INTERNATIONAL
Textile Raw Material Price 2016-11-06
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
Bottle Grade Chip |
1064.66 |
USD/Ton |
0% |
11/6/2016 |
|
PSF |
1053.57 |
USD/Ton |
-0.14% |
11/6/2016 |
|
VSF |
2351.13 |
USD/Ton |
-0.62% |
11/6/2016 |
|
ASF |
1892.74 |
USD/Ton |
0% |
11/6/2016 |
|
Polyester POY |
1101.63 |
USD/Ton |
0% |
11/6/2016 |
|
Nylon FDY |
2351.13 |
USD/Ton |
0% |
11/6/2016 |
|
40D Spandex |
4362.17 |
USD/Ton |
0% |
11/6/2016 |
|
Nylon DTY |
5574.70 |
USD/Ton |
0% |
11/6/2016 |
|
Viscose Long Filament |
1338.22 |
USD/Ton |
0% |
11/6/2016 |
|
Polyester DTY |
2158.90 |
USD/Ton |
0% |
11/6/2016 |
|
Nylon POY |
2055.39 |
USD/Ton |
1.09% |
11/6/2016 |
|
Acrylic Top 3D |
1308.65 |
USD/Ton |
0% |
11/6/2016 |
|
Polyester FDY |
2550.76 |
USD/Ton |
0% |
11/6/2016 |
|
30S Spun Rayon Yarn |
2942.61 |
USD/Ton |
-1.49% |
11/6/2016 |
|
32S Polyester Yarn |
1739.69 |
USD/Ton |
0% |
11/6/2016 |
|
45S T/C Yarn |
2587.73 |
USD/Ton |
0% |
11/6/2016 |
|
45S Polyester Yarn |
2232.84 |
USD/Ton |
0% |
11/6/2016 |
|
T/C Yarn 65/35 32S |
3120.06 |
USD/Ton |
-0.94% |
11/6/2016 |
|
40S Rayon Yarn |
2321.56 |
USD/Ton |
0% |
11/6/2016 |
|
T/R Yarn 65/35 32S |
1863.16 |
USD/Ton |
0% |
11/6/2016 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
11/6/2016 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
11/6/2016 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
11/6/2016 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
-0.22% |
11/6/2016 |
|
45S T/C Fabric |
0.66 |
USD/Meter |
-0.45% |
11/6/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14787 USD dtd. 6/11/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Knitwear manufacturers here are not ‘much’ concerned about the ‘mere rate structures’ of Goods and Services Tax (GST) but eagerly been looking at the macro approach that would be adopted for fixing various raw materials in the production chain into different slab categories. According to the consensus reached, the GST rates have been fixed at 5 per cent for items of mass consumption or essential use, at 12 and 18 per cent for ‘standard items’ and at 28 per cent for ‘de-merit goods’. Garment manufacturers feel that apparels should have been considered on the 5 per cent slab because clothing was considered an essential thing as in the class of food and water.
Raw materials
“Rate structures overall looks o.k. But, unless the classification of items is done properly, the real benefits cannot be obtained. For example, the situation could become complex even if the textile products are classified at lowest slab but some of the key raw materials been taxed at 18 per cent. “Moreover, the cumulative tax on the textile products presently comes to around only 7 to 8 per cent so any categorisation beyond the lowest slab could make the products from the cluster not gain much under the Goods and Services Tax regime except for logistical benefits”, said Tirupur Exporters Association president Raja Shanmugam. R.M. Senthil Kumar, former chairman of Institute of Chartered Accountants of India (Tirupur chapter), cautioned that the tax refund rates should have be to proportionally raised if the rates under GST was fixed at higher slabs.
SOURCE: The Hindu
India improved its ranking by one spot in a global index of business optimism, with policy reforms and Goods and Services tax (GST) expected to become a reality soon, says a survey. According to the latest Grant Thornton International Business Report, India was ranked second on the optimism index during the third quarter (July-September 2016). Indonesia took the top spot, with the Philippines coming in third. India was ranked third during the April-June period after being on top for two consecutive quarters. "The improvement in the optimism ranking in the recent past clearly reflects that the reform agenda of the government and its efforts on improving the climate for doing business are having an impact," Grant Thornton India LLP Partner - India Leadership Team Harish H V said.
High business optimism was also complimented by the rise of employment expectations. India regained its top position on this parameter, from second position in the April-June period, while profitability expectations also moved up. "...all the programs and initiatives of the government as well as its focus on building relationships with all major economic powers has made India a bright spot in the global economy," Harish said, adding the recent push for GST augurs well and should give a further boost to business optimism.
While India continues to be amongst the top five countries citing regulations and red tape as a constraint on growth, for the first time in the year, the country's ranking on this parameter has dropped from second to fourth. As per the survey, 59 per cent of the respondents have quoted this as an impediment in the growth prospects compared to 64 per cent in the previous quarter. The report is prepared on the basis of a quarterly conducted global business survey of 2,500 businesses across 36 economies. Meanwhile, in terms of revenue expectations, India slipped to third position from top in the previous quarter. In spite of the downturn, India is much ahead of China where only 30 per cent respondents expect an increase in revenue, whereas in India, 85 per cent respondents have voted in favour of increasing revenue. The survey further noted that 68 per cent of respondents have voted for an upsurge in selling prices. On this parameter too, China lags India with only 10 per cent of respondents expecting an upsurge in selling prices. The global average is 19 per cent. Globally, business optimism stands at net 33 per cent, rising 1 percentage point from the previous quarter but falling 11 percentage points over the year. "Political events such as Brexit and the US presidential election understandably rattle the global economy and test the resilience and elasticity of businesses worldwide. In general, businesses do not like uncertainty, and that is what is happening," Grant Thornton Global CEO Ed Nusbaum said.
SOURCE: The Economic Times
Even before the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 received the ascent of the President of India, two key issues being debated in great length have been the rate of GST and administrative control over the assessee. The issue of rate of GST gained further prominence with a demand that upper cap limit of 18 per cent of GST be entrenched in the Constitution per se. With the passage of Constitution Amendment Bill and given the ambitious deadline of April 1, 2017 for the roll-out of GST, it was imperative that the GST Council took a stance and decided on the rate slabs at the earliest, which the GST Council seemed to have achieved in its meeting on November 3.
The multiple rate
The GST Council, at the recent meeting, decided and agreed upon the GST rates of 0, 5, 12, 18 and 28 per cent. In an attempt to compensate States for loss of revenue on account of change in indirect taxation regime from origin based to destination, certain goods in the peak rate bracket would be susceptible to an additional levy of cess for five years from implementation of GST. In the wake of the above GST structure, from a statement by the Finance Minister, it appears that the GST rates would be assigned based on the prevalent effective rate taxes on the products.
Also, the goods which are expected to attract a tax rate of 18 to 28 per cent currently attract an excise duty of 12.5 per cent and VAT of 14 to 14.5 per cent. Besides, based on the Finance Minister's statement, all goods presently attracting about 27 per cent tax rate are not expected to be automatically taxed at the peak rate of 28 per cent. The products which are commonly used by the lower middle class are expected to be taxed only at 18 per cent.
The impact of the above broad framework of GST slab rates on different industries would make for an interesting analysis. The lowest rate of 5 per cent proposed to be levied on mass consumer goods would ensure that the common man is not saddled with additional tax burden under the GST regime. However, on the contrary, white goods and consumer durables are proposed to be taxed at a peak rate of 28 per cent, notwithstanding the mass consumption of the same and consequently, the effective rate of GST on such goods would increase. The instant industry was anticipating that such goods would be taxed at 18 per cent and proposal to tax at 28 per cent has taken the industry by surprise. In the light of the above announcement, industry is curiously awaiting the quantum of cess that is likely to be imposed on goods and more importantly the categorisation of products into 12, 18 and 28 per cent.×
Specific tax for goods & services
On services, while the rates are yet to be finalised, it is emerging that the GST rate of 18 per cent would apply on all services other than the ones which presently enjoy some form of exemption or abatements, which would translate into higher working capital requirements. It is further expected that the essential services are taxed at a lower standard rate of 12 per cent. While the broad GST rate slabs have been agreed by the GST Council, the list of goods and services that fall under GST rate slab would determine the winners and losers on account of GST. With multiple tax structure being ingrained under the GST regime, it is expected that rate of GST specifically in respect of goods is aligned to Harmonised System of Nomenclature. However, the litigation around classification of goods and services appears to be imminent.
Notwithstanding that final schedule of goods and services with applicable rates is yet to released, the very consensus amongst the GST council members on the rate structure is a significant progress in the implementation process of GST. Thus, with the Government effectively clearing decks for the imminent implementation of GST, it is in industry’s own interest that it start gearing up in a systemic manner. Accordingly, it is crucial that industry gear up their system to appropriately capture multiple rates of GST/cess across goods and services with former being further linked to the Harmonised System of Nomenclature and augment its reporting system as well.
ANXIOUS WAIT
OUTCOMES
SOURCE: The Hindu Business Line
India has suffered a setback in its efforts to facilitate easier movement of services sector professionals across borders. A concept paper to set the tone for a recent global meeting of trade ministers and officials in Norway excluded any mention of work permits and visa related issues, dealing a blow to India’s attempts to secure simplified procedures for easy movement of its IT professionals, doctors and architects so that they can work overseas. India recently submitted a proposal to the World Trade Organisation on removing barriers to global trade in services through simplified procedures for temporary entry and stay for professionals, technically called Mode 4 services. It pitched for transparency, streamlining of procedures and elimination of bottlenecks in its paper on Trade Facilitation Agreement in services.
Instead, the concept note only talked about technical standards and qualification requirements — called domestic regulation — needed to ease services trade. "In services, discussions are also moving beyond headlines, at least on the topic of domestic regulation," the note said. Though the note said that no firm conclusions will be drawn from the meeting, the mini ministerial held a fortnight ago was a preparatory one for the WTO ministerial conference (MC) next year in Argentina.
"They want domestic regulation and we want market access in services through Mode 4...We have said there can't be only one issue that can be discussed," said an official aware of the development. The note further said, "The issues that are at the forefront of the discussions leading up to MC 11, including agriculture, fisheries subsidies, domestic regulation in services, e-commerce and micro- small-, and medium-sized enterprises, as demonstrated by the high level of engagement in Geneva on these issues, are all of interest to developing members."
The development is a cause for concern, experts said. "What we want in services is not there in the note. Developed countries want us to open our legal services which we can’t allow because dispute settlement should stay with us," said a Delhi-based expert, who did not wish to be identified. Similarly, further opening up insurance, banking and broadcasting sectors to foreign investment, in accordance with the demands of developed countries, is not plausible, he said.
SOURCE: The Economic Times
Economic think-tank NCAER has pegged India’s GDP growth at 7.6 per cent for the current fiscal on back of pick-up in rural demand and “positive signals” on the manufacturing front. India’s economy had expanded at 7.6 per cent in 2015-16. On one hand, it said the anticipated improvement in the agricultural sector and the associated increase in rural demand will give an upward push to economic growth. The manufacturing sector is also giving positive signals with Purchasers’ Managers Index, Index of Industrial Production for core sectors and auto sales going up. The domestic aviation sector growth continues to be robust. “However, other service index indicators continue to be muted. Food inflation is also showing signs of dampening in the latter part of the second quarter. However, fuel inflation may revive. Although urban demand is predicted to remain strong, external demand continues to be volatile,” NCAER said in statement. Its estimates show that the output of kharif foodgrains is expected to reflect an increase of 10 per cent to 11 per cent over last year’s output of 124 million tonnes. It further said that India’s fiscal position remained under stress during first half of the current fiscal.
Despite healthy growth in tax revenues, the combination of rising expenditure and lower-than-expected non-tax revenues is likely to “test the government’s resolve” to abide by the fiscal deficit target set out in Budget 2016-17, NCAER added. The National Council of Applied Economic Research (NCAER) is one of India’s oldest economic think-tank set up in 1956.
SOURCE: The Financial Express
India’s first coastal economic zones (CEZs) could finally take some concrete shape, with the likely announcement in the Union Budget for 2017-18 to give units in these areas a 10-year holiday from corporation tax. However, there could be a rider these units must generate a specific threshold of direct jobs. The provision in the Budget could come up despite the finance ministry looking at phasing out exemptions given on corporation tax and reducing levy to 25%, from the current 30% in the next two years.
Officials said the first two CEZs are expected to come up in Gujarat and Andhra Pradesh, and land is being sought for them. According to a preliminary proposal, CEZs would have to be around 450-km long areas from the sea, where big manufacturing and export-oriented units would come up to set up labour-intensive industries such as clothing, footwear, electronics as well as electrical and light manufacturing to tap overseas markets. The proposed CEZs would be of a much bigger size than the special economic zones (SEZs).
The Budget for 2017-18 is likely to provide a 10-year corporation tax exemption to all the manufacturing units located in the CEZs. The Centre might announce other relaxations as well and impressive infrastructure. The CEZs would have liberal land and labour laws; something which cannot be done on a mass scale and could be modelled along the lines of China’s Shenzhen and Guangzhou areas. The government’s main think tank, NITI Aayog, is actively pursuing the proposal.
Last month, NITI Aayog Vice-Chairman Arvind Panagariya, in a meeting with his Chinese counterpart Xu Shaoshi of National Development and Reform Commission, had sought China’s cooperation in setting up of such CEZs. Panagariya, in a blog in February this year, had also spelt out his idea of CEZs. These zones, according to Panagariya, would have to be set up near deep-draft ports, which are capable of accommodating very large and heavily loaded ships. “They must provide a business-friendly ecosystem, including ease of doing business, especially ease of exporting and importing, flexible labour laws, swift decisions on applications for environmental clearances and speedy water and electricity connections. Apart from conventional infrastructure, the zones should create urban spaces to house local resident workforce,” Panagariya had said.
It is still being debated whether CEZs would come up through an Act along the lines of SEZs or will these be built through an executive order. While the legislative backing would be a preferable route, the government does not have a majority in the Rajya Sabha. As such, both options are being considered, officials said. The finance ministry had announced a plan to phase out tax exemptions, so that it could cut corporation tax rate to 25% by 2018-19, from 30% at present. It had said profit-linked, investment-linked and area-based deductions will be phased out for both corporate and non-corporate taxpayers. In this year’s Budget, Finance Minister Arun Jaitley had said the new manufacturing companies, which were incorporated on March 1, 2016, onwards, would be given an option to be taxed at 25%, provided these do not claim profit-linked or investment-linked deductions, and do not avail of investment allowance and accelerated depreciation.
The Chinese experience with these zones such as Shenzhen and Guangzhou is being told to sell the idea of these zones. The argument in favour of these zones are that India has not been able to generate employment in manufacturing since large players are missing in those areas such as footwear, clothing, electronics and light manufacturing, which generate jobs and, hence, face absence of economies of scale.In 2014, China exported $56 billion worth of footwear, compared with $3 billion by India, and $782 billion worth of electrical and electronic goods, compared with $9 billion by India. Also, home market in electronic goods is $65 billion, of which $26 billion is supplied by domestic firms. In comparison, the world market in electronic goods is $2 trillion. Domestic market can serve as an attractive complement; it cannot substitute for the large world market, officials said.
An important advantage of locating the zones near the coast is that these would attract large firms interested in serving the export markets. These firms would bring with them technology, capital, good management and links to world markets. These would help create an ecosystem around them in which productive small and medium firms would emerge and flourish.
SOURCE: The Business Standard
The proposed GST structure with "higher rates" has left "a lot to be desired" and there is a room for improvement in the multi-tier tax framework, former Finance Minister P Chidambaram said here. The senior Congress leader further said the government should announce "GST slab that will be acceptable in Parliament".
Fielding questions from students after a lecture on economic reforms at IIT Madras, he said, "It is too early for me to form an opinion. I want to see the fine-prints of the decision." Quoting media reports, he said the government has decided on slabs like nil rate, 5, 12, 18 and 28 percent and then a 'sin tax' of 60 percent plus cesses. "I think there is a room for improvement, I think there is a lot to be desired in that higher rates. I agree that initially we will have more than one rate. In fact, I said in Parliament that you must have a standard, standard minus and standard plus," he said, adding there will also be zero rate. "...I can understand four rates, but I cannot understand six rates plus cesses...I think there is still a scope for improvement. But I have not come to a final view in the matter. I will take a final view after I study the matter more carefully," Chidambaram said.
Speaking to reporters later, he said in general the government was going on the path "we (Congress) had indicated in our Parliament debates, but my opinion is some corrections need to be made in this regard". He said a five (slab) rate structure itself was high as the world over GST was one tax. "Since GST is being introduced in India, I had said that there could be standard, standard minus and standard plus. If you include 0, that will make it (slab) four. Now four has become five and it looks it might go up to seven or eight. All these things should be reconsidered," the former Finance Minister said. He further said the government does not appear to have taken a final decision. "The next meeting is on November 24 and I feel they will reconsider these things in that meeting. The government should announce GST slab that will be acceptable in Parliament.
SOURCE: The First Post
The finance minister has expressed his view that chappals cannot attract the same rate of duty as AC. Further, he said that different items used by different segments have to be taxed differently, otherwise the goods and services tax (GST) will be regressive. Even Arvind Panagaria has supported multiple rates and cess. So, I am worried that he may follow this wrong path with good intentions.
Let me first assert that VAT/GST is basically a regressive tax like all other indirect taxes. If one tries to make it progressive by giving exemptions and making multiple rates, he will fall in the same old trap of misunderstanding. One has to see the whole taxation structure and try to make it progressive and not just one tax. I am giving the whole logic in detail.
There has been an effort in most countries to exempt or lower the duty on food and other essentials and, thereby, reduce the element of regressivity. However, there is a great administrative cost for trying to get progressivity by rate differentiation. The advantage of progressivity gained by a whole host of exemptions, zero rating and multiple rates is almost not certainly sufficient to offset the disadvantages associated with departure from a uniform rate and comprehensive base. Exemptions and differential rates distort consumer and producer choices, make for administrative complexity (and hence increased administrative and compliance cost) and raise questions of interpretation that often must be resolved in courts.* Any equity gains from differentiation of rates are likely to be more than outweighed by the additional administrative cost entailed. Exemption introduces cascading leading to major distortion and lack of neutrality, which is the virtue of VAT. In Turkey, achieving progressivity in 1991 was done through a cumbersome mechanism that required monthly representation of receipts, their verifications, huge bureaucracy and a very high compliance costs.** The conclusion is therefore that the VAT regression can theoretically be reduced or mitigated by exemptions and rates differentiations but in practice it is impossible to apply these measures efficiently due to many factors that are unknown or sufficiently quantified, qualified or defined.
VAT is not to be seen in isolation but in combination, that is, as a part of a total tax structure along with (i) excise on luxuries and demerit goods, (ii) income tax and (iii) expenditure policy. What has to be judged is whether the tax structure as a whole is regressive or not. The combination can be made of the best qualities of all the taxes. The strength of VAT is in its ability to raise revenue, that of excise is also in garnering revenue, of income tax is in attaining progressivity and of expenditure policy is in effectuating a pro-poor direct redistribution of income and consumption opportunity. A combination will make a strong tax structure, which will serve the welfare purpose more than a messed up VAT by multi-rated distortion. Regressivity issue may be addressed better by other tax such as income tax.*** and expenditure measures. What has to be ensured is that the whole tax structure is progressive in that it raises enough revenue to make sufficient funds available for pro-poor welfare expenditure. The strength of VAT in realising revenue (if it is a simple single rate VAT with only a zero rate for export and a few exemptions) should be harnessed to combine with the progressiveness of high excise on luxuries and an effective income tax to make a progressive and buoyant tax structure. So VAT may well be regressive in the usual sense but it need not be regressive in combination with other taxes as a part of a tax structure in the more comprehensive view of things.
So, my suggestion is that though we need not have a flat rate, we should have rates: five, 16 and 26 per cent and no cess. And, no separate rates for service tax. Now that GST Council has finalised the rates as five per cent, 12 per cent, 18 per cent, 28 per cent and cess and separate rates for service tax, there will be enough controversy about classification. Maximum damage has been the creation of rates 12 and 18 where there will be most controversies. The finance minister’s assertion that several rates in GST will be a progressive tax is unfounded. Bad days back again.
SOURCE: The Business Standard
Government will introduce a bill in the winter session of Parliament beginning next week tabulating the revenue likely to be foregone by each state on account of subsuming of local taxes and the Centre's contribution to make up for the loss. The GST Compensation Bill will provide a legal backing to the Centre's promise to compensate the states if their revenue growth rate falls below 14 per cent in the first five years of the GST roll out. The base year for calculating the revenue of a state has been decided as 2015-16. "The compensation law would have the taxes subsumed and the revenue forgone by each state on account of GST implementation. It will give details on how the Centre plans to raise funds for compensating the revenue loss," an official said.
A separate law will give the provisions a statutory backing and there will not be any case of any understanding error between the Centre and the states in future. The winter session of Parliament begins on November 16. The officials of the central government will finalise the draft GST Compensation Law by November 15 and thereafter it would be circulated to the states. The GST Council in its meeting on November 24-25 will discuss the proposed law. Goods and Services Tax (GST) will replace all indirect taxes on goods and services imposed by central and state governments. The Centre and the states have converged to a four-tier GST tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent and keeping out essential items out of the purview of the new taxation regime.
SOURCE: The Times of India
After much to-ing and fro-ing, the centre and states have agreed on the rates of the goods and service tax (GST). A five-slab structure of 0%, 5%, 12%, 18% and 28% has been finalized, with some demerit goods taxed above 28% and cess on them has been retained. The issue of administrative control over assesses is still to be thrashed out. The rates at which individual items are to be taxed is yet to be decided, which could explain the lack of enthusiasm in the market, which is anyway nervous at the prospect of a Trump win in the US presidential elections.
Given the long run-up to the GST agreement, part of the macro benefits such as the formation of a unified market for the country and supply-chain benefits should have been priced into the markets by now. But analysts say the impact of GST-related developments on individual stocks will be felt only after product-wise tax rates are fixed. Also, the multiplicity of rates may lead to a whole lot of litigation by firms, so the uncertainty may persist.
Coming to the macro-level impact, economists highlight that the multi-tier rate structure mirrors the current indirect tax regime; it seeks to ensure that prices do not vary significantly from where they are and almost 50% of the Consumer Price Index (CPI) basket is exempted from tax, hence a marginal surge of 15-20 basis points is foreseen in CPI inflation. A basis point is 0.01%. But service tax is expected to inch higher—HDFC Bank Ltd said in a note that it sees service tax going up from 15% to 18%.
While the aim of multiple tax slabs is to minimize the impact on inflation and government revenues, growth could take a hit in the near term. “The perception that goods will become cheaper after the GST could prompt consumers to postpone purchases of high-value consumer goods. Therefore, if the GST is implemented from April 2017, there could be a slightly negative impact on consumer demand in the run up to its implementation (i.e., in Q1 2017),” said a Nomura report. That is apart from the adverse impact it may have on the unorganized sector. Also, for benefits of GST to start reflecting in India’s gross domestic product (GDP) it could take more than two years, the caveat being successful integration. “The bump-up in GDP on GST implementation would not be more than 0.5%,” said Madan Sabnavis, chief economist at CARE Ratings. The multiple rates will make things complicated from a compliance perspective and could dilute some benefits of the GST system. Given the prevailing ambiguity on many aspects, a Religare Institutional Research report calls GST a leap of faith, adding that even though the structure scores high on progressivity and inflation neutrality, it is against the very essence of a simplified tax regime. There are also challenges such as getting the IT infrastructure in place followed by training of tax officers for a smooth integration. In short, while GST is now likely to be a reality soon, much depends on its implementation.
SOURCE: The Live Mint
Though there has been no solution as yet to the thorny issue of who is to control which lot of taxpayers, finance minister Arun Jaitley has done well to get all state governments to agree on a broad GST taxation structure, and enough care has been taken to ensure the inflation-impact will be kept to a minimum. With this, India is on its way to become a single market, with uniform tax rates across states and, thanks to 24×7 uploading/matching of invoices of goods moving across states onto a GSTN computer system, state governments can remove most border check-posts quite soon. A single tax rate, suggested by some, would have helped avoid classification disputes but was never going to be possible due to the apprehension of huge revenue losses and the fact that a very large number of items would end up paying higher rates than they do now.
While the eventual aim of GST has to be lowering the number of rates once the system stabilises, the biggest problem right now is that, for too many commodities, the GST rates may not be much lower than the rates being charged right now—in which case, that pretty much defeats the purpose of GST which was, due to increased compliance, to lower the effective tax rate dramatically. Had the GST council taken into account the much higher compliance which will happen once the system stabilises, it could have lowered tax rates quite substantially—you may or may not agree with the chief economic advisor’s estimate that R4.3 lakh crore can be got through increased compliance, but that does indicate there are significant gains to be made.
There is also no clarity on whether services are to be taxed at 12% or 18%, but one way to fix things is to ensure just a handful of goods and services are retained in the 28% tax bracket—in the earlier proposal, where the top tax was 26%, over a fourth of the tax base was to fall in this bucket; if most of these items are shifted to the 18% bucket, the average tax incidence will be lower than what it is today. This is critical since the best chance at getting a low rate-structure is now, when the Centre is compensating states for any revenue loss—there is no guarantee that the GST Council will lower rates a few years down the line even if tax compliance rises. Finance minister Jaitley is obviously right when he says the R50,000 crore cess is better than a R172,000 crore tax—just 29% of any GST tax remains with the Centre—but a better solution would have been to finance the compensation for states through a temporary relaxation of the FRBM limit; this is especially important since the bulk of the R50,000 crore is to come from a clean-energy cess which, because it cannot be set off as input tax credit, will add to production costs.
SOURCE: The Financial Express
The Centre is hopeful of a consensus around 'vertical division' of assessees, one without a turnover threshold, to resolve the issue of dual administrative control under the proposed goods and services tax (GST) regime. While most states are in agreement over the principle of division in a pre-decided ratio between the two authorities, Kerala, West Bengal and Tamil Nadu have pressed for exclusive state control over those with annual turnover up to Rs 1.5 crore and dual control for beyond that. Also termed 'horizontal division', this threshold formula would ensure states get control over most assessees. By government data, 88% of assessees are below the Rs 1.5 crore threshold. "A consensus appears to be evolving around the 'vertical division' of assessees for scrutiny and audit. Negotiations will centre around the ratio of division. We are willing to do less assessment than states," said a central official. The ratio could be 1:2 or 1:3 in favour of states.
Resolution of the issue is needed to prevent harassment of taxpayers. "We can’t have two competing authorities for the same assessees," said the official. Assam’s finance minister, Himanta Biswa Sarma, told a television channel after the Council meeting on Friday: "When the meeting started, the Council was leaning towards a Rs 1.5 crore threshold but now many states feel that it should be vertical division. We expect the dual control issue to be resolved soon." Jammu & Kashmir’s Haseeb Drabu said the state would back a vertical split of administrative powers. While the states had earlier agreed to exclusive assessment of manufacturing units with turnover of up to Rs 1.5 crore, they went back on it as the Centre retained administrative control over all 2.6 million service tax assessees.
Finance Minister Arun Jaitley said after the meeting, "We don't want to take a decision in a hurry because, administratively, any mistake on this front could be chaotic." The finance ministers will have an informal meeting on November 20 to discuss it. “Sometimes ministers in the Council meeting discuss a politically correct stand in the presence of everyone. Informally, they might have a different view," said an official.Pratik Jain, partner at consultancy PwC, said: "With services also getting split between Centre and States, it is unlikely the Centre would agree on horizontal division. A vertical division on an agreed ratio seems more viable."
GST structure likely to be non-inflationary
New GST structure is likely to be 'non-inflationary' as most of the items in the Consumer Price Index basket will be taxed at a rate which is very close to their current levels, says a Citigroup report. The GST Council has agreed on 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. PTI
SOURCE: The Business Standard
Defence, security and trade relations will top the agenda of talks between Prime Minister Narendra Modi and his British counterpart Theresa May during her India visit as they review the ‘breadth’ of ties after the Brexit vote. The two leaders will discuss the “breadth” of India-UK relations during their working lunch at Hyderabad House on Monday afternoon, May’s official spokesperson told reporters at Downing Street here. “It will not be about how many deals are signed or that kind of transactional visit but more about the depth of the ties and working towards creating more jobs and growth in both countries. Defence and security will be an important part of the bilateral discussions. We are keen to develop that partnership and see how we can put in more energy and enthusiasm into that,” she said. “Why the Prime Minister is going to India for her first bilateral visit outside Europe, and her first trade delegation, is because India matters to us — now more than ever. In the context of Britain leaving the European Union (EU), the aim is two-fold –- to build on the groundwork already done to bring down trade barriers and deepen the UK’s relationships outside the EU,” she noted.
In reference to discussions on a potential India-UK free trade agreement (FTA), the spokesperson stressed that the UK would not be pursuing a bilateral trade deal with India while it remains a member of the EU. “We will continue to support the India-EU FTA, respecting our rights and obligations within the EU,” she said. While there has been wide speculation over a potential India-UK FTA, Britain remains inhibited from openly pursuing bilateral trade negotiations until Article 50 of the Lisbon Treaty triggers the official process of Brexit. May, who left for India this morning, will begin her visit by opening the India-UK Tech Summit on Monday morning alongside Modi.
Following her bilateral talks with Modi, both leaders will issue a joint statement. While in New Delhi, she is also expected to visit Rajghat and India Gate. On Tuesday, she will leave for Bengaluru, where she has a series of business engagements as well as an address to a tech summit. The British premier will be accompanied by 40 small and medium enterprise (SME) representatives from across the UK, many of whom are on the lookout for a foothold in India. The recent tightening of the Tier 2 intra-company transfer (ICT) visas, expected to hit Indian IT companies the hardest, is expected to be on the agenda from the Indian side. However, Downing Street stressed the UK remains open to the “brightest and the best” from India and that Indians had been issued more work-related visas than the US, China and Australia combined.
SOURCE: The Financial Express
Sumith Nakandala, secretary-general of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec), the seven-nation regional grouping, spoke to Subhayan Chakraborty on the under-negotiation Free Trade Agreement (FTA) in merchandise:
What are the major bottlenecks still holding back the FTA, 20 years after it was first proposed?
In 2004, the process of trade negotiation was started and the 19th meeting of the Trade Negotiating Committee was in 2011. In that time, all member-states agreed on a time frame for exchanging of schedules, ministerial meetings. The agreement was that the FTA will be done by the end of 2011 but it didn’t happen because one member didn’t submit their recommendations. I had to convince them personally, after which they gave it by the end of November 2014.
Which country?
I can’t tell you that but when the 20th meeting of the Committee was held in 2015, the entire trade scenario had changed in South and Southeast Asia, and that is where we are stuck.
How do you see the agreement moving on from here?
Again, one member-state wanted to revise the list of Production Specific Rules. Therein lies the problem but we are addressing that. Bimstec is not dead and these differences will be handled.
The agreement is being negotiated based on reducing the number of goods in the restricted list, rather than increasing the number of goods which can be brought under free trade. Why this negative approach?
The Indo-Sri Lanka FTA was also based on a negative list approach. In Bimstec, the final aim is to redefine the negative list and ultimately remove it.
A number of countries have also expressed reservations about negotiations on services. How would you convince them?
All nations will have concerns on services. Especially on how to liberalise services or to what extent it can be done, as well as the categories of services. So, that will take some time. But, I’m sure the agreement on investment can go (forward) because, by and large, all countries have liberalised the investment regime in various orders.
What are the strong points of Bimstec as compared to SAARC?
The most positive thing in Bimstec is no political conflicts or disagreements. Also, the South Asian countries (India, Bangladesh, Bhutan, Nepal, Sri Lanka) don’t have bilateral problems with the two South-east Asian (Myanmar, Thailand) ones. And, historically, these nations were linked through trade ties over centuries. That is the strength of this organisation.
SOURCE: The Business Standard
The government is looking to engage more with Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) nations and has started pushing for a trade pact. The Bimstec grouping, which comprises seven nations lying in the adjacent areas of the Bay of Bengal — India, Bangladesh, Bhutan, Nepal, Myanmar, Sri Lanka and Thailand — is set to become a focus area for India thanks to the trade, economic opportunities. However, the grouping has not progressed much in terms of economic cooperation or physical connectivity since 1997. Since then, only three summits have been held with the latest one being held earlier this month when India hosted the Bimstec nations on the sidelines of the BRICS (Brazil, Russia, India, China and South Africa) summit in Goa.
Back then, Commerce and Industry Minister Nirmala Sitharaman had called for an early conclusion of a trade pact based on the ‘complementarities’ among the seven-nation grouping. However, that might be easier said than done as persistent differences over tariff rates and sectors covered under merchandise trade had been difficult to break through even after 20 rounds of negotiation having taken place over the past 20 years.The region brings together 1.5 billion people or 21% of the world population and accounts for almost 3.7% of global trade and a combined gross domestic product (GDP) of over $2.5 trillion. A framework agreement to establish a free trade area was signed in 2004 but it is yet to be operationalised. Talks on services trade are set to resume. The Bimstec nations being also engaged under other groupings such as South Asian Free Trade Area, the Association of Southeast Asian Nations and the Regional Comprehensive Economic Partnership have also made talks slow.
Intra-regional trade is currently very low at 2.8% of the total trade conducted by the countries. This is also blamed on equally low connectivity among nations in the region owing to tough terrain, under-developed border areas and the issue of funding. The most successful connectivity project so far involves the sub-group of Bangladesh, Bhutan, India and Nepal who signed a Motor Vehicles Agreement in 2015. It enables vehicles to enter any of the four nations without the need for trans-shipment of goods from one country’s truck to another’s at the border. Trial runs of trucks between Bangladesh and India have also begun. However, other major projects such as the Kaladan Multimodal project which seeks to link India and Myanmar, or the Asian Trilateral Highway connecting India and Thailand, are yet to be finished.
The Kaladan project envisages connecting Kolkata to Sittwe port in Myanmar, and then Mizoram by river and road. India and Myanmar had signed a framework agreement in 2008 for the implementation of this project. It is yet to be finished. Myanmar is the only Southeast Asian country that shares a land boundary with India and will help it extend trade into the region. This will be accompanied by the Asian Trilateral Highway that is set to run from Moreh in Manipur to Mae Sot in Thailand via Myanmar. Expected to be completed this year, the highway is one of the key projects that figures in a big way in the government’s Act East (earlier Look East) policy.
Experts said these and other projects would have seen further progress had India’s approach to the grouping not been slow till now. India is still to appoint a full-time director representing the country to the Bimstec secretariat in Dhaka, a senior Bimstec official told Business Standard. The secretariat itself was set up only in 2014, some 20 years after talks started, and it is still in the process of studying and creating feasibility reports on the various sectoral issues.The seven members of Bimstec cover 14 priority sectors. Each country leads at least one area in a voluntary manner. India leads two – counterterrorism & transnational crimes, and telecommunication & transport. The other key sectors are trade and investment, technology, energy, tourism, fisheries, agriculture, cultural cooperation, environment and disaster management, public health, people-to-people contact, and poverty alleviation.
SOURCE: The Business Standard
To boost exports of goods to Bangladesh and explore business opportunities, a 13-member CII Eastern Region delegation would visit Dhaka from November 8 to 10. Led by Arun Mishra, Chairman, CII Eastern Region Investment Task Force and Vice President (Project Gopalpur) Tata Steel Limited, the delegation would especially focus on power, mining, electronics, steel, textiles, infrastructure, healthcare, light engineering, skill and education sectors. "The aim of the CII business mission is also to make a strong case for the Eastern and North-Eastern States of India, understand how we can work more closely with our Bangladeshi counterparts and create a win-win situation for both," Arun Mishra said.
During the visit, the CII delegation would meet a host of senior officials, especially those associated with the Power and Industry Ministries in Bangladesh, Investment Development Authority and also Bangladesh Bank. "Bangladesh is not only India's largest trading partner in South Asia, but also a natural ally for businesses in India," T V Narendran, Chairman, CII Eastern Region, and Managing Director, Tata Steel LtdBSE 1.25 %, said. "There is a huge scope to popularize Indian products and raise the volume of bilateral trade and investment, especially at a time when many countries have turned their focus on Bangladesh," Narendran said. The potential sectors for investment in Bangladesh are power, power cables, cement, steel, pharmaceuticals, textiles, spinning, frozen foods, leather, electronics, agro-based industry, IT, ceramics, light engineering and natural gas based industries, he added.
SOURCE: The Economic Times
As many as 7,000 firms from India and abroad are expected to participate in the forthcoming India International Trade Fair (IITF) at Pragati Maidan, which is beginning from November 14. "The theme of this year's IITF is 'Digital India'. All pavilions including state and central ministries will project this theme in their stalls," India Trade Promotion Organisation (ITPO) General Manager Guna Sekaran told PTI. He said 150 companies of from about 24 countries would showcase their products. Tickets for the 14-day fair will be available online as well as at Delhi metro stations. South Korea is the partner country, while Belarus is the focus country this time. Among states, Madhya Pradesh and Jharkhand are partner states and Haryana is the focus state. First five days of IITF will be for business people. There will be free entry for senior citizens and differently-abled persons.
SOURCE: The Economic Times
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$ 43.01 per barrel (bbl) on 04.11.2016. This was lower than the price of US$ 43.86 per bbl on previous publishing day of 03.11.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2869.75 per bbl on 04.11.2016 as compared to Rs. 2925.05 per bbl on 03.11.2016. Rupee closed weaker at Rs. 66.72 per US$ on 04.11.2016 as against Rs. 66.69 per US$ on 03.11.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on November 04, 2016 (Previous trading day i.e. 03.11.2016) |
Pricing Fortnight for 01.11.2016 (Oct 13, 2016 to Oct 26, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
43.01 (43.86) |
49.53 |
|
(Rs/bbl |
2869.75 (2925.05) |
3309.10 |
|
|
Exchange Rate |
(Rs/$) |
66.72 (66.69) |
66.81 |
SOURCE: PIB
From textiles and shoes to paper and furniture, Chinese manufacturers are pouring investments into neighbouring Vietnam, hoping to ride on the coattails of the Southeast Asian country’s pending trade blitz. Vietnam’s Free Trade Agreement (FTA) with the European Union, signed last year, and the Trans Pacific Partnership (TPP), if it clears significant political hurdles in the U.S., would collectively give the country access to markets worth $44 trillion in combined gross domestic product. Even as doubts linger over the future of U.S. President Barack Obama’s TPP once he leaves office, early moves by China Inc to leverage off Vietnam’s lower factory wages – about a third that of China’s – show a re-centering of the world’s factory activity.
Importantly, a base in Vietnam gives Chinese manufacturers access to trade agreements of which China is not currently a part. “So far this year, I’ve had more than 30 Chinese wood companies coming to me for consultation,” said Nguyen Ton Quyen, who heads Vietnam’s Timber and Forest Product Association. “There’s a considerable amount of Chinese wood furniture firms moving their investments to Vietnam, to enjoy tax incentives.”
Chinese inflows into Vietnam in 2015 doubled from a year earlier to $744 million and 80 percent of that was in the second half of the year, just after Vietnam signed the EU FTA and the TPP. In the first nine months of this year, investments from China quadrupled to $1 billion compared with the same period in 2015. Vietnam has numerous other free trade agreements, including with top investor South Korea, supporting resident giants like Samsung and LG. As a part of the Association of Southeast Asian Nations, it also enjoys free trade with other members of the 10-nation zone, plus the various bilateral agreements the bloc has with other economies, like China.
Nguyen Chien Thang runs a furniture factory and is also feeling the Chinese surge. He estimates a third of the approximately 500 foreign-owned wood processing firms in Vietnam are from China and Taiwan, adding to competition for his Scansia Pacific, a supplier for Swedish giant IKEA. “Tax rates here are also much more favourable,” said Thang. “Labour costs in their mainland are getting much higher.”
MANUFACTURING MUSCLE
Much of the investment is going into Vietnam’s textile industry, the second biggest garment exporter to the U.S. after China, supplying brands such as Nike, Adidas, Zara, Armani, and Lacoste. The U.S. Department of Commerce projects U.S. imports of textile and apparel from Vietnam to jump 45 percent to $16.4 billion by 2025 from 2015 while such imports from China are expected to tumble 45 percent to $23.7 billion. Vietnam’s trade agreements with TPP and the EU require textile manufacturers source their own yarns, dyes and fabrics locally or from within the respective trade blocs. For Chinese firms in Vietnam, this means securing access to local supply chains. To prepare for TPP, Chinese textile group Texhong Textile is building a $450 million industrial park in northern Quang Ninh province, with an additional $640 million for supporting industries.
To be sure, this year’s U.S. presidential campaign has cast deep doubts over the TPP. Before last year, TPP approval on Capitol Hill looked highly likely, but now neither candidate is willing to support a deal that could have implications for U.S. jobs. Donald Trump has called the TPP a “death blow” for U.S. manufacturing, while rival Hillary Clinton appears to have backtracked on her previous advocacy for the TPP while serving as Obama’s Secretary of State. While U.S. political noise has created anxiety for those invested in Vietnam, there are hopes Clinton might change her tune on TPP or seek an alternative version of it if she becomes president, in contrast to Trump’s more stridently protectionist policies. Amid the uncertainty, Vietnam’s ruling party has taken the ratification of the TPP off its agenda this year. “Vietnam so far hasn’t shown a clear opinion on the two candidates … but Vietnamese people have shown clearly that they want Hillary Clinton to win,” said economist and former government advisor Le Dang Doanh.
SURPRISING CONSEQUENCES
Even with the TPP in doubt, Chinese firms are looking to leverage off Vietnam’s clout as an emerging industrial and trade power. Ironically, deals like TPP, Obama’s signature trade policy intended to boost American influence in Asia and challenge that of China, have actually encouraged Chinese engagement. Rising investment from China is also changing Vietnam in other ways. Anti-China sentiment is entrenched in Vietnam, shaped by centuries of perceived Chinese bullying and sustained by recurring wrangles over sovereignty in the South China Sea. But there are signs Vietnamese are putting nationalist ideals aside and are learning Chinese, in the hope of getting jobs offered by China Inc and swarms of Taiwanese investors.
In the sprawling industrialised province of Binh Duong, China and Taiwan are bringing huge job opportunities, with the two countries accounting for a third of over 100 new investment projects announced in the first five months of 2016. “I don’t like China, or Chinese, but their firms are coming here more and more,” said Minh Anh, a university student who juggles Chinese classes at night with university lectures and a part-time job by day. “Speaking Chinese may widen my job opportunities and help me earn a good job with good benefits.”
SOURCE: The Financial Express
The volume of trade between the European Union, EU and Nigeria declined by 26.7 per cent to 29 billion eruos in 2015, as a result of persistent fall of commodity prices especially oil and gas. This was disclosed by the EU Ambassador/Head of Delegation to Nigeria, Michel Arrion while addressing a press conference for the upcoming fifth EU-Nigeria business forum in Lagos yesterday. According to the ambassador, “In 2014, Nigeria’s total trade with the EU, which accounted for 31 per cent of Nigeria’s total trade, stood at €39 billion. EU Investment stock in Nigeria grew from €23.8 billion in 2013 to €25.3 billion in 2014. However, with the fall in oil prices, EU-Nigeria trade declined by 26.7 per cent to €29bn in 2015. Nigerian exports to EU declined by 35 per cent while imports declined by 7 per cent over the period. Unfortunately, about 97 per cent of the exports to the EU are oil and gas.” He said, to reverse the trend, the EU delegation to Nigeria through the fifth EU-Nigeria business forum, which is scheduled to hold in Lagos on November 10th and 11th, will draw key private sector actors and policy makers in Nigeria to have the opportunity to exchange business ideas with their counterparts from Europe in order to strengthen the EU-Nigeria business relations through identification of opportunities in the global textile value chain; Expose Nigerian SMEs to opportunities in the EU market through the platform of the Enterprise Europe Network and explore the financing options available for funding of the power sector and diversifying the energy mix in the country. Arrion said this year’s event which is themed: ‘Harnessing Nigeria’s Potential for Economic Growth’ “has been designed to discuss business opportunities and address bottlenecks to investments, particularly in the power and textile sectors, and diversification of the economy, especially through SMEs.”
SOURCE: The Vanguard
Finnish Ambassador to Korea Eero Suominen said he hopes to raise the awareness of his country’s firms focusing on food and education, taking advantage of Korea’s decades-long expertise in information and communication technology (ICT). The remark came as the North European country _ lesser-known to Korean people in terms of business activities here ― seeks to shatter the image in Korea by inviting more Finnish small- and medium-sized enterprises (SME) or startups into the Korean market. “We have specialized in healthcare products and education systems,” he said in a press conference at his residence in Seoul, Tuesday. “When we combine them with information technology (IT), this will be a big flagship. IT, combined with different kinds of sectors, is the sort of ship we are bringing to the Korean market.” There are some 40 to 50 Finnish companies operating here, but the ambassador hopes to further raise their profile and build a foundation where more small businesses can expand their presence by teaming up with Korean firms with strong ICT expertise. “Korea is far away, but I think there are a lot of possibilities, different kinds of opportunities in such areas as food, ICT, education and clean technology,” he said. The Finnish market is very limited with population of 5.6 million, and that is why Finnish businesses look for opportunities outside the country. “This is the way for our country to grow. We have to encourage more Finnish SMEs to be braver, as some 60 percent of all the companies in our country are SMEs,” he said. Shown above is a service center of Lindstrom in Vantaa, Finland. The Finnish textile rental service operator offers services to some 1 million users in 24 countries. Lindstrom Korea said Tuesday it will reach its goal of attracting more than 50,000 users in the Korean market by 2020. / Courtesy of Lindstrom Korea
Lindstrom expanding presence here
At the press event, the ambassador invited Lindstrom, a Finnish business-to-business (B2B) textile rental service operator, requesting more help for the firm to expand its presence in Korea where no companies offer a workwear rental and laundry service as the company does. Allen Kim, managing director of Lindstrom Korea, said the company has been recognized by a growing numbers of Korean clients, even though it started operations here only a year ago. “We are in a partnership with a group of Korean food companies including Lotte, The Coffee Bean Korea and Samyang,” he said. “We are the first and only company to provide the B2B-level textile rental service in Korea. We are a total workwear management systems provider.”
At first, people remained negative over its growth outlook in Korea, as it was perceived that there was no strong demand for such a service. “But we are extending our client base in Korea,” he said. “That is why we believe we are and will continue to grow bigger and bigger here.” The local subsidiary has one service center in Bundang, Gyeoggi Province. But with growing demand, the company said it will establish at least one service facility in all of Korea’s nine provinces by 2020. The company also set an annual sales projection of 500 million won ($438,000) in Korea. “In the Korean market, we do not hire any staff dispatched from headquarters, as our core competency comes from a strong localization strategy,” he said. “This will help grow the local industry. The mutual growth model is what we want to push.” “We have never left any international market that we have tapped into, and that will be the same for the Korean market,” he said. The perception of textile rental services still remains weak here, but this will soon go away in a few years amid rising health concerns. Food and beverage companies here and abroad are strengthening safety standards for work clothes, as worsening air and water pollution is posing an increasing threat of diseases, according to the company.
Lindstrom offers services to some 1 million users in 24 countries, with some 400 coming from the Korean market. The company expressed confidence that it will attract more than 50,000 users by 2020 by signing contracts with local food industry players. Jaakko Antikainen, director of sales and business development at Lindstrom, said: “Being or acting for our partners and understanding their needs are our top priority.” “That brings huge value in combining taking care of clients in sustainability,” he said, adding that the company can last for more than 160 years under the corporate motto of building a more sustainable workplace environment. The company, established in the North European country in 1848, posted 374 billion won ($328.18) in sales last year. Lindstrom employs 3,000 employees worldwide.
SOURCE: The Korea Times
Revival of factories like Tanzania-China Friendship Textile Company (FTC) is essential for Tanzania's economic development, said Dr. Adelhelm Meru, permanent secretary in the Tanzania Ministry of Industries and Trade. He was speaking during the 50th anniversary exhibition of 'Urafiki' Friendship Textile Mill and 20th anniversary of FTC held in Dar es Salaam. FTC is a China-sponsored project in Tanzania. It is a joint venture company between Changzhou state owned Textile Assets Operation Company of China and the government of Tanzania.
Welcoming Yan Li, China's party secretary of Changzhou Municipal Committee, Dr Meru appreciated the Changzhou initiative to visit the textile company as Tanzania is entering a new phase of industrialization, Tanzanian media reported. Dr. Meru also commended the textile craftsmen from Changzhou for their dedicated service for a period of 20 years to both nations whilst facing all odds. Changzhou craftsmen have helped in the development of Tanzania by improving the situation in the textile industry and by creating employment opportunities for its citizens, said Dr. Meru. “Textile experts are regarded as role models of the friendship and cooperation between China and Tanzania,” said Dr. Meru adding that this project has far-reaching political, diplomatic and economic significance against the backdrop of booming bilateral ties between China and Tanzania. (RR)
SOURCE: Fibre2fashion
Bangladesh's garment exports to the US increased slightly in the first nine months of 2016, according to data from the US Department of Commerce. Between the months of January and September, $4.32 billion worth of garment items were shipped to the US, up 0.32 percent year-on-year. However, garment import by the US dropped 6.25 percent year-on-year to $80 billion during the period. Among the top 10 garment exporters to the US, only shipments from Bangladesh and Vietnam increased slightly during the period. Vietnam exported $8.61 billion of garment items to the US, up 0.01 percent year-on-year.
Apparel exports from China, the largest garment exporter to the US, declined 10.97 percent to $29.42 billion, from India by 0.77 percent to $5.57 billion, from Pakistan by 10.44 percent to $2.05 billion and Mexico by 5.53 percent to $3.32 billion. Garment exporters and market analysts said American garment imports from all over the world declined mainly due to the US general election, which has consumed the general public. On the other hand, overall exports from Bangladesh to the US in September declined 6.56 percent to $497.8 million from the previous month. In the January-September period, total exports to the US, the single largest export destination for Bangladesh, stood at $4.63 billion, while total imports from the US were $681.6 million. Usually, the balance of trade between Bangladesh and the US is heavily tilted towards Bangladesh because of higher export of garment items to the American market. Bangladesh imports mainly machinery and food items from the US.
SOURCE: The Global Textiles
Export earnings bounced back in October thanks to higher shipment of garment items, according to data from the Export Promotion Bureau. Bangladesh fetched $2.71 billion from exports in October, which is 14.39 percent higher than the earnings in the same period a year ago and 2.84 percent higher than the monthly target. Earnings from the garment exports have been rising mainly due to increased efficiency in productivity and increased volume of value-added garment items, said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association. The actual price of garment items declined worldwide, which prompted Bangladeshi garment makers to start producing value-added items, Rahman said. It is no longer true that Bangladesh only produces cheap basic T-shirts, he said. A good number of garment makers have been producing high-end apparel items for upscale customers in the West, he added. When the prices of items go down, garment makers try to make a profit by improving production efficiency, he said. In July-October, garment exports grew 7.08 percent year-on-year to $8.82 billion, which is 7.25 percent lower than the periodic target of $9.51 billion, data showed. The monthly garment export growth has to be around 12 percent or more to achieve the country's target of exporting $50 billion by 2021, he said. “But the garment exports grew only 7 percent in October, which is much lower than our expectation.” Rahman called for improved infrastructure, efficient port operations and an adequate supply of gas and power to the factories to raise growth. International retailers are returning to Bangladesh, as normalcy has been restored after the July 1 attack at a cafe in Gulshan, he said. However, apparel prices are not going up, he added.
Export earnings also increased periodically. Total earnings increased 6.53 percent year-on-year to $10.79 billion in July-October. However, the July-October earnings are 6.84 percent lower than the target of $11.58 billion for the period. Leather and leather goods performed well in July-October, fetching $428.51 million, which is 19.45 percent higher than the same period last fiscal year. The export of leather and leather goods surpassed the periodic target of $381.96 million by 12.19 percent. Earnings from footwear exports increased 21.8 percent to $83.96 million in July-October. Export of frozen foods and live fishes rose 9.94 percent to $196.61 million.
Shipment of jute and jute goods also performed well during the period. In the four months, earnings from jute and jute goods were recorded at $296.26 million, which is 4.15 percent higher than that in the corresponding period last year. However, the export of agricultural products declined 1.33 percent year-on-year to $169.03 million in the first four months of fiscal 2017, mainly because of floods in major vegetable producing districts. Moreover, vegetable exports have also been affected by a ban on direct cargo flights from Dhaka to the UK, Germany and Australia. Home textile exports fell 1.55 percent to $216.66 million and terry towel declined 26.94 percent to $12.04 million.
SOURCE: The Global Textiles
