The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 20 AUGUST, 2018

NATIONAL

INTERNATIONAL

Revise trade laws, tariffs: U.S. Ambassador

Kenneth Juster says you can’t attract investment and build industry by creating higher duties or more regulation. Calling upon India to rethink trade barriers, tariffs and regulations in order to become a “hub” for innovation and production, U.S. Ambassador Kenneth Juster says that India and the U.S. need to see trade relations as an “important strategic element” of their ties. “I still think there’s a notion here that you can attract investment and build industry by creating higher tariffs or more regulation, or by directing resources in a certain direction,” Mr. Juster said at a function in the capital to talk about the bilateral relationship. He made a particular mention of barriers for the technology industry, including a Reserve Bank order telling technology companies to base all their servers in India. “I worry now with this talk of data localisation. There is a legitimate concern over data privacy, but do not construct these laws in a way that will make it more difficult for India to be a hub for technology companies all over the world,” Mr. Juster warned over the issue that has become one of a growing number of economic differences between New Delhi and Washington over the past few months.

 Intense negotiations

After rounds of intense trade negotiations since June, India agreed this month to put off until late September its plan to hit the U.S. with retaliatory tariffs worth $ 235 million on 29 American products. The action was in response to the U.S. raising tariffs on steel by 25% and aluminium products by 10%, which India has failed to get a waiver on. The U.S. is also taking a decision on whether to cancel India’s Generalised Systems of Preferences (GSP) status over the tariffs issue. The U.S. Ambassador’s comments are an indicator that trade issues will be highlighted during next month’s “2+2” ministerial engagement between India and the U.S., though the main purpose of the talks is the inaugural engagement of Defence and Foreign Ministers on both sides.

On visa policy

In an answer to Parliament last month, External Affairs Minister Sushma Swaraj made it clear that she would raise the US’s proposed legislation to cut down H-1B visas during the talks as well. “We are already raising the issue formally at various fora... We will raise it humbly at the 2+2 dialogue on September 6 in New Delhi,” Ms. Swaraj said in the Rajya Sabha, admitting that the government had several “apprehensions” about the U.S. visa policy. Countering those concerns, Mr. Juster said the problem was that India’s economy was not “open” enough. “There is simply no reason there shouldn’t be more innovation and entrepreneurship taking place in India, rather than having 300,000 Indian entrepreneurs doing their work in the United States,” Mr. Juster told a gathering at the American Centre in Delhi.

 ‘Why?’

“It doesn’t make sense to me, and I ask myself why. And I truly believe it is because the Indian economy needs to open up further to get the full benefits of this innovation and entrepreneurship,” he said, comparing restrictions on the Indian economy unfavourably with those prevalent in smaller countries such as Israel and Estonia.

Source: The Hindu

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What’s ailing the textile sector?

The challenges facing the Indian textile industry are multi-fold. While on the one hand, it is losing to competition because of a lack of free trade agreements (FTAs) with the EU and the US, on the other, the small scale of business is making it difficult for textile manufactures to compete on cost with players from outside. Prabhu Damodaran, Convenor, Indian Texpreneurs Federation, a textile entrepreneurs association that works towards improving the competitiveness of the Tamil Nadu textile sector, spoke with BusinessLine on issues plaguing the sector and how the industry is trying to address them. Excerpts:

Why is India’s textile export falling?

India is facing huge competition from other countries in ready-made garment (RMG) exports, particularly cotton. And, while the world of fashion is moving towards blends, India is not making many blended apparel items. So, on the one side, our traditional items are facing competition, and on the other, we are behind in product diversification. While favourable FTAs and market diversification strategies will help, what is needed to grow our overall textile exports is bringing in a fibre-neutral policy. The tax rate on all textile raw materials should be the same. Now, even after GST, it (tax) is 18 per cent for MMF (man-made fibre) and 5 per cent for cotton. If this change is brought about, textile companies will make and sell more blended textile items from cotton viscose, cotton polyester and polyester viscose, etc, and our export competitiveness will also improve. Vietnam has a higher market share than us in textile exports because it offers a good product spread to its clients with more MMF and cotton blends. Textile imports from Vietnam and Bangladesh are cheaper for buyers across the world.

What can be done to counter this? Is the absence of FTAs a problem for Indian textile companies?

Lack of FTAs with the EU and the UK is a major differentiator in the India versus Bangladesh competition. But it is not just to do with FTAs. In the past few years, the two countries, Bangladesh and Vietnam, have scaled up the size of their factories, design capabilities, marketing strategies and operational efficiency in a big way. The Centre has doubled the import duty on 300-plus textile products; this should curb imports into India. Is the industry happy? It is a good move. It will help domestic textile manufacturers, no doubt. But the move leaves out Bangladesh. It will restrict direct flows from China, but China will use the Bangladesh route to dump their textiles here. India allows duty-free import of ready-made garments from Bangladesh under the SAFTA (South Asian Free Trade Area) agreement. So sourcing restrictions have to be introduced. The Centre should look at tweaking the ‘rules of origin’ in the SAFTA agreement. The benefits under SAFTA should be available only to those countries that mandatorily use yarn and fabrics of Indian origin. This will prevent China from taking undue advantage of a facility given to LDCs (least-developed countries) and, at the same time, boost India’s yarn and fibre exports to Bangladesh and other LDCs.

Is the problem for the industry in the spinning end or the textile end?

In spinning, India is very competitive. We are able to export yarn to many countries, including China, because we have the technology, size, quality, productivity and the ability to manufacture at a very low cost. The problem today is with the textile industry. Though we have improved reasonably in the past few years, there is still a lot to catch up . The apparel sector should work towards global benchmarks in terms of new techniques in manufacturing, particularly improving operational efficiency.

How is Indian cotton in quality compared with that from other countries? Do we meet the global standards?

Indian cotton is a good one in terms of all quality parameters and comparable with any good cotton in the world. But from farm to ginning, a lot of man-made contaminations get into it. Even African countries are supplying cotton with 1.5-2 per cent trash (impurities), whereas we are still struggling with 3 per cent trash levels. From the industry side, we have now started working with selective ginners to introduce a new concept in the trade through contamination-controlled cotton, and are trying to introduce some best practices at the farming and ginning stages.

With the minimum support price for cotton increased significantly, is acreage going to rise under cotton this year?

Yes, we are expecting a reasonable increase in acreage with a definite support-purchase mechanism in place and vibrant domestic consumption; more Indian farmers will go for cotton. But the long-term solution is to increase the average yield. Many countries have crossed 1,000kg/hectare yield. We need to catch up from 550 kg/hectare levels. India should announce a new cotton technology mission to achieve this.

We are hearing of pink bollworm attack in Maharashtra. What is the outlook on cotton output this year?

State governments are working closely on the field. Farmers may be able to manage this issue better this year, and we are expecting a robust crop.

What is the potential for Indian cotton textiles over the next five years in the global market? Will some share from China come to India, given the US-China trade war?

Yes, exports are critical, but Indian textile manufactures should focus on the opportunities in the domestic market too. With increase in disposable income and higher aspirations, India is going to be a faster growing clothing market in the world. In the next seven years, the menswear market size of branded apparels in India will reach a size of $44 billion. Domestic opportunity aside, through trade agreements such as India-Mercosur PTA (Preferential Trade Agreement) and Eurasia-India FTA, we can bring more volumes to the export trade. If the trade war intensifies further, India may naturally get some more percentage of business from the US. But many Chinese companies are moving to LDC countries to spread the risk of this trade war.

Source: The Hindu Business Line

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GST: No profiteering plaint from 17 States/UTs, so far

New Delhi : Not one complaint of profiteering has been made in 17 States and Union Territories under the Goods and Services Tax (GST) regime, post the rate cuts. This, despite a National Anti-profiteering Authority (NAA) being in place, with screening committees in every State. States can file cases suo motu and also forward them for further action.

Possible reasons

 “Gujarat is one of the biggest manufacturing and trading hubs and Tamil Nadu is one of biggest manufacturing hubs. Still not a single complaint against profiteering post-GST has been received from them and 15 other States. It means either the companies there are passing on all the benefits of GST rate cuts to consumers, or the consumers are unaware, or there are some issues with tax officials,” a senior government official told BusinessLine. After the introduction of the new indirect tax regime from July 1 last year, the GST Council has lowered duties on 384 goods and 68 services. The National Anti-profiteering Authority was set up to determine if the reductions in tax rates and the benefits of the input tax credit are being passed on to consumers by way of commensurate reduction in prices. The NAA is stratified at these levels — the Directorate General of Anti-profiteering in the Central Board of Indirect Taxes and Custom (CBIC), a Standing Committee, and Screening Committees in every State.

Screening panels

All the 29 States and three Union Territories (Delhi, Puducherry and Chandigarh) have Screening Committees. Rule 128 of the CGST Rules 2017 prescribes that a complaint can be filed by an interested party or a commissioner or any other person. The official said a commissioner is the most competent authority to find whether a rate reduction has been passed on or not. “On the effective date of rate reduction itself, the commissioner just needs to check whether invoicing has been done properly. If it is, then the benefit will reach the next level and ultimately to the consumer,” he said, adding that at the first level of distribution, any mischief can be reported and action taken. The issue is whether the NAA can ask field officers (Commissioners) to take pro-active steps. The Rules are not very clear on that. “There is no institutional mechanism of superintendence and administration of various layers, especially the States’ Screening Committees and the Standing Committee,” the official said. The DG is one of 10 in the CBIC, reporting to the Board’s Chairman. This is unlike the Competition Commission of India (CCI) where different layers such as DG are under the administrative control of the Chairman. “The current arrangement is making it difficult to achieve the legislative intent that the concession of the government reaches the end consumer,” the official said.

 ‘Consumer must benefit’

Union Minister Arun Jaitley in his blog of July 27 had said that the net revenue loss the government has suffered on account of the reduction of tax on goods and services is about ₹70,000 crore. Now, there is a need to ensure that consumers get the benefit of not only this loss but any possible loss in the future. Keeping this in mind, the NAA wrote to the CBIC earlier this month urging it to ask field officials to look for profiteering and file complaints suo motu. It is expected that the CBIC will write to its Commissioners. The matter can also be taken up with the GST Council so that State governments can instruct their tax officials accordingly. The NAA came into existence last November. As per Rule 137 of the CGST Rules, the Authority shall cease to exist after the expiry of two years from the date on which the Chairman took charge.

Source: Business Line

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CBDT defers till March 2019 GAAR, GST reporting under the new tax audit form

New Delhi: The Central Board of Direct Taxes (CBDT) has put off till March 31, 2019, the proposed GST and GAAR reporting under the amended tax audit form. This dispensation would be available for tax audit reports to be furnished on or after August 20 but before April 1, 2019. In a circular issued on Friday, the CBDT said representations had been received by the Board that the implementation of the reporting requirement under the proposed Clause 30C (pertaining to General Anti-Avoidance Rules or GAAR) and the proposed Clause 44 (pertaining to Goods and Services Tax compliance) of the tax audit Form No 3CD may be deferred. “The matter has been examined and it has been decided by the Board that reporting under the proposed Clause 30C and proposed Clause 44 of the Tax Audit Report shall be kept in abeyance till March 31, 2019. Therefore, for Tax Audit Reports to be furnished on or after August 20, 2018 but before April 1, 2019, tax auditors will not be required to furnish details called for under the two clauses,” the CBDT circular said.

Expert take

Anupam Jain, Executive Director, Nangia Advisors LLP, said the CBDT move is a welcome step, given the new reporting requirement and lack of any guidance on it. “Ever since the revised audit format was circulated, there was much restlessness in the industry and auditors alike on the expansive import of the clause introduced on GAAR. It was indicative of loading tax auditors with an onerous responsibility to step into the shoes of a tax officer and determine if any transaction was an impermissible arrangement,” he said. Further, even though the Act prescribes a threshold of ₹3 crore of tax impact, for a transaction to be categorised as an impermissible transaction, the proposed clause, at the first step wanted disclosure on any ‘impermissible transaction’ and then required quantification, said Jain. Rahul Garg, Senior Partner, Tax and Regulatory, PwC India, said it would have been burdensome for companies to compile the enhanced requirements for tax audit after the close of the accounting period and statutory audits. “The decision of the CBDT would save companies from the effort to go back to their closed and audited books to compile additional information for last year,” said Garg. Sanjay Sanghvi, Partner, Khaitan and Co, said a fair decision has been taken by the CBDT. “It was practically not possible for a tax auditor to provide those details/ remarks concerning applicability of GAAR,” said Sanghvi.

Source: Business Line

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RCEP and beyond

The Centre does not appear to be comfortable with the general drift of negotiations in the 16-member Regional Comprehensive Economic Partnership (RCEP). The reasons are not too far to seek. The RCEP is led by China, with the 10 ASEAN countries, Australia, New Zealand, India, Japan and South Korea as partners. India’s trade engagement with these countries has not been favourable, when seen in terms of the trade deficit. A recent NITI Aayog “note” on Free Trade Agreements and their “costs” points out that India’s trade deficit with the RCEP group (it already has FTAs with the ASEAN, South Korea and Japan) has risen from $9 billion in 2004-05 to over $80 billion today. Its trade deficit with China alone was $63 billion in 2017-18, or about 60 per cent of its overall trade deficit. The bilateral trade deficit has risen exponentially from $0.6 billion in 2000-01 to current levels, and there are no signs of this trend reversing. This surge in Chinese imports — from electrical and electronic goods, plastics, chemicals, boilers and mechanical appliances to toys and stationery items — has undeniably hurt Indian manufacturing, without helping it move up the technology and productivity ladder. A government committed to ‘Make in India’ cannot be expected to embrace a deal that entails zero tariffs on over 70 per cent of goods traded with China, and a higher level of openness with ASEAN. Trying to drive home the point that FTAs in general have not paid off, the NITI Aayog paper says that “exports to FTA countries have not outperformed exports to the rest of the world.” While this is a protectionist view, it is also a product of both domestic and global circumstances. Given the discontent over lack of jobs and agrarian distress, with the general elections less than a year away, this cannot be an opportune time to throw open sensitive sectors such as dairy products. If the RCEP countries are keen on a slice of India’s market, they must sweeten the deal. The push for trade blocs has acquired a new urgency, with the Trump administration unleashing a trade war of sorts against China and even the EU. The RCEP countries, which account for 25 per cent of global GDP and 30 per cent of global trade, could act as a countervailing influence. India too has reversed its years-long policy of reducing tariffs by raising them across the board in the last Budget. Meanwhile, Malaysia’s Prime Minister Mahathir Mohammad has mooted an ‘East Asian Economic Caucus’ to offset China’s economic might. India should seriously consider the impact of any exit from RCEP on its links to global supply chains. The East Asian Tigers were, like India, remarkably protectionist economies, but they opened up at the right time, and at the right pace. India could still learn a few lessons, given its botched experience in industrial development.

Source: Business Line

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Aditya Birla to unveil linen-based fabric brand

Aditya Birla (AB) Group entity Jaya Shree Textiles is planning to unveil a range of linen-blended fabrics under a new brand name, Mazury, complementing its offering of linen-blended apparels under the Cavallo brand, a top official said. Initially, both the brands, in the value-for-money range, would be available only online, Satyaki Ghosh CEO, domestic textile and Thai Acrylic Fibre of the AB Group told The Hindu, adding that the fabrics and apparels would be manufactured at its six decade-old Rishra unit in West Bengal. “With over 41,500 spindles, this is the world’s fourth-largest linen yarn spinning facility,” he said. “The integrated unit houses annual fabric manufacturing capacity of 10 million metres,” he added. The facility also makes worsted yarn from Merino wool. It uses raw material (flax and hemp) from France and Belgium and has four strategic business units, exporting to more than 50 countries according to its official website. Both, the fabrics and the garments, would be made at the Rishra unit which is now being ramped up after a two-month closure. It was closed since June 4, first on account of a strike by workers protesting disciplinary action by the management and then a lockout declared by the company which saw growing militancy by a section of the workers. All this happened amid talks of a productivity-linked five-year wage pact (the current three-year agreement expired in July). It employs about 5,700 persons.

New wage pact

While suspensions were revoked (barring on two who would face enquiry), the management was able to hammer out a five-year productivity-linked wage pact with a daily minimum wage of ₹299, it was learnt. “Everyone is working overtime now,” Mr. Ghosh said, pointing out that promotional campaigns were also being readied for the ensuing festive season beginning with Durga Puja. The unit was being geared up. The AB Group has invested ₹400 crore since 2015, including ₹250 crore recently for a linen production line. The unit, operating as a division of Grasim, contributes about ₹2,000 crore to Grasim’s topline. “While Linen Club, the brand promoted by the Aditya Birla Group for its linen range, has been a pioneer in developing the market for nearly two decades, there is intense competition among the top five players,” added Mr. Ghosh. On Cavallo and Mazury, Mr. Ghosh said that the first lot of shirts and trousers, using a 55:45 linen-cotton blend, was already available on Amazon. Mazury may be unveiled on and offline by August-end. The premium offerings of pure linen garments and accessories are already available at the stores under the Linen Club Studio brand.

Source: The Hindu

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Can technology help revive artisanal textiles? These designers say yes

After a successful display at Lakmé’s Sustainable Fashion Day in February, The Digital Empowerment Foundation (DEF) returns for another showcase this week. Pairing three designers with handloom clusters across the country, the organisation facilitated a creative exchange by providing artisans with access to digital tools and mentorship. The premise of the collaboration, according to DEF’s founder Osama Manzar, is to ensure that weaving communities “are enabled to leverage the benefits of computers and the Internet”. This includes software training, establishment of e-commerce platforms, and social media marketing. Thanks to DEF, designers from three labels — Naushad Ali, Indigene and Three — were able to conduct remote workshops for weavers from Odisha and Uttar Pradesh, delving into topics such as “trending colours” and contemporary design.

Naushad Ali (Puducherry)

At SFD, Ali will present a collection of azo-free, handloom trench coats, trousers, dressers and jumpsuits made by the Musiri weavers in Tiruchiralpalli. “The fabrics are simple and honest, much like life in the agri-handloom-dominated village of Musiri,” shares Ali. “They usually weave saris and veshtis, but we’ve gotten them to do yardage for the first time, while retaining a lot of their typical patterns like checks and stripes.” Ali found the working relationship to be an easy and efficient one because “the artisans were always only a WhatsApp message away”. Even as she praises the initiative, founder Pallavi Dhyani — who collaborated with Barabanki cotton weavers from Uttar Pradesh — believes that real digital empowerment of artisans has a long way to go. The designer shares that her line will feature appliqué and quilting on travel-friendly dresses, high-waisted flared trousers, and jackets. “Handloom weavers often wonder about the long-term when working on a single collection like this,” she shares. “I intend to continue working with the fabric to create awareness, and hope to produce more collections of well-finished pieces that people will fall in love with, and not merely buy because it comes with a handloom tag,” she says.

Indigene (Delhi)

Slim fit pants, kurtas, jackets and kalidars in intricate, geometrically-patterned silk and cotton ikat weaves are what you will find in Indigene’s collaboration with artisans from Barpali and Nuapatna, Odisha. “Unlike their better-marketed Andhra counterpart, Odisha ikatshave largely been about saris with large, animal motifs. But we found more ornate and time-consuming geometric patterns in older artisans’ archives,” shares designer Ruchi Tripathi, who founded Indigene with Jaya Bhatt. “We’ve worked with this and inspirations from Palestinian/Syrian hand-embroidery, to create an ornate, but very global look,” says Tripathi, who found tools such as WhatsApp and computer-aided design software to be an essential part of her collaboration with the weavers.

Source: The Hindu

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Arvind showcases Azurite technology for denims at Gartex

Arvind Limited is showcasing Azurite–the company’s patented technology in denims–at the Gartex India 2018, which opened today at Pragati Maidan in New Delhi. The display comprises a wide range of bottom weight and shirt weight denim products manufactured using Azurite technology. Gartex, the garment textile machinery tradeshow will last till August 20. Azurite product range is an indigo lover’s delight, as it employs indigo dyed weft yarns to complement indigo dyed warp sheets, thereby manifesting a truly premium and unique Blue Cast, Arvind said in a press release. The Azurite product line is targeted towards the true connoisseurs of denim who appreciate very authentic and saturated indigo fabrics. The product lives up to its tagline ‘Nothing is Bluer’ and has a global cult following. Various authentic denim brands and premium retailers use this line of fabrics in their fashion lines. Arvind, a pioneer of the denim revolution in India, has mastered the delicate art of infusing indigo dyed weft yarns in denim fabrics and accentuate such fabrics with very authentic, vintage—industrial garment wash processes. The company has introduced many firsts to the denims industries including various IP-led designs and technologies.

Source: Fibre2Fashion

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TRIFED hosts first Aadi Mahotsav in Nagaland

Dimapur (Nagaland), Aug 19 (ANI): In a bid to promote tribal handicraft and handloom products of Northeast region, the Tribal Cooperative Marketing Development Federation of India Limited (TRIFED), Ministry of Tribal Affairs hosted the Nagaland’s first Aadi Mahotsav at Durga mandir in Dimapur on Saturday. Altogether 35 artisans from Northeast states – Assam, Manipur, Meghalaya, Mizoram, Sikkim, Nagaland and from other mainland states participated in the 10-day-long festival. “The Aadi Mahotsav aims to improve the livelihood of indigenous communities by creating a sustainable market and business opportunities for our tribals based on their culture, knowledge and traditional skills while ensuring fair and equitable remuneration through marketing of their products all over India,” Nagaland Marketing Cooperative Federation Limited (MARCOFED) Managing Director T Vikuto Zhimo said. Zhimo was optimistic that through this Aadi Mahotsav mela will help tribal’s celebrate the spirit of tribal culture, craft, cuisine and commerce, and also provide tribal artisans to exhibit their products cum sale and channelise tribal natural skills and provide them source of income. Various items like potteries, khadi, handicrafts, etc were on sale.

Source: Deccan Chronicle

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Global Textile Raw Material Price 2018-08-19

Item

Price

Unit

Fluctuation

Date

PSF

1498.03

USD/Ton

2.79%

8/19/2018

VSF

2072.52

USD/Ton

0.21%

8/19/2018

ASF

3025.15

USD/Ton

0%

8/19/2018

Polyester POY

1643.47

USD/Ton

2.26%

8/19/2018

Nylon FDY

3388.75

USD/Ton

0%

8/19/2018

40D Spandex

5017.68

USD/Ton

0%

8/19/2018

Nylon POY

5490.36

USD/Ton

0%

8/19/2018

Acrylic Top 3D

1868.90

USD/Ton

2.39%

8/19/2018

Polyester FDY

3083.33

USD/Ton

0.47%

8/19/2018

Nylon DTY

3199.68

USD/Ton

0%

8/19/2018

Viscose Long Filament

1832.54

USD/Ton

2.02%

8/19/2018

Polyester DTY

3490.56

USD/Ton

0%

8/19/2018

30S Spun Rayon Yarn

2748.82

USD/Ton

0%

8/19/2018

32S Polyester Yarn

2283.41

USD/Ton

1.29%

8/19/2018

45S T/C Yarn

2966.98

USD/Ton

0.49%

8/19/2018

40S Rayon Yarn

2908.80

USD/Ton

0%

8/19/2018

T/R Yarn 65/35 32S

2530.66

USD/Ton

0.58%

8/19/2018

45S Polyester Yarn

2414.30

USD/Ton

0.61%

8/19/2018

T/C Yarn 65/35 32S

2516.11

USD/Ton

0.58%

8/19/2018

10S Denim Fabric

1.36

USD/Meter

0%

8/19/2018

32S Twill Fabric

0.84

USD/Meter

0%

8/19/2018

40S Combed Poplin

1.16

USD/Meter

0%

8/19/2018

30S Rayon Fabric

0.65

USD/Meter

0%

8/19/2018

45S T/C Fabric

0.70

USD/Meter

0%

8/19/2018

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14544 USD dtd. 19/8/2018). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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EU, 11 others back US complaint against India's export subsidies at WTO

The European Union, Russia, China, Japan and eight other countries have backed the US complaint against India’s export promotion schemes at the World Trade Organisation (WTO). These countries have joined the dispute as third parties. The US has challenged almost all of India’s export programmes at the WTO saying they will harm its workers, citing the Agreement on Subsidies and Countervailing Measures (ASCM). It pegged the subsidies at $7 bn. “The number of third parties in the issue is a matter of concern and has serious implications. They are backing the complainant,” said a person aware of the development. Negotiators had expected other countries to join the dispute when it began in March. Former commerce secretary Rita Teaotia has said there was a “real” possibility that India could lose the trade dispute. “It is a much larger issue now with the number of countries targeting India,” the person added. Brazil, Canada, China, Egypt, the EU, Japan, Kazakhstan, Korea, Russia, Sri Lanka, Taiwan and Thailand have become third parties in the dispute. “All these are interested parties because some countries have market access issues with us while others have problems related to RCEP,” said a Delhi-based trade expert. China, Korea, Japan and Thailand are members of the Regional Comprehensive Economic Partnership (RCEP) trade agreement along with India and have been pressuring it for deep duty cuts on at least 90 per cent of the traded goods. “Sri Lanka wants to benefit from us losing our export incentives because it competes with us in many exports,” the expert explained. The WTO has set up a panel under the Philippines’ Jose Antonio S Buencamino as the two sides have failed to find a mutually agreed solution through consultations. The panel’s other members are South Africa’s Leora Blumberg and Switzerland’s Serge Pannatier. “There is pressure on India to prepare its defence because the setting up of the panel is an important step forward,” said a negotiator. The panel has to circulate its report to all WTO members within 90 days of the date of its composition and the establishment of its terms of reference.

Source: The Economic Times

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Trade expansion likely to boost India-Vietnam ties

As India and Vietnam celebrate 45 years of bilateral relations by upgrading their Comprehensive Strategic Partnership, the future seems to hold a lot of potential for the two nations. The rising power of India, not just in South Asian region but with considerable clout in the Indo Pacific, will be more balanced than before, said Vietnamese envoy to India, Ton Sinh Thanh. India is one of the three nations with which Vietnam has Comprehensive Strategic Partnership, the other two being China and Russia. It was during Prime Minister Narendra Modi’s visit two years ago that the partnership was elevated. Vietnam has Strategic Partnership with 11 countries. Vietnam boosts of US$2,100 per capita per annum. This year will see more dialogues between India and Vietnam. Visits from India include a just concluded trip of Defence Minister of India, Nirmala Seetharaman. A Defence Dialogue will soon take place in Delhi. External Affairs Minister Sushma Swaraj will visit Vietnam to co-chair a joint meeting in the end of August. According to sources, the President of India is likely to visit Vietnam by the end of this year. Regarding India’s role in the Southeastern region and the Indo Pacific for establishing peace and stability, the Vietnamese Ambassador said, “India is moving fast. It is becoming a strong player in the region and will now look over a bigger space in the Indo Asia Pacific region. Its role will be played out in the extended neighbourhood. We welcome India’s new role and its engagement in the region, so does the Association of South East Asian Nations (ASEAN).” Thanh said, “India’s increasing role and growing power will act as a balancing element inthe region.” Trade between India and Vietnam has scope to expand further. Ambassador Thanh said, ‘’FTA between India and ASEAN should be upgraded and expanded for the pact to deliver desired results. ‘’Vietnam wants to diversify trade with different countries specially India which is a big market and a big investor.’’ There is need to expand the agreement to include more products, the ambassador added. Last year, the trade between India and Vietnam stood at US$7.56 billion, a very small amount compared to other countries of the world that stood at US$420 billion last year. In the year 2016-17 investment from India to Vietnam was a little more than US$800 million which is very small in comparison to the total of US$300 billion investment from the world. Indian companies are investing to the tune of US$40 billion a year in the world whereas in Vietnam it was merely US$100-150 million a year. Thanh said, ‘’There is a lot of potential for Indian companies to invest in Vietnam. Big groups like Mahindra and Adani are looking for investing in Vietnam.” Vietnam has a good foreign investment regime, labour cost is low. Bilateral trade with Vietnam is much lesser in trade with India even in the ASEAN countries. With Singapore it is US$20 billion and with Indonesia, Malaysia around US$18 billion. Vietnam has a 100 billion trade with China. Elucidating the demand in Vietnam’s textile sector, the Ambassador informed that textile was one sector where Vietnam imported to a tune of around US $10 billion every year. He expressed that India has the capacity of meeting Vietnam’s demands for textile inputs. ‘’If trade was opened up, we could be importing a lot of items from India’’, he said. ‘’There a potential of 20 billion trade in textile to Vietnam from India which is a possibility waiting to be explored. Vietnam needs it and this is the time’’. Presently investment from India is merely US$1 billion, there is scope for much more like in energy, especially in solar energy and tourism. India and Vietnam commonalities are abound as both countries are rapidly growing economies. Vietnam’s growth rate last year was at 6.8 per cent and in the previous years, it has even touched 9 per cent. The Ambassador said that while the defence ties were robust, the economic relation could still be taken much forward. And the cultural ties needed to be tapped. He informed Vietnam exports are more than the country’s GDP. The South eastern country is trading with more than 200 countries presently. India, although, has objections to China’s ambitious Belt and Road Initiative (BRI), Vietnam is still studying the various aspects of the initiative. “We have to figure out if it is good for us or not. If it is good, we will join it, if not, we will stay away from it,” he said. Unlike India, however, Vietnam had attended the big BRI meet that China organised last summer. Thanh did not mince words on the Indo Pacific saying India’s vision on the Indo-Pacific, which was revealed in Modi’s address at the Shangri-La Dialogue recently, was similar to Vietnam’s approach, which is about inclusiveness, openness and engagement rather than confrontation. “We, in fact, refer to the area as Indo Asia Pacific,” he said. Vietnam has issues with the growing Chinese footprint in the South China Sea and it wants a rules based order to prevail (like India does). “Vietnam will raise its voice, asking for support from other countries, including those outside the region because so many vessels pass through the seas (which makes other nations also stakeholders).” In the absence of direct flight from New Delhi to Hanoi tourist traffic to Vietnam and India is considerably poor. It is a roadblock that the two governments are working upon. The Ambassador informed that connectivity between the two capitals is being worked out and talks are being held. Currently, only Jet Airways operates flights to Ho Chi Minh City from New Delhi and Mumbai via Bangkok. Last year 110,000 tourists visited Vietnam while 22 million Indians travelled abroad. 3.5 million Indians went to South Asia out of them 1.6 million went to Thailand alone. Vietnamese come to India for pilgrim. Vietnam is expecting 1,70,000 visitors this year, as per reports. The number of Indian tourists to Vietnam has risen from 16,000 in 2010 to an estimated 1,10,000 last year, Thanh informed and called for promoting India as a destination for Vietnamese. As per the embassy figures 20 million Indians travel overseas every year, while only 90,000 of them go to visit Vietnam. Thanh said the first direct air service between Vietnam’s most populous city Ho Chi Minh City and New Delhi is likely to commence by the last quarter of this financial year.

Source: Tehelka

Azerbaijan's Gilan Textile Park raises exports by 40%

Azerbaijan's Gilan Textile Park has raised its exports by 40 per cent compared to 2017, according to park CEO Mehriban Akhundova, who is also the chairwoman of the Azerbaijani Textile Producers and Exporters Association. Russia continues to remain the biggest importer of the park’s products, followed by Turkey, Ukraine and Belarus, she said. The textile park’s products include bathrobes and towels, bed linen, blankets and pillows made of 100 per cent cotton. Plans are under way to expand exports to other CIS countries, an Azeri news portal quoted her as saying. Equipment from Belgium, Germany and Japan have been installed in the factories located in the park.

Source: Fibre2Fashion

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Exporters demand tax exemption certificates on machinery imports

KARACHI: Value-added textile exporters on Saturday urged the government to expedite release of tax exemption certificates on machinery imports as the delay in such issuance is costing them demurrage. The exporters have been availing exemption from withholding tax on machinery imported under government’s balancing, modernisation and replacement (BMR) initiative since 2008. They need to apply online for tax exemption on the Federal Board of Revenue’s (FBR) system, IRIS. “A large number of our member exporters have complained that after lapse of several days, Commissioner Inland Revenue, Zone-VI, Corporate RTO (Regional Tax Office), Karachi is not providing / issuing exemption certificate despite requests have been submitted online through IRIS,” Pakistan Hosiery Manufacturers and Exporters Association (PHMA) said in a letter available with The News. The association, in the letter to FBR Chairperson Rukhsana Yasmin, said the facility to apply for exemption certificate online was introduced to save time and expedite the process, enabling the exporters to import machinery for BMR without hassle to enhance their export efficiency. “It appears that such delays have been deliberately caused for some ulterior motives to fail the automated system as the commissioner also demands the hard copy of such request which is not understood as the IRIS is a centralised system providing access to FBR officials,” it added. PHMA said exporters fall under final tax regime and they often pay excess tax and apply for refunds. They apply for tax exemption to avoid further tax deduction. “Due to excessive delays (of exemption certificates) and since demurrages are charged, the exporters are compelled to pay the input tax to get their machinery released.” The association urged the FBR chairperson to look into the matter and direct the Commissioner Inland Revenue to promptly respond to the genuine and legitimate requests of exporters and do not cause unnecessary hassle to genuine taxpayers in future. Textile exports, accounting for more than 60 of the country’s $23 billion exports, have a minute 1.7 share in the world’s market. The share stood at 2.2 percent a decade ago. Analysts said the textile industry is reluctant to enhance its production capacity as energy shortage and tariffs structure have already left them uncompetitive in the international market. Exporters called rupee depreciation as a stopgap measure to stimulate industrial cycle. Rupee lost around 20 percent since December last year and was seen as a step to improve international competitiveness of Pakistan’s sagging exports. They said rationalisation of energy tariffs at par with regional competitors would give a genuine leg-up to imperiled industrialisation.

Source: The International News

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Kenya: Unregulated imports are killing industry and endangering Kenyans

In the 1970s and 1980s, the average Kenyan town hosted a tailor at every street corner. There was a gentleman’s tailor and another one to carter to the ladies perched on the highest veranda frontage at the market. On a montage behind the tailor stood a display of the best of their works. Usually, these were the uncollected pieces. Beside the busy Singer sewing machine stood rolls of textiles. It is these textiles that made work easy for the village tailor. They were all made in Kenya and proudly sported their manufacturer’s label on the ribbon at the edge. Kicomi and Rivatex were a mark of Kenyan excellence. Fast-forward to the 1990s. Open-air second-hand markets have replaced the tailor as the focus of the village market. Here, you could buy everything, from used underwear to babies’ clothes at low prices. If invited for a ‘first camera’ viewing when the mitumba bales were opened, you could even chance upon a designer label. Suddenly, the village girl matched her city rival in countenance and dress. The village boy too could hold his own against the more savvy and streetwise city dweller. On the face of it, it looked just fine. But the importation of used clothes killed a whole value chain, from the cotton farmer, the textile mills and all the way to the village tailor. It killed the innovation that drove local fashion such that we now rely on hand-me-downs from West Africa, Europe and America. Except for West African wear, the fabrics used never get to the Kenyan tailor. Hence, dressmaking, which almost every woman from the 1940s, 1950s and 1960s could do, is a dying art.

Going down

It is not just the textile industry that has taken a hit. Everything from fruits, toothpaste, cooking oil, sugar, wheat and furniture is now imported. What this means to local industry is death. With unregulated imports of even basic agricultural products, even our farmers are slowly being pushed out of the market. It started with the death of the fisheries industry at the Coast, with local fish exporters such as Wananchi Marine going down, allowing Japanese and Korean trawlers unrestricted access to local resources. Next came the death of the cashew nut sector. Sugar and rice followed. Now the maize sector is staring into the barrel of the gun. From a vibrant and promising economy that assembled cars and refined petrol and cooking oil in the 1970s, we have now become a nation of traders importing even bananas from South Africa and oranges from Israel. We have exported Kenyan jobs to the most unlikely places on earth. Brazilian horsetail hair or real Bulgarian human hair have become must-have accessories won by upwardly mobile women. But that is just one part of the story. Recent revelations on the importation of sugar laced with mercury bring to the fore the question of the safety of imports. There have been reports of fake medicines, fertilisers, seeds or even infant formula. The Kenya Bureau of Standards (Kebs) and other import inspection agencies have either struggled or been compromised, allowing suspect goods into the country. Now we are graduating from destroying jobs to the more sinister destruction of the health of our people. The bold revelation by Cabinet Secretary Fred Matiang’i on suspected contaminated sugar has led to speculation that the high incidence of cancer in the country is associated with the consumption of toxic foods and chemicals, including fake medicines. Improve competitiveness Globalisation is not an excuse for the destruction of local production. As the sugar scandal has shown, the cheap import is often unfit for use and might have been dumped in the market. What globalisation calls for is a more robust quality inspection regime and the fine-tuning of local industry to improve competitiveness. Except for limitations arising from climate shocks, our agricultural sector should hold its own, particularly against producers in the region. It is also possible that some of the produce said to originate in neighbouring countries comes from elsewhere and is merely rerouted into Kenya. This is true for sugar and maize. It is possible that unregulated imports of unmilled maize or maize seed from North America have brought in pests such as the fall armyworm, which has devastated crops in the last year. Countries such as Australia or even the European Union impose strict conditions on the importation of plants and plant or animal produce to limit the occurrence of disease or pests. It should be remembered that the importation of the water hyacinth as a pond beautification plant now threatens fresh water lakes in the region. Likewise, prosopis juliflora commonly known as mathenge, is threatening native species of trees in the arid and semi-arid areas. It is evident that unrestricted imports threaten not only the economy and human lives but also the flora and fauna. It is high time laws governing imports were enforced without let. Also, institutions charged with import verification, testing and registration such as Kebs, KEPHIS and the Poisons and Pharmacy Board must comply with their mandates. Trade and industry policies must also shield local producers from unfair competition.

Source: The Standard Digital

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Egypt seeks to restore global cotton reputation

Egypt’s Trade and Industry Minister Amr Nassar said that cooperation is underway between the Agriculture Ministry and the business sector to develop Egypt’s cotton industry further, diversify its uses in the industry and thus improving the quality of products manufactured by Egyptian cotton, making it more appealing to global markets. Nassar stressed the importance of placing Egyptian cotton in its proper position as among the finest type of cotton in the world. On Saturday Nasser met with the chairman of the Cotton Egypt Association (CEA), Wael Olama. Nasser then expressed how important the CEA’s efforts are in protecting the quality of Egyptian cotton, which includes follow-ups of its DNA through careful sampling, analysis and identification of violations. The CEA conducts global awareness campaigns in major retail chains in the United Kingdom, as well as the Europe, the United States of America, India, Turkey, China and Pakistan. Olama said that the CEA is currently implementing a comprehensive plan to increase the rates of production and exports of cotton, ready-made garments and textiles. He explained that since utilizing careful DNA tests to ensure the cotton is pure Egyptian, the export demand for Egyptian cotton has seen a significant increase. Olama added that the association contracted with an international company to conduct examination of Egyptian cotton samples globally.

Source: Egypt Independent

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Bangladesh: BJMC gets Tk 100cr to pay jute mill salaries

The finance ministry has provided a Tk 100 crore loan under some conditions to Bangladesh Jute Mills Corporation (BJMC) to help the state agency pay salaries and wages of the staff of its 25 loss-making jute mills. A finance ministry official said the loan was provided upon a request of the textiles and jute ministry to pay the salaries and allowances before Eid-ul-Azha. The amount was provided in the first week of the current month. One precondition is that the loan has to be repaid in instalments within 20 years at 5 percent interest. It includes a grace period of five years. Another is that the money cannot be used for any other purpose. The textiles and jute ministry sought Tk 1,000 crore from the finance ministry for the BJMC for paying salaries and allowances and making the 25 jute mills profitable. Last fiscal year the BJMC was given Tk 200 crore in two phases against the textiles and jute ministry's proposal for Tk 1,800 crore as a revolving fund. The finance ministry official said since 2016, the jute ministry has been pushing the finance ministry for about Tk 1,800 crore to pay staff salaries and various dues and to purchase jute. Besides, about 5,500 employees retired in the last few years and the BJMC is unable to provide their dues.  Both ministries held several meetings in 2016 in this regard. After that a piece of land of the BJMC in the capital's Gulshan was sold to the youth and sports ministry and Tk 1,080 crore was given to the BJMC. Even then the problem could not be solved and the BJMC had to be provided an amount every year. Since 2009, the BJMC has been given around Tk 7,000 crore for buying jute and paying dues and staff salaries, said the finance ministry official. The funds were given under various conditions, such as turning the jute mills into holding companies. Of the 25 jute mills under the BJMC, at least five would have to be turned into holding companies. The BJMC will hold the majority of the shares while the rest will be offloaded into the stockmarket. The BJMC has been provided with the fund at various times but it did not fulfil any of the conditions. In the last 11 years, the mills suffered losses every year, save for one, in fiscal 2010-11, when a slight profit of Tk 14.59 crore was made. From fiscal 2006-07 onwards, they made losses of Tk 66 crore to Tk 726 crore each year. Last fiscal year, the BJMC suffered a loss of Tk 489 crore, according to provisional estimates. Officials of the ministries of finance and jute said there were various problems in the running of the jute mills. For instance, the mills are said to be over-staffed: about 60,000 work in them. And the salaries paid to them are much higher than those in the private sector. The jute mills cannot utilise even half of their capacities but they still have to pay salaries to their employees. In 2011, the government reopened five mills that were shuttered due to loss-making and freshly recruited workers for them. When the jute procurement season starts, the mills fail to make purchases due to a lack of funds. They end up paying a higher price to make purchases when the season is over.

Source: The Daily Star

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