According to industry veterans, an extension of the GST to both fabrics and apparel is expected to lead to a very substantial expansion of the tax base. Assuming even a modest compliance in the sector, a 5% GST would generate revenues to the tune of Rs. 11,000 crores, a three-fold increase over current revenues from the sector. As we all wait anxiously for the GST Council to decide upon the rates for the textile and apparel industry on June 3, 2017, the industry has decided to voice its opinion in favour of a uniform taxation. There is virtual consensus in the industry for seamless application of the GST throughout the supply chain at a moderate uniform tax rate, without any exemptions at any point in the supply chain. Taxation of all segments of the industry at a single uniform rate has been defined as ‘critical’ for this consensus to prevail. The GST provides a historic opportunity for simplifying the tax structure and promoting fibre neutrality, innovation, technology development and productive efficiency in the sector. It can play a central role in accelerating growth in the domestic market, thereby enabling India to become a significant player in the international markets. According to industry veterans, an extension of the GST to both fabrics and apparel is expected to lead to a very substantial expansion of the tax base. Assuming even a modest compliance in the sector, a 5% GST would generate revenues to the tune of Rs. 11,000 crores, a three-fold increase over current revenues from the sector. A low uniform GST rate would also encourage voluntary compliance and get rid of all competitive distortions arising out of the current differential tax regime. Indications are that the GST Council is in general supportive of this structure. However, some sections wish to continue the preferential tax regime for cotton fabrics and for unbranded garments. Whatever the merits of such a differential tax regime, it would be bad politics and bad economics. Historical experience shows that selective application of tax to this sector at higher rates would encounter significant political resistance, be perceived as inflationary, be subject to leakages, and be detrimental to job creation and growth of the sector. Role of the Textile and Apparel Sector The textile and apparel sector plays a critical role in the Indian economy. Next to food, it is the single largest component of the consumer basket. Its share of GDP and exports are 6% and 13% respectively. The sector is the second largest employer after agriculture with direct employment of over 5 crore and indirect employment of over 6 crore people. The apparel sector in particular is the most labour intensive sector in the manufacturing industry. It is 80-fold more labour intensive than the automotive industry and 240-fold more intensive than the steel sector. The sector is also a vehicle of social transformation, particularly suitable for employment of women. The domestic industry is poised for exponential growth over the next decade . Per capita consumption is likely to grow 2-3x by 2025.The domestic demand provides an opportunity to attract new investment in manufacturing. Over 20 million new jobs can be created by the growth in domestic consumption alone. India is one of the unique countries in the world, which has large garment production base, supported by an even larger domestic market. The domestic market provides a natural hedge to the uncertainties of global demand, says Rahul Mehta, President CMAI. Challenges Faced by the Indian Textile and Apparel Sector Industry veteran argue that amongst the key challenges faced by the Indian textile and apparel sector, the tax and tariff policy in particular has created distortions that impede India’s domestic as well as export competitiveness. The sector is characterised by small and inefficient manufacturing, arising out of the exemption from the central excise for those Rs 1.5 crores of turnover. The current tax regime also differentiates by type of fibre (cotton vs man-made fibres), by price (for garments above Rs. 1,000), by type of product (fabrics vs garments) and by branding (branded vs unbranded garments). As a result, the supply chain (consisting of ginning, weaving, processing, and garment manufacturing) is fragmented, and individual production units do not have the scale required for competitiveness in domestic or export markets. The ad-hoc and fragmented application of tax leads to blocked input taxes, high compliance costs, and product categorisation disputes (example, whether saree is to be taxed as fabric or garment). It also creates opportunities for tax avoidance and gives rise to competitive distortions, which in turn creates pressures for further exemptions. Historically, the states had transferred their powers of taxation of the textile industry to the Centre through the Additional Excise Duty (AED). After the introduction of VAT, the AED was withdrawn In 2007, and the States were empowered to levy VAT on textiles. However, they have encountered significant resistance from dealers in applying the tax, and, as a result, the textile supply chain remains largely untaxed. The fabrics are exempt from both Central Excise and State VAT, and garments upto Rs. 999, are exempt from excise & above Rs. 1000/- attract and excise duty 1.2% and VAT of 5%. The aggregate revenues from this sector is a meagre Rs. 3,400 crores against a total consumption of Rs. 4.5 lakh crores. Although there are supplementary revenues from blocked taxes on production and distribution inputs, their quantum is not large relative to the total size of the sector. (The author of the article is joint managing director of Future Retail.)
Source: ETRetail
AEPC urged the Government to continue RoSL Scheme in GST era for sustained growth. The apparel exports from India recorded a momentous rise of 31.7% in April this year as compared to same month a year ago. In a statement to the media Apparel Export Promotion Council (AEPC) said “India’s apparel exports registered momentous growth of 31.7% in April 2017 compared to same period last year.” According to the data, the apparel sector has been witnessing a double-digit growth, after the introduction of disbursement of RoSL (Rebate of State Levies) scheme. During March-April, this year, the garment exporters were able to enhance their production capacity by about 30% for achieving such growth and employed around 5% more workers during this same period, the statement said. AEPC Chairman Ashok G Rajani, while attributing this growth to RoSL scheme, said, “The big jump in apparel exports is the result of recently implemented incentive called RoSL on Export of Garments, as it helped the industry to increase the production at very competitive rates for a larger share of global markets.” AEPC wants that RoSL scheme to stay even after the implementation of new regime of Goods and Services Tax (GST) and also urged the Government to continue the Scheme in GST era for sustained growth. “It is important that ROSL is continued even in GST era to ensure sustained growth momentum. We made a presentation to Finance Minister last week to continue RoSL in current form under GST regime. We have also rolled out a study of more than 1000 exporters on the key contributors to exports and we will be sharing the results shortly,” he said. “Around 80% beneficiaries of RoSL scheme are exporters with a turnover of less than Rs.10 crores (SMEs) per year,” he added. RoSL scheme is in tune with the recognised economic principle of ‘zero rating’ of export products and in recognition of the fact that at present only central levies are rebated by the way of drawback schemes. With GST being operational from July 1, any dilution in the RoSL scheme will hit the apparel export sector badly impacting the job growth. “India is at the cusp of major tax reforms and move like GST is a milestone. However, to provide seamless business environment, policymakers have to be flexible and address the collective wisdom of industry for a robust economic system, specifically when the industry provides jobs to 129 lakh workers,” Rajani said. Some additional details of the RoSL scheme:
• The scheme is meant for export of garments eligible for the All Industry Rate of Drawback. Applicable to exports with Let Export Order dated from 20 Sept. 2016 onwards.
• The rebate is available either as the general rate of rebate (schedule) or the rates of rebate applicable for rebate when the fabric (including inter-linking) has been imported duty free under Special Advance Authorisation (schedule II). The rebates are not applicable on exports made under the general Advance Authorisation Scheme with claim of duty drawback under Rule 6 of the Drawback Rules.
• In RoSL scheme, the rebate of state levies is understood to comprise state VAT/CST in inputs, including packaging, fuel, duty on electricity generation, and duties and ‘charges’ on purchase of grid power as accumulated through stages of production from yarn to finished garments. The RoSL scheme is not mandatory for an exporter.
Source: The Dollar Business Bureau
BEIJING: After years of decline, Indian exports to China rose sharply in the first four months of this year registering a 20 per cent increase to USD 5.57 billion, though the trade deficit continued to persist. Indian exports received a major boost mainly due to China increasing the steel consumption by importing big quantity of iron ore as well as gems and diamonds besides cotton materials. As per the data, the Indian exports have gone up to USD 5.57 billion, registering a 20 per cent increase. China's exports to India too amounted to USD 20.45 billion, a 14 per cent raise. Last year, the deficit aggregated to around USD 52 billion in a little over USD 70 billion total bilateral trade becoming a thorny issue between the two countries. But the spurt in Indian exports to China this year showed promise of recovery, the first since iron ore exports started declining in 2013 due domestic crackdown on mines as well as China scaling down its steel production due to global economic crisis. The trade deficit began expanding ever since the iron ore exports, the main stay of Indian exports started declining. The iron ore exports from India to China in the first four months totalled to USD 1.04 billion jumped by about 45 per cent. Also, Indian exports of iron and steel rose by USD 218 million almost 300 per cent. Indian diamond, gems and precious stones exports also contributed to the rise. In the first quarter this year, Indian exports of diamonds and gems and stones amounted to USD 558 million. India had 33.8 per cent market. Last year India's exports of diamonds, stones and gems to China grew by 28.48 per cent to touch USD 2.48 billion with India emerging as top two exporters in the burgeoning Chinese market after South Africa. Officials say there is a huge scope for Indian exports in this field as China's total volume of imports in 2016 was USD 15.816 billion. In 2015 China has imported USD 17.974 billion worth of diamond and precious stones. Indian exports of cotton and yarn in the first four months rose to USD 600 million a 40 per cent increase. Chinese exports to India also rose by 14 per cent during this period and the bilateral trade grew by six percent. Indian business and trade circles associated with the bilateral trade, however, advised caution saying that base of Indian exports continued to be small and it is to be seen whether the increase is sustainable in the long run. But at the same there was hope of major increase as China has announced liberalisation of pharmaceutical imports. India has been pressing China to open up its pharmaceutical and IT software sectors to expand the base of Indian exports. So far, no major breakthrough have been made in both the areas, despite promises by China.
Source: Economic Times
Textiles-India 2017 Fair at Mahatma Mandir, Gandhinagar, Gujarat, from June 30 to July 2 is scheduled to be organised by Ministry of Textiles. This event – a first ever major international exhibition will be a prestigious event and Prime Minister is likely to inaugurate the event. This mega exhibition will showcase India's strength in the entire gamut of textile and apparel value chain from fibre to fashion. During this event International conferences and round table seminar will also be held with participation from global and national leaders of industry, technical experts and senior policy makers from the Union and State Governments. With an exhibition area of about 125,000 square metres, over 1000+ exhibitors will showcase their products and services, 2500+ International Buyers, 15000+ Domestic Buyers will be attending the show. There will be thematic display of textile and apparel, handicrafts products, Dedicated Pavilion for Startups, Skills, R&D Sustainability, best display and design etc. all under one roof. The show will cover entire segment of Textile industry consisting display of products from exporters and stakeholders, Round table conferences, fashion show, theme pavilions of partner states Assam, Andhra Pradesh, Jharkhand with special focus state Karnataka. Ministry of Textiles organized a Road Show on "Textiles India 2017" on Thursday at 11.00am at Hotel Deep Palace , Lucknow.
Source: Team MP
MANGALURU: In its next meeting on June 3, the goods and services tax (GST) Council will fix rates for certain items that could not be decided upon at its meeting in Srinagar, Union minister of state for finance Arjun Ram Meghwalsaid at an ASSOCHAM eventin New Delhi. "We have also received representations from some sectors including textile for which the rates had been fixed, we will discuss it in the next GST Councilmeeting," said Mr Meghwal while inaugurating an ASSOCHAM-CEAMA GST Summit for traders. "In textile sector, garment manufacturers and cloth manufacturers want different rates, we will discuss these issues on June 3," he said. He also said that FinMin has advised the trade and industry bodies along with its three technical institutes viz., Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI) and Institute of Cost Accountants of India (ICAI) to organise awareness campaigns as GST is likely to be rolled out from July 1. He said that so far whatever decisions have been taken by the GST Council are not based on majority but on the basis of consensus among all state finance ministers. The Union minister said that GST will help bring down logistics cost and that would perhaps be the biggest benefit of this game-changing reform. "Recently, an international conference on logistics charges was organised by Union minister Nitin Gadkari whereby we observed that logistics charges in developed countries like Canada, US, France, Germany and others is a meagre 8% whereas in India it is about 13.5%," said Meghwal. "We include transportation and warehouse charges in logistics charges, GST will bring down logistics costs massively and bring us at par with the developed nations," he added. "We live in WTO-era, when there is such a difference in costs for the same product it does not provide India a level playing field as such implementation of GST is a must," further said Meghwal. Highlighting certain other possible benefits of GST, the Union minister said that GST would undoubtedly lead to ease of doing business, besides it will also simplify filling returns, widen tax net, reduce human interface and curb corruption. "For years together we have lived as a society which believed in tax evasion but now we have to be prepared for this slight change and help India rise up to paying taxes," he said. On the low GDP (gross domestic product) numbers in the quarter to March, to 6.1%, Meghwal termed it a 'temporary phase,' and said that there is no need to fear as the country's economy is growing rapidly.
Source: Jaideep Shenoy
The polyester prices have been increased by Rs. 2000 per tonne with effect from today. The price rise is on account of increase in melt cost by Rs. 2340 per tonne informed market sources. Sources informed that for the month of June PTA prices have gone by Rs. 900 per tonne to Rs. 52 000 while MEG prices are up by Rs. 4600 per tonne to Rs. 56 700 per tonne. The Chips prices have been increased by Rs. 2500 per tonne to Rs. 65 500 per tonne. On account of the increased in above polyester intermediate prices the PSF prices have been increased Rs. 2000 for June deliveries. Meanwhile the POY and FDY prices have been increased by Rs. 2000 to Rs. 3000 per tonne for June 2017 for different deniers and lustres informed market sources. It may be noted here that Reliance Industries Limited has not increased POY and FDY prices.
Source: Tecoya Trend
MUMBAI - The All India Recycled Fibre & Yarn Manufacturers Association which represents 35 recycled polyester staple fibre (PSF) producers in India requested the Union Finance Ministry to maintain the current excise duty cost advantage of recycled PSF vis-à-vis virgin PSF while finalising the GST rates. Because of the concessional rate of duty given by the Indian government to producers of recycled PSF the industry has continued to grow. The association has requested the finance ministry to maintain the same uniformity in the GST regime so that the excellent work of recycling PET bottles continues which otherwise would have harmed the environment and also ensures the survival of the industry According to the association if the existing differential is not maintained operations of the whole PET recycling industry will become unviable. As if the cost benefit is lost PSF buyers would prefer to buy virgin PSF which would lead to closure of PET bottle recycling companies which apart from destroying jobs will also harm the environment. The PET bottle recycling value chain provides direct and indirect employment to around 500 000 people which includes rag pickers scrap dealers and employees working in the industry. The industry has grown in the last ten years and the current production of recycled PSF is around 660 000 metric tons per annum turnover around Rs 5 000 crore and currently recycles around 700 000 metric tons of used PET bottles. These PET bottle recyclers are directly helping the ‘Swach Bharat’ mission initiated by honourable Prime minister Mr. Narendra Modi by recycling billions of PET bottles per year which otherwise would have been strewn all around or ended up in landfills posing grave risks to the environment as it takes 500 years for a PET bottle to decompose. If the PET recycling industry cripples due to an unfavourable GST there will be PET bottles littered across whole of India as rag pickers will not be inclined to picking them nor will scrap dealers be inclined to doing business in the same. “First we were hit by the ban on import of PET bottle scrap which led to a steep increase in prices of locally available PET bottle scrap and now if GST on recycled PSF is at parity with virgin PSF this will make the survival of the PET bottle recycling industry very difficult” BP Sultania president of the All India Recycled Fibre & Yarn Manufacturers Association said. “Under the circumstances we urge Finance Minister Shri Arun Jaitley to consider our demand of continuing the tax cost advantage when considering GST on recycled PSF. We also seek intervention of Textiles Minster Mrs. Smriti Irani to convince the finance ministry to accept our valid demands and thereby safeguard and promote the PET bottle recycling industry” he added.
Source: Tecoya Trend
Jaitley says unfair to blame DeMo for GDP slump, and that Modi Sarkar has restored economy's credibility while GST will boost it Finance minister Arun Jaitley said an annual growth rate of 7-8% was “fairly reasonable“ in the current global situation, countering criticism that the note ban had taken a toll on the economy after a slowdown in the fourth quarter. He also said there will be swift action on the resolution of banks' bad loans. “There are several factors which can contribute to GDP in a particular quarter. There was some slowdown visible given the global and domestic situation even prior to demonetisation in the last year,“ the minister said at a press confe rence marking the government's three years on Thursday. GDP growth slowed to 7.1% in the year to March and to 6.1% in the fourth quarter, the government said on Wednesday. Full-year growth was in line with the official estima te but down from the revised growth of 8% in FY16. Jaitley said demo netisation, which was announced in November last year, had established a new normal. “It was a step to end the shadow or cash economy... There is greater movement towards digitisation, taxpayer base has increased,“ he said. “Revenues in 2016-17 re-grew by 18% despite all challenges to the economy ... The message has gone loud and clear that it's no longer safe to deal in cash.“ The finance minister said the government inherited a weak economy when it came to power three years ago. Credibility had been restored and India is now back on the global radar, he said. “Three things have had their impact. First is decisiveness, second is changes in framework to end corruption and discretion, third is direction of decision-making became clear,“ he said, adding that the government adopted policies to boost the economy . “FDI (foreign direct investment) reforms had their impact. We became largest recipient of foreign investment in the world... I am sure that as the impact of all these policies holds out, this certainly would be beneficial,“ Jaitley said.The goods and services tax (GST), expected to be in place July 1, will help boost the economy , he said. “I see no reason why there would be any adverse impact of GST. GST by itself should add to growth,“ he said, responding to a query on whether the switchover would dampen growth. Chief economic adviser Arvind Subramanian said GST will lower tax incidence and would be like a tax cut, boosting consumer demand. Asked if there was any move to consider postponing the GST rollout in the wake of West Bengal finance minister Amit Mitra's reservations about preparedness, Jaitley said there had always been broad agreement on the GST Council's steps. “Decisions in the council are taken by consensus -so far we have maintained that,“ he said. “At the Srinagar meeting, ministers from almost every state who spoke to me were absolutely clear for July 1. “On bad loans, the minister said an ordinance had been promulgated to further strengthen the Reserve Bank of India's hands and the resolution of nonperforming assets (NPAs) should now see greater momentum. “The resolution of banking NPAs is still work in progress,“ he said. “It's a major chal lenge because it also impacts the capacity of the banking system to support growth.“ He also drew a distinction between writing off debt and loan waivers. Jaitley said one of the key challenges before the government was to increase private sector investment in line with FDI and public investment, both of which have risen significantly.
Source: Economic Times
BOND GOING STRONG Prime Minister Narendra Modi and Russian President Vladimir Putin give final touches to the Kundankulam nuclear deal and highlight key areas ranging from defence to counter-terrorism where the two sides look to work together New Delhi, Moscow to collaborate in areas of defence manufacturing, connectivity initiatives Strategic partners India and Russia on Thursday unveiled a grand vision for bilateral partnership in the 21st century that traverses cooperation in all possible areas, including defence, counter-terror, intellig ence sharing, connectivity initiatives, trade, state-of the art technological innovations, railways, fossil fuel and nuclear energy and ventures in Arctic and Russian Far-East. A vision statement released after the annual summit in St Petersburg between president Valdimir Putin and prime minister Narendra Modi elaborated on a slew of areas of economic partnership from space to ocean, Delhi and Moscow have decided to work towards a qualitatively higher level of military-to-military cooperation. Both sides decided to upgrade and intensify this cooperation, through joint manufacture, coproduction and co-development of military hardware and military spares, with increasing reliance on the adoption and sharing of future technologies. The two sides signed five agreements including nuclear power, railways, jewellery, culture and IPR. “We appreciate the compelling logic of regional connectivity for peace, progress and prosperity . We believe that connectivity must be strengthened It should be based on dialogue and consent of all parties concerned with due respect to sovereignty .T h e Ru s s i a n a n d Indian sides being guided by the principles of transparency , sustainability and responsibility, reiterate their commitment to build effective infrastructure for the International North South Transport Corridor and implementation of the Green Corridor,“ the vision statement said. The PM thanked Putin for his stand on cross-border terror. Russia, hoping to strengthen strategic partnership, announced its unequivocal support to India's NSG and Wassenaar Arrangement membership. This is first time that India's application at Wassenaar Arrangement was publicly acknowledged. Putin also announced that India will enter SCO next week fulfilling a long cherished dream of Delhi that will enhance its presence in the Central Asian region. “In a week, we will formalise India's full-fledged accession to the SCO. This process began in 2015 in Russia's Ufa. Russia has always backed this process and encouraged it.“ ET was the first to report that India and Russia will announce a vision statement at St Petersburg at the annual summit outlining vision for cooperation in the coming decades. The vision statement which focussed on pushing economic envelope of the partnership decided on an ambitious agenda of joint cooperation across sectors. This includes energy corridor, deep sea technology, agriculture, metallurgy, shipbuilding thermal power stations and inland navigation in India, a credit rating agency and IndiaEurasian Economic Union FTA.
Source: Economic Times
The goods and services tax is an enormous opportunity to transform business. The GST law and the GST rates together make sure that firms would pay fewer taxes, face less tax on tax incidences, pay same taxes across the country and almost forget about State boundaries. But to benefit fully, firms will have to grasp the import of the new business issues introduced under the GST. The crucial eight There are eight issues that are crucial for business. 1. Working capital blockage due to the taxability of stock transfers between branches: GST makes any stock transfers to the branches of the same firm located in different States taxable. This would result in working capital blockage. Why? While GST will have to be paid in the month of stock transfer, input tax credit can only be claimed when the stock is sold by the receiving branch. This will affect most firms. Those in FMCG and pharmaceuticals will take a bigger beating. Firms dealing with seasonal products will also be hit hard because even though production takes place throughout the year, sales are limited to just a few months. 2. The recipient of the goods and not the supplier would be responsible for payment of tax and filing of returns: The recipient would be allowed to claim input tax credit only when the previous supplier actually files returns and pays the full tax on supplies. If the supplier/recipient does not pay tax, the tax payable on account of such mismatch will be added to the output tax liability of the recipient. For a sector like retail where a large number of small firms supply goods, it would be difficult to ensure that everyone has paid tax on the invoices raised. 3. Buying of goods from firms not registered with GST would be expensive: A GST-registered firm buying goods from unregistered firms will not get input tax credit. If a firm registered under the composition schemes buys goods from unregistered firms, he (buyer) will be required to pay tax under reverse charge. Such provisions will put firms otherwise legally exempted from registration (on account of low turnover) at a disadvantageous position making their supplies expensive. As the firms would prefer to source goods from GST-registered vendors, many unorganised sector firms may register under GST even though they would be exempt on the turnover criteria. 4. No refund of taxes on the use of taxable supplies as inputs for producing GST exempt produce: GST paid on the inputs would add to the price of the GST exempt products as the input tax paid would not be refunded. Major products affected would be agriculture products. For example, taxes paid on pesticides, insecticides, capital goods for the growing of wheat would not be refunded. Thus, the post-GST situation would be the same as in the current system. Refunds would, however, be available on the use of exempted supplies as inputs. 5. A large number of returns: GST mandates electronic filing of returns. A regular dealer operating in one State will have to file three monthly returns and one annual return. A firm needs to take registration for each business vertical in a State. Let us say a firm operates in 10 States and in each State it took four registrations, one for each of the business verticals. The total number of returns it would be required to file annually would be 1,480. A firm will need to upgrade IT and accounting systems to meet the needs of GST-compliance requirements and hire appropriately trained manpower. Since GSTN will have precise details of each transaction, its software can be tweaked to work effectively with just a single registration without sacrificing any functionality of the multiple registration or interests of the State governments. This would greatly reduce the compliance burden. Who knows, this may be the next reform. 6. Cumbersome procedure for payments received in advance: Consider the coming launch of iPhone-8 after six months. Apple has allowed consumers to book the phone by paying advance money now. In the present system, the dealer pays tax at the time of actual supply of the phone. But under GST, the dealer would be required to pay tax as soon as he receives an advance and not at the time of actual supply of goods which will happen subsequently. Input tax xredit would be available only when the actual sale takes place. Dealers now will have to declare the details of each advance in the electronic GSTR-1 form (monthly return form for suppliers). If a dealer has booked 2,000 phones, details of each will have to be entered in GSTR-1 and tax paid on the money received. All details have to be reconciled when the actual sale takes place and the invoice is raised. Such a procedure will increase compliance cost. 7. Existing tax incentive schemes would lose special treatment: States such as Himachal Pradesh and Uttarakhand offering area-based exemptions would be affected as such exemptions will no longer be available. For continuance of exemptions, they would require reimbursement through the budgetary route. This provision along with the concept of tax collected on destination principle will influence the location of industries. Producer States will have a lower financial incentive to offer such concessions, as GST will only be credited to the State where the supplies are consumed. So States with many metros and large cities will collect more tax and will be in a position to invest more in infrastructure and thereby attract businesses to locate production centres in their States. Underdeveloped States with large consuming populations will also collect more tax. 8. Treatment of existing tax credits such as CENVAT, VAT: The carry forward would be allowed as input tax credit only when the date of invoices or any other prescribed duty/tax-paying documents is within 12 months from the date of transitioning to GST.
There are also other conditions such as the closing stock must be used for taxable supplies and benefit of such credit is passed on, by way of reduced prices, to the recipient. A careful factoring of these issues in the business strategy would allow firms to realise the full potential unleashed by GST.
Source: Business Line
The fourth quarter GDP figure for 2016-17, at 6.1 per cent, has ‘demonetisation impact’ written all over it; this comes as a marked contrast to the Q3 GDP figures which, by estimating a growth of 7 per cent, came under scrutiny for suggesting that the economy had been unaffected by the huge drop in currency in circulation. Demonetisation appears to have impacted the organised sector, which accounts for three-fifths of the economic output, with a lag. The CSO’s quarterly estimates are based on organised sector data, while informal sector output is arrived at on the basis of extrapolations. In all probability then, the output of the informal sector in the third quarter was overestimated. Economic Survey 2016-17 alludes to this aspect while observing (in contrast to assertions of some finance ministry officials) that the costs of demonetisation have been “real and significant”. Therefore, in Q4, the economy was buoyed basically by government expenditure — not so much agriculture — without which GDP growth was perhaps in the region of 4 per cent. Construction (which actually contracted), finance, insurance and real estate, trade and hotels, electricity, and manufacturing took a hit. A GDP growth rate of 7.1 per cent in 2016-17 is well below 7.9 per cent growth in 2015-16 — this slide seems out of place in a good monsoon year, with agriculture growing 4.9 per cent. Surprisingly, manufacturing shows a growth of 7.9 per cent in 2016-17 — higher than the new IIP series’ estimate of 4.9 per cent. It cannot be reconciled with low bank credit growth either. This once again raises doubts on the accuracy of GDP estimates, which should be sorted out. The economy is expected to grow 7.5 per cent in 2017-18. Achieving this would require not just spatially and temporally well-distributed rain, but also a strong performance by the informal sector, which accounts for 40 per cent of the GDP and three-quarters of the workforce. It remains to be seen how the pressure of increased compliance under GST, payment of wages by cheque rather than cash and the ₹2-lakh limit on cash transactions will impact the informal sector. Uncertainties in GST, such as the lack of clarity on circumstances under which input credit can be claimed, could hold back investment in areas where the tax rate on output has moved to a higher bracket. Growth is under stress as a result of declining investment rates — from 30.4 per cent of GDP in 2014-15 to 27.1 per cent in 2016-17. With retail inflation at 3 per cent and few signs of a pick-up in investment, public spending must show the way in 2017-18. The rise in the proportion of government spending from 10.3 per cent of the GDP in 2015-16 to 11.7 per cent in 2016-17 would have to be sustained this year. The Monetary Policy Committee could consider a rate cut when it meets on June 6-7.
Source: Business Line
To make overseas exports easier for Indian companies, especially SMEs, Denmark-based AP Moller - Maersk, one of the largest container shipping companies globally, has set up a new business vertical, Maersk Trade Finance. In a nutshell, Maersk Trade Finance is a digital platform with pre-shipment and post shipment credit facilities. It enables exporters – manufacturers or traders – to not only get the cargo shipping services online but also apply for funds that can be used either to pay for the shipment or to invest in new orders. Pilot countries India is a pilot country for such services, followed by Singapore, the Netherlands, Spain, the US and the UAE. The funds are provided to Indian exporters in foreign currency as, being a foreign entity in India, Maersk cannot lend in rupees. It cannot finance imports either. In future, the company may consider applying for a banking licence, provided there are no alternate ways to expand the trade finance services in India.
Lending target
“Right now we are writing off loans from our own balance sheet. We’ve written off about $60 million for India and we intend to give about $200 million in the next 12-18 months,” Vipul Sardana, CEO, Maersk Trade Finance, a former banker who joined Maersk in 2012, told BusinessLine. In India, Maersk has contracted 95 companies so far, 90 per cent of which are SMEs. The funding is provided in foreign currency, which is linked to LIBOR. According to Maersk, the rate range from LIBOR+2.5% to 5.5%, which is determined based on the financial health of the company and its history, if exists, with Maersk. “Typically, SMEs do not get foreign currency funding, which we are able to provide, hence reducing their overall cost,” Sardana added.
Market share
For Maersk, which has around 7,000 customers in India and, according to the company, enjoys 18 per cent market share here, the new trade finance vertical could not only generate additional revenue but help growing market share also, especially in the SME sector. Cost, time and ease of access to funding are the features that Maersk is betting on. Unlike banks that generally provide trade finance, Maersk does not look at the borrower’s balance sheet while considering the loan. “The goods shipped is the only thing we mandate, which serves as collateral. We do not ask for any other collateral or security, helping the SMEs to avoid the collateral trap,” Sardana said. Data analysis The advantage of Maersk, according to Sardana, is its ability to get information about the potential borrower and their buyers from the company’s database. Being in the shipping industry for more than 100 years with 130 offices worldwide, Maersk owns large data that can be used for analysing the clients’ history and possible risks. “The data of 100 years is something that no bank of financial institution has,” Sardana said. The shortage of trade finance across businesses is cited as one of the main obstacles in the global commerce. Risks related to import-export operations compel lenders to raise the barriers for borrowers, making access to funds difficult for SMEs.
Source: Business Line
Finance Minister Arun Jaitley on Thursday said it will be “erroneous” to attribute the sharp slowdown in economic growth in the fourth quarter of 2016-17 solely to demonetisation since several factors, including the global situation, pulled down the GDP growth to 6.1 per cent in the January-March quarter. Resolving non-performing assets (NPAs) in the banking sector and pushing up private consumption were the two major challenges the government faces, Jaitley told a press conference to mark three years of the Modi government. He expressed hope that the proposed Goods and Services Tax (GST) will spur growth in the economy. Asked if it was now clear that demonetisation led to lower growth, Jaitley said: “What you think is very clear is not very clear. So let us not put the question with an erroneous premise. There are several factors which can contribute to GDP in a particular quarter. There was some slowdown visible even in the global and the domestic situation prior to demonetisation last year.” “There was impact of global factors. There could be some impact on one quarter or two quarters of one particular factor (demonetisation) which you mentioned. There is also the impact of… if you look at the growth of some sectors, the 9-10 per cent growth that was normally in services, especially in the financial sector, has come down. The ability of banks itself was in question,” he said. Data released by Central Statistics Office (CSO) on Wednesday showed that financial, real estate and professional services grew at 2.2 per cent in January-March 2016-17, down from 9.0 per cent in the same quarter the previous year. For the full year, growth for these services reduced to 5.7 per cent from 10.8 per cent a year ago. “So these are cumulative factors which came into play. But I do believe in the current global situation, a seven-eight per cent growth, which is at the moment the Indian normal, is a fairly reasonable, by global standards very good, (and) by our standards a very reasonable level of growth,” he said. The GST will not have any adverse impact on economic expansion, rather it will push up growth, he added. Maintaining that high level of NPAs was a key challenge for the government, Jaitley said its resolution is work in progress and some action will be taken within the next few days. President Pranab Mukherjee last month promulgated an ordinance amending the Banking Regulation Act, 1949 to empower the Reserve Bank of India to resolve the thorny issue of NPAs or bad loans. “RBI was taking measures under the existing mechanism. We have now taken other steps and there would be visible action taken under the new mechanism in the next few days,” Jaitley said. On the privatisation of debt-ridden national carrier Air India, Jaitley said Niti Aayog has already given its recommendations to the Civil Aviation Ministry to explore various options. “It is for the Civil Aviation Ministry to explore various options,” he said. While noting that boosting private investment in the economy is a challenge, the government’s strategic partnership policy in the defence sector will help attract Foreign Direct Investment, said Jaitley, who is also the Union Minister for Defence and Corporate Affairs. He said unless the opening of the FDI rules is accompanied by some reasonable possibility of getting orders, an investor is not going to set up an establishment in the country. Entry of foreign investors “is linked to the kind of orders they will get and the only entity which can place the orders is the Government of India”. “There are no two procurers, there is only one and that is why the strategic partner policy now has been brought in as it will supplement the FDI policy,” he said. Whether the strategic partner comes through the FDI route or the investor comes with just a technology tie-up, they would be free to do so, he added. Recounting the series of reform measures taken in the last three years, Jaitley said the government has “restored the credibility of the economy” with a decisive and corruption-free regime which has the ability to take decisions in a transparent and market-linked manner.
Source: Indian Express
Last month, the GST Council arrived at a consensus on the fitment of items in GST rate slabs and announced them for most goods and services in line with the government’s aim to roll out the goods and services tax regime on July 1. Since the announcement of rates, the benchmark Sensex at the BSE has jumped 2.3 per cent and closed at 31,137.6 points on Thursday, reflecting an overall optimism around the announcement. However, different sectors have reacted differently to the GST Council’s decision. While there is a general view that most of the GST rates have a neutral impact on the indirect tax burden for the industry, a look at the performance of various sectoral indices shows variance in performance over the last 10 trading sessions since the announcement of rates. While the FMCG and auto indices at the BSE rose the most, by 8.2 per cent and 3.9 per cent, respectively, in the past 10 trading sessions between May 19 and June 1, the healthcare and the realty indices have been the worst performers as they fell 7.9 per cent and 5.4 per cent, respectively.While GST is expected to have a positive impact on the economy in the medium to long term, as it aims to widen the tax net, it might lead to some disruptions in the near term. A report prepared by ICRA states that the implementation of GST would have three major implications for the corporate sector — expand availability on input tax credit, higher tax compliance with business moving to organised sector and reducing bottlenecks and improved efficiencies in supply chain and logistics. “Closer to the implementation date however we would expect some disruptions, as the distribution chain gets rid of channel inventory to avoid potential inconvenience after transition. The working capital cycle of the industry is also expected to expand marginally, after the GST implementation,” says the ICRA report. On May 18 and 19, the GST Council announced that 81 per cent of the 1,211 goods would be taxed at up to 18 per cent. In the case of services, while healthcare and education have been kept in the exempt category, transportation would be taxed at five per cent and items such as five-star hotel accommodation and entertainment will be taxed at 28 per cent. A report prepared by Morgan Stanley research says that while GST is likely to have a minimal direct impact on the Consumer Price Index (CPI)-based inflation, the rates will have varying impact on various sectors. “The impact of GST rates would likely be positive for consumer staples and media, and negative for airlines and oil & gas. For automobiles, hotels, and telecommunications, the impact is likely to be neutral to marginally negative; for cement and steel, it should be marginally positive,” says the Morgan Stanley report. Most of the tax rates for the items in the CPI basket are likely to be taxed at a lower rate under GST as compared to the existing tax regime. While implementation holds the key, ICRA, however, points out: “Assuming that GST does have the intended effect of increasing tax compliance, the tax burden would increase, too, and could lead companies to pass the costs of increased tax compliance on to the consumer, though at a later stage. The final impact will depend on the trends in aggregate demand and output gap after the implementation of GST.” Key sectoral impacts Auto segment will see different cars and bikes getting impacted differently. According to an analysis by ICRA, with the passenger vehicle segment will see reduction in overall taxation under GST as it will subsume infrastructure-cess currently levied on the segment, but the extent of reduction in overall taxes will vary across segments and bigger cars and SUVs will benefit. On the other hand, the two-wheeler segment will attract a GST base rate of 28 per cent, compared with the existing tax rate of 30 per cent. Motorcycles above the 350 cc segment will attract an additional cess of three per cent, leading to an overall tax rate of 31 per cent. The growth in fast-moving consumer goods (FMCG) stock over the past 10 trading sessions is in line with the overall decline in the tax rate for consumer staples. The GST Council decided to tax toilet soaps, hair oil, shampoo, toothpaste, etc, at 18 per cent, against the existing rate between 22 and 24 per cent. The pharmaceutical sector will see a marginal rise in their rates and the companies have seen a decline in their share prices. According to Finance Minister Arun Jaitley, the finished medicines now come under the slab of 12 per cent rate in GST as against an existing combined excise duty and value-added tax (VAT) of nine per cent. Moreover, the bulk drugs, which are used as ingredients to manufacture finished medicines, have been kept at 18 per cent in GST rate slab. Till date, this used to be around 12.5 per cent. The pharma companies are worried about how much time it would take for refunds to come as per the new inverted duty structure of GST. While a lot will depend on the implementation of GST and expansion in availability of input tax credit, the Morgan Stanley report says that its implementation will give rise to a simplified tax structure, help to integrate state economies, increase compliance and tax revenue collections, and improve the competitiveness of domestic production. “With the elimination of multiple tax rates and cascading impact of tax, GST is expected to improve overall efficiency in the allocation of key factors of production — land, labour, and capital. The overall impact of better allocation of resources, plus improving efficiency of domestic production and exports, is likely to improve overall growth,” says the report prepared by Ridham Desai, equity strategist, Morgan Stanley. While estimates from the National Council of Applied Economic Research show that gross domestic product (GDP) could increase by 0.9 to 1.7 per cent, a report by the CEA-led panel says that the boost to growth is expected to come from making investments more attractive and estimates that GDP growth could see a minimum boost of 0.5 percentage points.
Source: Indian Express
New Delhi: Manufacturing sector growth in the country moderated to a three-month low in May amid softer rise in new orders and production, a monthly survey showed on Thursday. Meanwhile, muted inflationary pressure may prompt the Reserve Bank to adopt an accommodative policy stance, the survey said. The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- declined from 52.5 in April to a three-month low of 51.6 in May. The Indian manufacturing sector, however, stayed in expansion mode for the fifth consecutive month in May. A reading above 50 indicates expansion, while any score below the mark means contraction. "The upturn in the Indian manufacturing sector took a step back in May, with softer demand causing slower expansions in output and the amount of new work received by firms," said Pollyanna De Lima, Economist at IHS Markit and author of the report, adding that there was also a renewed decline in new export orders. During May, there was "softer expansions" in both new orders and production. Incoming new work rose at the weakest pace since February, with slowdowns evident in the consumer and intermediate goods categories, while capital goods producers recorded a contraction in order books. On price rise, the survey said that the rate of inflation softened to the slowest in eight months. "With inflation under control and manufacturing growth below par, we may see the RBI changing neutral monetary policy stance to accommodative in coming months in order to support the economy," Lima said. The Reserve Bank in its monetary policy review meet on April 6 kept the repurchase or repo rate at which it lends to banks -- unchanged at 6.25 percent, but increased reverse repo rate to 6 percent from 5.75 percent. With regards to future performance, goods producers were the most optimistic in last next six months, with firms expecting new product launches, machinery acquisitions and marketing campaigns to support output growth in the year ahead. "Echoing a more positive tone, the PMI dataset highlighted a stronger increase in businesses' input purchasing, while optimism reached a six-month peak," Lima said.
Source: PTI
NEW DELHI: NITI Aayog has decided to merge its 15-year vision document with the 7-year medium-term strategy paper to come out with a comprehensive roadmap to expedite economic growth. NITI Aayog vice-chairman Arvind Panagariya told PTI in an interview that the government think-tank has received comments from about 10 states on the draft 3-year action agenda and will finalise it within two weeks. It had earlier planned to come out with three documents 3 year action agenda, 7-year medium-term strategy paper and 15-year vision document. "We are thinking of having a brief chapter regarding the vision in the 7-year strategy paper which will be a bulky document outlining the action plan for expediting growth. "The vision document will be aspirational, about the kind of country we want to build...the kind of society we want to be in. It will be a kind of vision for the future," he said. The Aayog, he added, aims to finalise the 7-year strategy paper in the next three months. The draft 3-year action agenda has been circulated among Chief Ministers at the third NITI Aayog's third Governing Council meeting held on April 23. Once the agenda is finalised by the Aayog after obtaining comments of Chief Ministers, it would be referred to the Prime Minister Narendra Modi, who is the chairman of the Aayog. The agenda paper had suggested a host of reforms in taxation, agriculture and energy sectors with the objective of accelerating growth and increasing employment opportunities. The draft agenda also had underlined the need for recalibrating the role of the government by limiting its involvement in activities that do not serve a public purpose. Among other things, the Aayog had also suggested the closure of loss-making CPSEs and strategic disinvestment in 20 state-owned companies. The three-year agenda (2017-18 to 2019-20) called for steps to check tax evasion, expand tax base and simplify taxation system through reforms. It had suggested the government could consider consolidating existing custom duty rates to a unified rate. The other suggestions include creation of an institutional mechanism to promote competition through comprehensive review and reform of government regulations across all sectors, besides strengthening of the public procurement system.
Source: PTI
Successive failure of cotton crop, waterlogging and high taxation acted as deterrent for the Punjab-based ginning industry. As a result, in the past 10 years more than 85% of the units have been closed. According to data, there were around 422 units in 2007, each having a daily processing capacity of 150 bales. This number has now been reduced to 52 units in 2017 having processing capacity of 125 bales per day. Ginning industry is a seasonal industry and is in production for 4-5 months. “The industry is in a shambles and it needs government intervention. The cotton belt comprising Malout, Bathinda, Gidderbaha, Fazilka, Kotakpura, Jaito and Muktsar used to be a hub of cotton ginning industry. But now the number of units has been reduced to 52 from 422 in 2007, which suggests that the industry is on a ventilator and needs immediate support,” said Bhagwan Bansal, president, Punjab Cotton Ginners Association. “Ginning industry in North India, especially in Punjab, is not doing well as the cotton crop in both Punjab and Haryana had a successive failure at least for five times in the past 10 years. At the same time, prices are also not favourable for the business because of high taxes in Punjab as compared to neighbouring Haryana and Rajasthan. Punjab charges 2% market fee on cotton which used to be 4% till 2012. Compared to Punjab, Haryana charges 1.6% market fee while Rajasthan charges 0.80% for new units and 1.60% for the existing units,” he added. According to ginners, another area of concern is waterlogging in most of the cotton-producing belt that led to fall in the area. According to the ginners, there is a vast scope for the ginning industry in Punjab as there is a demand of 65 lakh bales by the textile industry whereas the annual production by the ginning industry in the state is only 9.5 lakh bales. The rest of the raw material is imported from outside the state. Naresh Bansal, another industrialist, said to revive the industry, the government must lower the market fee and bring it on a par with Rajasthan i.e. 0.80%. “Also, since it is a seasonal industry and we have to pay minimum charges for electricity which is around Rs 1 lakh per month. Over the years because of shortage of raw material, our working has been reduced to four months from five months earlier. So, the government must waive the electricity charges to give fillip to the industry.”
Source: Tribune News Service
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1105.62 |
RMB/USD |
-0.66% |
6/2/2017 |
|
VSF |
2167.31 |
RMB/USD |
0% |
6/2/2017 |
|
ASF |
2313.75 |
RMB/USD |
0% |
6/2/2017 |
|
Polyester POY |
1108.55 |
RMB/USD |
-1.05% |
6/2/2017 |
|
Nylon FDY |
2511.45 |
RMB/USD |
0.88% |
6/2/2017 |
|
40D Spandex |
5242.55 |
RMB/USD |
-0.56% |
6/2/2017 |
|
Polyester DTY |
5799.02 |
RMB/USD |
0% |
6/2/2017 |
|
Nylon POY |
1347.25 |
RMB/USD |
0% |
6/2/2017 |
|
Acrylic Top 3D |
2350.36 |
RMB/USD |
0.31% |
6/2/2017 |
|
Polyester FDY |
2489.48 |
RMB/USD |
0% |
6/2/2017 |
|
Nylon DTY |
1339.93 |
RMB/USD |
0% |
6/2/2017 |
|
Viscose Long Filament |
2731.11 |
RMB/USD |
0.27% |
6/2/2017 |
|
30S Spun Rayon Yarn |
2826.29 |
RMB/USD |
0% |
6/2/2017 |
|
32S Polyester Yarn |
1698.70 |
RMB/USD |
0% |
6/2/2017 |
|
45S T/C Yarn |
2709.14 |
RMB/USD |
0% |
6/2/2017 |
|
40S Rayon Yarn |
2987.38 |
RMB/USD |
0% |
6/2/2017 |
|
T/R Yarn 65/35 32S |
2313.75 |
RMB/USD |
0% |
6/2/2017 |
|
45S Polyester Yarn |
1845.14 |
RMB/USD |
0% |
6/2/2017 |
|
T/C Yarn 65/35 32S |
2269.82 |
RMB/USD |
0% |
6/2/2017 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
6/2/2017 |
|
32S Twill Fabric |
0.85 |
USD/Meter |
0% |
6/2/2017 |
|
40S Combed Poplin |
1.18 |
USD/Meter |
0% |
6/2/2017 |
|
30S Rayon Fabric |
0.66 |
USD/Meter |
0% |
6/2/2017 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
6/2/2017 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14644 USD dtd. 02/06/2017) The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
India and Russia will expand their bilateral economic cooperation to third countries with joint development projects in various sectors and also set up aviation manufacturing ventures for local and global markets. In a joint declaration, Prime Minister Narendra Modi and Russian President Vladimir Putin also said the two countries will cooperate for growth of diamond industry while countering entry of fake stones in this market. Besides, joint projects will be undertaken in high-speed railways, inland waterways, ports and agriculture sectors. “We are interested in launching joint projects on exploration and exploitation of hydrocarbons in the Arctic shelf of the Russian Federation. “We will develop joint strategies to harness the potential for mutually beneficial cooperation in the field of deep sea exploration and development of hydrocarbon resources, polymetallic nodules and other marine resources…” the declaration said. The two leaders welcomed cooperation among energy companies from the two countries for modernising of existing power stations and building of new ones in India. They also called for developing joint projects in the area of clean energy. The major economic objectives include expanding trade and investment and diversification of trade in goods and services, including in banking and financial matters, the declaration said, while calling for settlement of India-Russian trade in national currencies to reduce dependence of bilateral trade on other currencies. “we will extend our bilateral technical, economic and scientific cooperation to third countries by undertaking joint development projects in mutually agreed sectors,” it said. Stressing on the importance of developing economic cooperation at regional level, the two leaders said they will facilitate an early commencement of negotiations on a free trade agreement between the Eurasian Economic Union and India. The Eurasian Economic Union includes Belarus, Kazakhstan, Russia, Armenia and Kyrgyzstan. India and Russia also agreed to broaden their cooperation in high-technology products, aviation, agriculture, IT, pharma, robotics and artificial intelligence, among others. “We will work together to further develop the potential for cooperation in the diamond industry…We will also intensify our joint efforts to counter undisclosed synthetic stones entering diamond market and to support the development of generic marketing programmes for diamonds,” the two leaders said. India and Russia will also work together to improve market access for agriculture and food commodities, while joint projects would be explored for effective use of natural resources. Expecting India to become the world’s third largest aviation market by 2020, the two leaders said there is an opportunity for strengthening cooperation in joint production and setting up of joint ventures in India in the field of aviation manufacturing to serve the local demand and for exports to third countries. This assumes significance in the wake of India promoting regional air connectivity in a big way. “We will work together to step up joint efforts aimed at modernising infrastructure, explore ways to jointly respond to urbanisation challenges, address issues related to ensuring food security, preserving water and forest resources…” the declaration said. The two leaders also said the two countries will share experience in carrying out economic reforms and national programmes for the development of SMEs and in skill development.
Source: PTI
MADRID JUNE 01-(PTI) India and Spain has emphasised on the need for restarting negotiations for the EU-India Broad- based Trade and Investment Agreement (BTIA) as President Mariano Rajoy pressed for “solid progress” on the proposed pact after holding talks with Prime Minister Narendra Modi. The importance of making progress on the pact was highlighted in a joint statement issued after Prime Minister Modi the first Indian premier to visit Spain since 1992 met the European country’s top leaders here. Modi and Rajoy underlined the importance of EU India relations and the need to deepen the existing EU India dialogues the statement said. “They acknowledged the positive results of 2016 EU India Summit in March 2016 which marked a new momentum in the EU India relations. They reconfirmed their commitment to the EU- India Agenda for Action 2020 and to the development of cooperation in the areas of foreign and security policy trade and investment global issues natural movement of persons and people to people ” it said. The two leaders addressed the shared interest of the two sides to further engage on the India-EU BTIA and expressed the need to restart negotiations soon. President Rajoy welcomed the efforts of the Indian government to provide a positive business environment in India for foreign companies and to further international investment for which adequate protection of investments and legal certainty are instrumental. He also emphasised the importance that Spain attaches in the coming months to “solid progress” on the India-EU BTIA which may facilitate further Spanish and European investments in India the statement said. President Rajoy explained Spain’s position in the EU as a country fully committed with the European Project and with the main policies and instruments of the European Union. Prime Minister Modi called for active participation of Spanish companies in India’s ambitious Smart Cities projects. Both leaders also welcomed the holding of an India-Spain Business Summit in India in the later half of 2017 to promote trade and investment cooperation between the two countries. The talks on BTIA launched in June 2007 been stalled since May 2013 when both sides failed to bridge substantial gaps on crucial issues including data security status for the IT sector. The European Union earlier this year had pressed India to extend by six months its bilateral investment pacts with EU-member countries saying absence of the treaties could adversely impact trade ties and FTA talks.
Source: Tecoya Trend
BANGKOK, Thailand — Indorama Ventures Public Company Limited (IVL), a global chemical producer, has announced that the deal to acquire the Glanzstoff Group tire cord and single-end cord business has been concluded and will add to the company’s portfolio of choice auto sector solutions. Glanzstoff is Europe’s largest manufacturer of both tire cord fabrics and single-end cords, projecting IVL into a strong position for further growth with its extant pre-eminence in the Rayon, Aramids, Nylon 6.6 and Polyester businesses within the auto segment. Indorama Ventures entered into the tire cord business in 2014 with the acquisition of German-based PHP Fibers. The company also owns one of the most prominent polyester tire fabric businesses in China, Performance Fibers. Work commenced at the beginning of 2017 to expand the Performance Fibers manufacturing line due to increased demand from China’s improving economy. Glanzstoff is also currently implementing a single end cord project in China that will commence production in Q4, 2017. Aloke Lohia, Group CEO of Indorama Ventures said, “This is an outstanding asset in our portfolio and one we have acquired as part of our long-standing ambition to establish a solid foothold in the European auto sector, especially in relation to the tire business. Over the past five years, IVL has invested substantially into creating a diversified earnings stream via its High Value-added (HVA) portfolio. Diversification into HVA, which now accounts for 50% of the Company’s core EBITDA, has allowed us to deliver robust earnings on a sustained basis. In order to ensure sharp focus, the business is further segmented into high-growth industry verticals, including Automotive and Hygiene, and is driven by investments in intellectual property and innovations.” “The key,” Mr. Lohia added, “is the focus on our core areas of strength and a willingness to invest and then reinvest to take advantage of our global resources. The Glanzstoff acquisition takes us from Polyester and Nylon 6.6 into Rayon but that is still not far removed from our current portfolio as it will enhance our product offering to major customers. In a few short years, the HVA segment has skyrocketed and now delivers revenues of around $ 3 billion and serves segments that individually grow at around 7% year-on-year. “The automotive segment is a key investment driver for IVL within its rapidly-expanding HVA portfolio. IVL is at the forefront of developing new solutions, providing a unique global manufacturing footprint, an unparalleled product portfolio together with sustainable solutions making it the number one fiber partner for the automotive industry. The Glanzstoff acquisition provides a strategic fit to the automotive segment in the HVA portfolio. Geographically, we will enter Luxembourg, Italy and the Czech Republic, providing us the convenience of production bases nearby our major customers. As a world-class chemical company we expect to continue providing high growth and sustainable returns for our shareholders,” Mr. Lohia concluded.
Source: TextileWorld
ISLAMABAD - Pakistan’s exports to European Union (EU) have increased from 4.25 billion Euros in 2013 to 6.28 billion Euros in 2016, showing growth of 47 percent. This was stated by Commerce Minister Khurram Dastagir Khan in a statement issued here on Thursday. Terming it as a significant improvement, the minister applauded the EU and said that the trade incentives extended to Pakistan under the GSP Plus by EU have played a positive role in boosting Pakistan’s exports and in stabilising the elected government of Pakistan. “The president of Pakistan, today in his speech in the joint session of both the houses of the parliament, also praised the positive role of European Union (EU)”, said Dastagir. GSP Plus is a unique system of concessions developed by the EU. No other market in the world offers such liberal concessions ie, duty-free access to more than 90 percent products unilaterally to a few developing countries in return for the commitment of the beneficiary countries to adopt and implement principles of good governance and sustainable development, as enshrined in 27 Core Conventions of United Nations. The duty free access is helping Pakistani products to compete with products originating from Bangladesh, Vietnam and Turkey and many other countries. The minister said that EU is the largest market for Pakistani goods in the world and under GSP Plus, Pakistani goods have duty free access in 28 EU member states. Textile sector has been a major beneficiary of EU’s GSP Plus Scheme. Pakistan’s Exports of Textiles have increased by 55 percent in value terms in 2016 over 2013 and Pakistan’s exports also registered an increase of 33 percent in terms of quantity during the same period. He said that as a result of GSP Plus Pakistan exports to EU registered an impressive increase of 38 percent in 2016 over 2013. Pakistan’s exports to EU have increased from 4.52 billion Euros in 2013 to 6.28 billion Euros in 2016. Pakistan’s exports of textiles to EU have increased by 55 percent during the same period. As a result of GSP Plus arrangement, out of 28 EU countries, Pakistan’s exports have registered increase in 26 countries. Out of these 26 countries, 10 EU member countries are such in which Pakistan’s exports have increased by 50 percent or more while 8 countries are such where Pakistani exports have risen by 25 percent. In textile, Garments and Hosiery sectors, Pakistani exports to Europe are significant and have registered 75.7 percent increase. Likewise, Textile sector exports to EU have increased by 60 percent, in Footwear the increase is 26 percent and in Plastic it is also 26 percent.
Source: Nation.com.pk
Exports from Cambodia’s garment and footwear sector continued to grow in 2016, rising by 7.2 per cent to $7.3 billion, but the number of exporting factories officially registered in the sector fell by 10.4 per cent and the number of workers declined by 2.9 per cent, compared to 2015, according to the sixth edition of the ILO’s Cambodian bulletin. The latest issue of the ILO’s Cambodian garment and footwear sector bulletin identified three main factors which may have contributed to the divergence between strong exports and weaker employment and enterprise creation. These factors include a rise in the industry’s productivity, statistical problems with the measurement of employment and factory numbers, and an increase in production in subcontracting factories. Maurizio Bussi, director of the ILO country office for Thailand, Cambodia and Lao People's Democratic Republic, commented: “A rise in employment and production in subcontracting factories could be a concerning development if subcontracting is being used as a way to undercut regulations, including labour law and the minimum wage”. Unlike registered exporting factories, subcontractors are not monitored by Better Factories Cambodia and also may receive less attention from national enforcement agencies. “The situation should be carefully monitored by stakeholders and relevant agencies of the Royal Government of Cambodia,” said Bussi. According to the bulletin, garments and footwear remain the most important of Cambodia’s exports, accounting for 78 per cent of the country’s total merchandise exports in 2016. The EU remains the most important market destination for Cambodia’s garment and footwear exports, with the US being second. The sector’s exports to the EU and US combined accounted for only 65 per cent in 2016, down from 72 per cent in 2015, with an increasing share going to markets outside the US and EU, notably Japan and Canada. Average monthly earnings, including overtime, of Cambodia’s garment and footwear workers increased from $145 in 2014 to $175 in 2015 to $195 in 2016. Adjusted for inflation, real average monthly wages/earnings were eight per cent higher in 2016 than they were in 2015. The Bulletin has been published within the framework of the ‘Labour standards in global supply chains’ programme financed by the Federal Ministry of Economic Cooperation and Development (BMZ) on behalf of the Government of the Federal Republic of Germany.
Source: Fibre2fashion
LAHORE: Pakistan’s cotton output is feared to fall short of around two million bales this year against an annual target of 14 million bales as water shortage, late sowing and inept management are virtually nipping the country’s cash crop in the bud, said agriculture experts. The experts said around one third of the new crop was planted after a lapse of the optimum sowing time. The half-baked cotton management plan and lingering water shortage have adversely affected cotton sowing pattern, sparking a fear of low production of silver fibre, they added. The annual target for cotton output was set at 14.04 million bales (of 170-kilogramme each). “Even after achieving target of per acre yield, which is again questionable due to late sowing, the national crop size could maximum be around 12 million bales,” said an expert. Production could adversely be affected in the major producing belt. Even the target of cotton sowing is likely to fall short of targeted area in both Punjab and Sindh. Cotton could only be planted on less than 65 percent of the targeted area till May 20, which is considered as the optimum time of sowing for getting maximum production. Officials said cotton sowing should ideally be completed by mid-May to the third week in most parts of Sindh and Punjab. Only some varieties are allowed to sow in core zone of Punjab by May 31, they said. “Late sowing always attract problems associated with harsh weather and disease onslaught, causing a dent in the per acre yield,” said an expert. Official estimates said cotton output is still around 10 percent short of target of 3.11 million hectares by May-end. In Sindh, cotton sowing is around 25 percent short of the target. The United States Department of Agriculture forecast Pakistan’s cotton output for 2017/18 at around 11 million bales (of 170kg each), based on an assumption of a modest expansion in area as compared to the previous year. Ihsanul Haq, chairman of the Pakistan Cotton Ginners Forum said cotton plantation is affected in Rahim Yar Khan district. “Farmers in several districts opted to rather sow maize, sunflower, potato and sugarcane,” Haq said. Zafar Yab Haider, director general of Punjab agriculture extension department admitted that there is a possibility of not achieving the cotton sowing target this year due to water shortage. The decision of the Punjab government to ban cotton sowing before 15 April also caused low crop plantation. The order was issued as a precautionary measure to save the cotton crop from pink bollworm. Mia Asim, a farmer from Vehari district, clinched a stay order from a court against the ban and went ahead with the plantation in March instead. “My early sown cotton is blossoming well, while farmers who followed recommendation of the agriculture department had to fight with pest,” Asim told this scribe. He said cotton production target may be hit this year. “Farmers could not plant cotton as per the official target in several districts of South Punjab.” Zafar Hayat, a well-known cotton grower from Multan said the agriculture department’s drive usually has no impact on farmers. “Growers this year have to some extent again decided to sow cotton, but it is purely due to a fact that they are not getting much money by producing other crops,” Hayat said. “Farmers feel that they can get better price of cotton crop this year and that is why they are opted to cultivate cotton in southern districts of Punjab.”
Source: The News, Pakistan
