NATIONAL
INTERNATIONAL
Textile Raw Material Price 2016-11-20
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1064.75 |
USD/Ton |
0% |
11/20/2016 |
|
VSF |
2209.34 |
USD/Ton |
0% |
11/20/2016 |
|
ASF |
1858.05 |
USD/Ton |
0% |
11/20/2016 |
|
Polyester POY |
1115.55 |
USD/Ton |
0% |
11/20/2016 |
|
Nylon FDY |
2424.17 |
USD/Ton |
1% |
11/20/2016 |
|
40D Spandex |
4282.22 |
USD/Ton |
0% |
11/20/2016 |
|
Nylon DTY |
5472.53 |
USD/Ton |
0% |
11/20/2016 |
|
Viscose Long Filament |
1335.47 |
USD/Ton |
0% |
11/20/2016 |
|
Polyester DTY |
2235.46 |
USD/Ton |
1% |
11/20/2016 |
|
Nylon POY |
2032.24 |
USD/Ton |
0% |
11/20/2016 |
|
Acrylic Top 3D |
1364.50 |
USD/Ton |
1% |
11/20/2016 |
|
Polyester FDY |
2612.88 |
USD/Ton |
1% |
11/20/2016 |
|
10S OE Cotton Yarn |
2064.18 |
USD/Ton |
0% |
11/20/2016 |
|
32S Cotton Carded Yarn |
3324.16 |
USD/Ton |
0% |
11/20/2016 |
|
40S Cotton Combed Yarn |
3788.68 |
USD/Ton |
0% |
11/20/2016 |
|
30S Spun Rayon Yarn |
2859.65 |
USD/Ton |
1% |
11/20/2016 |
|
32S Polyester Yarn |
1718.69 |
USD/Ton |
0% |
11/20/2016 |
|
45S T/C Yarn |
2554.82 |
USD/Ton |
0% |
11/20/2016 |
|
45S Polyester Yarn |
3004.81 |
USD/Ton |
0% |
11/20/2016 |
|
T/C Yarn 65/35 32S |
2235.46 |
USD/Ton |
0% |
11/20/2016 |
|
40S Rayon Yarn |
1843.53 |
USD/Ton |
0% |
11/20/2016 |
|
T/R Yarn 65/35 32S |
2191.92 |
USD/Ton |
0% |
11/20/2016 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
0% |
11/20/2016 |
|
32S Twill Fabric |
0.82 |
USD/Meter |
0% |
11/20/2016 |
|
40S Combed Poplin |
1.15 |
USD/Meter |
0% |
11/20/2016 |
|
30S Rayon Fabric |
0.66 |
USD/Meter |
0% |
11/20/2016 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
11/20/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14516 USD dtd. 20/11/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Textiles, the second largest industry in India, is seeing dull days post demonetisation of Rs 500 and Rs 1000 notes. Few textile units pan India are mulling shutdown while some other units have stopped production temporarily. The Centre’s decision has affected the entire chain of people involved in the process of producing and selling of the textile items. “This is a temporary phase but the pressure will be built on every week till the issues are addressed. It will take at least two months for the business to get back on track. The only way to deal with this cash crunch is by changing our payment system,” VD Zope, chairman of The Textile Association (India) told Fibre2Fashion. Since most of the transactions in textile industry are done via cash, it has become difficult for retailers to do business with the cash crunch. This is likely to affect over 15 crore people who are directly or indirectly linked with the textile and its ancillary industries. “Once a unit is shut down, restart expenses will be a lot. We can make up for the loss only if the situation improves within 10-15 days. However, it does not seem that the cash flow will increase in the market in the coming weeks,” said Jitendra P Vakharia, president of South Gujarat Textile Processors Association. Vakharia said he will raise this issue with Union textiles minister Smriti Irani, who is visiting Gujarat on Saturday.
Chairman of Southern Gujarat Chamber of Commerce and Industry’s (SGCCI) textile committee Devkishan Manghani said, “Usually, we produce 3-4 crore metres of cloth per day. Today, the production has reduced by 50-60 per cent. Sales have also reduced drastically. The trade has not picked up after Diwali. With low production in the textile units, labourers are also going back home. Most of the labourers in the textile industry are from Bihar, Uttar Pradesh, Orissa and southern states.” Raising concern over the rise in the number of textile units shutting down in Ahmedabad, Nitin Thakkar, president of Ahmedabad Textile Processors’ Association, said, “Around 50 per cent of the textile units in Ahmedabad have closed. The situation is getting worse. The entire chain of production and sale of textile products has been hampered. It has not been possible for us to do full-fledged business after November 8.” “The weekly cap for cash withdrawal is also very low. Industries like us at least need 5-6 lakh per week to bear daily expenses,” added Thakkar.
SOURCE: Fibre2fashion
The Integrated Skill Development Scheme (ISDS) that aims to train individuals in the textile sector was reviewed by the Union textiles minister Smriti Irani. She has suggested measures to increase the outreach for imparting skills to individuals in the textile sector. Emphasis was also laid on strengthening the monitoring mechanism of ISDS. Irani discussed the functioning of project management unit under ISDS, reported a news agency. She suggested that physical verification module should be developed with a feature to upload videos of visits in stipulated time to keep a watch on the working of ISDS. Further, she reviewed the web-based Management Information System (MIS) devised to monitor skill training programmes in the sector. In order to ensure that the benefits of the scheme reach to the maximum number of people, Irani stressed on the importance of displaying scheme details in the public domain. At present, 21,577 trainees are being trained under ISDS in the textile sector through 556 centres across India.
SOURCE: Fibre2fashion
At a textiles buyer-seller meet held in Salem, attendees were informed that the central government offers several schemes for marketing of textile goods, which should be taken advantage of, by small textile units. So, while units in tier-1 and tier-2 cities were taking advantage of these schemes, units from tier-3 cities should also do so. The buyer-seller meet was organised as a part of a Powerloom Expo and was jointly organised by the Powerloom Development and Export Promotion Council (PDEXCIL) and the Regional Office of the Textile Commissioner, Coimbatore. “The buyer-seller meet was held to enable buyers find the right suppliers and boost prospects of sellers of powerloom fabric, garments and made-ups,” a leading daily reported. The meet also provided an opportunity to buying houses, textile traders and exporters to meet producers of these textiles products directly.
SOURCE: Fibre2fashion
The power loom cloth manufacturers have urged the Centre to take steps to set up textile business clusters and regular markets in the districts across the country where the weaving industry is active. In a memorandum submitted to the Union Minister for Textile and Secretary, Department of Textiles in New Delhi recently, the Tamil Nadu Small Power loom Export Cloth Manufacturers Seva Sammelanam led by its president K. P. Appu Chettiar said that about 24 lakh power looms and lakhs of hand looms provide employment to a large number of work force in the country. Due to declining global economy, hike in the cost of raw materials, scarcity of power, the power loom and hand loom units are facing the danger of closing down. The petition demanded the Ministry to allocate required funds in the forthcoming Union Budget itself for this project.
Mr. Appu Chettiar told The Hindu that the Secretary of the Textiles Department assured adequate allocation of funds for the same, if the State Government came forward to allot adequate land in the respective districts for the establishment of textile business clusters and regular markets. The memorandum pointed out that the Centre had reserved certain varieties of cloth to be manufactured by the hand loom sector many decades ago. Thereafter, realising the changing needs, the government revised this reservation in 1985. The Sathyam Committee brought down those varieties from 22 to 11. This continued to this day. The existing 11 varieties reserved for the handloom sector very much hampers the production pattern in both the power loom and handloom sectors. It suggested reviewing the present reservation under handloom sector. The cotton fabrics with multicolour border, strips, checks and varieties, towels, dhotis and lungies may be allotted to the power loom and auto loom sectors.
The Sammelanam also demanded the government to take into account the domestic requirement of cotton while deciding the quantum of cotton for export. This will prevent the price rise of cotton in the domestic market thereby helping the export of cotton based garments. The state accounted for 13 cooperative defunct spinning mills in Tamil Nadu. The government should take steps for the revival and modernisation to produce more yarns which can be supplied to the power loom and handloom sectors at affordable cost. The other demands included introduction of weaving course in polytechnics and engineering colleges, steps for the manufacture of advanced modern auto looms in the country itself and creation of a separate directorate for power loom sector.
SOURCE: The Hindu
Commerce and Industry Minister Nirmala Sitharaman has called a meeting of export promotion councils and other sector representatives tomorrow to discuss the impact of demonetisation. “All the issues pertaining to exports and impact of demonetisation are likely to be discussed,” an official said. The government on November 8 announced demonetisation of Rs 500 and Rs 1,000 notes from mid-night and replace them with new Rs 500 and Rs 2,000 notes. The move created shortage of currency which led to hardship for people.
Expressing concerns on the development, Council of Leather Exports (CLE) Chairman Rafeeq Ahmed said the move to put limitations on cash withdrawal is impacting the working capital of exporters. “It is not practical and is impacting exporters as we have to pay cash for certain perks like overtime and extra incentives to labourers. Temporary workers too demand cash,” he said. Sharing similar view, trade experts said that the move has implications on the supply side. “Demonetisation would impact exporters particularly small and medium units as most of them still deal in cash with regard to wages of labourers,” they added. All the export promotion councils including sectors from pharmaceuticals and textiles will attend the meeting besides Federation of Indian Export Organisations (FIEO). After recording negative growth for about two-years, exports have started recording positive growth. The outbound shipments continued to grow for the second month in a row, expanding by 9.59 per cent to USD 23.51 billion in October on healthy growth in shipments of jewellery and engineering products. India’s exports are expected to reach USD 280 billion by the end of this fiscal as against USD 261.13 billion in 2015-16.
SOURCE: The Financial Express
Itema, Italy's leading, privately held provider of advanced weaving solutions, including best-in-class weaving machines, spare parts and integrated services, is set to show new innovations in airjet and rapier weaving technology at India ITME 2016, from December 3 to 8, 2016, at the Bombay exhibition and convention centre in Mumbai, in hall 6, booth B1. The company will exhibit five weaving machines in its booth and one rapier machine with Jacquard application in Stäubli booth. Moreover, the company will highlight the strong advantages of its original spare parts in a dedicated corner, which will be of great interest for many weavers who have installed both the latest Itema machines and the previous Sulzer, Somet, and Vamatex models.
Exhibition visitors will have the chance to see live the most successful rapier machine in recent history, the Itema R9500. The R9500 will display a high-end shirting fabric, featuring the latest technological advancements dedicated specifically to shirting applications, such as the brand-new Itema Pneumatic Tuckers, the most appreciated in this specific market segment allowing reduced maintenance costs and no speed limitations.
Officially presented for the first time in India, the Itema R9500terry, will demonstrate its strong leading position in weaving the most refined and soft terry fabrics. On the airjet technology side, three machines will be on display, covering all the main airjet technology application fields growing continuously in the Indian and surroundings markets. The A9500 featuring a bed sheeting style, will run with the latest improvements designed to excel in this market, meeting weavers' requirements of widest versatility and substantial cost savings. The brand-new Full Width Reed Tuckers guarantee weavers the possibility to reduce reed stock and increase the flexibility of the machine. Moreover, the brand-new Double Tandem Nozzles ensure superior fabric quality and significant cost savings. A stretch denim fabric will be woven on the A9500p, the racehorse model in the Itema airjet portfolio. The popular recent trend to weave stretch and super stretch fabrics with dedicated weft yarns, inspired Itema to create and patent the innovative BLC – Brush Lycra Clamp – nozzle to weave elastic weft yarns. The third airjet machine is an A9500p weaving a top quality yarn-dyed shirting and featuring another Itema patented feature – the ELD Electronic Leno Device – which, with its innovative design, self-cleaning and no need to wind the leno spools, provides a perfect leno binding even at highest speeds, whilst significantly reducing operational costs.
SOURCE: Fibre2fashion
Ranked a lowly 35th on the World Bank’s Logistics Performance Index (LPI) in 2016, India is an inefficient place as far as logistics is concerned, with the extant system falling far short of international standards in terms of costs, efficiency, sustainability, and safety. Besides resulting in higher cost of doing business, this increases the prices of goods and services. The toll such inefficiency exacts on the economy can be gauged from the fact that India’s annual logistics costs of R25 lakh crore constitute around 19% of its GDP. With the logistics system skewed towards roads (55%) and rail, pipelines, and waterways accounting for 32%, 7% and 6%, respectively, the cost of per tonne-km logistics is a high R2.3 for roads, R1.2-1.5 for rail, R0.2-0.3 for waterways and R0.1-0.15 for pipelines. This might change if the Centre’s ambitious Sagarmala project succeeds in unlocking the full potential of the country’s coastline and waterways. “The vision is to reduce logistics costs by up to R35,000-40,000 crore per annum for both domestic and export cargo,” Road Transport and Highways and Shipping Minister Nitin Gadkari has said, adding the project would create 10 million jobs. Says Jaideep Ghosh, Partner and Head of Transport and Logistics, KPMG in India, “Sagarmala is a transformational initiative, which could potentially change the way we do business. Integrating multi-modal transportation with coastal economic zones encompassing commerce, trade, tourism would boost the economy rapidly, when implemented.” Port-led development is central to the Sagarmala vision which envisages an infrastructural investment of over
R7 lakh crore. Modern port infrastructure and seamless multi-modal connectivity would be created in tandem with development of competitive logistics-intensive industries. To avail the economic opportunities on offer, the population in adjoining areas would be skilled. Existing industrial capacities in the hinterland are also expected to benefit from Sagarmala.The government has proposed an investment of $1,989 million on modernisation of ports, $2,437 m on new port development, $1,818 m on development of port-based industrial parks, and $36 m for coastal community development, a source says. In all, 142 minor ports have been identified for capacity expansion over a period of 20 years, with a total investment of R91,434 crore. In addition, six new port locations have been identified for development – Vadhavan, Enayam, Sagar Island, Paradip Outer Harbour, Sirkazhi and Belekeri.
For enhancing port connectivity, the Indian Port Rail Corporation Ltd (IPRCL) has been set up to implement last-mile rail projects. It has already taken up 25 works for 9 major ports; of this 4 works have been awarded and another 9 are targeted in the remaining period of the current fiscal. As for port-linked industrialisation, 14 Coastal Economic Zones have been identified. CEZ perspective plans have been shared with relevant ministries, states and other stakeholders for feedback, the source says.
Keeping in mind skill requirements, the ministry of shipping is currently undertaking a skill gap analysis study in 23 coastal districts. Projects identified through the study would be funded under Sagarmala. The government would also be conducting skill training at four locations across the country. Inland waterways development is another essential part of the Sagarmala project with the government mulling an investment of $47.69 million. The plan has been approved by the Cabinet. These projects will be implemented by relevant central ministries, state governments, ports, and other agencies, primarily through the public-private-partnership mode. Besides projects being undertaken by different agencies, R243 crore has been released so far by the ministry of shipping for 14 projects under Sagarmala in FY15-16 and FY16-17. “Sagarmala will revolutionise the logistics system when implemented,” sums up Vinayak Chatterjee, Chairman, Feedback Infra.
SOURCE: The Financial Express
The Centre and states on Sunday failed to resolve the contentious dual control issue as to which set of taxpayer is assessed by whom, making the November 25 meeting crucial if the government is to meet the April 1 deadline for the roll out of the goods and services tax (GST). Officials from Centre and states will meet on Monday to reach a solution ahead of the meeting of the GST Council on November 25. The informal meeting of state finance ministers and Union Finance Minister Arun Jaitley was called on Sunday to find a political solution to the deadlock on sharing of administrative control under GST so that a tax payer is not assessed by both the Centre and the relevant state, the so-called issue of dual control. “The meeting has remained incomplete. Discussions will continue on November 25,” Jaitley told reporters after the three-hour long meeting. The states are insisting on having oversight over all assesses, goods and services, who have turnover of up to Rs 1.5 crore, or a horizontal division.
The GST will subsume a number of indirect taxes levied by states and Centre, which will mean tax administration responsibility will have to be shared but the division has been contentious. The council needs to quickly decide on the issue on November 25 so that it can also approve the model GST laws that need to be introduced and passed in the ongoing winter session of parliament for the government to meet the April 1, 2017 deadline to roll out this reform. The November 24 meeting of the council has been called off. The earlier solution was that assesses with turnover of up to Rs 1.5 crore in the case of goods will be assessed by states and above that by the Centre. In case of services, all were to be assessed by the Centre. The formula collapsed as states wanted oversight of the services as well and there were doubts that it may not be able to split goods and services in some cases, making the implementation of the Rs 1.5-crore threshold difficult. Kerala, Uttarakhand, West Bengal, Uttar Pradesh and Tamil Nadu want states to have jurisdiction over businesses of turnover of less than Rs 1.5 crore for both goods and services, reasoning that the state tax administration has better understanding of small taxpayers. “Centre is agreeable on goods, but is not yielding on services. States are looking at their interest to safeguard their revenue. Centre will have to yield to states to get the CGST and IGST bills passed. A middle ground on the issue has to be worked out politically,” said Uttarakhand Finance Minister Indira Hridayesh. Kerala Finance Minister Thomas Issac said there is a stalemate on the issue and his state is not ready to compromise.
The Centre is keen on a vertical split wherein certain percentage of taxpayers are under central administration and the balance under the states. The percentage could also be the sticking point in this case. The Centre is willing to give a bigger share to states to settle the issue. The Centre and states have agreed to a four-slab GST of 5%, 12%, 18% and 28%. The Centre and the relevant state will split these taxes evenly.
SOURCE: The Economic Times
With the banknote crisis sharpening the political divide, the Centre and states on Sunday virtually refused to move an inch from their stated positions on the separation of administrative powers in the proposed Goods and Services Tax (GST) regime. After marathon deliberations with state finance ministers, Union Finance Minister Arun Jaitley said “meeting remained incomplete and discussions will continue on November 25”. States alleged that the Centre, which wanted a vertical split of the near-10-million indirect tax assessee base, had only turned more adamant.
With a predictably acrimonious Parliament looking less likely than a few days ago to pass the central GST, integrated GST and compensation-for-states Bills, the Centre’s plan to roll out the comprehensive indirect tax, which will subsume excise, service tax and local levies, from April next year, is indeed threatened. Kerala finance minister Thomas Isaac told FE: “We had a prolonged discussion from 10am to 3pm. A number of key states have the view that there must a combination of horizontal and vertical split of responsibility. We are discussing about number of dealers and how much (of the base) would be exclusively under the control of the state governments, and what would be a fair division of work between states and the Centre. We couldn’t reach an agreement.” Isaac added: “The Centre wants a share of the small dealers, who have been exclusively serviced by the states except for the service providers. We fear that this will only create unnecessary problems.” The political leadership has, however, given the bureaucrats a brief, and officials of both central and state governments will meet on Monday to work out a solution. At Sunday’s meeting, state FMs from West Bengal, UP, Tamil Nadu, Kerala and Uttarakhand have insisted on an exclusive control over small taxpayers, with annual revenue below R1.5 crore, for both goods and services. They feel states have the infrastructure deployment at the grassroot level and small taxpayers are familiar with local authorities. The central government, on the other hand, is not in favour of the demand as it wants a single-registration regime for ease to service taxpayers.
Instead of horizontally splitting the taxpayers — those with R1.5-crore revenue with states and those above with Centre — it has proposed to divide the entire taxpayer base vertically wherein the taxpayers are divided between the Centre and the states in a fixed proportion. As a compromise, it is willing to give states an administrative power over 2/3rd of the taxpayer base if service tax continues to be administered by the Centre.
There are five options being discussed for the division of administrative powers : 1) a pure turnover-based division where taxpayers with turnover below R1.5 crore would be administered by the states and the larger ones by the Centre, however, this is not acceptable to states as bulk of the tax revenue comes from the second category; 2) below R1.5-crore revenue taxpayers with states and others under cross-empowerment (the Centre won’t agree on this as it is a skewed distribution; 3) the second option tweaked to keep all service taxpayers with the Centre (this option is put on the backburner as it was recognised to create jurisdictional problems for businesses which supply a substantial mix of goods and services; 4) cross-empowerment where every year both the Centre and states will decide who will audit whom on the basis of risk parameters; 5) a complete vertical division for three years, including for audit, with a Centre-state ratio of 4:6; with a mirror image approach favouring the Centre for over R1.5-crore revenue taxpayers.
At its last meeting, the GST Council had agreed on a four-slab structure – 5, 12, 18 and 28 percent — along with an additional cess on luxury and `sin’ goods, such as tobacco, to raise the funds for the Centre to compensate the states. The council is yet to take a call on the rate on precious metals, including gold, but sources say 3-4% rate is under active consideration.
SOURCE: The Financial Express
Tax revenue of the Centre, after the mandatory transfer to states, is expected to exceed the Budget target by at least R 50,000 crore, or close to 5%, during the current fiscal, helping the government meet the fiscal deficit target of 3.5% of the gross domestic product rather easily. This is despite telecom spectrum proceeds lagging the budgeted figure by about R32,000 crore and nothing much is being garnered via strategic sale of PSUs. Thanks to a likely fiscal bonanza, estimated to be upward of R2 lakh crore after demonetisation of high-value currency notes, the government would also stick to the 3% fiscal deficit target for FY18, sources said.
Net tax receipts are budgeted at R10.54 lakh crore for FY17. This target would be exceeded as the recently-concluded income declaration scheme could fetch R15,000-20,000 core, while indirect tax receipts are likely to be R30,000-35,000 crore higher than budgeted, mainly because of the robust growth in excise collections on the back of the rate increases for petroleum products effected last year. “This estimate (R50,000 crore additional tax revenue) is without factoring in likely extra tax proceeds from demonetisation. While the income tax department has already started issuing notices to those who made cash deposits above R2.5 lakh crore in their bank accounts after November 10, many businesses could be showing higher turnovers after the crackdown on black money,” an official said. In the April-October period, the Centre’s gross tax revenue receipts (before 42% devolution to states) stood at R8.62 lakh crore or 53% of the current year’s target, compared with R 6.93 lakh crore or 48% of the relevant target in the previous year.
Official data showed that the Centre’s gross excise duty collections rose 45% year-on-year during the period as against an 11% growth required to meet the annual target of R2.14 lakh crore. On November 8, the government withdrew the legal tender status of existing R500 and R1,000 notes, constituting about R14.2 lakh crore or 86% of total notes in circulation as on March 31, 2016. Cashholders are permitted to deposit these notes in their bank accounts by December 30 or exchange limited old notes for some time to overcome a cash crunch. Analysts say this would increase the size of the white economy, with businesses choosing to show sources of cash they tried to hide earlier and paying taxes on them.
Despite a likely shortfall in revenue from strategic sale of PSUs (the budgeted figure is R20,500 crore), the overall disinvestment target might be almost met because of aggressive buyback of shares by some cash-rich PSUs and the sale of the government’s stake in private forms held through SUUTI. Some believe that a fixed-band fiscal deficit target could be set from the next year after the NK Singh panel, entrusted with reviewing of the 13-year-old Fiscal Responsibility and Budget Management (FRBM) Act and the FRBM road map, submitted its report. Sources said the range system, instead of the current practice of a fixed number as fiscal deficit, could be looked at from FY19. A fiscal deficit range of 3 +/- 0.3% looks plausible to many officials, who said a final decision in this regard would be taken closer to the FY18 Budget that will be tabled on February 1.
SOURCE: The Financial Express
There are various estimates on the impact of the central government’s demonetisation move on the country’s economic growth. Economist and a NITI Aayog member Bibek Debroy tells Indivjal Dhasmana the impact would be felt in the third quarter of the current financial year and up to the middle of January in the fourth quarter to be replaced by benefits in the medium term. Edited excerpts:
There are fears that the portion of cash will shrink in the system due to demonetisation that will affect the economic growth at least in the third and fourth quarters. Do you think these fears have any ground?
When it comes to cash, we must distinguish between something that is a period of transition and, therefore, is a one-shot kind of change and something that happens afterwards. Roughly, let us say high-value notes of Rs 500 and Rs 1,000 are to the tune of roughly Rs 14 lakh crore –I’m not counting counterfeit notes. Let’s break it up. While Rs 14 lakh crore is a RBI (Reserve Bank of India) figure, the break-up is my guesstimates and my guesstimates could be different from yours. Out of Rs 14 lakh crore, probably something like Rs 4 lakh crore may be black money. There are two kinds of black money. I will call one kind of black as ‘double black’ where the activity that led to generation of that income is illegal – crimes, trafficking etc. ‘Single black’ is when the activity is not illegal but you have not paid taxes. Let’s assume that out of Rs 4 lakh crore, Rs 2.5 lakh crore is single black and Rs 1.5 lakh crore is double black. So, Rs 1.5 lakh crore is roughly 10 per cent of Rs 14 lakh crore. This is completely destroyed. On Single black – Rs 2.5 lakh crore – I think a large part of it will come back into the system. Of the remaining Rs 10 lakh crore, Rs 8 lakh crore is just probably transaction-related. This cash temporarily goes out of the system, but it eventually comes back into the system.
The remaining Rs 2 lakh crore is what the people were sitting on. This is not illegal. This Rs 2 lakh crore is unproductive for the people holding on to it and for the system. This comes into the system. In the short-term of course there is impact — macro and sectoral impact. But, in the slightly medium-term, several things happen through RBI and outside RBI. And, the government and the banking system have more resources. The government can spend this extra money on various public goods and services including infrastructure, and the lenders can lend more. So, wealth is transferred from relatively rich to relatively poor in the process.
How long will short-term impacts last – the third quarter of the current financial year or will it spill over into the fourth quarter?
Because of secrecy, there are some things that you could not really do. One step is printing the notes, the second step is getting the notes to banks, branches etc. There is a separate step of getting them into the ATMs. Remember, banks have largely outsourced replenishment of ATMs. So, this is outside the control of banks. Yes, Q3 (third quarter) will be affected, but, not all of Q4. I would say by mid-January, problems relating to transactions would be over. I suspect the effect on Q4 will be more concentrated on the month of January. I don't think it will affect Q4 as much as it will affect Q3.
How much will the GDP growth in Q3 and Q4 be? It was a five-quarter low of 7.1 per cent in Q1 and Q2 GDP numbers are yet to come out.
There are two GDP series – old and new. And, there are two main differences between the two. Old series was on production; the new series is on consumption. I can give you a counter argument to say that because of the government’s step, the people are now going to splurge on consumption. I don’t know how important it is quantitatively. Secondly, there is no great controversy about nominal GDP numbers. So, those who criticise the new GDP series don’t do so on nominal GDP, but on deflators. And, deflators have still not been satisfactorily resolved.
One can reasonably predict nominal growth in reasonable terms, but not real GDP growth. Independent of all this, if you would have asked me would growth be eight per cent in real terms for the entire 2017-18, I would say I’m somewhat sceptical because when the economy begins to improve, deflators also go up. I would say 7.5 per cent, not eight per cent, because of the demonetisation move would not be very significant. If you expect me to say if instead of 7.5 per cent, it will be 7.4 per cent, I would say it is complete conjecture.
You said nominal GDP growth could be reasonably predicted. So, what will it be in the current financial year?
I’m hazarding a guess. The right people to ask this question are people like the chief economic adviser because they really track indirect tax revenue, which is a good indicator of nominal GDP growth. Having said all that as a qualification, I would say 12.5 per cent, if I am optimistic. If I am pessimistic, I would say 12 per cent.
So, will the gains which were to accrue because of the normal monsoon after two consecutive years of drought be nullified, at least in Q3?
It is impossible to quantitatively answer that. We tend to exaggerate quantitative importance of several things. People talk of lack of financial inclusion, but all said and done, 600 million people in India have debit cards. Of this, 225 million cards are Jan Dhan kind of debit cards. So, a lot of people, including the poor ones, have debit cards but they don’t use these cards for transactions. They use the debit cards for withdrawals from ATM, nothing more. I will be extremely foolhardy to hazard a guess on your question.
SOURCE: The Business Standard
For a New Delhi-based trading company that mainly imports electrical goods from China and then sells them in India, demonetisation has wiped out more than 50% of profit. The company has for years been importing goods from China and under-invoicing them to save on taxes in India. The balance would be paid into the bank account of the seller in Hong Kong through illegal hawala channels. Since the government banned Rs 500 and Rs 1,000 notes on November 8, not only has the company been finding it hard to send money by hawala, the cost of the process has shot up, an executive told ET. In the grey market, one renminbi rose to Rs 16 against the official exchange rate of Rs 9.89 on Saturday evening. “We are aware that many Indian traders while importing goods from China show only 10% to 20% of the original price of goods on each container,” an Indian customs officer told ET. “The arrangement with the Chinese counterpart is that the remaining money would be remitted through informal channels a few months down the line.” He added that the Indian government had introduced anti-dumping duty on many goods imported from China, but the practice continued and flourished due to the connivance of importers and exporters.
Demonetisation is set to have an unintended impact on India-China trade, experts said. The government may see a rise in taxes collected on goods imported from China in the coming months as the value of these goods will go up, even as actual imports may dip. The movement of goods along the importertrader-customer chain was entirely paid for in cash. When remitted to Hong Kong, the cash would be handed over to the hawala contact in Rs 500 and Rs 1,000 notes, which were scrapped on November 8. This has meant most traders owe money to wholesalers while the latter owe Chinese exporters. The move will hit future trade between India and China as well, said an expert. “Due to demonetisation we have seen that many imports from China will be affected adversely,” said Rakesh Nangia, managing partner, Nangia & Co. “This is mainly because the imports were under-invoiced to save on import duties and now with the black economy hitting a lower circuit breaker, Chinese products may not have the price advantage. Going ahead, I see that the balance of payments situation between India and China would improve as well.”
The total trade between India and China is officially worth about around $72 billion, favouring China to the tune of $60 billion. Actual trade, said experts, could be even more skewed in China’s favour. While most of the bigger Chinese and Indian companies stay away from the practice, the ruse is said to be used by many wholesalers and traders. According to the customs officer cited above, under invoicing is mainly seen in electronic items including cell phones, clothes, tiles and plastic items including toys. “It would be interesting to see how the trade would adjust to the new reality as once the products imported are fully priced, and industry may emerge much cleaner,” said Amit Maheshwari, partner, Ashok Maheshwary and associates LLP.
SOURCE: The Economic Times
India and the UK can now look forward to doing more business together after British Prime Minister Theresa May's recent visit to the country, NRI industrialist Lord Swraj Paul has said. Participating in a debate in the House of Lords yesterday on 'The Impact on the economy and investment of fluctuations in the level of pound sterling', Paul said, "The Prime Minister's most recent foreign policy initiative has been a trade mission to India, on which I hear good things and must congratulate her; both countries can now look forward to doing more business together." At the outset, the Chairman of the Caparo Group noted that Brexit and the US Presidential elections have been singled out by commentators as leading to significant fluctuations in the exchange rate over recent weeks. "We have heard much doom and gloom from survey firms and others, keen for a good story, on the adverse consequences for the British economy that will surely follow. All are now very excited, and this has provided opportunities for the speculators to make money," Paul said. Paul felt that the recent events would bring opportunities for business and investment in the UK. "If these are followed through, they will create jobs and generate tax revenues for the greater good," he said.
Asking the House to ponder over the effects of a weaker pound on higher education, the Chancellor of the Wolverhampton University said, "A weak pound means studying in the UK is cheaper". Britain's international reputation means it is the number one destination for international students and "we can't afford to lose that status", he said. "In fact we must strengthen it. Universities are looking to an increase of fee income from overseas students — 4.8 billion pounds in 2018-19 versus present figures of 3.7 billion pounds — and to see growth in home and EU students over 10 percent in the period," Paul said. Paul said encouraging more overseas students is at odds with current immigration policy. "So we have to find ways to make sure that they return to their own countries when their studies end. The University of Wolverhampton, where I am Chancellor, is doing all it can to promote these policies," he said.
SOURCE: The Economic Times
A top American lawmaker has said the economic reforms unleashed by India would not only boost its growth but also accelerate the Indo-US relationship. “Reforms put in place has helped us realised this impressive growth. I see an opportunity here to accelerate this (India-US) relationship,” Congressman Ed Royce, Chairman of the powerful House Foreign Relations, told a global meeting of Hindu businesses and entrepreneurs here. Royce, a Congressman of 24 years and one of the key founders of House India Caucus, said the Modi Government has taken “impressive steps” to “boost growth; increase and investment” and double export. He said he would continue to strengthen this relationship. The top Republican Congressman was speaking on “the contribution of Hindu entrepreneurs to US economy” at the World Hindu Economic Forum here in Los Angeles. Into its fifth annual event, the World Hindu Economic Forum is an effort to bring Hindu entrepreneurs from across the world together, said its media coordinator Sushil Pundit. Nearly 500 delegates from across five continents have gathered here to cooperate and collaborate globally and help each other with market access, technology, innovation, and competitively priced capital for success in business.
Prominent among the participants at this three-day conference are Mohandas Pai, Gururaj (Desh) Deshpande, Vandana Tilak and Mukesh Aghi. Founded by Swami Vigyananand, the previous WHEF meetings have been held in Hong Kong (2012), Bangkok (2013), New Delhi (2014) and London (2015). “Hinduism is not a stagnant thing. It is something that gets redefines,” Deshpande said. “I am hopeful that Hinduism would continuously get redefined… My hope is that out of all this one day we would one get a Vivekananda who would come and lead the world and bring about the much needed peace and harmony that the world needs at this time,” he said.
Addressing the gathering, Congresswoman Tulsi Gabbard, the first Hindu lawmaker to the US Congress, said there has never been the kind of excitement to realise the full potential of India-US relationship. Gabbard underscored the importance of spirituality and seva by the business and entrepreneur community. “We have an opportunity to make our offerings as actions,” she said as she shared her own practice of karma yoga has taught her how to view success. In his remarks, Royce praised the contribution of the Indian-American community and mentioned the two Republican Indian-American Governors Nikki Haley from South Carolina and Bobby Jindal who was the two-term governor of Louisiana. “The contributions made by Indian-Americans have changed the perception the most – whether it is the IT sector, whether it was in the hospitality industry, or whether it is in the physicians community,” he said.
SOURCE: The Financial Express
India and Cyprus on Friday signed a new double tax avoidance pact under which capital gains tax will be levied on sale of shares on investments made after April 1, 2017, bringing the island nation at par with Mauritius in terms of tax treatment. The latest pact would replace the existing Double Tax Avoidance Agreement (DTAA), which was in place since June 13, 1994. “The new DTAA provides for a source-based taxation of capital gains arising from alienation of shares, instead of a residence-based taxation provided under the existing DTAA. However, a grandfathering clause has been provided for investments made prior to April, 1 2017, in respect of which capital gains would continue to be taxed in the country of which taxpayer is a resident,” the finance ministry said in a statement.
The new agreement provides for assistance between the two countries for collection of taxes. The new agreement also updates the provisions related to exchange of information to accepted international standards, which will enable exchange of banking information and allow the use of such information for purposes other than taxation with the prior approval of the competent authorities of the country providing the information. The new agreement expands the scope of ‘permanent establishment’ and reduces the tax rate on royalty in the country from which payments are made to 10% from the existing rate of 15%, in line with the tax rate under Indian tax laws. It also updates the text of other provisions in accordance with the international standards and consistent policy of India in respect of tax treaties.
Provisions of new DTAA will enter into force after the completion of necessary internal procedures in both the countries and is expected to come into effect in India in respect of income derived in fiscal years beginning on or after April 1, 2017, the finance ministry added.
SOURCE :The Financial Express
Even as negotiations are underway, Mauritius is hopeful of remaining the largest source of foreign investments into India even under the new treaty. In May, India and Mauritius signed a protocol amending the India-Mauritius Tax Treaty to introduce in-principle taxation of capital gains in India in a phased manner. "The initial treaty was the double taxation avoidance, it was helpful to both Mauritius as well as India because many investments were coming here through Mauritius. "The relations between the two countries have always been very strong and I see no reason that it will be otherwise. It will be very strong we are doing everything to make it stronger," Mauritius Prime Minister Sir Anerood Jugnauth told PTI on the sidelines of a luncheon meet with business leaders organised by All India Association of Industries (AIAI).
The Prime Minister of the island nation said economic and diplomatic ties between the two nations have been on an upswing and pointed out that there are already lots of investments by Indian people so he does not see any reason why it should not continue. Jugnauth said they had no other option but to negotiate with India after the Indian government decided to put an end to the decades old treaty. "Now we are still negotiating to have something new to replace it. The old treaty was obviously beneficial but to us and since it is not there we are losing the benefit that we were making as I said we had no other option," he said. When asked about the impact of the abolition of the old treaty would have on the country's economy, the Prime Minister said, "Mauritius is still having its financial centre which has not been affected to much extent and we are trying to diversify. We are also trying to make up for whatever loss the centre is facing. We have to live up to reality (abolition of the treaty), we can't do otherwise." He said the country is trying to diversify and at the same time negotiating for new treaty. "We have already said it to Prime Minister Narendra Modi that it (the new treaty) should not be less favourable than the treaty that India would be making with other countries which they used to have the treaty before," Jugnauth said, adding, "India would do everything not to make us lose therefore we are still negotiating. I can't say what will be the final result."
As per the protocol, India would be taxing on capital gains arising from sale/transfer of shares acquired on or after April 1, 2017. The protocol protects investments in shares acquired before 1 April 2017, that is existing investments made before 1 April 2017 have been grandfathered and will not be subject to capital gains taxation in April next. According to statistics, foreign investments in India from Mauritius has been around 33 per cent since 2000 and in FY 2016, it was 21 per cent. The foreign funds owned over 28 per cent in the Sensex and Nifty stocks.
SOURCE: The Business Standard
Exports of textile and apparel in Vietnam in Oct 2016 amounted to around $1.934 billion, down 2.34% y-o-y and 10.74% m-o-m respectively; exports of yarn totaled around 103.4kt, up 29.35% y-o-y and 2.31% m-o-m respectively. Imports of yarn in Oct rose 8.40% on the year to around 73.6kt, up 12.78% compared with Sep. In Jan-Oct, 2016, exports of Vietnamese textile and apparel stayed $19.759 billion, up 3.13% on annual basis, and exports of yarn increased 20.12% on the year to 960.7kt. Yarn imports amounted to around 705.1kt in Jan-Oct, 2016, up 8.30% on the year.
SOURCE: The CCF Group
A toxic political war over money, jobs and globalisation killed the vast and complex trade deal that was supposed to be a signature legacy of President Obama. But the deal, between the United States and 11 Asian and Pacific nations, was never just about trade. The agreement, the Trans-Pacific Partnership, was conceived as a vital move in the increasingly tense chess match between China and the United States for economic and military influence in the fastest-growing and most strategically uncertain part of the world. The deal, which excluded China, was intended to give those 11 nations more leverage in that strained match by providing them with a viable economic alternative. And its defeat is an unalloyed triumph for China, the country that President-elect Donald J Trump castigated repeatedly over trade.
Obama, in comments just before meeting his counterparts, who laboriously negotiated the pact, made no reference to its near certain burial. “This is always a useful occasion for us to get together and examine how we can make sure that we’re creating more jobs, more opportunity and greater prosperity for all of our countries,” Obama said. “So it’s wonderful to see all of you again, and I look forward to a constructive discussion.” In remarks during a bilateral meeting on Saturday between Obama and President Xi Jinping of China, Xi said the relationship between their countries was at “a hinge moment” and added that China would work with others to ensure a successful summit meeting. “I hope the two sides will work together to focus on cooperation, manage our differences and make sure there is a smooth transition in the relationship, and that it will continue to grow going forward,” he said. Obama will find that his counterparts are already getting pulled deeper into China’s economic riptide because of the pact’s demise.
Australia said on Wednesday that it wanted to push ahead with a Chinese-led trade pact that would cover Asian nations from Japan to India but exclude the United States. Peru has opened talks with Beijing to join the agreement as well. Even American business leaders are positioning themselves for the potential opportunities in Asia. “Two-thirds of what we do there ends up in another country,” said John G Rice, General Electric’s vice chairman for international operations. “So if they’re going to lower tariffs and trade barriers within that region, we’ll find ways to do more there.” For the United States, such trade ties have geopolitical undertones. Much of Asia has for decades quietly accepted American security guarantees while also running large trade surpluses with the United States, turning them into prosperous manufacturing powerhouses. But China is now the largest trading partner for most of the region, while at the same time making territorial claims against many of its neighbours. The neighbours fear they could soon face a stark choice among money, pride and place: Accede to China’s security demands, or lose access to China’s vast market.
SOURCE :The Business Standard
The Yarn Fabric & Accessories Show (YFA) 2016 which starts from November 23-26, 2016 at NSIC Okhla, New Delhi, India aims to redefine the way fiber, yarn, fabric and apparel accessories are sourced and bring renowned suppliers from the these four segments closer to buyers and also offer buyers a one-stop place to source all their requirements. Renowned and major textile companies like Indorama Synthetics India Limited, RSWM Ltd, Bhilosa Industries Pvt. Ltd, Vardhman Textiles Limited, TT Limited, Nahar Industrial Enterprises and many others have signed up to exhibit at the biggest South Asian show of fibers, yarns, fabrics and accessories and which has received support from NITMA, TEXPROCIL, SRTEPC, PDEXCIL, AEPC, CMAI, FOHMA, UPAEA, NAEC, TAI, NITRA, NSIC & PTA Users Association.
The Indian textile industry is the world’s second biggest industry, while India also has the second biggest population with rising incomes. With rising costs, China is losing its competitiveness, due to which, India is emerging as the next best worldwide alternative to do business in the sector, due to its cost-effectiveness and also demographics. By exhibiting, the YFA show can prove to be a gateway for foreign companies to enter the attractive and lucrative Indian market and grab a slice of the ever-growing market for textiles and apparels, since the show is taking place in a region of India, which is one of the biggest Indian hubs for manufacturing textiles and apparel. The show has attracted attention of Indian textile companies in the textile value-chain, not only from just Northern India, but also Southern, Western and Eastern India, which goes to prove the popularity of the show with exhibitors. The fibers segment will see India’s biggest private sector company; Indorama Synthetics india Ltd. showcase its specialty portfolio of fibers for various applications alongside will be Roica, a spandex yarn brand which will be represented by Bishnu India, its marketing agent in India. The Yarn segment will see India’s biggest private sector company LNJ Bhilwara Group’s flagship company, RSWM Ltd., Vardhman Textiles Limited, Nahar Industrial Enterprises, Mumbai based Nimbark Ltd., Soundararaja Mills, Everflow Petrofills Ltd., T.T. Ltd., National Textile Corporation and many more.
Fabric section is represented by Kudu Knit Fab from Ludhiana and Meher International, Textrends, Rawalwasia Group from Surat, Sanchi Velvets from Mumbai alongside Winsome Textiles, Gloster Limited and many more. The garment accessories section will see action from exhibitors like Uflex Industries, Jai Roop Narrow Fabrics, PETAL, Sky Hemmay, Nilesh Ribbon Industries, Crystal Collections, Mohan Thread Mills, Madeira India, Nandganesh Ribbon, B.K.S. Exim LLP, King lace, Kiona fashion and many more. In order that exhibitors get full advantage during the course of the four-day show, the organizers have also planned several B2B meetings between exhibitors and visitors and also invited business delegations from various parts of the world. Delhi and its surrounding area, is the headquarters for several renowned Indian and global apparel brands and also home to hundreds of spinning and weaving units as well as thousands of garment manufacturing units. Top officials, merchandising and sourcing teams from these companies and brands are expected to attend to the show, which will provide exhibitor’s access to the most exclusive buyers ever seen in any other exhibition of this category. Sourcing teams from some of the iconic global brands like GAP, H&M, Nike, M&S, Levis, etc are expected to visit the show, while teams from Indian apparel brands like, Wills Lifestyle, Arvind Ltd., Madura Lifestyle, etc, also will be seen and sourcing teams from the biggest Indian garment manufacturers like Shahi Exports, Pearl Global, Orient fashions and many more too will be visiting the show. A lot of professionals from the abovementioned companies have already registered with the show as visitor. The show has already gathered a lot of enthusiasm among the industry. Vision Communications, the organizer, has initiated a 360 degrees integrated marketing and PR campaign to attract the maximum number of genuine visitors.
Founder duo of Vision Communications, Abhishek Sharma and Ankur Goel say, “Our aim is to bring producers of world class and multiple varieties of value added fibers, yarns, fabrics and also garment accessories closer to the end-users in Delhi and its surrounding areas through YFA 2016.” So, if you are a producer of fibers, yarns, fabrics or clothing accessories, YFA 2016 is the place to be, whereby, participating in this exhibition will offer a sense of satisfaction never seen before, as a large number of only genuine and serious buyers will be seen visiting the exhibition.
SOURCE: Yarns&Fibers
China and New Zealand have agreed to start formal negotiations to upgrade the pair’s free trade agreement (FTA), the Pacific nation’s Prime minister said on Monday. New Zealand Prime Minister John Key said in an emailed statement that the upgrade would ensure the existing trade agreement “takes into account the FTAs that China has negotiated with other trading partners since 2008”. The first round of negotiations would begin in the first half of 2017 and would be followed by an as yet unknown number of talks that would take place in both China and New Zealand. Both nations said they were aiming to speed up the negotiation process. Issues that would be covered include technical barriers to trade, such as customs rules, as well as e-commerce, competition policy and the environment. China entered into a free trade agreement with New Zealand, the first Western country to do so, in 2008, which has helped the Asian giant grow to become New Zealand’s largest goods export partner. The value of goods and services exported from New Zealand to China was NZ$12.2 billion (7 billion pounds) in the year to June.
SOURCE: The Euro News
Donald Trump’s position on trade could provide an opportunity for Australian agribusiness exporters, but leading industry executives are worried that the fine print attached to current free-trade deals is limiting access to markets. Reserve Bank governor Philip Lowe warned last week that Mr Trump’s trade policy was “dangerous” for Australia and probably “top of the list” of things that worried him about a Trump presidency. The much vaunted Trans-Pacific Partnership trade deal is in tatters following Mr Trump’s election. Prime Minister Malcolm Turnbull met world leaders, including Barack Obama, at the Asia Pacific Economic Co-operation leaders’ summit in Peru over the weekend to discuss how to rescue the $27 trillion TPP deal. At a closed-door meeting of the 12 member nations of the TPP, leaders are believed to have agreed to a “wait-and-see” approach from the new Trump administration on whether the deal was dead.
Leading Australian food industry executives have said it was too early to judge whether Mr Trump’s rhetoric on trade — including imposing a 45 per cent tariff on imports from China — would translate to reality. Speaking at The Australian and Visy’s Global Food Forum dinner in Melbourne, the chief executive of the $2 billion Thomas Foods International, Darren Thomas, said he was “'bullish” about the opportunities for Australian exporters in a Trump regime. “There is Donald Trump the campaigner, there is Donald Trump the president-elect and there will be Donald Trump the president of the US. Trump himself will play a moderate role, congress will be the interesting thing,” Mr Thomas said. “'With my US hat on I am very bullish about the opportunities that will be there for us in the US in the food industry. “It also sounds a warning for Australia that a competitive America — just look at the car industry — also poses a threat to us. They are both a customer and a competitor. But if Trump does make a slip-up or makes some decisions that distance the US from some of their traditional trading partners, it will be a great opportunity for Australia.”
Treasury Wines chief executive Michael Clarke said he expected Mr Trump would surround himself with “clever folk” who would “tone him down” on trade issues. Treasury also counts the US as a large export market. “It is part of his negotiation style to go in hard. But I think he will be much more reasonable in how he negotiates with different countries on trade and tariffs,” Mr Clarke said. “I think the opportunity for the food industry is tremendous, both inside and outside this country.” Costa Group chief executive Harry Debney told the forum that it would be six months before the Trump administration was settled and it sorted “the wheat from the chaff”. But he was worried about claims that free-trade agreements with select trading partners were benefiting Australian agriculture. “When we talk about trade deals, they are one thing. But it is the non-tariff trade barriers where the game is played. And I get a bit tired of people saying we have these wonderful trade deals being done, but then you get into the fine print and see all these non-tariff issues. A lot of countries will import our horticultural products in theory. But that is not the reality until you go through the protocols, and they can delay the protocols for 10 years,” he said.
OECD statistics have showed the balance of trade positions of Australian agriculture and food manufacturing with the US, New Zealand and Thailand have deteriorated since FTAs were struck with those countries. But in July the Department of Agribusiness and Water Resources claimed that the first five months of 2016 following the signing of the China-Australia free-trade agreement last year had seen a big lift in sales of key food products such as infant formula, milk powder, cherries and lobsters into China. The value of agribusiness and food exports to China is now more than $11bn. However, David Foote, the chief executive of Australian Country Choice — one of the nation’s largest, vertically integrated supply chain organisations — said free-trade agreements were “only on the surface”. The group is the largest supplier of beef products to retailing giant Coles. “All they are is tariff agreements. The meat industry has 39 technical barriers in terms of reaching across Asia and the Middle East,” he said. “At no level in government are we seeing people focusing on the impediments to trade. They are just falling back on the laurels of ‘there’s an FTA, so we have lower tariffs’. All the FTAs are doing are setting us on a level playing field.”
SOURCE: The Australian
