 2017?
Meeting the target of April, 2017 is still doable. It is touch and go but can be done.
SOURCE: The Hindu Business Line
The GST Council took its time to freeze the rate structure but eventually it appears to have hit upon the most workable combination given the unique economic and political characteristics of the country. Yes, the cess riding on top of the structure could have been avoided but thankfully it will be a temporary imposition to be reviewed after five years and the Centre’s argument that it is needed to fund the compensation to States appears believable. There is some criticism over having too many rates — there are four now at 5,12,18 and 28 per cent and if the zero rate and the yet-to-be-decided gold rate are included, there will be six — as also the fact that there will be two standard rates of 12 and 18 per cent. Yet, in a country such as India, with its wide income disparities and peculiarities in consumption, a single rate can only remain an ideal to strive for in future. The council seems to have rightly based its decision on the dictum that “the best should not become the enemy of the good”.
With the rates now frozen the focus shifts to grouping goods in the different tax slabs. Essential commodities will obviously be either zero-rated or fitted into the merit rate of 5 per cent to ensure that prices don’t rise and the poor are protected. Similarly, the 28 per cent category of items will also select themselves as demerit goods. The interesting categories will be the two standard rates. These will also be the slabs where items consumed by the middle-class will fall. But given that there are two standard rates, the bureaucrats doing the categorisation will have greater room to play around within the context of ensuring that GST does not become inflationary. There is some confusion over whether service tax will rise to 18 per cent or there will be two standard rates here too. There could be a pushback from middle-class consumers in the event there is only a single rate of 18 per cent as services will turn costlier.
Arriving at the rate structure appears to have been easier compared to the agreement on the issue of dual control over assessees. The council hasn’t been able to agree on the modality of control — whether it should be horizontal as in terms of turnover value, or vertical, as in which assessee is assessed by who, the Centre or the State. To be sure, this is a turf battle given the army of tax officers that both the Centre and the States have built up and who need to be deployed. Hopefully, the issue will be thrashed out before the next meeting of the council on November 24, laying the ground for introduction of the GST Bills in the winter session of Parliament.
SOURCE: The Hindu Business Line
The government is expected to make it clear to visiting British Prime Minister Theresa May that while it is “open” to the idea of having a comprehensive trade agreement with the UK, there is no scope of initiating formal negotiations at this point. May, who is embarking on her first outside the EU to India starting November 6, is said be coming here with the single-most important agenda of securing a comprehensive trade agreement. She is scheduled to meet Prime Minister Narendra Modi on Monday.
During the meeting, Modi is expected to express his commitment to engage with the UK to strengthen bilateral trade and economic ties, but there will be no specific promise on beginning the talks formally, said sources. “India has already indicated to the UK that it is open to the idea of having a separate trade agreement with it, there will not be any commitment on initiating formal negotiations. Although Britain has been insisting on starting the talks now, we are not ready to go for any commitment unless we are sure on what terms it leaves the EU,” a top official involved in the talks told BusinessLine . However, the official said that India might offer to open a dialogue mechanism on trade under the chairmanship of Commerce and Industry Minister Nirmala Sitharaman and UK’s International Trade Secretary Liam Fox. She is expected to tell Modi about the benefits of having a preferential trade arrangement with UK and the concessions that will follow.
Ever since Britain voted to leave the EU, May has been struggling to strengthen UK’s trade and investment ties with some of its leading economic partners. During his last visit to India in August, Fox had talked about the “future potential” for enhancing trade ties. So far, four UK ministers have visited India in an effort to bolster economic ties with India. “The UK’s share in India’s total trade had been falling for last couple of years. Under the India-EU FTA, the UK had been pushing for opening up legal and financial services. India’s main demand under any trade pact has been opening up of markets for its services. So, we should wait and watch,” said Biswajit Dhar, Professor of Economics, Jawaharlal Nehru University.
Support for deal
Meanwhile, the chorus for a bilateral trade agreement is growing among the private sector on both sides. “Time waits for no one and it is important that companies don’t wait for the Brexit dust to settle and a comprehensive bilateral economic agreement to be inked to do business — the opportunity is now,” the UK India Business Council (UKIBC) said in a statement. According to the UKIBC, India trades more with Indonesia, Germany and Japan, than with the UK. While trade between India and UK grew by 170 per cent between 2004 to 2014, India’s total trade grew by 800 per cent in the same period. On the other side, the Confederation of Indian Industry (CII) has urged both governments to take urgent measures to arrest the decline in bilateral trade. Bilateral trade in goods dropped to $14 billion in 2015-16 from $15.8 billion in 2013-14, CII said in a note.
SOURCE: The Hindu Business Line
Demand for Chinese products in India is decelerating and imports from the country would see a "major hit" in the coming months, according to a report, which revealed a significant shift in the consumption pattern of Indian consumers towards domestic products. The analysis by the PHD Chamber of Commerce & Industry said increasing competitiveness of India's production capabilities to match its Chinese counterparts due to the improvement in the ease of doing business was another factor responsible for the trend. "Indian production capabilities are becoming competitive as compared with China because of many reasons such as improvement in the ease of doing business. Also, there is a significant shift in the consumption pattern of Indian consumers from the Chinese products to domestic products. "As the Make in India programme is getting pace month after month, we can anticipate a significant improvement in the balance of trade with China," said PHD Chamber's President Mahesh Gupta. The analysis is based on around 2,000 responses from the consumption segment and more than 100 industry stakeholders who participated in the survey. "Demand for industrial products such as raw materials etc. is declining by 10-15 per cent and demand for consumption goods is less by 20-25 per cent," said the study.
India's imports from China increased more than 500 per cent from USD 10 billion to USD 61 billion during the last ten years from 2005 to 2015. China's share in India's imports increased from 7 per cent in 2005 to around 16 per cent in 2015, said the analysis by PHD Research Bureau. However, the trend has been reversed and growth of imports from China decelerated by 8 per cent in the first six months of the current financial year 2016-17. "The growth of imports from China has been decelerating and is in the negative trajectory in the recent months; no enthusiasm is seen in the upcoming months too," Gupta said. Despite the festive season imports from China decelerated (-) 14.5 per cent in the month of September whereas imports from World decelerated (-) 2.5 per cent, the study revealed.
Majority of the decline in India's imports from China has been witnessed in products such as ships and boats, tobacco products, aquatic products, pearls and precious stones, musical instruments and parts thereof, mineral fuels and oils, lead and articles thereof, cocoa products, and wool and products thereof, further revealed the analysis. It highlighted the pivotal role of investments for the long term sustainable goals. "FDI inflows from China to India between April 2000 and March 2015 stood at USD 288.512 billion wherein China's share was roughly 0.47 per cent which rightfully indicates that China is not a significant and substantial investor in India as compared to Singapore, Mauritius and Switzerland," the report pointed out.
SOURCE: The Economic Times
Turkey wants India to start talks on a proposed Free Trade Agreement (FTA) soon and said the ongoing political turmoil will not impact foreign investment flows. Though there is an India-Turkey Joint Study Group report on “the feasibility and possibility of concluding a Comprehensive Economic Partnership Agreement” (CEPA, or in other words an FTA), there have been no dates yet for starting the FTA negotiations.
In an interview to The Hindu, Turkey's Development Minister, Lütfi Elvan said: “We (Turkey) are ready to start FTA negotiations. But we are waiting for the Indian side to move ahead. We are expecting an official Indian delegation to come to Turkey soon in this regard.” He said Turkish companies want to make India a gateway for improving business ties in South Asia. Indian companies can use Turkey as a hub to expand operations in the European Union (with which Turkey has a Customs Union), the Middle East and Africa.
Shrinking trade
In FY’16, India-Turkey trade had shrunk nearly 28 per cent year-on-year to $4.91 billion, of which India’s exports to Turkey were $4.14 billion (contraction of 22.7 per cent), while Turkey’s exports to India fell 47 per cent to $776 million. Asked if Turkey is planning special measures to protect investors against any losses due to the political unrest, Mr. Elvan said: “Investors have been coming even after the (failed) July coup attempt. The month following the coup, there was $1 billion worth of capital flows into Turkey. So, there is no risk at all for investments in Turkey.” “Turkey is a safe haven for investors and has a stable environment for (foreign) trade. Turkey has many French, British and German companies, and more Europeans are coming in to do business. So we don’t feel there is any need for it (political risk cover or other special investment protection measures).”
‘Tailor-made incentives’
However, he said while there is a standardised general incentive policy for investors, Turkey now has ‘tailor-made’ incentives for investments that help Turkey meet its economic development plans including reducing foreign dependency and bringing technological advancement. Such incentives will include up to 100 per cent discount in corporate tax, allocation of public property for up to 49 years without rent obligations and free ownership transfer of such property on meeting certain conditions, social security payment exemption for ten years and the government helping out by taking a 49 per cent stake in investment company on the condition that such holding will be offered to public in ten years. Stating that Turkey is a world leader in Public Private Partnership (PPP) projects, Elvan said Turkey has around 211 PPP projects worth $122 billion including $66.8 billion in airport sector and $25 billion in the energy industry. “We have well-experienced companies doing PPP projects. If India invites, Turkish companies can share their experience in PPPs. The Turkish government can work on that with the Indian government,” the Minister said.
SOURCE: The Hindu
In a memorandum to the union textiles minister Smriti Irani, J Thulasidharan, president of the Indian Cotton Federation (ICF) reiterated the demand to set up a Cotton Board on the lines of the Jute Board and Coffee Board. He had earlier made the same demand to promote and monitor development of the fibre at the AGM of the ICF held in September. A leading daily quoted him as saying in the memorandum that raw cotton needs a regulatory mechanism, since the primary data which is available currently on cotton acreage and production is more of an estimate rather than factual figures. According to J Thulasidharan, dependable statistics can only guide policy initiatives, so ginning and pressing factories must report the pressing figures, while marking of bales should be made mandatory. The memorandum also added that the Seed Act is outdated and the norms for certification are not appropriate for the new generation of cottonseeds. “Since, there are over 400 cottonseed producers in the country, so norms for certification should be made more stringent and laws amended,” the memorandum informed.
SOURCE: Fibre2fashion
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.86 per barrel (bbl) on 03.11.2016. This was lower than the price of US$ 44.35 per bbl on previous publishing day of 02.11.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2925.05 per bbl on 03.11.2016 as compared to Rs. 2964.15 per bbl on 02.11.2016. Rupee closed stronger at Rs. 66.69 per US$ on 03.11.2016 as against Rs. 66.83 per US$ on 02.11.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on November 03, 2016 (Previous trading day i.e. 02.11.2016) |
Pricing Fortnight for 01.11.2016 (Oct 13, 2016 to Oct 26, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
43.86 (44.35) |
49.53 |
|
(Rs/bbl |
2925.05 (2964.15) |
3309.10 |
|
|
Exchange Rate |
(Rs/$) |
66.69 (66.83) |
66.81 |
SOURCE: PIB
A decade ago, buyers would have been lining up at China's biggest trade fair to make deals with textile firms selling material and clothing at a fraction of the prices charged in Italy or the United States. This month, exporters say, the queues have gone. "You can't survive if you make low-end goods," said Melinda Zhang, chief executive of Nantong Kelin Textile Co Ltd, which employs about 250 people and supplies bedding to clients including the W Hotel in Singapore. "When you compete to sell at the lowest price, there's always someone selling at an even lower price."
Textile exporters, a symbol of the low-cost manufacturing behind Asia's "tiger" economies, said this week at the Canton Fair in China's south that they were being crushed by rising costs. There are still foreign buyers - and China is still by far the world's biggest textiles exporter - but they said they were turning increasingly to India, Pakistan and even back to Europe, as price gaps narrow. It's not all grim in China's economy. Upbeat manufacturing data this week showed the strongest output since early 2011. Other firms, exhibiting household electronics and decorative materials, have been more bullish. But quiet halls during the last phase, focused on exports, of the 25,000-exhibitor, biannual three-week Canton Fair, underscore just how hard some of China's lower margin companies are being squeezed.
China's vast economic transformation has meant rising living standards, but also rising wages, forcing companies to move up the value chain to remain competitive. High-tech industries are springing up to replace labor-intensive sectors such as textiles and apparel. "I've come to the fair for 10 years. At its peak, people would be queueing up to talk to us," said a Shenzhen-based exporter selling towels and other goods. "Now there are very few people. There are more exhibitors than foreign buyers."
FALLING EXPORTS
China's textile exports fell last year for the first time in six years, slipping 5 percent to $286.8 billion. In January-August of this year, textile and clothing exports are down more than 4.5 percent. Some buyers at the sprawling fair complained of poor quality and price rises of more than 10 percent on some goods in the past year. Other prices have doubled in five years, but standards have not kept pace, some noted. Turkey and Italy were among countries many buyers are switching to. "Maybe they are more expensive, but they have better design," said Sergey Gerts, an import manager at Sparta Trade House in Russia, referring to markets closer to home. Gerts was visiting the fair for the third time to buy mainly tablecloths and doormats.
Among the biggest headaches for textiles and other low-end manufacturers are wages.
Average wages in China have grown at an annual compound rate of more than 12 percent - to 45,676 yuan ($6,755) a year in 2013 from 4,538 yuan in 1994, according to the All-China Federation of Trade Unions. Authorities in China have called for a slowdown in wage rises in order for the country to remain competitive. Sam Ma, at Nantong Lu-Ri Co Ltd, which sells mostly high-end bed sheets, blankets and fleeces, said wages had been rising 5-10 percent a year for several years. "In five to 10 years, all the low-end production will go to Pakistan," he said.
SOURCE: The Reuters
Cotton output in 2015-16 fell due to pest attacks, competitive prices of other crops and climate changes, resulting in the demand for cotton exceeding production for the second consecutive year. An increase in the share of polyester in the world fibre market is also affecting cotton, making polyester the greatest competitive threat for cotton. The issues pertaining to cotton and its cultivation were discussed at the international cotton advisory committee’s (ICAC) 75th plenary meeting being held in Islamabad, Pakistan. The meeting was attended by 378 persons, including representatives from 14 Members, 4 international organizations and 4 non-member countries.
The International Textile Manufacturers Federation made presentations to demonstrate the basic challenges faced by cotton and textile industries – water, energy and the need for creative ideas. The federation suggested solutions such as developing cotton varieties that use less water, concentrating on reducing energy consumption in cotton gins and transportation, and creating and applying new ideas, especially for increasing efficiency and reducing costs to tackle the challenges. Biotech cotton resistant to the whitefly is at advanced stages of development, said experts at the ICAC meeting. When commercialised, the new varieties will bring a big relief to growers.
The ICAC also noted that the Nairobi Ministerial Conference of the World Trade Organization, held in December 2015, had adopted a decision on cotton prohibiting export subsidies and calling for a further reduction in domestic support. The decision also calls for improvements to market access for least developed countries. The objective of the decision is to level the playing field for cotton exporters in the poorest countries, where the cotton sector is of vital importance. The committee also decided that the topic for its 2017 technical seminar will be ‘Opportunities and Challenges for Technology Transfer in Cotton’. It also accepted Uzbekistan’s offer to host the 76th plenary meeting to be held next year. (KD)
SOURCE: Fibre2fashion
Italy has shown keen interest in bilateral trade with Pakistan, said Italian Deputy Trade Commissioner AR Daudpota. In a meeting with Multan Chamber of Commerce and Industry president Khawaja Jalaluddin Roomi here on Friday, Daudpota said that a 58-member Italian trade delegation would visit Pakistan from November 5 (today) to discuss viabilities in bilateral trade with Pakistan. The delegation would have representatives from all Italian sectors of economy in addition to the heads of different associations, he added. Daudpota said that another high-powered Italian delegation would visit Pakistan on December 7 under the leadership of the Italian state minister. He said that the delegation would have representatives of 80 Italian companies from textile, leather, footwear, infrastructure, information technology, renewable energy, agriculture and automotive sectors.
MCCI president Khawaja Jalaluddin Roomi suggested that the delegation should also visit south Punjab to explore opportunities for trade and investment. He said: “Italy’s main industries are tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear and ceramics.” He said that the joint ventures between private sectors of the two countries could help enhance mutual trade volume. Jalaluddin Roomi said that Italy was an important trading partner of Pakistan in Europe, which came at 5th and 3rd places respectively among the top exporting and importing destinations for Pakistan in the European Union. He said that the balance of trade favoured Pakistan and it was encouraging to see that volume of bilateral trade was being maintained over $1 billion.
Jalaluddin Roomi said that the Multan Chamber of Commerce and Industry would like to develop a close liaison with the Italian Trade Commission Office in Pakistan to exchange important information related to trade. He hoped that the Italian embassy would play an active role in projecting Pakistan as a safe place to invest and trade.
Italian Deputy Trade Commissioner AR Daudpota has offered to arrange a meeting of local businessmen with the Italian trade delegation, which would arrive in Pakistan on November 5. On November 5, various sector specific seminars would be held in a hotel in Islamabad while on November 6, the delegation members would have B2B meetings with local businessmen, he added. Later, the delegation would also visit Lahore to have the B2B meetings. He further said that an Italian trade delegation would also visit Faisalabad in January next year.
Earlier, in his welcome address, Faisalabad Chamber of Commerce and Industry (FCCI) president Muhammad Saeed Sheikh stressed the need for frequent exchange of trade delegations between Faisalabad and Italy to give a quantum jump to the bilateral trade between the two countries. He said that textile was the mainstay of the national economy. Out of total $13 billion textile exports, the share of Faisalabad was around $6 billion, he added. He said that being situated in the heart of Pakistan, Faisalabad was the best location for safe investment, particularly in export oriented projects, he added.
SOURCE: The News
After completing the seventh round of negotiations, the authorities of Central America and South Korea agreed to sign the free trade agreement (FTA) on November 16 in Nicaragua. "We expect to make the official closing of negotiations on November 16 in Managua, during the meeting of Ministers and the heads in charge of foreign trade," said Enrique Lacs, the Guatemalan Vice Minister of integration and foreign trade.
According to Lacs, "there are only some technical aspects of the access and origin lists pending, and this will be defined at the ministerial meeting." The completed chapters include: government procurement, labor, dispute settlement, environmental, sanitary, and phytosanitary measures, competition policies, and technical barriers to trade. However, once the negotiations are finished, the agreement will be subject to legal review, must be signed by the president, and voted on by the respective congresses. The negotiations for the free trade agreement between Central America and South Korea started in June 2015 and the first round of negotiations was held from September 21 to 25 in Seoul.
SOURCE: The Fresh Plaza
