Mumbai: As the threat of a currency war looms large over the globe, it is worth asking if the weakness of the rupee could boost India’s performance in global trade. An analysis of trade flows and currency movements suggests that the overall buoyancy in global trade flows has a far greater impact on the export performance of most emerging markets including India compared with currency movements. Among major Asian economies, the ones which saw the most currency depreciation versus the dollar in the last five years have also been the ones with the worst export performance. India’s currency weakened around 22% against the dollar between 2012 and 2017 and the compound annual growth rate in exports during the same period was a meagre 0.2%.It is worth noting that this period witnessed a slowdown in global trade, with the global trade-to-GDP ratio declining from 60.6% in 2012 to 56.2% by the end of 2016. Most emerging markets including India performed poorly in export markets in this period. A historical analysis of India’s trade performance suggests that the biggest factor driving India’s export performance has been world demand. It is no surprise then that when global trade tanked after the global financial crisis of 2008, India’s exports slipped into red, declining 2.8% on a year-on-year basis after having consistently attained double-digit growth in the preceding seven years. After a brief recovery since then, India’s export performance has been lacklustre despite several spells of rupee weakness. For instance, in 2012, India’s exports fell 4% despite a 13% depreciation in India’s nominal exchange rate in that year as world trade stagnated. Given that the China-US trade conflict could dampen world trade once again in the months to come, the prognosis for India’s trade performance does not look bright. The IMF identified the threat of trade conflict as the greatest threat to global growth and prosperity in its recent update of the World Economic Outlook published earlier this month. With India’s manufacturing sector becoming increasingly integrated with the rest of the world and using more of imported inputs, it has become more difficult for India today to reap the benefits of a cheaper currency than it was earlier. Even though the content of imports in India’s exports shows a decline post 2011, it still makes up for over 20% of India’s gross exports, sharply higher than just 9% in 1995. As the domestic value added of India’s manufacturing sector declines and it becomes more reliant on foreign inputs, currency depreciation will lead to higher costs of production. This will eventually lead to higher inflation in prices of domestically produced goods and will prevent them from becoming more competitive in the world market. Thus, higher inflation—due to imported prices—might offset any gains from depreciation in terms of export competitiveness. If domestic inflation continues to remain high and exceed the depreciation in rupee-dollar exchange rate, then the currency would witness appreciation in real terms. In fact, the real effective exchange rate (REER) has risen for India gradually since 2000 and accelerated post 2013 even as rupee depreciated against the dollar in nominal terms. The contrasting stories of India and Vietnam’s exports to the US illustrate why nominal currency depreciation is often not the biggest factor in trade performance. Between 2012 and 2018, India’s share of US imports rose marginally from 6.5% to 7.5% while those of Vietnam rose from 7% to around 12%, shows a report dated 5 July by Saugata Bhattacharya and other economists of Axis Bank. During the same period, the rupee fell around 30% against the dollar while the Vietnamese dong depreciated by just 10%. More than currency movements, it is infrastructural bottlenecks that seem to hobble India’s export performance. A 2015 IMF working paper suggests that unreliable and costly supply of electricity or fuel (coal or gas) limit the ability of India’s export-oriented firms to quickly respond to changing international prices or to exchange rate movements. While agricultural exports might not face as many bottlenecks as manufacturing, they are the victims of ad hoc restrictions on exports. As a previous Plain Facts column pointed out, the pro-consumer bias of India’s trade policy has often deprived Indian farmers of remunerative returns in global markets. These restrictions in trade policy seem to have adversely affected India’s share in global food exports, which have declined from about 2.6% in 2013 to 2.3% in 2017. Unless the infirmities in India’s trade policies are addressed and infrastructural bottlenecks cleared, mere depreciation is unlikely to boost India’s exports much. This is the concluding part of a two-part data journalism series on India’s trade prospects in a protectionist world.
Source: Live Mint
The International Monetary Fund (IMF) has cautioned India it should not rely on global financial markets to finance its current account deficit (CAD) when it goes above 3 per cent of gross domestic product (GDP). The Fund basically advised India to rely more on stable sources of foreign inflow — foreign direct investment (FDI). The advice came amid expectations that India's CAD will rise to 2.5 per cent of GDP in the first quarter of 2018-19. On the contentious issue of the rupee’s value, the Fund in its latest external report has noted the real effective exchange rate (REER) is in line with the fundamentals with the range of -7 to +5 per cent for 2017-18. India's current account deficit has sharply deteriorated over the past few quarters. As the report, released on Tuesday, notes, the country’s current account deficit rose to around 1.9 per cent of GDP in 2017-18, up from 0.7 per cent in the previous year, partly due to the sharp rise in oil prices. The Fund now expects the deficit to rise to 2.5 per cent of GDP over the medium term “on the back of strengthening domestic demand”. As a consequence, its net international investment position to GDP ratio is expected to deteriorate. Financing the current account deficit is likely to be tricky. While FDI flows have increased, they are not sufficient to cover the deficit. The Fund estimates that the sum of FDI, foreign portfolio investments (FPI) and financial derivatives flows on a net basis slowed to 1.9 per cent of GDP in 2017-18 from 2.3 per cent in 2016-17 despite larger portfolio inflows. On the use of portfolio inflows to finance the deficit, the IMF notes that while “portfolio inflows into government and corporate securities were strong in 2017, leading to almost fully exhausting ceilings on non-resident investment”, they are volatile and are “susceptible to changes in the global risk appetite” as seen during the infamous taper tantrum of 2013. It cautions that given the volatility in portfolio debt flows, “attracting more stable sources of financing is needed to reduce vulnerabilities”. It adds that “implementation of structural reforms to improve business climate would help to attract FDI”. The Fund has noted India’s foreign exchange reserves are adequate for precautionary purposes. The country's forex reserves reached $424.5 billion at the end of March this year, declining thereafter to about $412 billion as of May. At current levels, the reserves represent about 190 per cent of short-term debt and about 7.5 months of prospective goods and services imports. On the contentious issue of the rupee’s true value, the Fund notes that as of May 2018, the REER depreciated 3.6 per cent relative to its 2017 average. On the external debt front, the IMF notes that at about 20 per cent of GDP, India's external obligations are moderate, “compared with other emerging market economies. 48 percent of the external debt is denominated in US dollars and another 37 percent is dominated in Indian rupees. The debt maturity profile is favorable, as long-term external debt accounts for about 81 percent of the total, and the ratio of short-term external debt to foreign exchange (FX) reserves is low”.
Source: Business Standard
The Indian growth story is intact with the gross domestic product (GDP) expected to grow around 7.5 per cent in this fiscal and improve further. The slowing down of the industrial output growth in May to 3.2 per cent and the inching up of the retail inflation in June to 5 per cent are short-term challenges, according to a top Indian industry federation. The challenges are being pro-actively addressed by the government and the Reserve Bank of India, and these should not be seen in any way as significantly hurting the signs of revival in the economy, said Federation of Indian Chambers of Commerce and Industry (FICCI) president Rashesh Shah. "While the industrial output growth is expected to rebound in the next few months; the rise in inflation is being watched by the RBI closely, and the apex bank and the government will certainly take necessary measures to keep it at the manageable levels," a FICCI press release quoted Shah as saying. The goods and services tax (GST) collection trends clearly indicate a positive sentiment in the economy and the tax structure will also bring down inflation, he added.
Source:Fibre2Fashion
The Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed the recent multi-faceted measures taken by the government to address the problems of the textile industry. The government has recently hiked import duty on several textile products, while the GST Council decided to refund input tax credit to fabrics, and reduced GST for carpets. “Increase in import duty on 76 textile items from 10 per cent to 20 per cent and GST reduction on carpets and handicraft items have given a big relief to domestic textile, carpet and handicraft manufacturers,” said Shishir Jaipuria, chairman, FICCI Textiles Committee. Jaipuria stated that the garment and carpet industry was under immense pressure after implementation of GST. “After GST, substantial drop in import duty was observed which has encouraged cheaper imports. It is also worth noting that total imports of textiles and garments increased in 2017-18 ($7 billion) by 16 per cent in comparison to 2016-17 ($6 billion). Total import of garment alone increased by 30 per cent in 2017-18 in comparison to 2016-17.” However, imports from Bangladesh is an area of concern for the industry, said Jaipuria. Due to full exemption of basic customs duty from Bangladesh and also due to lack of regional cumulation clause under the treaty, third countries’ raw material and fabrics are getting benefitted indirectly. Imports from Bangladesh have increased by 44 per cent in 2017-18 in comparison to 2016-17. “The government may consider imposition of regional cumulation clause in Rules of Origin on the countries that have FTAs with India to safeguard garment industry further as cheaper fabric of third countries enter India through these countries,” he suggested. He also felt the need to increase the import duty on MMF spun yarn as import of MMF yarn-based fabric also increased sharply after GST implementation. (RKS)
Source: Fibre2Fashion
The Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed the recent multi-faceted measures taken by the government to address the problems of the textile industry. The government has recently hiked import duty on several textile products, while the GST Council decided to refund input tax credit to fabrics, and reduced GST for carpets. “Increase in import duty on 76 textile items from 10 per cent to 20 per cent and GST reduction on carpets and handicraft items have given a big relief to domestic textile, carpet and handicraft manufacturers,” said Shishir Jaipuria, chairman, FICCI Textiles Committee. Jaipuria stated that the garment and carpet industry was under immense pressure after implementation of GST. “After GST, substantial drop in import duty was observed which has encouraged cheaper imports. It is also worth noting that total imports of textiles and garments increased in 2017-18 ($7 billion) by 16 per cent in comparison to 2016-17 ($6 billion). Total import of garment alone increased by 30 per cent in 2017-18 in comparison to 2016-17.” However, imports from Bangladesh is an area of concern for the industry, said Jaipuria. Due to full exemption of basic customs duty from Bangladesh and also due to lack of regional cumulation clause under the treaty, third countries’ raw material and fabrics are getting benefitted indirectly. Imports from Bangladesh have increased by 44 per cent in 2017-18 in comparison to 2016-17. “The government may consider imposition of regional cumulation clause in Rules of Origin on the countries that have FTAs with India to safeguard garment industry further as cheaper fabric of third countries enter India through these countries,” he suggested. He also felt the need to increase the import duty on MMF spun yarn as import of MMF yarn-based fabric also increased sharply after GST implementation. (RKS)
Source: Fibre2Fashion
Expanding CEPA with South Korea is not a good option unless it enhances Indian exports. South Korea is aggressively pushing for speeding up negotiations on expanding the existing Comprehensive Economic Partnership Agreement (CEPA) with India. But instead of rushing ahead, New Delhi should pause and take a clear look at where it is heading. Since the bilateral CEPA was implemented in 2010, South Korea’s exports to India jumped from $10.47 billion in 2010-11 to $16.36 billion in 2017-18. India’s exports to South Korea, however, remained sluggish and increased insignificantly from $3.72 billion in 2010-11 to $4.46 billion in 2017-18. As a result, the trade deficit between South Korea and India increased to a staggering $12 billion in 2017-18. These are numbers that should not be taken lightly. They show that while Indian businesses have not been able to take advantage of the provisions of the CEPA. But Korean companies have increased their exports taking advantage of the lower duties. Moreover, much of the Indian exports to South Korea are still taking place outside the CEPA at higher duties. According to various studies, including one by the ADB, the average utilisation of free trade pacts ranges between just 5 per cent and 25 per cent in India. That is mostly because Indian exporters find it too onerous to meet obligations such as rules of origin. Low awareness is another reason for low utilisation. With lack-lustre growth in India’s exports to South Korea, and much of it happening outside the ambit of the CEPA, there is clearly no point in expanding the pact, until and unless it provides more market access to Indian goods. But that is certainly not going to happen as South Korea has made it clear that it wants increased market access in a number of items including sensitive ones like automobiles and textile that got excluded in the original CEPA. Agreeing to an Early Harvest Programme for the CEPA, under which India would speedily cut down duties on 11 items and South Korea on 17 items, might have been a diplomatic necessity to mark South Korean President Moon Jae-in’s visit last week. Going beyond it would be foolish.
Source: The Hindu Business Line
Tripura, in India’s North East region, is the country’s second largest producer of rubber. But exporters from Tripura have to lug the rubber sheets out to neighbouring states to send it across the border to Bangladesh. This is despite Tripura having more than one trading station with Bangladesh, says Jayanta Choudhury, senior lecturer teaching rural development at Tripura University. There are problems of reciprocity with Bangladesh too, but the cumbersome rules for rubber export from Tripura that if sorted would add to the state’s economy handsomely, has been in vogue for decades. The rules demonstrate why India, despite its booming economy, scores so low in global trade coming in at 20th position (WTO data). The key lesson from free trade agreements (FTA) is they offer preferential access to the markets of other countries than is possible through the WTO framework. “Big, medium, small – all countries are searching for such access across the world”, says Amitendu Palit, Senior Research Fellow and Research Lead (Trade and Economic Policy) at the Institute of South Asian Studies, Singapore. But as a “trade purist”, India showed no interest in developing these platforms till the late nineties. “It was only after the Uruguay round of trade negotiations when we saw other countries setting up trade arrangements did India sign its first FTA with neighbour Sri Lanka”, says Ashok Sajjanhar, former Indian Foreign Service officer. The Ambassador, who has done stints in Europe and Asia, said the string of agreements has shown Inda has made little use of its FTAs. India’s unwillingness to engage in FTAs is also dictated by the puny size of the domestic manufacturing sector at less than 18 per cent of the GDP. Most products are not competitive abroad as stand-alone brands. “It is largely on account of our own product deficiency. We can use FTAs only if our producers can tap the global value chain. Else its no good,” said former commerce secretary Rajiv Kher and now distinguished fellow, RIS. The deficiency could have been made good by undertaking what Palit calls “comprehensive approach on potential FTA partners in alignment with national interests – both economic and strategic”, but ministers scared about backlash from both industry and labour signed on the documents with hardly any conviction. This made it easy for the customs department under the finance ministry to set up stiff terms. “Customs duties are an important source of revenue which is difficult to compromise on. With persisting fiscal stress, it made our reluctance to give up tariffs and offering of greater market access much more than just a domestic industry issue, said Palit. Yet, as commerce secretary, Rita Teotia says India’s trade is balanced with those countries with which there are no agreements. She says FTAs with countries like Australia or New Zealand offer little benefit for India as their interest is limited to only a few tariff items. When India sails out to do FTA with partners like Korea or EU, the lack of competitive advantage of Indian manufacturing makes the process unequal. So, there is no reason to rush to sew up preferential trade agreements. Kher says “India must finalise trade agreements with Eurasia, Iran, some African nations such as Kenya and Ethiopia, and Latin American countries such as Peru, post haste”. But the commerce ministry would rather not walk on any FTA as of now. Her bleak assessment is shared by most in the industry. This is despite the risk posed by the threatened walkout from WTO by the USA under President Donald Trump that is making others work on mutual trade arrangements that would survive the collapse of the global trade architecture. Abhijit Das, head and professor at the Centre for WTO Studies, said FTAs also agreed, adding it makes little sense for India to keep engaged on FTAs. Except for India-EU FTA, which would have helped the textiles, he supported Teotia’s position that none of the other FTAs would help India.
Source: Business Standard
The growth for BRICS, led by India and followed by China was due to their growing exports to the world at 13 per cent and 5 per cent year-on-year respectively. Overall exports from India to BRICS saw an upswing of 7.5 per cent in the first quarter of 2018 over the corresponding period of last year in terms of total volumes, a report said on Monday. Ahead of the BRICS summit in South Africa, Maersk Line, one of the leading container shipping company, has released the BRICS Export-Import (EXIM) containerised trade data. The world registered a year-on-year growth of 1.5 per cent in the first quarter of 2018 as against in the same period last year. "The overall exports from India to BRICS saw an upswing of 7.5 per cent in Q1 2018 year-on-year in terms of total volumes while the country's imports from BRICS nations is reduced by 3.5 per cent," the report said. The growth for BRICS, led by India and followed by China was due to their growing exports to the world at 13 per cent and 5 per cent year-on-year respectively. Commenting on the export development amongst BRICS nations, Steve Felder, Maersk Line Managing Director for India, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives said, In 2017, the BRICS nations contributed to 23.6 per cent of the world economy in terms of GDP value and as per IMF, this will rise to 26.8 per cent by 2022.
Source: Business Standard
New Delhi : The Centre will come out with amendments to Special Economic Zones (SEZ) Rules, to synchronise them with the Goods and Services Tax (GST) laws by end of this month, a senior government official has said. “We have been working for a few months on the amendment of SEZ Rules, 2006 to synchronise it with the GST laws. Following due consultation process with the Department of Revenue, I am glad to tell you that this fairly elaborate amendments of the rules is likely to come out now by the end of this month. It is almost at the final stage,” said Bidyut Behari Swain, Additional Secretary, Department of Commerce, at an Assocham International SEZ Investment Summit on Tuesday. Swain said while the Department of Commerce consistently looks at facilitating ease of doing business by removing bottlenecks, it was observed that there is a possibility of different authorities handling administrative and financial matters being at slight variance with each other, according to an Assocham release. “We have taken up a project in which we would like to have a very clear set of guidelines regarding how administrative and financial matters by the authorities are carried out and we are hopeful that we will come out with a report in two months which should be implemented in three months,” he said. Pranab Kumar Das, Special Secretary and Member Customs, Central Board of Indirect Taxes and Customs (CBIC), said his department will get in touch with the Commerce Ministry to explore possibility of connecting SEZ Online with National Import Database (NIDB) for better uniformity and transparency in operations, the release added. “We will definitely get in touch with Ministry of Commerce and try to find out whether the SEZ Online can also be housed in our system and with facilities provided to development commissioners and officials posted there so that they get benefit not only from SEZ Online but also the robust facility that is already available within CBIC,” said Das.
Source: Business Line
The rupee on Tuesday dropped by 8 paise to close at 68.94 against the US currency, extending its fall for a second straight day due to sustained dollar demand from importers even as local equities hit a record high. The rupee plunged below the 69 mark in early session to trade near its all-time low levels due to overnight gains in the dollar against global currencies. However, local unit regained some lost ground towards the tail-end as overall trading mode turned little positive after the dollar lost strength against the euro, pound and safe haven Japanese yen. The dollar index was down 0.16 per cent at 94.48 against overnight levels of 94.84. Domestic forex sentiment also remained shaky due to ongoing tensions between the US and other global economies, a dealer said. Currency traders also reacted negatively to comments by President Trump on EU and China for manipulating their currencies and keeping interest rates lower, raising concerns that the current global trade tensions could be followed by a currency war. Most Asian peers were also trading weaker against the greenback. On the energy front, crude prices trade little changed as rising tension between the US and Iran highlighted risks to supply. The benchmark Brent was trading 20 cents up at $73.26 a barrel. The rupee resumed sharply lower at 68.96 compared to 68.86 previously at the Interbank Foreign Exchange market. It lost ground to hit a session low of 69.08 in mid-morning deals due to steady dollar demand, but managed to cut losses short and ended at 68.94, down by 8 paise or 0.12 per cent. The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 69.0530 and for the euro at 80.5434. The bond market, however, staged a recovery and the 10-year benchmark yield settled lower at 7.78 per cent. In the meantime, equities maintained their upbeat trend with both the benchmark indices — Sensex and Nifty closing at life-time high levels on the back of encouraging earnings. In the cross currency trade, the rupee remained under pressure against the pound sterling to settle at 90.52 per pound from 90.50 and softened against the euro to finish at 80.69 from 80.68 earlier. It also edged lower against the Japanse yen to close at 62.08 per 100 yens from 62.00. In forward market today, premium for dollar showed mixed trading activity due to lack of market moving factors.The benchmark six-month forward premium payable in November was steady at 103-105 paise, while the far-forward May 2019 contract edged up to 253-255 paise from 252-50-254.50 paise yesterday.
Source: Hindu Business Line
Due to the ongoing all-India strike by truck operators, Rs 70 billion worth of trade in goods has been affected in Tamil Nadu alone, said All India Motor Transport Congress' (AIMTC's) representatives. Vegetable prices are also soaring in various parts of the state, especially in Chennai, due to the strike. Truck operators are demanding the closure of toll plazas across the country. They are also pressing for the acceptance of a charter of demands, including a reduction in fuel prices and uniform national pricing with quarterly revision, among other things. They have been on strike for the past five days. C Dhanaraj, secretary of the State Lorry Owners Federation – Tamil Nadu, which is spearheading the strike in the state, said that almost its entire 460,000-strong truck force was off the roads, causing a loss of Rs 3 billion every day. G R Shanmugappa, south zone general secretary of the AIMTC, said that due to the strike, good worth Rs 70 billion were stuck in various parts of the state. Meanwhile, the stock of textiles has piled up in the towns of Tirupur, Karur, and Erode and from other major textile production centres in the state. Tirupur Exporters Association President Raja M Shanmugham said, "The ongoing indefinite lorry strike has created a major impact on Tirupur's knitwear exporting units as they could not transport the finished garments for shipment either through seaports at Thoothukudi, Chennai, Kochi, and Mumbai or through airports at Chennai, Bengaluru and Kochi." He added that in the "season-conscious and design-driven export market", on-time supply is a major factor. Shanmugham said that any delay would not be appreciated by foreign buyers at a time when Indian exporters are competing with countries like Bangladesh, Cambodia, Myanmar, Sri Lanka, Pakistan, Vietnam, and China in the international market. Shanmugham added that given the nature of production activities in the Tirupur cluster, the stoppage of vehicle movement from garment units to outside job working units -- like knitting, dyeing, compacting, printing, embroidery, checking, ironing, and packing -- will affect production. Further, he said that these job working units would not be in a position to provide work to their employees as a result. Reports stated that tension prevailed at the goods yard in the Namakkal railway station. While rice meant for the public distribution system was being loaded onto lorries from the goods compartments, a group of truck operators arrived on the scene and entered into an argument with the Railway Goods Yard Lorry Owners Association and prevented the loading operation. Vegetable prices at Chennai's Koyambedu market have gone up by 15-20 per cent due to the strike. Tomato prices have increased by Rs 5 to Rs 25 a kg, big onion prices have increased by Rs 5 to Rs 25 a kg, small onion prices have increased by Rs 25 to Rs 65 a kg, potato prices have increased by Rs 6 to Rs 25 a kg, green chilli prices have increased by Rs 5 to Rs 35 a kg, and carrot prices have increased by Rs 20-25 to Rs 50-55 a kg. Around 300 lorries used to come to the market every day. However, due to the ongoing strike, lorries from other states are not coming to the market, which has led to the increase in prices.
Source: Business Standard
Amid debate over employment generation in India, wealth management firm ASK Wealth Advisors estimated that around five million jobs were created in the non-farm sector in 2017. The ASK figure is higher than the Centre for Monitoring Indian Economy’s (CMIE’s) estimate of 2 million job creations for entire economy in 2017, but lower than the estimation by Ghosh & Ghosh (State Bank of India chief economist Soumya Kanti Ghosh and Indian Institute of Management-Bangalore professor Pulak Ghosh). Based on Employees’ Provident Fund (EPF) subscribers, Ghosh & Ghosh had estimated 7 million jobs in the formal segment of the non-farm sector in 2017-18. Prime Minister Narendra Modi had said 4.5 million new subscribers had joined the EPFO, of which 77 per cent were less than 28 years of age, in the nine months between September 2017 and May 2018. Estimates by ASK were not as rosy as what was presented by the PM. “Actual employment creation in the country is neither as gloomy as only 2 million annual job creation in the whole economy, a conclusion based on traditional employment surveys, or as hopeful as 5-7 million jobs only in the “formal” part of the non-farm sector as recent EPFO-based estimates would seem to suggest," said Somnath Mukherjee, managing partner, ASK Wealth Advisors. The new study attempted to come out with an estimate of employment using three different sources. It employed data on commercial real estate sector to enable them to come up with estimates of employment being created in the urban offices (UO). However, most of the new jobs were created in the employment intensive sectors in non-offices such as the factories in the manufacturing sector, construction sites, retail spaces, hospitality, educational and medical facilities (FRESHH), said Mukherjee. To estimate this segment, ASK relied on the quarterly estimate of employment (QES) by the Labour Bureau. Finally, data from the industry was tapped to arrive at estimates of people employed “on the go” (OTG) -- broadly covering the employment in e-commerce, transport, logistics, and warehouse sectors. Using these sources, ASK estimated that the new additions to employment only through UO was 0.9 million in 2017. There was a strong correlation (62%) of current year’s real gross domestic product (GDP) growth with the job creation of the next year in the UO segment. Another up to 3 million jobs were created in the non-offices (FRESHH) sectors. Finally, another close to a million people were estimated to be employed “on the go” (OTG) sectors, according to the estimates. When asked how would ASK estimate employment in FRESHH if the labour bureau stopped quarterly employment survey, Mukherjee said they would use EPFO payroll survey but only when it stablised. A panel under former chief statistician TCA Anant is reviewing the quarterly survey. The EPFO payroll survey gives lots of duplication, he said, adding the office had taken several measures to drive employees to enrol themselves. The numbers thrown up by the payroll figures include this bump up, he said. As such, the figures given by Ghosh & Ghosh were over-estimated, he said. Also, the picture is not as dismal as was portrayed by CMIE.
Source: Business Standard
Prime Minister Narendra Modi and Chinese President Xi Jinping — both of whom are headed to South Africa for the BRICS leaders’ summit — have visited Rwanda within a few hours of each other. Modi went on to Uganda, while Xi is visiting Senegal and Mauritius. Why Rwanda, the country Modi became the first Indian Prime Minister (and Xi the first Chinese President) to visit? It is one of Africa’s fastest growing economies, and President Paul Kagame is chair of the African Union. India signed two loan agreements worth $ 100 million each for investments in agriculture and the development of special economic zones; China gave a loan of $126 million to build two roads. After the end of its civil war, Rwanda is moving steadily on the path of recovery and national reconciliation. About 3,000 Indian nationals and PIOs live in the country — its only sugar refinery, only modern textile mill, and a soap and cosmetic factory are all PIO-owned. The Rwandans have always had a positive attitude towards the Indian community. During the infamous 1994 genocide — in which an estimated 500,000 to a million Rwandans, mostly Tutsis, were massacred in a window of 100-odd days — no Indian was killed or injured, and neither the government forces nor Kagame’s Rwandan Patriotic Front interfered with the evacuation of Indian nationals by the Indian government from Rwanda to Bujumbura (Burundi) and Nairobi (Kenya). India-Rwanda bilateral relations have been cordial and have grown steadily over the years. In 1999, Rwanda officially opened its mission in New Delhi and posted a charge d’affaires; in 2001, it appointed its first resident ambassador in New Delhi. India has taken a decision to open a diplomatic mission in Kigali, the capital of Rwanda, and the modalities are being worked on. In Uganda, India established its diplomatic presence in 1965, even though the countries’ relationship dates back to the era when traders ferried goods in dhows across the Indian Ocean. Eventually a number of Indians settled in East Africa, and many made Uganda their home. India’s freedom struggle inspired early Ugandan activists to fight colonialism, and the country achieved freedom in 1962. Under President Idi Amin in the early 70s, nearly 60,000 Indians and persons of Indian origin were expelled from Uganda. President Yoweri Kaguta Museveni, who came to power in 1986 and continues to rule Uganda, however, reversed his country’s anti-Indian policies. Modi’s visit to these countries is a reflection of the intensity and seriousness of New Delhi’s engagement with Africa, which got a fillip with the visit of more than 40 Heads of State and Government for the 3rd India-Africa Forum Summit in October 2015, and of several other Heads during the International Solar Alliance (ISA) Founding Conference this March. President Kagame visited India to participate in the Vibrant Gujarat Global Summit 2017, and again the following year for the ISA conference. Uganda is currently chair of the East African Community. There are over 30,000 Indians/PIOs in the country, and President Museveni is credited with inviting back many Indians and assuring them of their safety and security. He has also been hosting the Indian community for Diwali dinners in the State House. With both Rwanda and Uganda, India signed defence cooperation agreements — a key takeaway from Modi’s visits. While India’s structured outreach to Africa began in 2008, China was quicker — President Jiang Zemin began the process in 2000, with the first ministerial meeting of the Forum on China-Africa Cooperation (FOCAC) in Beijing. “Africa, in many ways, has been a learning ground for China’s international role. What China has been doing in the continent must be watched closely as it showcases the future of Chinese power… It was the Sudan conflict where China first took a proactive position on an internationally significant conflict; it was in Mali that China sent its first combatant unit under the UN peacekeeping framework in 2013; and Djibouti will be the first location of the People’s Liberation Army’s overseas base,” researcher Avinash Godbole wrote in a 2015 paper, China’s Deepening Engagement with Africa and Its Implications, for the Institute for Defence Studies and Analyses (IDSA).
Source: The Indian Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1298.18 |
USD/Ton |
0.69% |
7/24/2018 |
|
VSF |
2139.04 |
USD/Ton |
-0.34% |
7/24/2018 |
|
ASF |
3068.42 |
USD/Ton |
0% |
7/24/2018 |
|
Polyester POY |
1423.57 |
USD/Ton |
0% |
7/24/2018 |
|
Nylon FDY |
3437.22 |
USD/Ton |
0% |
7/24/2018 |
|
40D Spandex |
5163.20 |
USD/Ton |
0% |
7/24/2018 |
|
Nylon POY |
5568.88 |
USD/Ton |
0% |
7/24/2018 |
|
Acrylic Top 3D |
1644.85 |
USD/Ton |
0.45% |
7/24/2018 |
|
Polyester FDY |
3097.92 |
USD/Ton |
0% |
7/24/2018 |
|
Nylon DTY |
3171.68 |
USD/Ton |
0% |
7/24/2018 |
|
Viscose Long Filament |
1644.85 |
USD/Ton |
0.90% |
7/24/2018 |
|
Polyester DTY |
3533.10 |
USD/Ton |
0% |
7/24/2018 |
|
30S Spun Rayon Yarn |
2817.63 |
USD/Ton |
0% |
7/24/2018 |
|
32S Polyester Yarn |
2094.78 |
USD/Ton |
0.71% |
7/24/2018 |
|
45S T/C Yarn |
2876.64 |
USD/Ton |
0% |
7/24/2018 |
|
40S Rayon Yarn |
2979.90 |
USD/Ton |
0% |
7/24/2018 |
|
T/R Yarn 65/35 32S |
2537.34 |
USD/Ton |
0% |
7/24/2018 |
|
45S Polyester Yarn |
2227.55 |
USD/Ton |
0.67% |
7/24/2018 |
|
T/C Yarn 65/35 32S |
2448.83 |
USD/Ton |
0% |
7/24/2018 |
|
10S Denim Fabric |
1.38 |
USD/Meter |
0.43% |
7/24/2018 |
|
32S Twill Fabric |
0.85 |
USD/Meter |
0% |
7/24/2018 |
|
40S Combed Poplin |
1.18 |
USD/Meter |
0% |
7/24/2018 |
|
30S Rayon Fabric |
0.66 |
USD/Meter |
-0.22% |
7/24/2018 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
7/24/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14752 USD dtd. 24/7/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
India’s imports from the US jumped a massive 38% in the first quarter of this fiscal to $8.53 billion, while those from China dropped 4% from a year before, an outcome contrary to what analysts would have expected at a time when the world’s top two economies are engaged in a trade war. While Washington’s protectionist moves are directed at India too, China is widely believed to be looking for alternative markets like India to offset its reduced exports to the US. Clearly, the Trump administration’s insistence on greater market access is yielding results. The US emerged as India’s second-biggest goods import destination (after China) in Q1, having improved its position from the fourth-largest exporter to New Delhi a year before. Of course, what made the growth in India’s purchases of American goods substantial was also the fact it came off an unfavourable base (imports had grown 33% in Q1FY18), while exports to the world’s largest economy grew only 11.7% in the June quarter, showed the latest commerce ministry data. This means India’s merchandise trade surplus with the US could shrink for a second straight year — something the Trump administration will cheer. India’s overall merchandise exports grew 14.5% in the first quarter, while imports rose 11.6%.India’s exports to China jumped, unusually, by almost 62% in the first quarter of this fiscal to $4.03 billion, albeit on a relatively low base. As for imports, China still remains India’s largest destination, having accounted for goods supplies worth $17.36 billion in Q1, against the US’ $8.53 billion. Interestingly, India’s exports to Hong Kong — considered a gateway to China — dropped 25% in the April-June period, while imports from Hong Kong rose over 8.8%. This suggests more Indian products are perhaps being shipped to China directly rather than through Hong Kong to bypass the traditional Chinese non-tariff barriers. In fact, at $14.69 billion, India’s merchandise exports to Hong Kong beat those to China last fiscal. While the Trump administration has targeted New Delhi, among others, in a bid to set right the US’ trade deficit, New Delhi has been impressing upon Beijing to reduce the massive trade imbalance in the latter’s favour. India’s goods trade surplus with the US dropped almost 6% to $22.9 billion in 2017 from the year before, according to US official data. India is one of the few countries with which US’ trade deficit has decreased in the last one year. While China alone accounted for a massive $375 billion, or 46%, of the US goods trade deficit of $810 billion in 2017, India made up for just 2.8% and occupied the ninth spot in the list of nations with which the Trump administration seeks to pursue a trade balance agenda. India’s massive trade imbalance with China has long been a sore point with New Delhi, which has raised the issue in almost all bilateral trade discussion with Beijing for years now, but with very limited success. India’s merchandise trade deficit with China touched a record $62.9 billion last fiscal. Precious and semi-precious stones were the biggest imported item segment, having made up for 18% of the total imports from the US in Q1, followed by coal, coke and briquettes (almost %). Telecom equipment made up for close to 12.5% of India’s imports from China and electronic equipment 6.5%.India and the US are working on a trade package. For India, greater access to the American market in food, farm, engineering goods, auto and auto parts segments hold promise in the long term (over five years), said a senior government official. The US sees good prospects for its companies in Indian civil aviation, oil and gas, education service and agriculture segments. India is seeking an exemption from the US’ additional tariff on steel and aluminium and has conveyed to the World Trade Organisation its desire for retaliatory action involving $235 million worth of American goods if the US doesn’t roll back the “unfair” duties. India has also been seeking greater market access from China in various sectors, especially agriculture, pharmaceuticals and IT, to improve trade balance.
Source: Financial Express
Chinese President Xi Jinping seated with his South African president Cyril Ramaphosa at the Union Buildings in Pretoria after holding bilateral talks. More than 1000 delegates from Brazil, Russia, India, China and South Africa (BRICS) will gather at the Sandton Convention Centre in Johannesburg tomorrow, Wednesday, 25 July 2018 for the BRICS Business Forum which will take place as part of the 10th BRICS Summit. The Heads of State of the BRICS countries will preside over the afternoon session of the Business Forum and provide direction on strategic issues under discussion. According to the Minister of Trade and Industry, Dr Rob Davies, the delegates who will comprise of captains of industry, heads of state-owned entities and government leaders will deliberate on strategic economic matters affecting the future of BRICS. “In line with the BRICS Summit theme, BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in The Fourth Industrial Revolution, the Business Forum will deliberate on the current global political economy and its implications for BRICS member countries, the implications of the 4th Industrial Revolution on inclusive growth and transformation, facilitating Intra-BRICS trade, as well as fostering BRIC-Africa partnerships,” says Minister Davies. Minister Davies added that the business forum will provide a platform to showcase the economic prowess of the African continent with a particular focus on advanced manufacturing, energy, technology,rail, aviation, information and communication technology, financial services and beneficiation (agro-processing and mining), as well as to enhance the flow of foreign direct investments from the BRICS bloc into the continent. The five emerging economies, namely Brazil, Russia, Indian, China and South Africa have enjoyed steady growth. Statistics show that the five BRICS countries have about 41 percent of the world population,while their combined nominal GDP has increased from 12 percent to 23.3 percent of the gross world product and their share of trade volumes have increased from 11 percent to 16 percent of the world’s total. In 2017, the BRICS countries enjoyed a growth rate of 5.3 percent, contributing more than half of the world economic growth. The 10th BRICS Summit is expected to discuss concrete measures to strengthen BRICS’s role in the South-South cooperation as a mean to promote multilateral cooperation and boost the global economy.
Source: Business Standard
WASHINGTON (AP) — The government announced a $12 billion plan Tuesday to assist farmers who have been hurt by President Donald Trump's trade disputes with China and other trading partners. The plan focuses on Midwest soybean producers and others targeted by retaliatory measures. The Agriculture Department said the proposal would include direct assistance for farmers, purchases of excess crops and trade promotion activities aimed at building new export markets. Officials said the plan would not require congressional approval and would come through the Commodity Credit Corporation, a wing of the department that addresses agricultural prices. "This is a short-term solution that will give President Trump and his administration the time to work on long-term trade deals," said Agriculture Secretary Sonny Perdue. Officials said the direct payments could help producers of soybeans, which have been hit hard by the Trump tariffs, along with sorghum, corn, wheat, cotton, dairy and farmers raising hogs. The food purchased from farmers would include some types of fruit, nuts, rice, legumes, dairy, beef and pork, officials said. In Kansas City, meanwhile, Trump told a veterans' convention that he was trying to renegotiate trade agreements that he said have hurt American workers, and he asked for patience ahead of key talks. "We're making tremendous progress. They're all coming. They don't want to have those tariffs put on them," Trump told the Veterans of Foreign Wars national convention. "We're opening up markets. You watch what's going to happen. Just be a little patient." Agriculture officials said the payments couldn't be calculated until after harvests come in. Brad Karmen, the USDA's assistant deputy administrator for farm programs, noted that the wheat harvest is already in, so wheat farmers could get payments sooner than other growers. But officials said soybeans were likely to be the largest sector affected by the programs. Trump declared earlier Tuesday that "Tariffs are the greatest!" and threatened to impose additional penalties on U.S. trading partners as he prepared for negotiations with European officials at the White House. Tariffs are taxes on imports. They are meant to protect domestic businesses and put foreign competitors at a disadvantage. But the taxes also exact a toll on U.S. businesses and consumers, which pay more for imported products. The Trump administration has slapped tariffs on $34 billion in Chinese goods in a dispute over Beijing's high-tech industrial policies. China has retaliated with duties on soybeans and pork, affecting Midwest farmers in a region of the country that supported the president in his 2016 campaign. Trump has threatened to place penalty taxes on up to $500 billion in products imported from China, a move that would dramatically ratchet up the stakes in the trade dispute involving the globe's biggest economies. Sen. Charles Grassley, R-Iowa, said the administration's move was "encouraging for the short term. What farmers in Iowa and throughout rural America need in the long term are markets and opportunity, not government handouts." Indeed, the plan magnified objections among many Republicans that the tariffs amount to taxes on American consumers. House Speaker Paul Ryan of Wisconsin said lawmakers are making the case to Trump that tariffs are "not the way to go." Sen. Bob Corker, R-Tenn., said the administration "finally seems to understand that the Trump-Pence tariffs are hurting the American people. These tariffs are a massive tax increase on American consumers and businesses, and instead of offering welfare to farmers to solve a problem they themselves created, the administration should reverse course and end this incoherent policy." Before departing for Kansas City, Trump tweeted that any U.S. trade partner needs to either negotiate a "fair deal, or it gets hit with Tariffs. It's as simple as that." The rhetoric came as the president has engaged in hard-line trade negotiations with China, Canada and European nations, seeking to revise trade deals he says have undermined the nation's manufacturing base and led to a wave of job losses in recent decades. The imposition of punishing tariffs on imported goods has been a favored tactic by Trump, but it has prompted U.S. partners to retaliate, creating risks for the economy. Trump has placed tariffs on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that allies such as the European Union and Canada reject. He has also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion. The president is meeting with European Commission President Jean-Claude Juncker on Wednesday. The U.S. and European allies have been at odds over the president's tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production.
Source: abc@wbay.com
The Government of Nigeria has launched the Nigeria Agri-business and Agro-industry Development Initiative (NAADI), to revive agro-allied industries including the textile industry. A zonal office for the implementation of the initiative has been set up in Kano, in North West Nigeria. NAADI offices are already set up in Akure, Bauchi, Uyo, Owerri and Sokoto. NAADI would facilitate the achievement of productive and profitable value chains as well as greater agribusiness participation in domestic and international markets, said Hajiya Aisha Abubakar, Nigerian minister of state for industry, trade and investment, at the inauguration of the Kano office, according to Nigerian media reports. The initiative is part of the Federal government’s efforts to accelerate the growth and diversification of the Nigerian economy. It is intended to harness the enormous potentials inherent in the non-oil sector of the Nigerian economy and other opportunities that are capable of diversifying the revenue base of the country, Abubakar, represented by the ministry’s permanent secretary, Edet Sunday Akpan, said. Nigeria’s dependence on imports of manufactured goods has affected the necessary value-chain linkage between agriculture and the industry. So, a major objective of NAADI is to develop an industrialised and commercialised agriculture sector comprising highly productive and profitable commodity value chains with a view to accelerating the growth and diversification of the economy into high value products, Abubakar said.
Source: Fibre2Fashion
A solemn opening ceremony of Azerbaijan’s next trade house was held in Riga, the capital of Latvia on July 23. The trade house aims to promote products under the “Made in Azerbaijan” brand in the Latvian market as well as support the export of the country goods, including wine products, cognacs, vodka, tea, juices, compotes as well as vegetable oils, rice, textile, cosmetic, industrial products, and their sale in Latvia. A delegation, led by Deputy Minister of Economy Sahib Mammadov, attended the opening ceremony, where he stressed that the opening of the trade house demonstrates the two countries’ presidents will in the development of trade and economic ties. He went on saying that the relations between Azerbaijan and Latvia are progressing prosperously in a manner that the investments to Latvia amounted to $164 million, whilst Latvia’s investments to the country were $84 million and the launch of the trade house will contribute greatly for further development. Moreover, local companies, Kaslar and Bina Aqro signed bilateral memorandums of understanding regarding the export of products. Forty companies with Latvian share operate in the country. Trade turnover between Azerbaijan and Latvia amounted to $15.1 million in January-June 2018, according to the Azerbaijani State Customs Committee. The trade house happens to be the county’s first opened in the European Union market. The country’s first ever trade house was opened in Minsk, Belarus in May 2017. The second appeared in Ukraine. Other trade houses are expected to open in Shanghai and Astrakhan soon. The country also eyes such countries as China, the UAE, Netherlands, and Kazakhstan.
Source: Azer news
The French Agency for Food, Environmental and Occupational Health & Safety (ANSES) recently recommended revising the regulatory threshold for chromium VI in leather products and setting a regulatory threshold for nickel in textiles following a study to identify the chemicals likely to be found in these articles that possibly create skin allergies. The French ministries of health and economy had asked ANSES to identify the skin irritant or sensitising chemicals, regulated or non-regulated, liable to be found in these articles, according to an ANSES press release. ANSES proposed a classification as ‘skin sensitiser and/or irritant’ for non-regulated substances identified as responsible for skin allergies. In addition, it recommended organisations responsible for placing apparel and footwear on the market to ascertain with their suppliers the absence of carcinogenic, mutagenic and reprotoxic (CMR) substances, skin sensitising and irritating substances in their footwear or textile clothing and conduct studies to obtain toxicological data on the dyes CI Disperse Orange 37/76 and CI Disperse Yellow 23. ANSES also recommended reminding consumers of the importance of washing any clothing likely to come in contact with the skin before it is worn for the first time and following the washing recommendations issued by the manufacturer. The results of this expert appraisal will serve to support the European Union-level restriction proposal under the REACh Regulation being submitted by France and Sweden on skin sensitising or irritating substances found in clothing and shoes.
Source: Fibre2Fashion
Arnasoy Gold Tex, an Uzbek textile company, is planning to establish manufacture of products under the Zara Home Collection and Tac Home brands in the territory of Uzbekistan, Gazeta.uz reports. Arnasoy Gold Tex, which has a factory with the latest textile equipment and quality standard of ISO 9001, has won the support and recommendations from such world fashion houses as Zara Home Collection and Tac Home. Specialists of these brands have been involved in the work for successful completion of the project, as well as for cooperation for a period of 5 years. The company has an Oeko-Tex Standard 100 certificate, which serves as an additional confirmation of the quality of its products. The factory will be launched in early 2019 and will provide jobs for more than 700 people. The presence of ISO 9001 certificate will allow Uzbek textiles to enter international markets, where the presence of such certificate is a mandatory requirement. Also, it is planned to sign contracts with the world famous brands Nike and Adidas for production of sportswear. This news will be a real gift for football fans, especially now that Uzbekistan is actively developing this branch of sports and physical culture in general. The products to be manufactured at the new factory will easily compete with the products from the world textile leaders. Residents and guests of Uzbekistan will have a great opportunity to buy comfortable and fashionable novelties from well-known manufacturers, made of domestic cotton and sold at an affordable price.
Source: Trend New Agency
The proposed foreign investment in textile and garment industry will bring cotton production in Nigeria to total extinction, the Cotton Ginners Association of Nigeria has cried out. The president of the association, Salman Abdullahi, while addressing a press conference on Tuesday in Abuja, noted that all efforts been put in place over the years on cotton production in Nigeria would be jeopardised if the proposal is approved. The association said it believes that well-meaning investors should rather help to develop and grow the production of cotton and not to bring it to extinction. It said friendly investors should help the existing industry such as farmers, ginneries and textiles to survive and not to send them packing. Abdullahi stressed that while the association is not against having genuine investment in the devastated sector, it believed it should be such investment that would further promote employment of the teeming youths especially at the grassroots which would help to foster security and peace for the country. He stated: “It has come to our knowledge that there are some international organisations with the proposal to invest in Nigeria in the textile and garment industry with a proviso that they would have to be allowed to bring into the country cotton from their home countries to feed the proposed industries. “We hereby reject this proposal in its entirety because of the danger it poses to cotton production in Nigeria and the devastating impact it would have on over two million Nigerian cotton farmers and their dependants. “Beside, this would mean the end of over 52 existing cotton ginneries and with their huge investment lost apart from losing many textiles industry that are trying to come back to operation. “We are indeed at a loss, by the assertion that there is no cotton in Nigeria. We are fully aware that cotton can be grown in 26 out of the 36 states of the federation. Cotton has been in existence in the country for close to a century. It is a major cash crop that contributed to the GDP of the nation and the development of not only the Northern Nigeria but the entire country before the advent of oil.”
Source: This DayLive
