NEW DELHI: India Inc., looking to scale down inventory ahead of the expected rollout of the goods and services tax (GST) on July 1 to overcome the tax credit problem, may have something to cheer about. The GST Council will consider raising input tax credit from the current 40% at its meeting on Saturday. “There is a proposal to raise it... the council will take it up," said a government official. It could be pegged higher at 50-60%. According to the draft transition law, companies can get credit of up to 40% of their central GST liability against excise duty already paid on stocks lying with traders or retailers when GST is implemented. This has prompted many in the consumer goods sector to cut down on inventory lying with distributors, dealers and stockists. Industry had lobbied the government and the GST Council on the issue seeking an increase. The government is keen to ensure that transition to the new tax framework--which seeks to replace multiple central taxes such as central excise duty, services tax, cesses and state taxes including value added tax, central sales tax, octroy, entry tax with a single levy--be smooth for both businesses and consumers. “Possible loss of tax on transition stock is a key concern of the industry leading to de-stocking in many industries,” said Pratik Jain, leader, indirect tax, PwC India. Jain said if the percentage of deemed credit increased, it would be a big relief for industry, particularly where the GST rate on products is 28%. “It would minimise the impact on sales in the last month before introduction of GST," he said. The draft transition rules had provided that credit would be given once the central GST has been paid on the supply and the applicant provided evidence of purchase of these goods. For those items that enjoyed exemption under excise duty, the same principle would apply. The transition rules will be taken up by the GST Council at its meeting along with other crucial issues including setting the rate of gold and six other items including textiles, leather footwear, packaged foods and biscuits. Some states such as Kerala have proposed a 5% rate on gold while others want it pegged lower at 4%. The Centre is not inclined toward creating new slabs for items or going in for differential rates for the same goods. The council will also take stock of preparedness of the GST Network, the mechanism for implementing the anti-profiteering provision and rules for return forms.
Source: Economic Times
With less than a month to go for the implementation of the Goods and Services Tax (GST), States are likely to seek a lower rate on items such as gold, footwear and biscuits at the GST Council meeting here on Saturday. Sources said that States are likely to call for a four per cent rate on gold under GST but will also seek input tax credit, which in effect will halve the rate. Similarly, for biscuits, footwear and textiles, many States are keen to have differing tax slabs — lower rates for cheaper biscuits and footwear and five per cent GST for textiles. “At present, there is a wide variation in the taxation of each of these commodities, with differently priced items being taxed at differing rates,” said an official, adding that there was a view that to tax them all at the same level may not be fair for consumers. For instance, in the last round of meetings in Srinagar, many States had called to exempt biscuits costing less than ₹100 per kilogram while the Centre wanted to levy a 12 per cent tax on it. The GST Council in its meeting on May 18 and 19 had fixed the rates of over 1,200 goods and 500 services in the four-tier tax structure of five, 12, 18 and 28 per cent. But it could not reach an agreement on the rates to be levied on six commodities, including agriculture equipments, biscuits, textiles, footwear, bidis and bidi wrapper leaves (tendu patta) and precious metals, including gold. A decision is expected in Saturday’s meeting, along with a finalisation of GST on lottery and packaged and branded food items. Additionally, the Council, chaired by Finance Minister Arun Jaitley, will finalise draft GST rules on transition provisions and returns that were being vetted by the legal committee. It will also review the preparedness of the GST Network that will provide the IT backbone for the new tax levy. However, casting a shadow on what was being seen as one of the last round of discussions before the GST roll-out, some States may also call for a review of the target launch date. Sources said the Centre and most States are still keen for a July 1 rollout, while some other States are apprehensive about the administrative preparedness. States like West Bengal and Delhi have already sought a re-look.
Source: Business Line
It’s been nearly two weeks of confusion since GST rates were announced for close to 2,000 goods and services. While it is clear that essentials are either in the nil or 5-per cent category, there are some inconsistencies, overall. Citing anomalies, West Bengal finance minister Amit Mitra has rather dramatically said that the “GST Bill in its current form is not acceptable”. While his observations seem unfair considering that he was not present at the last two GST Council meetings, they are not without merit. There have been other representations against the fitment of rates, some misinformed and others genuine. Revenue Secretary Hasmukh Adhia displayed the right attitude by saying in Bengaluru on Tuesday that “there is a scope for rationalisation of tax rates on various goods and services”. The GST Council could take into account specific objections such as the need to review the rates on foodgrain, puffed and flattened rice, and the rates applicable in the electricity, hospitality and entertainment sectors. By placing insulation cables and wires in the 28-per cent category(‘luxury’ and ‘demerit’ goods), the price of power could see a spike. Since electricity, like alcohol and petroleum, is out of GST, power companies cannot claim input tax credit. Higher rates on pharma items such as rabies vaccine could lead to victims avoiding such treatment. Generally speaking, higher rates in the case of B2C items could have inflationary and welfare impacts. The three percentage point rise in services rate to 18 per cent is worth considering, since these are largely in the B2C category. Some egregious errors have crept in such as plastic commodes and even wigs and other items made out of human hair being highly taxed. Hotels may resort to creative accounting to escape a higher tax bracket, as indeed would many other sectors. A multiplicity of rates distracts from the stated GST goal of making tax compliance easier. The GST Council has taken the easy route of fixing most rates at close to the current central excise plus VAT rate in the case of goods. Seamless implementation of input tax credit — thanks to the Centre and States dipping into the same basket of goods and services for their revenues, thereby reducing leakages — should have led to lower rates. The Council seems to have been guided by a motive of short-term revenue maximisation, rather than easing the burden on business and raising tax revenues by boosting economic activity. The Council should work towards reducing the number of rates and tax incidence.
Source: Business Line
The Goods and Services Tax Network (GSTN) is reportedly unable to get the electronic way bill, meant to track intra-state and inter-state movement of goods, as rules have not yet been finalised. Rules must be clear for an e-way bill to be generated on the portal of GSTN, the nodal body to which all producers and suppliers of goods and services will file their tax payments. Till then, the current system of border checkposts will continue. A unique e-way bill number will be made available to the supplier, the recipient and the transporter, hopefully, by the year-end. If GSTN needs rules to be finalised to get going on its work, so would accounting software-makers. The government should not be in a hurry to adopt GST on July 1. The tax must be rolled out at least three months after the finalisation and publication of the rules. A messy start is avoidable. Reportedly, the GST Council has so far cleared seven rules pertaining to registration, payment, refund, invoice debit, credit note, input tax credit, valuation, and composition scheme — essential prerequisites for the industry to gear up for the transition to GST. Two rules on transition provisions and returns have been sent for legal vetting. Also, rates for commodities such as bullion need to be finalised. A dozen state legislatures have passed the state GST law. But all states must ratify the law to enable a smooth transition to the new tax regime. Concerns over the lack of preparedness of small and medium enterprises to transit to GST are not entirely misplaced. Businesses will also face inventory, logistics, budgeting and working capital issues as they move to the new regime. Interactive sessions with state and central government officials make sense. And better preparedness calls for a deferment of the roll out of the actual tax to September 1.
Source: Economic Times
The GST Council has not agreed to the Commerce Ministry’s suggestion of exempting exporters from the micro-small and medium enterprise (MSME) sector from paying Goods and Services Tax (GST) instead of blocking their capital by making them pay first and then giving refunds. The Council will, however, take up for consideration the Ministry’s other proposal of expanding the scope of the existing duty drawback scheme for exporters to include input tax (Integrated GST) credit in addition to basic customs duty, a government official told BusinessLine. “The GST Council is not keen on exemptions at all, so our proposal of exempting MSME exporters has not found favour.
“There is definitely a concern that MSMEs working capital may get blocked due to possible delay in refund of duty paid, so we will have to ensure that payments are released as early as possible,” the official said. Duty drawback is a scheme to refund input taxes paid by exporters, including customs duty, countervailing duties and a number of other input taxes. Under the GST regime, duty drawback is supposed to include only basic customs duty while the other taxes are to be subsumed under the IGST and get refunded under the IGST mechanism.
One window
“The Commerce Ministry has proposed that the duty drawback scheme under the GST regime should include both basic customs duty and IGST so that the refunds are made under one window and exporters do not have to run to two different places for their money,” the official said. The panel of senior officials constituted by Commerce Minister Nirmala Sitharaman, which includes former Commerce Secretary GK Pillai, has prepared a presentation for the GST Council on how the expanded duty drawback scheme under the tax regime could work. “We have to wait and see if the GST Council is convinced. Even if the scope of duty drawback is not expanded immediately, it could always happen later,” the official said. The GST regime, which primarily seeks to put in place a uniform tax regime across States, will have a four-tier tax structure: 5 per cent, 12 per cent, 18 per cent and 28 per cent for different commodities.
Exporters for refund
Exporters favour refund of IGST under the duty drawback scheme also because it is a known mechanism that will be under the control of the Centre. “Exporters are apprehensive that IGST refund mechanism, which will also include State governments, may not work as smoothly as they have not had very good experience in the area of refund of VAT by States,” the official added.
Source: Business Line
With only about a month left for lakhs of MSMEs to technologically upgrade and prepare to catch up with GST roll-out on July 1, MSME Minister Kalraj Mishra said here on Friday that he was also aware of concerns over “high” tax rates in some sectors. “Some representations have been made to the Finance Minister. He may consider these,” Mishra told reporters, adding that “changes can also be made once the Goods and Service tax (GST) rolls out.” In the past few days, several medium, small and micro enterprises (MSMEs), such as in the plywood, plastics, marble & granite, cosmetics and other sectors have aired their anxieties over losing out to cheap Chinese goods due to higher tax slabs. Meanwhile, highlighting three years of his Ministry’s work, Mishra disagreed that job generation was poor. “Many unorganised sector jobs are not reflected,” in surveys, he said, adding that 11 lakh jobs had been created in three years under the Prime Minister’s Employment Guarantee Programme (PMEGP). Also, Khadi & Village Industries institutions have provided employment to more than 11 lakh persons each year in the last three years, he said. When asked about the impact of demonetisation on the MSME sector, Mishra said “Initially there was a problem, but that eased later. Now, more and more people are being hired by MSMEs.” The Minister also said that over 30 lakh Udyog Aadhar memorandum registrations had been done, and ₹1,027. 82 crore subsidy was released to 16,304 MSEs during 2014-17 under the Credit-linked Capital Subsidy Scheme. Under the Credit Guarantee Trust Fund, a total of 13,69,527 proposals with credit guarantee of ₹61,155.73 crore have been approved.
2 more Samsung schools
Earlier in the day, the MSME Ministry signed a memorandum of industry (MoU) with Samsung India to renew its partnership for 10 existing schools being run across the country. Also two new schools will be added at Bengaluru and Jamshedpur, a Samsung India release said. The company also announced the MSME-Samsung Technical School Scholarship programme for girls and differently-abled trainees.
Source: Business Line
The ROSL scheme was announced in the month of December 2016 for the made ups sector for a period of three years. The Made ups sector is poised to create additional employment on account of the Govt support extended to this sector, said Shri Ujwal Lahoti, Chairman of The Cotton Textiles Export Promotion Council ( TEXPROCIL). The Rebate of State Levies (ROSL) scheme was announced in the month of December 2016 for the made ups sector for a period of three years. Subsequently, the ROSL rates were announced and were made effective from March 23, 2017. The objective of the scheme is to provide a rebate of state levies consisting of State VAT/CST on inputs including packaging, fuel, duty on electricity generation and duties and charges on purchase of grid power, as accumulated through the stages of production from yarn to finished made ups. Many leading Companies manufacturing “made ups” are reportedly drawing up plans for investments in this sector after the scheme has been announced. The ROSL scheme will certainly lead to an increase in exports of made ups articles which in turn will create more employment, according to Lahoti. The Chairman said that any increase in the exports of made ups will create additional employment in the entire value chain such as spinning and weaving besides the made ups sector especially in the rural areas and for women. Earlier, a package including the ROSL scheme was announced for the garments sector in July 2016. The Chairman, TEXPROCIL pointed out that according to data released by the Ministry of Textiles, after the package was announced, between July 2016 and March 2017, garment exports increased to USD 13.47 as against USD 12.37 billion during the same period in the preceding year. Shri Lahoti expressed his confidence that exports of made ups will also grow as a result of the ROSL scheme as in the case of “garments”. Since both “garments” and “made ups” fall under the category of “cut & sew” products and the requirement for labour is more or less similar in both the sectors, increase in the exports of made ups will certainly lead to the creation of more employment and the effect can be seen in the next three to six months, according to Shri Ujwal Lahoti. The Chairman, TEXPROCIL urged the Govt to continue with the ROSL scheme for three years as committed even under the GST regime as there are still many State taxes/levies which are not subsumed under the GST.
Source: Financial Express
New Delhi: Retailers Association of India (RAI), an industry body for retailers, has created a a helpdesk for member retailers across the country to help them resolve their queries by subject matter experts and facilitate a smoother transition to GST, a tax reform to be implemented from July 1, it said in a statement. According to the statement members can reach RAI through its website http://rai.net.in/gst or via email gst@rai.net.in, to get assistance on their queries regarding the monumental tax policy.
“Members of RAI deal with a variety of goods and services as they represent various retail formats and segments such as supermarkets, garment retail, jewellery and quick service restaurants. Many of them are small and medium Enterprises (SMEs) located in various parts of the country," said Kumar Rajagopalan, CEO of RAI. A help desk with seasoned experts on the panel will help extract collective wisdom and ease the move towards GST, said Rajagopalan further. The GST Council has declared tax slabs and cesses on 1,211 items. For services, the council broadly agreed on 4 tax brackets — 5%, 12%, 18% and 28%.
Source: ETRetail.com
BK Goenka turned 50 in 2016. The landmark year brought with it a business crisis of unexpected proportions. BK Goenka is a man of many words, but he doesn't display the same enthusiasm when it comes to posing for photographs. A quick glance into the camera and he's done. Fortunately, he doesn't mind speaking. The hour-long conversation takes place over diced alphonso mangoes at the Mumbai office of Welspun, of which he's the chairman. In the course of the interaction, Goenka unveils a side of him that is not known to most. He opens up about the tumultuous year that 2016 was, a year in which he turned 50, but also when his company faced its toughest challenge ever. The US based Target Corp ended business ties with the textile manufacturer. Its allegation: about 750,000 Welspun bedsheets and pillowcases label led as Egyptian cotton were made of another type of cotton. Nine months after the incident, Goenka talks about how he rode out the storm. The year 2016 was a difficult one for you professionally. What was going through your mind at that point? While I believe that there is a learning in every experience, what happened in 2016 was different. We have seen many ups and downs in my business with different kinds of financial restructuring and exporting issues. This time my credibility was on the line. People doubted that I have done something wrong and to make it worse, the whole world was watching. At the same time, you are responsible towards 20,000-odd Welspun employees and their families. People had written us off, saying that we will never come back. I was at a stage where I had learnt so many things, fought off challenges, but was still unprepared to face something like this. That too over one incident. It was not like we had used harmful chemicals or that someone was likely to fall ill sleeping on our bedsheets. What loopholes did you plug? My biggest learning that came from this episode was that our processes have to be tight. One has to maintain a process-oriented company rather than an individual-oriented one. I think our mistake, if I can call it that, was our attitude that if things are going well, there's no need to interfere. How difficult was it for you to arrive at the decision to come clean? Tough! We were debating for at least 30 hours what we should say and the ramifications of each scenario. Admitting to the entire world that you are at fault is not easy. At that time, we didn't know what the outcome of this action would be either. I think what this shows is that if you are clear in your heart, your body language conveys that too. Otherwise you are hesitant and people can sense something is wrong. Around that time, Tata Group board said it wasn't informed of the transaction with Welspun Power. Your company was caught in the fight between Cyrus Mistry and Ratan Tata. Did that miff you? That was a funny incident. We were clear internally because I never had a single rupee deal with Cyrus. So instead of the incident bothering me, I said, 'let's enjoy this also'. Jokes aside, the fact is who was I to speak to about this? Even if I were to start issuing clarifications that we have nothing to do with the Tata problem, people might question why we are so eager to prove that? We knew that the deal was signed and nothing could go wrong, so we didn't get involved. You weren't upset about being dragged into another controversy? See, I believe that no matter how negative a situation gets, after a point you have to just enjoy it. Because what is to happen, will happen. (Pauses) Plus, that gives you a kick. Everything going hunky-dory is also not good. And the Tata-Mistry incident didn't concern us at all, so I wasn't bothered. How much did you have to spend on damage control during the earlier incident? We invested around Rs 25 crore to install new technology to make everything happening at Welspun traceable and process-driven. But it's not about the money. I can confidently say that we are 100 per cent over the incident. No doubt the episode gave us a big jolt and a difficult time, but when you sit down and relax you realise that something good has come out of it after all. We lost Rs 500 crore last year, but there's no point fussing over spilt milk. You have to see how to save the situation. Money will always come back but business and credibility are more important. Did any heads roll in the company? Honestly, it was a system failure. So it's not like I could catch someone and blame them. I didn't want to make someone a scapegoat to save face either. We shifted people in the organisation but that's about it. What was your darkest fear at that time? I am a person who thinks about the worst and then starts working in reverse to fix the situation. I remember working late night, at about 1.30 am co-ordinating with the US teams and thinking, 'What opportunity can come out of this?' Then I realised that surely things can't get worse. We immediately scheduled meetings with clients. Dipali [wife and CEO, Welspun India Ltd] flew out to speak with them personally. The biggest challenge was to keep the trust and accept our mistake, rather than blame someone else. I think admitting our fault was the biggest game changer for us. Not much is known about you, personally. How would you describe yourself? That's a difficult question to answer. Others would be a better judge of it (laughs). I'd say I'm an aggressive person. I'm a little obsessed with my goals. I have that fire in my belly, so to speak. I'm also a caring person. On the whole, I think my personality has changed over the years. Earlier, my risk-taking capability was vastly different. I was chasing a dream like a wild goose. Today, I feel more responsible and I think of myself as a trustee to the shareholders and employees. I also think a lot about philanthropy these days. Your wife Dipali's main grouse with you is that you watch the news while working out, while she likes to play music. Has that been resolved now? (Laughs) Discipline is very important in any sphere of life, when it comes to gymming also. If I have to catch a flight at 8.30 am, I wake up at 5.30 am and hit the gym. And yes, Dipali has started working out before me now, at about 6.30 am, with her loud music for company.
Source: ET Bureau
CHANDIGARH: Contrary to claims of a level playing field for industry, cotton from Gujaratand Maharashtra is actually cheaper in Punjab even as local cotton farmers from the state prefer to sell their produce in Rajasthan due to an uneven tax structure. Amidst shortfall of cotton in Punjab, aggravated by white fly attacks during recent years, the cotton industry in the state is struggling with deficit in supply, forcing it to import cotton from cotton surplus states of Gujarat and Maharashtra. This actually puts double financial burden on them as besides paying transportation cost of cotton, they have to again pay for carrying the yarn to the ports. Rakesh Rathi, president, Indian Cotton Association Limited (ICAL), told TOI, "The current scenario is disadvantageous for the Punjab industry. Either we shut shop or import cotton from other states. The government can intervene by offering incentives as in case of Rajasthan and lowering the market fee." "Despite Punjab offering free power to farmers and use of previous ground water, cotton produce is being sold in Rajasthan. This results in the state losing out on value added tax as well. So the present scene is detrimental for the state, industry and also the cotton farmers. Cotton from Gujarat and Maharashtra is still cheaper and it is a reflection on how uneven the present economics is," he added. Punjab has consumption of around 85 lakh bales of cotton but the supply is close to 45 lakh bales, leaving a huge shortfall. The higher price of home grown cotton is prompting the industry to import cotton. "To add to it, Rajasthan has lower market fee at 80 paise per new unit, apart from other incentives, which attracts cotton from Punjab and Haryana. In Punjab, there is market fee plus rural development cess, which comes to Rs 2.20. Rajasthan also has the advantage of not having menacing truck unions. So if cotton is available at Rs 44,300 per candy (1 candy=356kg) here, it can be got at Rs 43,500 per candy from the cotton surplus states. February onwards prices of cotton begin to go up," he added. The issue was recently brought to the notice of chief minister Captain Amarinder Singh and he too was surprised. He has asked departments concerned to look into the matter, said a member of PHD Chamber of Commerce and Industry. The cotton industry has to shell out Rs 5 per kg extra as transportation charges to get cotton from other states but they still prefer this option to keep their mills running.
Source: TNN
Cotton seed companies will no longer require a no-objection certificate (NoC) from licence providers for developing new varieties based on the latter's technology. The Protection of Plant Varieties and Farmers’ Rights Authority has waived the condition. All seed companies had to mandatorily get a NoC from the Authority every time they wanted to develop a new variety based on the registered technology. The waiver could open the door for many more companies to develop hybrid cotton seed varieties based on Monsanto’s Bollgard-2 technology. “The NoC greatly hampered the growth of small and medium seed companies, those denied access to the technology” said Kalyan Goswami, executive director, National Seed Association of India. Now, he said, all 350-odd small and medium cotton seed entities could develop new varieties. Monsanto India declined to comment. "Removal of NOC from GEAC and PPVFRA would enable Indian seed companies engaged in Bt cotton to apply for their Bt cotton Hybrid approval and sales without signing the one-sided license agreement with Monsanto," said Goswami, adding, this condition greatly hampered the growth of small & medium seed companies those who were denied access to the technology. He said that after the order all the over 350-odd small and medium cotton seed firms in India could develop new seed varieties. NSAI had been requesting the government to make the change. When contacted Monsanto India declined to comment on the development. Meanwhile, a section of the seed companies, including license holders, alleged that some companies have been pressing that NOC requirement should be withdrawn for a patented product and replace it with a mere confirmation of getting the license in a proper manner. They also alleged that entire waive off has been influenced by people who are party to dispute between seed companies and license holders.
Source: Business-Standard
Telangana government extensively promoted not to go for Cotton in the Kharif Season of 2016-17. This has resulted in acreage under cotton falling from 17 lakh hectares to 12 lakh hectares while there is an increase in acreage and yields of chili, pulses, and maize. But then, the prices of the pulses dropped while Cotton prices soared. Farmers are of the opinion that the government had misguided them with wrong advice. So, the ruling party had decided to stay mum this season and let the farmers take the decision.
TRS cannot afford to have a repeat of last year’s protests by farmers who were upset about the wrong advice of the government. With elections likely sometime next year (early election), the Pink cannot afford to upset farming community again.
Source: Mirchi9
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1109.40 |
USD/Ton |
-0.66% |
6/2/2017 |
|
VSF |
2174.71 |
USD/Ton |
0% |
6/2/2017 |
|
ASF |
2321.65 |
USD/Ton |
0% |
6/2/2017 |
|
Polyester POY |
1112.34 |
USD/Ton |
-1.05% |
6/2/2017 |
|
Nylon FDY |
2520.02 |
USD/Ton |
0.88% |
6/2/2017 |
|
40D Spandex |
5260.45 |
USD/Ton |
-0.56% |
6/2/2017 |
|
Polyester DTY |
5818.82 |
USD/Ton |
0% |
6/2/2017 |
|
Nylon POY |
1351.85 |
USD/Ton |
0% |
6/2/2017 |
|
Acrylic Top 3D |
2358.39 |
USD/Ton |
0.31% |
6/2/2017 |
|
Polyester FDY |
2497.98 |
USD/Ton |
0% |
6/2/2017 |
|
Nylon DTY |
1344.50 |
USD/Ton |
0% |
6/2/2017 |
|
Viscose Long Filament |
2740.43 |
USD/Ton |
0.27% |
6/2/2017 |
|
30S Spun Rayon Yarn |
2835.94 |
USD/Ton |
0% |
6/2/2017 |
|
32S Polyester Yarn |
1704.50 |
USD/Ton |
0% |
6/2/2017 |
|
45S T/C Yarn |
2718.39 |
USD/Ton |
0% |
6/2/2017 |
|
40S Rayon Yarn |
2997.58 |
USD/Ton |
0% |
6/2/2017 |
|
T/R Yarn 65/35 32S |
2321.65 |
USD/Ton |
0% |
6/2/2017 |
|
45S Polyester Yarn |
1851.44 |
USD/Ton |
0% |
6/2/2017 |
|
T/C Yarn 65/35 32S |
2277.57 |
USD/Ton |
0% |
6/2/2017 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
6/2/2017 |
|
32S Twill Fabric |
0.86 |
USD/Meter |
0% |
6/2/2017 |
|
40S Combed Poplin |
1.19 |
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 = 0.14694USD 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.
Vietnam government has prepared a draft plan on the country’s industrial restructuring during 2017-2020, which needs to be fine tuned, according to experts. The Ministry of Industry and Trade (MoIT) should clarify weaknesses and bottlenecks in the industrial sector to come out with a better plan on industrial restructuring, they said at a workshop. The workshop in Hanoi was organised by the MoIT and the European Trade Policy and Investment Support Project (MUTRAP) to get feedback on the draft plan on Vietnam’s industrial restructuring for 2017-2020, according to a Vietnamese news agency report. Industrial production in Vietnam has surged by nearly 3.5 times from 350 trillion VND (15.4 billion USD) to 1,170 trillion VND (51.5 billion USD) over the last 10 years. It makes up about 31-32 per cent of the country’s GDP, according to the MoIT. Electronics, textile-garment and footwear have become the key export items, accounting for over 60 per cent of the country’s total export revenue. MoIT deputy minister Cao Quoc Hung said the country still ranked 101st among 143 countries in terms of per capita added value in processing and manufacturing industries. Its industrial labour productivity was outpaced by developed nations and other countries in the region. Therefore, a restructuring plan has been prepared for industrial restructuring, the report said. Speakig about the plan, Le Tien Truong, general director of the Vietnam National Textile and Garment Group, said parts of data in the draft on the textile and garment industry, such as labour productivity, added value and import were incorrect. Therefore, the plan’s reliability remained modest and needed revision. Besides, the plan had not laid any industrial restructuring process, he noted, elaborating that the plan said labour productivity must be raised by five per cent to improve competitiveness but did not mention any processes to realise that target, the report said. Vietnam ranks fifth among the countries with highest labour productivity in fibre and textile production. It follows China in labour productivity in garment manufacturing. To promote textile-garment productivity, the key solution was updating technology and equipment. If the plan named improving manpower management and training the key solution, it would be a wrong direction, Truong said. Nguyen Tue Anh, deputy director of the Central Institute for Economic Management, said the MoIT’s plan needed to clarify the bottlenecks and their causes in the development of industries so as to devise effective solutions. Director General of the MoIT’s Planning Department Duong Duy Hung admitted that it was necessary to have a clearer plan which must point out major bottlenecks and detail restructuring processes in order to focus resources on right areas for substantive improvements. The MoIT would gather more opinions to fine-tune the draft plan. (SV)
Source: Fibre2fashion
Ethnic clothing and colourful woven accessories in Thailand's remote North are known for their beauty but these traditional garments and the livelihoods they afford are under threat from lower-quality rivals that are putting artisans under pressure. Crafted with skills passed on through generations sustained by the trade in hand-woven goods, these textiles represent the beauty and heritage of northern ethnic groups. These clothes are a part of ancient northern culture as well as a money-spinner for small communities. However, the tradition is in jeopardy with non-ethnic competitors churning out similar but inferior machine-woven products for a lower price, and the region's young people neglecting to learn the craft as they seek to earn a living elsewhere. Among those feeling the brunt of this trend is Areerak Hongprayoon, proprietor of a shop selling her own hand-woven fabrics in Chiang Rai's Chiang Khong district for 15 years. Distinctive clothes — sewn and stitched using hand-woven fabric that bears the hallmark of ethnic patterns and colours — are sold at a local shop in Chiang Rai. Vendors are struggling to compete with cheaper, mass-produced garments. Enchanted by the art of weaving, she said the muse behind her handicrafts is the uniqueness of designs and techniques created by different minority groups in Thailand and neighbouring countries. Ms Areerak studies the intricate designs of traditional fabrics from these ethnic groups and weaves textiles based on them. She also produces fabric designs incorporating a blend of different patterns. The traditional fabrics are made into typical-looking northern highlander garments. For women, who make up the majority of her customers, the clothes contain two pieces -- a long- or short-sleeved blouse embroidered with coloured stitches, and a sarong-like wraparound bearing striking layers of colours and patterns showing off tribal distinctions. Although she is not from a highlander ethnic background, Ms Areerak has learned to produce fabrics in their traditional way, using hand-spun yarn woven into cloth by hand. However, the meticulousness of the designs means a lot of effort and time must be invested in creating the fabrics, which pushes up the price tag -- creating an opportunity for mass-produced fabrics to dominate the market. Ms Areerak said it was simply not possible to significantly lower the price of hand-woven fabrics, so her business model is to target a select clientele who appreciate the craft and are prepared to pay accordingly. People who are aware of the value of handicrafts are more concerned with quality than price as they realise each piece of clothing requires painstaking work, passion and many hours of labour to finish, she said. Ms Areerak's customers include Japanese, who are fond of woven fabric; collectors or art gallery curators who obtain the fabrics for exhibitions; collectors; and preservationists who want to keep local traditions intact. She conceded that she initially felt disheartened seeing other people imitating her designs and churning out inferior quality fabrics for sale. But in managing to carve a niche in the market, Ms Areerak has come to terms with the "copycat" merchandise which she says is an insidious part of the trade, believing her work holds the value of individuality and genuine creativity which cannot be taken away from her. "My weaving crafts are inspired mainly by the wisdom of ethnic people, combined with my knowledge in applied arts and my passion for the art of weaving," she said. Ms Areerak said she often visits ethnic minority villages across the upper northern provinces as well as travelling abroad to seek fresh ideas for her fabric products. "I'm glad that I can be of service in prolonging the life of local weaving practices inherent in the culture of minority groups in different regions,'' she said. "What I do, I hope, will help add value to their fabric products which, in turn, encourages the ethnic people to continue creating these lovely fabrics and passing on their knowledge to the future generations." Ms Areerak said she owes a great deal of her love for "grassroots" fabrics to her father, who taught her to treasure rare and antique items. "When I was young, my father always impressed upon me the intrinsic worth of vintage wares," she said. With a bachelor's degree in applied arts, the 48-year-old artisan and business operator said her fabric crafts integrate her knowledge from the classroom with the time-honoured weaving art she has come across on her travels. During a trip along the Chinese-Lao border, she was attracted to the punctilious hand-embroidered fabric made by the Yao ethnic villagers she met on her way to Muang Sing, a small city in Laos' northern province of Luang Namtha. Ms Areerak said the Yao weaving artisans used a running stitch in their elaborate design that was beautifully visible on a piece of cloth. She decided to buy the fabrics from the Yao villagers and take them home to study more closely. She magnified the pattern to inspect the sewing technique. Soon, she understood the essential details and was able to reproduce a piece that closely resembled the originals both in appearance and texture. The Yao-inspired fabric also served as material for making apparel and bags. Ms Areerak added the weaving techniques of the Luntan minority, which aim for textured fabric suited to the climate in Luang Namtha, are also worth admiring and preserving. Luntan villagers' handwoven apparel is dyed at least five times for maximum colour absorption. Aside from the ethnic minorities in Thailand and nearby countries, Ms Areerak also develops handicrafts based on exquisite woven fabrics she as collected from Sri Lanka, Nepal, Tibet and Borneo. Anira Thinon, chief of the Chiang Rai Social Development and Human Security Office, said each design and pattern of a woven fabric originating from a different ethno-geography has a particular meaning associated with the people's livelihoods. For example, a triangle shape in an ethnic fabric denotes homes, a row of satin stitches implies farmland, and people holding hands means traditional plays or local festivities. Ms Anira said highlanders' weaving practices are closely connected to all aspects of their livelihoods, including family, work and local traditions. Some designs could be slightly altered when weaving techniques are conveyed to the younger generation. However, the original meaning will never change.
Weaving machines have gained popularity among younger highlanders, she said, but the beauty of the designs does not change, only the productivity of the craftsman, as technology can help save on manufacturing costs and time. Ms Anira admitted handmade woven cloth is hard to come by these days. Hailing from the northern province of Phayao, Thamolwan Sae-wang, a Hmong student who is studying textile engineering at the Rajamangala University of Technology Thanyaburi, said that after graduation she plans to start a small textile business in her ethnic community, which she hoped would generate some more jobs and invigorate the sleepy local economy.
Ms Thamolwan said her knowledge of textiles will help preserve traditional culture and local wisdom. "Weavers put their hearts into their crafts," she said.
Source: Bangkok Post
VietNamNet Bridge - A report of the General Statistics Office (GSO) shows a significant increase in Vietnam’s exports to South Korea in the first four months of the year, reaching $4.4 billion, an increase of 32 percent compared with the same period last year. However, imports from South Korea increased even more sharply by 45.3 percent with import turnover of $13.7 billion. This means the excess of imports over exports in trade with South Korea has reached 9.3 billion. Previously, Vietnam's biggest trade deficit was with China. Chinese and South Korean markets alone have brought the trade deficit up to $18.3 billion. Vietnam mostly exported to South Korea phone and phone components (33 percent), computer and computer components (up by 59.4 percent), machines & equipment (64.3 percent) and textile & garment products (16.7 percent). It imported machines & equipment, instruments, computers, electronics, petroleum, phones and plastics. Dau Tu quoted Deputy Minister of Industry & Trade Tran Quoc Khanh as saying that Vietnam mostly imports from South Korea products that serve domestic production and outsourcing for exporting. Following Samsung, more and more South Korean investors have flocked to Vietnam. By April 2017, South Korea had registered $54 billion worth of foreign direct investment in Vietnam, topping the list of foreign investors in Vietnam, far outstripping the second biggest foreign investor – Japan. The presence of many South Korean investors in Vietnam has led to an increase in imports of machines & equipment for domestic production. This explains the sharp increase in imports from South Korea. Nguoi Lao Dong quoted Vu Thanh Tu Anh, an economist, as reporting that in order to make up 20 percent of Vietnam’s export turnover, Samsung needs to import a large volume of input materials, components and accessories from other countries, including South Korea. This showed that Vietnam not only heavily relies on the foreign-invested economic sector, but also saw the trade deficit increasing after the FTAs (free trade agreements) with the markets took effect. Vietnam, for example, saw its trade deficit with Thailand and Malaysia increasing once the FTAs with the markets took effect. Dat Viet quoted a report as showing that the trade deficit with South Korea has been increasing very rapidly. In 2008, the trade deficit was $6.27 billion. The figure rose to $8.46 billion in 2011 and then to $20.6 billion in 2016. Dinh Trong Thinh from the Finance Academy said that in trade relations, the deficit is always a worrying problem.
Source: Vietnamnet
