MARKET WATCH 10 NOV, 2016

NATIONAL

INTERNATIONAL

 

Textile Raw Material Price 2016-11-09

Item

Price

Unit

Fluctuation

Date

PSF

1035.70

USD/Ton

-0.35%

11/9/2016

VSF

2314.65

USD/Ton

-0.95%

11/9/2016

ASF

1887.10

USD/Ton

0%

11/9/2016

Polyester POY

1094.67

USD/Ton

-0.13%

11/9/2016

Nylon FDY

2358.88

USD/Ton

0.63%

11/9/2016

40D Spandex

4349.19

USD/Ton

0%

11/9/2016

Nylon DTY

2049.28

USD/Ton

0%

11/9/2016

Viscose Long Filament

1304.76

USD/Ton

0%

11/9/2016

Polyester DTY

2543.17

USD/Ton

0%

11/9/2016

Nylon POY

5558.11

USD/Ton

0%

11/9/2016

Acrylic Top 3D

1334.24

USD/Ton

0%

11/9/2016

Polyester FDY

2167.22

USD/Ton

0%

11/9/2016

30S Spun Rayon Yarn

2919.11

USD/Ton

-0.50%

11/9/2016

32S Polyester Yarn

1724.93

USD/Ton

-0.26%

11/9/2016

45S T/C Yarn

2580.03

USD/Ton

0%

11/9/2016

45S Polyester Yarn

2270.42

USD/Ton

0%

11/9/2016

T/C Yarn 65/35 32S

1857.62

USD/Ton

0%

11/9/2016

40S Rayon Yarn

2226.19

USD/Ton

0%

11/9/2016

T/R Yarn 65/35 32S

3096.03

USD/Ton

0%

11/9/2016

10S Denim Fabric

1.35

USD/Meter

0%

11/9/2016

32S Twill Fabric

0.83

USD/Meter

0%

11/9/2016

40S Combed Poplin

1.17

USD/Meter

0%

11/9/2016

30S Rayon Fabric

0.67

USD/Meter

0%

11/9/2016

45S T/C Fabric

0.65

USD/Meter

0%

11/9/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14743 USD dtd. 9/11/2016)

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

Textile industry welcomes Centre's demonetisation decision

The Centre’s decision to scrap the currency notes of Rs 500 and Rs 1000 from Tuesday midnight has been welcomed by the textile industry. In a drastic step to curb corruption and counterfeit currency economy in India, Prime Minister Narendra Modi made the announcement that the old Rs 500 and Rs 1000 notes will no longer be valid in the country. Dr KS Selvaraju, secretary general of The Southern India Mills’ Association (SIMA) terms the decision as a brave step by the government. Speaking to Fibre2Fashion, he said, “Though implementation of the decision will be difficult in the short run, it is the right step taken by the government to strengthen our economy. Especially in the textile sector, there are numerous opportunities for tax evasion, and demonetising of high denomination notes will help in maintaining transparency in the financial transactions.”

Anil Kumar, executive director of The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) said, “It is the effective way to increase tax collection and boost our country’s economy which will also increase the textile business. Demonetisation will not have an adverse effect on the textile industry, instead is a roadmap towards GST.” “This is an extremely bold move by the prime minister and will have a debilitating impact on the parallel economy in the country as well as deal a body blow to terror financing. FICCI completely supports this move of the government and complements it for its continuous and comprehensive measures to deal with the issue of black money in the country,” said Federation of Indian Chambers of Commerce and Industry (FICCI) president Harshavardhan Neotia.

SOURCE: Fibre2fashion

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Textile sector could remain unaffected by the demonetisation turmoil

The textile sector in the city will not be affected much by the government's decision to scrap Rs500 and Rs1,000 denomination notes. This is because the industry has started to do business mainly by cheques. No major cash transactions take place in this sector now like it happens in the diamond industry. Surat's textile sector does annual business of Rs50,000 crore and it is based mainly on cheque discounting and credit system. Surat has 150 textile markets with 60,000 traders who have daily turnover of Rs130 crore. In short-term basis, the sector could face a liquidity crisis, but things will be on track soon with its credit supply chain working.

Pandesara Industrial Association president Kamal Tulsiyan, who owns a dyeing mill, said: "This is festive season and cash crisis can lead to negative sentiment. We are having vacation and no payment of workers is due. The problem will arise at the time of giving salaries to workers." Pramod Chaudhary, former chairman of South Gujarat Textile Processors Association, said, "We could reach a standstill after 15 days. We will not know about the situation until we start receiving new currency." Jaylal, a textile trader, said, "Saris and synthetic textile products manufactured in Surat are cheap. Markets will be in sleep mode for the first two months. We expect no trade due to cash crunch for two months."

SOURCE: The Times of India

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Net profit soars 57.7% at Sutlej Textiles in Q2FY17

In the three months to September 30, 2016, net profit at Sutlej Textiles and Industries, a producer of value added dyed yarns and home textiles soared 57.70 per cent to Rs 51.90 crore as against Rs 32.91 crore in the fiscal ago quarter. Net sales rose to Rs 567.38 crore, up 9.57 per cent compared to Rs 517.81 crore in the second quarter of fiscal 2016. “The second quarter continued to witness challenges due to global slowdown and stressed rural economy, chairman CS Nopany said. “Sutlej was able to offset these strong headwinds by its prudent raw material purchasing policy in a volatile cotton fibre market, by maintaining sufficient cotton inventory at lower prices.”

Sutlej Textiles is also optimistic of the future with normal monsoon, implementation of the seventh pay commission, one rank one pension scheme and other Government initiatives. The company also said that work on the expansion project for adding 35,280 spindles at Bhawanimandi, Rajasthan at a project cost of Rs 270 crore is progressing satisfactorily.

SOURCE: Fibre2fashion

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Industry watchers optimistic about India-US trade ties under Donald Trump

Donald Trump's electoral victory may not have an adverse impact on India-US trade relations as his hawkish statements during campaigning suggested. Industry watchers said his statements on free trade including immigration, outsourcing, renegotiating treaties with other countries on American terms and even pulling out of the World Trade Organization were mostly election rhetoric. In a note, State Bank of India said candidates who in the past scraped through in the US elections seemed to have performed better in terms of managing the economy. "If this is statistically significant, it augurs well for the US and India in the coming years," the note said, but emphasised the need for the US to adopt a realistic position so that it can avail itself of Indian expertise where it will tend to benefit.

Abhijit Das, head of Centre for WTO Studies at Indian Institute of Foreign Trade, said, "In the campaign, he came out as a person not favourably inclined towards trade. We need to see how much of that was election rhetoric, and how much gets actually translated into policy shifts." One key pressure point has been the export and temporary movement of Indian labour to the US, especially professionals in the IT industry. President-elect Trump has been critical of Americans losing their jobs to migrants including Indians and experts fear non-tariff barriers such as an increase in visa fees in the coming days. "One should have a comprehensive and integrated approach towards global economic engagement instead of looking at one sector only. Indians are the front runners of cutting edge technology companies in the US and have proved their contribution in sustaining big businesses there through employment generation," said Ram Upendra Das, professor at the external affairs ministry think tank Research and Information System for Developing Countries. Incidentally, some of the biggest US-based technology firms such as Google, Adobe and Microsoft are led by Indian Americans. "No doubt trade policy could bear the imprint of president's personal vision. However, one must also remember that it is the commercial interests of business groups which provide continuity to trade policy," Das said.

Further, Trump's vehement opposition to the US-led 11-member Trans-Pacific Partnership (TPP) trade agreement may not turn into reality because regardless of his victory the TPP could be ratified by a 'lame duck' session of Congress, which is held after the election but before the new president is sworn in. "We don't expect any adverse impact on our bilateral trade relations but if TPP takes a backseat, it will benefit us," said Ajay Sahai, director general of the Federation of Indian Export Organisations.

SOURCE: The Economic Times

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Weak global demand strongest challenge for economy: Finance Ministry

Weak global demand is among the “strongest challenges” in the near term for Indian economy, the finance ministry said on Wednesday, while outlining the need for resolving bad loans problem of state-owned banks to increase credit supply. It said banks have passed on less than half of the 1.50 per cent rate reduction benefit to consumers between January 2015 and August this year and, hence, the transmission of monetary policy has remained incomplete. “Weak global demand is one among the strongest challenges in the near term. Exports and imports together constitute 42 per cent of the GDP (gross domestic product), even at the reduced levels in 2015-16,” the ministry said in its background note for the 2-day Economic Editors’ conference beginning Thursday.

 It identified the twin balance sheet problem of stressed financial positions of some large corporates leading to stressed assets of banks which might affect private investment as a “critical challenge”. The gross non-performing assets (NPAs) of public sector banks (PSBs) increased sharply from 5.4 per cent in March 2015 to 9.8 per cent in March 2016, mainly on account of cleaning up of their balance sheets. “The problem of non-performing assets needs to be resolved and bank lending needs to pick up. Already there are some signs of improvement,” the ministry said.

According to the Reserve Bank of India (RBI)’s Financial Stability Report, the proportion of leveraged companies declined sharply from 19 per cent in March 2015 to 14 per cent in March 2016 and their share in the total debt also declined from 33.8 per cent to 20.6 per cent. The ministry said creating quality jobs is the imperative of the time and hence the government has focused its efforts on removing impediments to job creation, including addressing shortage of skills to the workforce. The ministry noted however that reviving the savings and investment cycle in economy is challenging. The savings rate that stood at 34.6 per cent in 2011-12, declined to 33 per cent in 2014-15. Investment rate declined from 39 per cent of GDP in 2011-12 to 34.2 per cent in 2014-15.

The International Monetary Fund (IMF) has projected India to grow at 7.6 per cent in 2016-17 and 2017-18, while World Bank has estimated India to maintain a robust growth of 7.6 per cent in 2016 and 7.7 per cent in the following two years. “This growth compares favourably with the growth of 3.2 per cent achieved by the global economy and 4 per cent by the emerging market and developing economies as a block in year 2015. Thus, against the global background, the current Indian growth is remarkable,” the ministry said. It said that while RBI has cut rates by 1.50 per cent since January last year and brought repo rate down to 6.5 per cent at the end of August, “the transmission of monetary policy has remained incomplete. The reduction in average base rate has only been nearly 0.62 per cent”.

SOURCE: The Business Standard

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CBDT notifies protocol amending ‘Double Taxation Amending Convention’ between India, Japan

The Central Board of Direct taxation (CBDT) has announced signing of Double Taxation Avoidance Convention between India and Japan, which already exists on March 7th, 1989 and was notified on March 1st, 1990. The DTAC was subsequently amended on February 24th, 2006. A Protocol amending the DTAC between India and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal evasion with respect to taxes on income which was signed on 11th December, 2015 has entered into force on 29th October, 2016 on completion of procedural requirements by both countries. The Protocol amending the DTAC aims to promote transparency and cooperation between the two countries. The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest.

It is further provided that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with the authorisation of the Competent Authority of Japan and vice versa. The protocol provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions. The protocol inserts a new article on assistance in collection of taxes. India and Japan shall now lend assistance to each other in the collection of revenue claims.

SOURCE: The Financial Express

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Don’s anti-TPP stance may help India

With Donald Trump as President, the US could see a renegotiation of some of its existing trade deals with other countries. Most of all, Trump, with his strong trade protectionist stance, has vociferously opposed the Trans-Pacific Partnership (TPP) and has talked about withdrawing from it. This could work in India’s favour. The TPP is a trade and investment agreement between the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. India is not part of the TPP. The deal, which was negotiated under Barack Obama’s presidency and agreed last year, is yet to be ratified. It aims at freer trade in goods and services and investment flows between the participating countries. It eliminates or reduces tariff and non-tariff barriers across trade in goods and services.

Loss of market

If the TPP were to go through, India could likely see a diversion of its trade with the US to TPP member countries, over a period of time. The US is India’s second biggest trade partner and the single biggest export destination. India exported goods worth Rs. 2.6 lakh crore to the US in 2015-16. The US accounts for over 15 per cent of our exports (in value terms) with pearls and gemstones, textiles and apparel and pharmaceutical products being the top items of export. For instance, countries such as Vietnam, which are among the biggest textile exporters to the US, could gain an edge over India thanks to freer market access. Moreover, the Indian textile sector would have to brace for the stricter labour standards laid down for imports by TPP countries. The TPP requires its members to discourage the import of goods that have not been produced in adherence with internationally recognised labour laws. This would impact employment generation. India’s merchandise exports to TPP member countries (apart from the US) would be rendered less competitive in the event of enforcement of the agreement. These countries account for 12 per cent of India’s merchandise exports. Services exports would also be hurt as these would be replaced by trade in services between the TPP member countries.

SOURCE: The Hindu Business Line

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Mixed trade expectations from Trump administration

India has mixed expectations on trade with a Donald Trump presidency.  He has a clear position on existing and proposed multilateral trade agreements. After vociferously denouncing the ambitious Trans Pacific Partnership between the US and 11 other Pacific Rim nations, chances of the mega trade deal being ratified now look slim. If it passes, textile manufacturer Vietnam and information technology outsourcing powerhouse the Philippines get access to the high-value American market. Our domestic textile industry relies on exports and has been worried.“Of India’s $40-billion of textile export, $9 billion goes to the US. If Vietnam gets greater market access, this figure will see a decline of $2-3 billion,” says economist Atul Mishra from the Confederation of Indian Textile Industry.

The US might also renegotiate the North American Free Trade Agreement, which Trump claims has cost the country hundreds of billions of dollars worth of investment and took away millions of jobs. Most of these jobs were in the manufacturing sector, which Trump is electorally committed to strengthening.While this would be a tough task, it is set to affect manufacturing powerhouse China. So far in 2016, the Asian mega manufacturer has exported $337 billion of goods to the US. As compared to this, the US exported $79 billion of goods to China. Trump has latched on to such data thorough his poll campaign to foment opposition towards China.

This might mean a benefit for India at China’s expense, say trade experts. However, they add that US is also expected to actively bring down its trade deficit, which would have its own impact on India. America is our second largest trading partner and largest export destination, with total bilateral trade at $109 billion a year; both sides are committed to increase this to $500 billion. Of this, merchandise trade was $62 billion in 2015-16, with exports to the US at $4.3 billion and imports $21.8 billion. “We expect the Trump administration to act strongly on trade issues,” a senior government official said, on condition of anonymity. Lateral entry into senior governmental positions, common in the US, will mean the Trump administration will be bringing its own personnel to fill key posts. It will take some time before contact can be set up with these people,” the official added.

Since Trump has not made his position clear on a number of other issues, India needs to sift through his rhetoric to guess his stance. Issues expected to continue are market access and lowering of tariffs.  At the India-US Trade Policy Forum  last month, the Indian government pushed for more market access for our agricultural export and better institutional mechanisms to improve food export. The US asked us to consider relaxing the local sourcing norms in single-brand retailing, aimed at helping American companies. That country’s Generic Drug User Fee Act and Food Safety Modernisation Act have created an elaborate system of inspection and high inspection fees, affecting smaller exporters, commerce minister Nirmala  Sitharaman has said. Foreign direct investment from the US was $4.2 billion in 2015-16, up from $806 million in 2013-14.

SOURCE: The Business Standard

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Global Crude oil price of Indian Basket was US$ 43.10 per bbl on 09.11.2016

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.10 per barrel (bbl) on 09.11.2016. This was lower than the price of US$ 43.34 per bbl on previous publishing day of 08.11.2016.

In rupee terms, the price of Indian Basket decreased to Rs. 2879.14 per bbl on 09.11.2016 as compared to Rs. 2890.77 per bbl on 08.11.2016. Rupee closed weaker at Rs. 66.80 per US$ on 09.11.2016 as against Rs. 66.71 per US$ on 08.11.2016. The table below gives details in this regard:

Particulars

Unit

Price on November 09, 2016 (Previous trading day i.e. 08.11.2016)

Pricing Fortnight for 01.11.2016

(Oct 13, 2016 to Oct 26, 2016)

Crude Oil (Indian Basket)

($/bbl)

43.10              (43.34)

49.53

(Rs/bbl

2879.14       (2890.77)

3309.10

Exchange Rate

(Rs/$)

66.80              (66.71)

66.81

SOURCE: PIB

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Functional textiles clean pollutants from air and water

A stark and troubling reality helped spur Juan Hinestroza to what he hopes is an important discovery and a step toward cleaner manufacturing. Hinestroza, associate professor of fiber science and director of undergraduate studies in the College of Human Ecology, has been to several manufacturing facilities around the globe, and he says that there are some areas of the planet in which he could identify what color is in fashion in New York or Paris by simply looking at the color of a nearby river. “I saw it with my own eyes; it’s very sad,” he said. Some of these overseas facilities are dumping waste products from textile dying and other processes directly into the air and waterways, making no attempt to mitigate their product’s effect on the environment. “There are companies that make a great effort to make things in a clean and responsible manner,” he said, “but there are others that don’t.”

Hinestroza is hopeful that a technique developed at Cornell in conjunction with former Cornell chemistry professor Will Dichtel will help industry clean up its act. The group has shown the ability to infuse cotton with a beta-cyclodextrin (BCD) polymer, which acts as a filtration device that works in both water and air. Their work is detailed in a paper published online Oct. 24 in Chemistry of Materials ("Cotton Fabric Functionalized with a β-Cyclodextrin Polymer Captures Organic Pollutants from Contaminated Air and Water").

Cotton fabric was functionalized by making it a participant in the polymerization process. The addition of the fiber to the reaction resulted in a unique polymer grafted to the cotton surface. “One of the limitations of some super-absorbents is that you need to be able to put them into a substrate that can be easily manufactured,” Hinestroza said. “Fibers are perfect for that – fibers are everywhere.” Scanning electron microscopy showed that the cotton fibers appeared unchanged after the polymerization reaction. And when tested for uptake of pollutants in water (bisphenol A) and air (styrene), the polymerized fibers showed orders of magnitude greater uptakes than that of untreated cotton fabric or commercial absorbents. Hinestroza pointed to several positives that should make this functionalized fabric technology attractive to industry. “We’re compatible with existing textile machinery – you wouldn’t have to do a lot of retooling,” he said. “It works on both air and water, and we proved that we can remove the compounds and reuse the fiber over and over again.” Hinestroza said the adsorption potential of this patent-pending technique could extend to other materials, and be used for respirator masks and filtration media, explosive detection and even food packaging that would detect when the product has gone bad. And, of course, he hopes it can play a role in a cleaner, more environmentally responsible industrial practices. “There’s a lot of pollution generation in the manufacture of textiles,” he said. “It’s just fair that we should maybe use the same textiles to clean the mess that we make.”

SOURCE: The Nano Werk

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Uzbekistan, S. Korean company produce ecological dyes for textile industry

Uzbekistan is planning to launch the export of ecological dyes for textile industry. The scheme will be implemented by Indikim Group Company, which was established last year in the Urtachirchik district of the Tashkent province, the Jahon information agency reported. The project was launched in 2014, when O'zbekyengilsanoat and the South Korean company Rainbow signed a memorandum providing for extraction of natural ecological dyes from agricultural plants and their subsequent use in the light industry in Uzbekistan and abroad.  Intended for completion in 2017, the project will cost a total of $1 million. The company will export over 80% of its production at full capacity.  The company plans to manufacture a wide range of powder and natural food dyestuffs. The South Korean side has provided advanced laboratory and production equipment. The method of obtaining ecological dyes will not differ from the South Korean technology, thereby guaranteeing their quality and competitiveness in the global market.  The first trial plantings for paints were made in 2014 in the Khorezm, Jizzakh, Samarkand and Tashkent regions. The first dyes of red, yellow, green, blue (indigo) and other colors were extracted in October. Test seedlings were also planted on 45 hectares in the spring of 2016.  The Rainbow company is currently working on the opening of a specialized research center which will issue certificates of product safety for the textile industry. In September, the company participated in the International Russian Federal Textile Exhibition Textillegprom 2016 in Moscow. Indikim Group made a presentation on the use of ecological dyes in textile industry, and Russian textile companies have already signed agreements on the supply of ecological dyes.

SOURCE: The Times of Central Asia

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Pakistan Textile sector concerned after Trump's election

The shocking result of the US presidential election has generated a little bit of anxiety among Pakistani textile exporters who believe political uncertainty in the US may harm their exports. “The current situation indicates that the dollar may weaken in the short term, which will negatively affect Pakistani textile exports to the US,” JS Global Capital Head of Research Syed Atif Zafar told The Express Tribune.

Pakistan’s total exports to the US in fiscal year 2016 stood at $3.5 billion out of which 83% were textile exports ($2.9 billion). The country’s textile exports to the US make up 23% of the total annual textile exports. Analysts say the unexpected election results have sent shock waves across global financial markets, resulting in major changes in almost all world currencies against the dollar. In case the dollar weakens, it will result in appreciation of the Pakistan rupee, making Pakistani textile products expensive for American buyers. However, unlike Brexit, this time market watchers say the situation is much calmer and the statements of president-elect Donald Trump may not affect the trade relations of US with other trading partners. “It’s too early to predict anything. However, the situation is not that uncertain because a large number of textile exporters of Pakistan have long term supply contracts in the US, which means that the exports are not going to be affected significantly,” added Zafar.

Analysts say investors are moving towards safe-haven assets such as Japanese yen and gold because they anticipate at least short term shocks for the US economy. Pakistan Apparel Forum Chairman Muhammad Jawed Bilwani commented that Donald Trump had vowed to terminate major US trade agreements in his campaign to protect American trade interests. “Though chances are low, but if he ends up terminating any major trade pact it will result in chaos and this may hit Pakistan’s textile exports,” he added.

Pakistan’s textile exports, after reaching a recent high of $13.7 billion, have been declining ever since, clocking in at $12.5 billion in fiscal year 2016. Textile sector’s disappointing performance is a result of multiple factors including an overvalued currency, which has rendered them uncompetitive internationally. Trump has vehemently proposed protectionist trade policies by threatening to rip up US trade agreements and suggested imposing punitive tariffs on goods from various countries (mainly China and Mexico) in order to create more jobs in the US.

SOURCE: The Tribune

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Donald Trump may jeopardize US TPP with 11 nations

Donald Trump’s election as the 45th American president could deal a deadly blow to the ambitious Trans-Pacific Partnership (TPP) between the US and 11 others, and the world’s largest economy under him may turn more protectionists, given his strong criticism of the mega trade deal as well as outsourcing during the course of the elections. Any attempt to either delay the passage of TPP or tweak it or scrap the deal altogether will ease some pressure on India, China and others and buy them some time to conclude the 16-nation Regional Comprehensive Economic Partnership (RCEP). If the pre-poll rhetoric is any indication, more protectionist measures, especially in services, could be in the offing, which will hurt the Indian IT industry. Even students aspiring to study in the US may face difficulty to get visas. Nevertheless, Trump’s tough stance on terrorism may serve to improve cooperation between the two sides in defence, said analysts. However, the fact that Trump hasn’t been a politician adds to the discomfit of some trade and government officials, as nobody knows him too well to predict with substantial clarity what course of action he will pursue. Some IT industry officials are already jittery about the prospect of a totalisation agreement with the US to exempt the Indian IT industry from mandatory payments for social security of their Indian employees in US. Even a rollback of the US move to drastically hike the H-1B and L-1 visa (meant for working professionals) charges late last year, which is estimated to quadruple the Indian IT industry’s annual visa costs to $400 million, is out of question now. This means India has to really slog it out at the WTO to force a likely more belligerent US to withdraw the hike.

The IT companies are paying around $1 billion a year to comply with the social security norms for their Indian employees in the US, despite the fact that these people don’t work there long enough to be eligible for such benefits. India is also gearing up to challenge the US at the dispute settlement body of the WTO on the hike in visa charges. Analysts said although most of the mad pre-poll rhetoric gives way to pragmatism after the elections are over, it’s too early to predict such an eventuality this time around, given the extreme positions he took on issues like TPP. Abhijit Das, head of the Centre For WTO Studies at IIFT, said: “There are already speculations that current President Obama will seek to ratify the TPP in the lame-duck session. So, let’s not think that TPP is already dead. But yes, it will be extremely difficult for Obama to push through the TPP now.” However, he added that there is some silver lining in the sense that in the US, ultimately pragmatic business sense prevails.

Congratulating Trump on his victory, IT industry body Nasscom said: “Many of his observations during the campaign concerning high-skilled immigration and outsourcing were based on fabrications put out by critics of the sector. Nasscom and leaders of the Indian IT industry look forward to working with him and his administration and leaders of the House and Senate to highlight our sector’s contributions to the US economy and help ensure that they understand these facts as well as the depth of our investments.”

SOURCE: The Financial Express

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Brexit plus, plus, plus: Donald Trump represents increasing global isolationism

Even those who expected a Donald J Trump victory didn’t expect anywhere as massive a margin—he won 276 electoral votes versus 218 for Hillary Clinton—but, as the candidate said during the campaign, it was Brexit plus, plus, plus with even Democratic strongholds coming out in his favour. Like Brexit, the US elections were a vote for bringing back the country’s perceived glory, it was a vote by those whom economic growth had passed over for several decades. As a recent McKinsey report pointed out, between 2005 and 2014, real incomes in advanced economies were either flat or fell for 65-70% of the population, while they rose for all but 2% of the population in these countries in the 1993-2005 period. Though Trump didn’t repeat the populist and anti-immigrant election rhetoric during his brief post-victory speech, and instead spoke of the need for all Americans to pull together in reviving the country, the Brexit-Trump well of discontent has been a big driver in the world downing its shutters for the past few years. Global trade volume of goods and services, for instance, has grown merely 3.1% since 2012 which is around half the growth of the previous three decades— WTO expects the volume of goods trade to slow down further to 1.7% in 2016, the slowest since the financial crisis. While global trade rose twice as fast as GDP in the 1990s, it is barely keeping pace today. According to Crisil, while import-weighted average tariffs declined almost 1% every year between 1985 and 1995, the pace of decline slowed significantly since 2012.

Whether Trump will be good or bad for India remains to be seen, but certainly investors in IT stocks weren’t taking any chances—shares of TCS fell 4.9% on close, Infoys 2.7%, Wipro 1.3% and HCL Tech 2.8%; like the post-Brexit-vote government in the UK, the markets are expecting a more isolationist visa policy in the US. Indeed, as elections come up in Europe, it is safe to expect mainline politicians to take more protectionist measures. While that means India should bank less on exports as an engine of growth, as a recent Crisil report pointed out, the reason for the continuous decline in India’s exports goes beyond a slowing global trade environment since others like Bangladesh, Vietnam and even China have seen their share of global exports rising in recent years.

SOURCE: The Financial Express

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