In a major relief, the textile ministry may soon announce simplified norms under the Amended Technology Funds Scheme (ATUFS) for players in textile and intermediaries across the value chain. Following severe difficulties faced by textile players to avail benefits under ATUFS due to its complicated structure, a steering committee under the aegis of senior textile ministry officials held its meeting on Thursday to discuss modalities for its simplifications. The industry hopes that the ministry would soon convene a meeting of senior industry officials including their representative bodies to make the scheme industry-friendly. The complications can be gauged from the fact that the textile ministry has received 8160 applications seeking benefits under ATUFS since its launch in January 2016 of which the government has issued unique identity numbers (UIDs) for 6400 projects. Out of the annual budgetary allocations of Rs 23 billion and claim sought for around Rs 18 billion, the government has released a meagre amount of Rs 3.5 billion. “Because of this massive fund blockage with the government, many units are facing financial strain for the purchase of raw material to feed their plants. Since the fund meant for speedy release, companies had borrowed from financial institutions. Consequently, they are paying interest on the fund blocked with the government. So, it is a double blow for the entire textile sector and its value chain,” said K Selvaraju, Southern India Mills’ Association (SIMA). The Finance Minister in the Union Budget 2017-18 and 2018-19 had allocated an annual sum of Rs 23 billion for technology upgradation in the textile sector. But, the complicated structure of ATUFS has made it one of India’s least preferred subsidy schemes. Textile units are facing a number of hardships to avail this benefit. For example, the overseas machinery suppliers should be enlisted in the suppliers’ list for which the government is asking for documents like ISO (International Organization for Standardization) certification which machinery suppliers find reluctance. Secondly, the government has introduced joint inspection by textile experts in financial institutions or industry associations. Apart from the allocation of 16-digit MIC (machine identification code) number engraved on imported machinery, the government has included approval for all individual machinery mandatory required for the plant. “The total fund allocation under ATUFS has been very low since its launch in January 2016,” said Sanjay Jain, Chairman, Confederation of Indian Textile Industry (CITI). While announcing ATUFS, the government allocated Rs 178 billion of which Rs 51.5 billion was meant for ATUFS alone. The balance was scheduled for old TUFS including blackout period, revised TUFS (RTUFS), revised and restructured TUFS (RRTUFS) etc. The textile industry has blamed manpower shortage at the Textile Commissioner’s office for joint inspection. The industry has recommended the textile ministry to set up a special task force to study the difficulties faced under ATUFS. “We believe, the government would soon announce relaxations in ATUFS for ease of doing business in this sector for the benefit of textile sector,” said a senior industry official involved in dialogue with the government. Meanwhile, India’s textiles and apparel exports jumped by a staggering 38 per cent in October due to growing demand from overseas. Led by the US, the largest importer of India’s clothing, the boom has been triggered by recovery in the global economy. Depreciating rupee helped boost realisations of textile, apparel exporters. According to data compiled by the Ministry of Commerce, the country's textile and apparel exports stood at Rs 203.53 billion for October 2018 as against Rs 147.79 billion in the corresponding month last year. While overall textiles exports posted a jump of 28 per cent, shipment of apparel from the country shot up by 54 per cent in the month under consideration. Being closely linked with the country's economy and employment generation, the increase in exports indicates a recovery in the global economy.
Source: Business Standard
Trade talks with the UK are scheduled next month that will give impetus to a free trade pact even as the Theresa May-government grapples with the complexities of Brexit that is being keenly watched by India Inc, which has a sizeable interest in the island nation. “India and Britain are expected to hold unofficial talks on free trade agreement and discuss the issues that need to be incorporated and areas of sensitivity in the post Brexit trade relations next month,” a senior commerce ministry official said. Commerce minister Suresh Prabhu is expected to hold discussions with UK Secretary of State for International Trade Liam Fox, who is due to visit the country in December. Officials said the two leaders were expected to lay the broad contours of the trade talks during their discussions so that negotiators can take them forward. About 800 Indian companies use Britain as a gateway for entry into the European Union and would be keen to continue their relations as Brexit unfolds. Indian firms employ more than 1.1 lakh people in the UK and account for more than $68 billion in revenues. Roughly half of India’s investments to the European Union go to the UK and about three-fourths of that from London. “India and the UK have always shared a close economic relation. It has been the second largest trade partner for India in the EU after Germany. It is in the interest of both countries to work towards intensifying the relations,” the official said. UK’s official exit from the EU will take place in March 2019, but the old rules and regulations will continue till December 2020. Trade between India and the UK stands at $24 billion a year, and analysts believe this can be easily ratcheted up to $30 billion by 2020, even without a trade pact. However, a formal deal can increase trade manifold. India is keen on deals to ease the export of software as well as the movement of IT and healthcare professionals. New Delhi also wants a greater access for generic drugs and pharma firms. India's textile and garment sectors are also extremely keen on a trade pact. They are the country’s biggest forex earners after software and gems and jewellery. India has been getting a raw deal in garments over its main competitors — Bangladesh, Cambodia, Vietnam and Pakistan — which have the advantage of either preferential agreements or quotas. Indian export of garments to Europe on the other hand attracts a 9.6 per cent duty, making such products uncompetitive.
Source: The Telegraph
The document identified a range of areas including trade, investment, infrastructure, defence and security, blue economy and environment for scaling up cooperation. The European Union unveiled a policy document, outlining the broad contours of significantly scaling up ties with India in a plethora of areas like trade, investment, infrastructure, defence, security and counter-terrorism, and proposed a military-to-military cooperation in the Indian Ocean. Releasing the document, the European Union's Ambassador to India Tomasz Kozlowski said it lays the foundation to take the relationship to the next level, besides seeking to work together for a rules-based international order as well as to jointly deal with pressing regional and global challenges. The strategy paper, which replaces a similar document issued in 2004, said the EU has an "interest" in strengthening its political, economic and defence cooperation with India as a strong partnership with New Delhi was key for a balanced EU policy towards Asia as a whole. "The strategy illustrates a very important fact that India is on the top of our agenda in the field of external relations. We think that we are ready for a joint leap now," Kozlowski told reporters. The document identified a range of areas including trade, investment, infrastructure, defence and security, blue economy and environment for scaling up cooperation. On the long-pending India-EU free trade agreement, he said the grouping is committed to negotiate a comprehensive, balanced and economically meaningful agreement on trade and investment, adding both sides are engaged on it. When asked about the contentious issue of data protection, Kozlowski said it is a very sensitive matter for the EU and that three delegations from Europe have apprised the Indian government as well as Indian industries about the EU's new data protection regulation. "We are happy that India is working on its privacy laws. We are impressed by the Supreme Court's ruling recognising privacy as a fundamental right. India is now working on privacy law. The EU will provide our contribution to public consultation on it," he said. The EU is known to have some reservations over India's move to localise data. The envoy said the EU was ready to explore "all options" for starting negotiations with India on data protection and related issues. The document said, as a leading world economy and the world's largest democracy, India's endorsement of a high level of data protection would constitute a critical example at a moment where there is an increasing demand for international standards on privacy. On maritime cooperation with India, he said, "we are proposing to the Indian side to establish military-to military cooperation." "The scope for cooperation, especially in the Indian Ocean, is very large. The EU and India have cooperated in anti-piracy efforts in the Indian Ocean and the EU would like to see India joining on efforts to escort World Food Programme shipments off the coast of Somalia," the envoy said. He said the EU and India should join forces to promote the UN Convention on the Law of the Sea, as the basis of ocean governance and work more closely in the field of maritime surveillance. "The EU aims to enhance overall cooperation with Asian partners, and with India in particular. To this end, the EU will seek to establish military-to-military contacts with Indian counterparts in order to explore concrete opportunities for cooperation," he said. Kozlowski, however, made it clear that it was not going to be a military alliance. Without mentioning China's military assertiveness in the Indo-Pacific region, he said both India and EU were strong promoters of the respect for international law, in particular the UN Convention on the Law of the Sea (UNCLOS). Asked about India joining the US, Australia and Japan in forming a quadrilateral coalition for the Indo-Pacific, he said it was New Delhi's decision and that EU's approach to manage international relations is based on multilateralism. On EU's position on grey listing of Pakistan by the Financial Action Task Force (FATF), he did not give a direct reply, but said the EU favours putting certain countries under such restrictions. FATF, the global financial watchdog had placed Pakistan in its grey list for failing to check terror financing in the country. The policy paper said countering radicalisation, including terrorist financing and preventing violent extremism were of priority for both partners. It said both sides should cooperate to pursue common objectives in international and regional organisations, including at the UN, G20, the FATF and the Global Counter-terrorism Forum, notably on terrorist financing and terrorist designation listing. About regional situation, the document said the stability and security of Asia was increasingly important for European interests and that EU and India should step-up engagement to support the resilience of states, and to address root causes of conflicts through joint approaches and preventive diplomacy. On connectivity projects, it said the EU and India share the view that their approaches to connectivity should be sustainable, comprehensive and rules based. The document recognised that India has emerged as the fastest-growing large economy and favoured deepening of trade and investment ties between the two sides.
Source: Money Control
The proposed India-Mauritius free trade agreement,being given the final touches by negotiators this week, is likely to be signed in January during Mauritius PM Pravind Kumar Jugnauth's India visit, a government official has said. “Textiles and marine products are the two tricky areas for India but the negotiators are trying to sort it out right now in Mauritius. We hope the agreement will be ready to be formalised when Mauritian PM visits in January," the official told BusinessLine. Negotiations on the free trade pact, officially called the Comprehensive Economic Cooperation and Partnership Agreement (CECPA), were suspended in 2013 due to disagreement over the Double Tax Avoidance Agreement (DTAA). Talks, however, re-started last year after the two countries resolved their differences and signed the DTAA. Mauritius is interested in convincing India to eliminate or substantially reduce its tariffs on textiles and marine products as it sees a lot of scope for increase in market access in these two areas. “The Textiles Ministry is opposed to offering zero or very low tariffs to Mauritius in textiles and garments. The Commerce Ministry is trying to convince it that the domestic sector will not be affected as Bangladesh and Sri Lanka already have zero duty access for many textile items in the Indian market,” the official said. Since Mauritius is a small market and has tariffs on very limited lines of products, India is not expected to gain substantially in the area of goods. “There are a number of agricultural items, processed food, furnishings & bed linen and some engineering goods, where tariffs exist in Mauritius and Indian exports can benefit from duty elimination or reduction,” the official said. Besides, New Delhi is expected to make greater in-roads into the services sector, especially tourism and hotels, with the CECPA granting it greater concessions in the area. Mauritius is also a beneficiary of the Generalised System of Preferences offered by Japan, Norway, Switzerland, the US, and the customs union of Belarus, Kazakhstan, and Russia. It is a FTA member of the Common Market for Southern and Eastern Africa and the Southern African Development Community. “Once India has a CECPA with Mauritius, Indian industry could use it as a base to trade with other countries on favourable terms,” the official explained. India’s exports to Mauritius increased 22 per cent in 2017-18 to cross $ 1 billion while its imports from the island nation during the year increased 12 per cent to $ 20.6 million. Apart from the economic gains, which could be limited for India, the free trade pact could help strengthen the common cultural and historical ties that the two countries share.
Source: The Hindu Business Line
The survey of 1,500 MSME owners with annual business revenue between Rs 3 lakh and Rs 75 crore pointed out key challenges for the sector, which has numbers about 60 million. With more and more micro, small and medium enterprises (MSMEs) in India adopting new technologies to grow their businesses, there is a golden opportunity for the sector as it may get as much as Rs 6-7 lakh crore annually from digital lenders alone by 2023, according to a new report. The report titled “Credit Disrupted: Digital MSME Lending in India”, by impact investment firm Omidyar Network and the Boston Consulting Group, surveyed 1,500 MSME owners with annual business revenue between Rs 3 lakh and Rs 75 crore also pointed out key challenges for the sector. There are about 6 crore small business units (MSMEs) in India, and lack of formal credit is one of the major hurdles for them. MSMEs are considered as the backbone of the Indian economy, given their contribution of about 30% of the gross domestic product and 49% of the country’s exports. MSMEs also make an enormous contribution to employment in the country as they the second largest employers, after agriculture. Still, MSMEs contribution to the GDP of India is as much as 10% lower than in the US and 23% than in China. Unavailability of access to formal credit sources is one of the primary reasons for this gap. Therefore, about 40% of the Indian MSMEs borrow from informal sources and end up paying an interest rate that averages 2.5 times higher than the ranges charged in the formal sector. The report, however, showed that more than 40% MSMEs in the country are now more receptive to digital lending, primarily after the introduction of goods and service tax (GST) as about 9.2 million MSMEs are now GST registered, an increase of 50% from the previous tax regime. Also, factors such as the launch of the unified payments interface (UPI) and the decline in mobile data and mobile phones cost as there is a 100% increase in MSME mobile phone adoption have led to a significant number of MSMEs to digitise their businesses. “Easier and cheaper credit through digital lending has the potential to trigger a virtuous cycle for formalization: up to 85 per cent of MSMEs could be formal by 2023,” said Saurabh Tripathi, senior partner and director and Asia-Pacific leader, Financial Institutions Practice at BCG. According to the survey, approximately 50% of MSMEs in the country are expected to use WhatsApp payments once it is fully rolled out. It may be noted that WhatsApp Pay was rolled out in the beta stage earlier this year. Established in 2004 by Pierre Omidyar, the founder of eBay and his wife Pam, Omidyar Network has committed over $1.3 billion to for-profit and non-profit organizations that are engaged in initiatives like financial inclusion, education, digital identity and emerging tech.
Source: Financial Express
The state industries department and the Maharashtra Industrial Development Corporation (MIDC) will soon jointly launch an outreach project to hold interaction with the with the consul generals of 10 countries, overseas and Indian trade bodies, government agencies and companies. The outreach is aimed at reaching out to those who have already carried out investments in the state to understand their experience and seek suggestions to improve ease of doing business. MIDC in the first phase has shortlisted US, Japan, China, UK, Russia, Germany, France, South Korea, Sweden and Singapore. The state undertaking hopes to start interactive sessions from the first week of December which will go on til February next year. MIDC CEO P Anbalagan told DNA,'' Maharashtra is the favoured investment destination. In order to further increase the FDI inflow, the state industries department and MIDC will reach out to the overseas firms to understand their issues, bottlenecks faced by them in carrying out investments and trouble shoot them. MIDC will clear those plans through single window system in a fixed time frame.''He further informed that Maharashtra already accounts for 48% of the FDI as on date. This is largely due to several initiatives taken by the government for Ease of Doing Business (EoDB), investor friendly policies, quality infrastructure and skilled manpower. He said that MIDC has already started contacting consulates of 10 countries and investors to line up meetings. ''Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry will be roped in to facilitate joint venture by overseas companies with Indian partners,'' he added. Another MIDC officer said that the state's industrial base comprises pharmaceuticals, petrochemicals, heavy chemicals, electronics, automobiles, engineering, food processing and plastics. Based on national and international trends in demand and also based on state's own resources, the state has identified auto, engineering, electronics, textile and defence as main focus sectors.
BUSINESS AT EASE
Source: Daily news & Analysis
The Reserve Bank of India (RBI) was back to building up its dollar reserves in the first two weeks of November, after almost seven months of continuously depleting them, as the need to defend the local currency receded and foreign portfolio investments trickled in. The central bank may have bought $500 million in the first week of November, according an estimate by Standard Chartered Bank, and it may continue the purchases. For most of this year, the RBI was said to be selling dollars heavily in both the spot and forward markets as the rupee declined to a record low of Rs 74.48 against the dollar on October 11. “RBI is estimated to have turned net buyers of dollars in the first week of November amid lower oil prices, revival of FPI flow and a strengthening rupee,” said Anubhuti Sahay, a senior economist at Standard Chartered Bank. “Sustenance of such a trend, however, would crucially depend on oil prices staying low and continuance of inflows.” Standard Chartered Bank estimates that spot intervention once again likely dominated its aggregate actions. The rupee recovered in November, likely after India received a waiver from US sanctions for importing oil from Iran, and ranks among the top three best-performing emerging market currencies. On Thursday, the local currency gained more than 1% to close at 70.70 to the dollar, an almost three-month high. Slumping crude oil prices have lifted global investor confidence in India, a major oil-importing country, and it is a key positive for the fiscal condition. “RBI has reduced its forex reserves fighting against a sliding rupee,” said Anindya Banerjee, a currency analyst at Kotak Securities. “It is a prudent central bank move if the same is recouped when the rupee is gaining. RBI may continue to buy dollars as long as the local unit shows signs of strengthening. The move also helps to infuse liquidity into the banking system that has been running in deficit for quite a few weeks.” The price of crude oil climbed to $85.55 in early October and dropped to less than $63 this week. Overseas investors resumed purchases of domestic assets on expectations the drastic fall in crude prices will boost corporate profits and reduce concerns over a runaway current account deficit, or the excess of overseas expenditure over revenue. “The recent strength in the rupee does open up spot intervention tool as one more option to infuse rupee liquidity in the banking system, in addition to the OMO (open market operations) purchases that they have been doing,” said B Prasanna, group executive and head of markets at ICICI Bank NSE -1.32. Open market operation are a way of adjusting liquidity in the banking system. If the RBI continues to buy dollars, it will infuse rupees into the system, a move that helps to increase the supply of the local currency. The central bank sold close to a net $19 billion from April to September. In addition, it is said to have sold heavily in the spot market in October. The central bank has sold an almost equal amount in the forward markets as well. “Following the six-month waiver received by India from the US government on the Iran sanctions (which were supposed to set in from November 4, 2018) it has been observed that there has been a reversal in the depreciation of the rupee,” said a report by Care Ratings.
Source: Economic Times
New Delhi: Outgoing finance secretary Hasmukh Adhia has said there were bound to be “some hiccups” in the implementation of the goods and services tax, but unlike many other countries that have rolled it back or grappled with problems for years, the Indian structure has stabilised within a year. Many experts, traders and opposition political parties have criticised the implementation of the new tax structure, but Adhia, who retires on 30 November, told ThePrint there was nothing wrong with the process. He added that overhauling any system in a short span of time was bound to face problems. However, he said that the inclusion of petroleum products and alcohol under the ambit of GST was still some time away. “It was not faulty implementation. There were some hiccups, and we immediately addressed those. Yes, there have been hiccups and that was expected… when you roll out a tax structure of such magnitude and scale, such hiccups are bound to happen,” the Gujarat cadre IAS officer said. He said over 1,000 decisions have been taken in 30 meetings by the GST Council, of which about 99 per cent have been implemented. “You have to take the examples of other countries. Malaysia implemented GST and then rolled it back in three years. Australia had problems relating to the new tax structure for years… We have managed to iron out most problems in about a year,” Adhia said, adding that the issue relating to GST refunds is an exaggerated one. “There is no problem in that area, exporters’ refunds have been cleared.” Adhia emphasised that all decisions pertaining to the new tax structure have been taken through consensus, something Finance Minister Arun Jaitley had insisted on. “That itself is an achievement — that it was a collective decision, and every state has been taken on board. Whenever there were disagreements, the FM waited and gave them time, but it was absolutely clear that no decision would be taken in case there was no consensus,” Adhia said.
Won’t stay on in any capacity
Adhia, known as one of Prime Minister Narendra Modi’s most trusted aides, took over as financial services secretary in November 2014, just after the BJP-led NDA government came to power. In August 2015, he was made revenue secretary. However, sources said he was unhappy and offended after senior BJP leader Subramanian Swamy levelled corruption charges against him. Swamy even said that Adhia helped defaulter Nirav Modi flee the country. Eyebrows were also raised when the government decided to extend cabinet secretary P.K. Sinha’s tenure by a year instead of appointing Adhia to the post. Adhia proceeded on a 16-day leave from 5 May, just after the decision. In a Facebook post on 17 November, Jaitley paid rich tribute to him, adding that the government wanted to use Adhia’s capability and experience in some other capacity, but the latter was not willing to stay on “for a single day after the 30th of November 2018”. “His tenure as the revenue secretary will be remembered for various initiatives where he provided the bureaucratic leadership in shaping and implementation of the policy. The campaign against black money both within and outside the country was the initial highlight of the revenue department,” Jaitley said, adding that Adhia was unquestionably highly competent, disciplined and a no-nonsense civil servant with impeccable integrity. On his part, Adhia, who also spearheaded demonetisation, said that rolling out social security schemes under the Jan Suraksha umbrella, such as the Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana and Atal Pension Yojana, among others, will remain his most cherished achievement.
Source: The Print
The State government on Thursday introduced a Bill to bring amendments to the Maharashtra Goods and Services Tax Act, 2017, to ease out inconveniences caused to medium and small enterprises. The government has proposed the amendments as per which a tax payer can now have the option to obtain multiple registrations for multiple places of business located within the same State. It also offers separate registration for the special economic zone unit or the developer. The amendment Bill offers enhancement in the exemption limit for registration in the special category States from ₹10 lakh to ₹20 lakh, empower the State to notify the classes of registered persons for paying the tax on reverse charge basis, in respect of receipt of supplies of certain specified categories of goods or service or both, from unregistered suppliers, enhancement in the limit of composition levy from ₹1 crore to ₹1.5 crore, a provision for temporary suspension of registration while cancellation of registration is under process, and an increase in the period relating to detention or seizure of goods and conveyance in transit from seven days to 14 days. Deepak Kesarkar, Minister of State for Finance, introduced the Bill in the Assembly, which will be discussed next week. The State cabinet had already announced these decisions last month. However, those will now be the part of the State GST Act after the Assembly passes the amendments.
Source: The Hindu
It may sound rather odd that India's high rate of economic growth has practically no net contribution to the country's job market. The net domestic headcount of full-time employees may be actually shrinking though the economy is growing above seven percent. It is a paradox which few economic researchers are ready to explain. If the latest report of the Teamlease Employment Outlook is to be taken seriously, India's net employment outlook is likely to decrease by 3 per cent to 92 per cent in the two quarters (October 2018 - March 2019) as compared to 95 per cent for the preceding half-year. The Teamlease report is based on a survey of 750 employers and 2500 employees of small, medium and large companies across 19 sectors and 14 cities to gauge the hiring sentiments in the country. The employment outlook looks really bad. The alarmingly high demand-supply mismatch in the job market came to light in April when Indian Railways received a staggering 23 million applications for just 90,000 vacancies. The result of a sample survey report of the Centre for Monitoring Indian Economy (CMIE) showed that the number of formally employed Indians may have declined marginally by 0.1 percent in 2017-18. It suggests that no jobs were added in FY 2018. This is certainly bad news for Asia's third largest economy. This also contradicts the government's claim ahead of the 2019 Lok Sabha election that 3.11 million jobs were added between September 2017 and February 2018, based on the employee payroll data. The CMIE had contested the data. Yet, such a government claim is in stark contrast to the ruling BJP's 2014 poll promise of creating 10 million jobs every year if the party came to power. What has gone wrong? The job push in a developing economy normally comes from new large projects and manufacturing expansion. Unfortunately, in the last several years, the country hardly witnessed many large new projects and manufacturing ventures. Instead, several of the existing ventures fell sick and referred to the country's Insolvency and Bankruptcy Board. Public sector banks lost billions in bad loans turned non-performing assets. The wrong economic policies and a deliberate attempt to weaken large public sector understandings and an overwhelming focus on primarily import-based digitisation - without creating a local manufacturing infrastructure of hardware and instruments, including memory chips, and education levels of users - appear to be primarily responsible for India's highly job-starved economic growth. The fear that increasing imports of manufactured goods and components may eat up more domestic jobs has now started haunting even many central government departments. That may explain why so many ministries recently flagged concerns over ongoing negotiations for the regional comprehensive economic partnership (RCEP) agreement. Rising cheap imports from China is causing the biggest fear. The ministries are believed to have conveyed their concerns to the union commerce ministry as well as the prime minister's office (PMO). At least three union ministries are still not convinced about the usefulness of an urgent RCEP agreement, which is now postponed to 2019. "We have more convincing to do within the government. The ministries of steel, heavy industry and textiles continue to be apprehensive as they feel their sectors are not ready to face competition from China and some others," said a government official. Even the finance ministry is reported to be worried, though for a different reason, as it may annually lose some Rs. 25,000 crore in customs duty collection the moment such an agreement comes into force. The amount of duty losses could only go up in the following years. An all pervasive RCEP agreement, fear these ministries, will see the end of the much-touted 'Make-in-India' programme. The country's make-in-India has failed to take off in the face of growing import-led economic expansion and an unprepared focus on digitisation. The domestic as well as foreign direct investment (FDI) in projects are shrinking. A substantial part of FDI is taking place not in new projects, but in domestic corporate take-overs as in the case of Walmart's majority Flipkart acquisition deal, or, growing "promoters' equity" in Indian companies by the likes of Alibaba and Softbank. Some cellphone companies are setting up assembly plants. But, they don't create many permanent jobs. The so-called 'make-in-India' hype may face the same fate as former US president Ronald Reagan's 1980 presidential campaign - Let's Make America Great Again - against the growing Japanese and Chinese import lobbies, then. Using the country's economic distress as a springboard for his campaign, Reagan used the slogan to stir a sense of patriotism among electorates. Under the RCEP agreement, 90 percent of goods from Asean countries, Japan, South Korea, Australia and New Zealand will enter duty-free into India. In case of China, 75-80 percent of all goods will enter the country without duty. It may further push up India's trade deficit with China to $100 billion or more and make India's unemployment situation even more acute. It's a common knowledge that import of goods also means import of labour that go into the manufacturing of those goods. The massive imports of manufactured products in the recent years are contributing substantially to India's services sector growth. Imports are creating jobs in manufacturer-supplier countries and hardly any in India. Going by last year's data from the programme implementation ministry, India's GDP from the industry sector was only $495.62 billion. In the services sector, its GDP was $1.186 trillion. This is unusual for a developing economy of India's size. It needs to be substantially reversed if the country's employment growth has to keep pace with economic growth. Even a World Bank report, published earlier this year, says that India needs to create over eight million jobs annually to keep its employment rate constant, as its working-age population (above 15 years) is increasing by 1.3 million every month.
Source: Kashmir Times
Global container shipping clients are complaining that outsourcing services to low-wage countries such as India has led to a sharpdrop in quality of services, says a fresh international transport report. However, shipping experts from India maintain that what global clients claim as a ‘drop in quality ofservices’ is a fall in thenumber of claims processed for the latter, which, the experts claim, is better for the global shipping firms as their payout on this account has dipped. Liner shipping services are provided as a commercial service to shippers (customers whose goods are shipped)on fixed routes with regular schedules between ports, mostly through container ships. The container ships move manufactured goods, machinery, paper, textiles, beverages and tobacco, frozen food, fruit, and certain commodities such as cotton. Merger of global shipping lines was expected to lead to further improvement in services and lower freight charges. The results are turning out to be different.
Quality hit?
It was expected that consolidation at a global level would lead to better services by the carriers. “Yet, most clients of container lines were outright critical of the level of customer service of most carriers, in particular of those that outsourced their customer service to low-wage countries like India, as this deteriorated customer service to dramatic levels,” says International Transport Forum (ITF) in a study on the impact of alliances in container shipping. Customer cribs notwithstanding, shipping sector experts in India count this as a strength from the shipping lines’ perspective. “The outsourcing to service centres has led to a trained and focussed look at claims-handling and documentation. “The efficiency generated leads to a closer examination of claims. It could be that as claims go through a closer scrutiny now, they are not paid easily as they used be in the pre-consolidation era,” Anil Devli, CEO, Indian National Shipping Association, told BusinessLine.
Surcharges soar
Consolidation in the segment was supposed to bring down freight rates (the cost of moving goods) as using large ships to carry huge volumes of cargo would effectively lower the cost of moving goods. While freight rates have dropped over the years, the effective rate paid by clients through so-called surcharges have soared. These surcharges are levied on services that were earlier considered usual shipping service, but are now categorised as value-added. The container shipping sector has become like the budget airlines industry, which now charge extra for food, aisle seats, a few kg of extra luggage, etc, notes the ITF study.
Anti-trust scanner
The latest round of mergers has led to the top eight shipping carriers gobbling up the largest chunk of cargo, effectively lowering customer choices. “Global alliances of the mid-1990s provided cooperation space between smaller carriers, while alliances are nowadays cooperation tools for the largest container lines. The three global alliances (2M, Ocean and THE Alliance) that are operational since April 2017 represent around 80 per cent of the overall container trade and operate around 95 per cent of the total ship capacity on East-West trade lanes, where major containerised flows occur,” adds ITF. Devli terms this level of concentration of the three alliances a “frightening concept,” adding that “India, too, needs to wake up to this, since all our containerised trade is carried 100 per cent on foreign carriers.” He draws attention to the specific recommendation of the study that anti-trust exemptions to shipping liners be removed. Most countries now believe that container companies do not deserve exemptions, and are removing anti-trust exemptions granted to them earlier. For instance, last year, New Zealand did away with a set of antitrust exemptions given to shipping lines.
Source: The Hindu Business Line
Surat: The women workers employed in the city’s unorganised man-made-fabric (MMF) sector may get the attention of the central government in the coming days. A 30-member Parliamentary Committee on Empowerment of Women will be visiting the Diamond City on November 28 to examine the condition of women workers in Surat’s unorganised textile sector. According to an estimate, out of the 14 lakh workers employed in the city’s textile, embroidery and jari industries, women workers account for about 15% workforce. Majority of the women workers are employed in the jari and hand-embroidery sector. Most of the women workers are employed in embroidery like Jardoshi work, butta and lose thread cutting jobs, saree stitching, lace, pearl tikki and sitara fixing to add value to the saris and dress material, stitching in garmenting sector, preparing of soft toys, pillows and other related products from textile scrap etc. The South Gujarat Productivity Council (SGPT), which will make a detailed presentation before the Parliamentary Committee members, stated that the women workers have been largely affected due to the ongoing recession in the textile sector. The impact of GST and the decreasing production has directly impacted the women workers in the unorganised textile sector. Apart from recession, the textile sector is facing major challenge in terms of changing trends in fashion and consumption of cotton based fabrics. Moreover, the textile sector in South Gujarat is facing stiff competition from neighbouring Maharashtra due to highly subsidised electricity tariff rates. At present, the solar subsidy is provided for eight looms shed, but there are an average of 24 looms in a single shed in the city that are unable to claim the subsidy. Vice-president of SGPT, Asha Dave told TOI, “There is an urgent need for the central government to provide an exclusive women textile market in the city to boost the entrepreneurial skills fo the women involved in the textile sector. Also, the government should formulate a special policy for the companies ready to give employment to more than 60 per cent women.” Dave added, “This is first time that the Parliamentary committee of Loksabha is on visit to understand the condition of women working in the textile sector. We have prepared a detailed presentation and hope for proactive measures for the betterment of the women workers.”
Source: Times of India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1290.87 |
USD/Ton |
-0.99% |
11/21/2018 |
|
VSF |
1987.06 |
USD/Ton |
0% |
11/21/2018 |
|
ASF |
3016.59 |
USD/Ton |
0% |
11/21/2018 |
|
Polyester POY |
1274.31 |
USD/Ton |
-0.95% |
11/21/2018 |
|
Nylon FDY |
3153.38 |
USD/Ton |
-0.45% |
11/21/2018 |
|
40D Spandex |
4809.27 |
USD/Ton |
0% |
11/21/2018 |
|
Nylon POY |
1439.90 |
USD/Ton |
0% |
11/21/2018 |
|
Acrylic Top 3D |
3412.56 |
USD/Ton |
-0.42% |
11/21/2018 |
|
Polyester FDY |
5428.42 |
USD/Ton |
0% |
11/21/2018 |
|
Nylon DTY |
1526.29 |
USD/Ton |
-0.93% |
11/21/2018 |
|
Viscose Long Filament |
2994.99 |
USD/Ton |
-0.48% |
11/21/2018 |
|
Polyester DTY |
3167.78 |
USD/Ton |
0% |
11/21/2018 |
|
30S Spun Rayon Yarn |
2721.41 |
USD/Ton |
0% |
11/21/2018 |
|
32S Polyester Yarn |
1951.06 |
USD/Ton |
0% |
11/21/2018 |
|
45S T/C Yarn |
2937.40 |
USD/Ton |
0% |
11/21/2018 |
|
40S Rayon Yarn |
2102.25 |
USD/Ton |
0% |
11/21/2018 |
|
T/R Yarn 65/35 32S |
2505.43 |
USD/Ton |
0% |
11/21/2018 |
|
45S Polyester Yarn |
3023.79 |
USD/Ton |
0% |
11/21/2018 |
|
T/C Yarn 65/35 32S |
2620.62 |
USD/Ton |
0% |
11/21/2018 |
|
10S Denim Fabric |
1.34 |
USD/Meter |
0% |
11/21/2018 |
|
32S Twill Fabric |
0.82 |
USD/Meter |
0% |
11/21/2018 |
|
40S Combed Poplin |
1.14 |
USD/Meter |
0% |
11/21/2018 |
|
30S Rayon Fabric |
0.64 |
USD/Meter |
-0.22% |
11/21/2018 |
|
45S T/C Fabric |
0.68 |
USD/Meter |
0% |
11/21/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14399 USD dtd. 21/11/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Report calls for immediate reversal of the protectionist trend before it has a serious impact on growth, employment and consumer prices.Voicing “serious concern,” the World Trade Organization (WTO) said Thursday that the world’s largest economies imposed import restrictions on nearly half a trillion dollars’ worth of trade over the past six months. A new WTO report shows that 40 new import barriers were erected by G20 states between mid-May and mid-October this year – six times more than during the preceding six months – impacting $481 billion in trade. That was the highest figure recorded since the WTO began calculating the measure in 2012. “The report’s findings should be of serious concern for G20 governments and the whole international community,” WTO chief Roberto Azevedo said in a statement. Calling for an immediate reversal of the trend, he warned that “further escalation remains a real threat.” He added, “If we continue along the current course, the economic risks will increase, with potential effects for growth, jobs and consumer prices around the world.” The report shows that an average of eight new restrictions on international trade, including tariff increases, import bans and export duties, were imposed by the largest economies each month. The report highlights the impact of US President Donald Trump’s belligerent approach to trade policy, including starting a trade war with China and slapping high tariffs on steel and aluminum imports from many countries. The WTO’s Dispute Settlement Body agreed on Wednesday to review complaints from a range of countries over the US tariffs, as well as Washington’s complaints about retaliatory duties. Azevedo said, “The WTO is doing all it can to support efforts to de-escalate the situation, but finding solutions will require political will and it will require leadership from the G20.”
Source: Asia Times
A FURORE is reportedly brewing between clothing and textile firms over new regulations on fabric import duty. Under Statutory Instrument 163 of 2017, Government introduced punitive duty on imported fabrics to promote the local industry. However, SI 163 ominously included an upward review of duty on polyester fabrics, which are not produced locally or anywhere in the region. Industry sources say the move has created a thriving smuggling syndicate since duty, at 40 percent plus $2,50 per kg, which is now effectively between 80 and 90 percent of value against the previous one which was 10 percent. The region charges an average of 15 percent. But some players have been irked by reports that the Zimbabwe Revenue Authority (Zimra) is relying on an industry player, the Zimbabwe Textiles and Manufacturers Association (Zitma), for technical know-how on differentiating fabric imports. The consultation is specifically to differentiate fabrics that can benefit from rebate or pay 10 percent duty, from those that should be levied at 40 percent plus $2,50 per kg. Fabric retailers and wholesalers, clothing manufacturers and small to medium enterprises who are all stakeholders in the sector but not necessarily Zitma members, feel left out. They also allege targeted disenfranchisement as a result of Zimra’s consultation with the textile manufacturers. Investigations show that cartels have been formed between big textile industry players, which are allegedly working with an official in the Ministry of Finance, to block any review of the tariff despite representations from the Ministry of Industry. The stakeholders say there is no need to protect what local industry is not producing. Industry sources who spoke to The Herald Business on condition of anonymity said the situation could see them failing to provide fabrics for school uniforms particularly in January when demand would be high. Fears are that thousands of workers in the sector could also be rendered jobless at a time when Government is working towards creating more jobs. A number of companies are said to have so far lost fabric worthy thousands of dollars after importing goods they say must pay 10 percent only to be charged more after input from conflicted industry players. “Parents might be forced to repeat uniforms in January because of unavailability that has been created by this challenge,” said an industry captain who declined to be named. “Zimbabwe uses more than 50 colours but only less than 10 are readily available on the market as we speak and this could see a few that can afford going to buy from beyond our borders, which again, is restricted because admittedly, Zimbabwe has the capacity to make the same. “We have made representations with the Ministry of Industry and they say they have been writing to their counterparts at the Ministry of Finance but a senior official there (name withheld) has been making sure that there won’t be any reprieve.” Principal Director in the Ministry of Primary and Secondary Education, Jacob Gonese, told The Herald Business yesterday that they have taken note of the complaint from the industry. But Mr Gonese said it was easier to address the problem if players in the sector approached Government systematically and through associations. He said the ministry is keen to find ways that make it easier and convenient for parents and guardians to access uniforms at lower costs. “The way this is being described, it is obviously a very worrying issue,” said Mr Gonese.“But the best way, I think would be for the concerned industry to consolidate their issues in writing and I am sure we will see to it that it gets to the requisite decision-makers and Government will find a solution to it. As a ministry we would not want anything that brings any strain on the pupil or parents and guardians,” he said.
Source: Herald
A group set up to improve safety in Bangladesh's garment industry after the Rana Plaza disaster in 2013 is warning global fashion firms that they will have to stop sourcing from some factories if the watchdog is forced to close next week. The threat to the apparel sector, which accounts for the bulk of Bangladesh's exports, comes at a precarious time for the country ahead of a bitterly contested election in December, when Prime Minister Sheikh Hasina is seeking another term. "The consequences of a closure of the Accord liaison office in Bangladesh will be significant, immediate, and damaging," said Joris Oldenziel, the deputy director of the Accord on Fire and Building Safety in Bangladesh. More than 200 firms - including the world's top fashion retailers like Zara-owner Inditex and H&M - signed the legally-binding, five-year Accord after at least 1,100 people were killed when the Rana Plaza complex collapsed. Bangladesh's government had agreed to allow the body an extension to complete remaining safety fixes and help build up a national regulatory body to take over the Accord's work. However, the High Court ordered it to close on Nov. 30"The premature shut down of the Accord, leaving workers in unsafe circumstances, would jeopardize the brands' ability to source from a safe industry," Oldenziel told Reuters. Low wages have helped Bangladesh build the world's second-largest garment industry after China, with 4,000 factories employing about 4 million workers. The sector exports more than $30 billion worth of clothes a year, mainly to the United States and Europe. Fashion group Esprit, which produces about a third of its garments in Bangladesh, has written to its factories in the country to say that the closure of the Accord's office in Dhaka will undermine the reputation of the textile industry. "Activism in key market countries could make the Bangladesh brand toxic to consumers in spite of the tremendous improvements that we have achieved in recent years," Luis Gonzaga, Esprit's head of global supply, said in the letter to suppliers.
FACTORIES AT RISK
The Accord has inspected more than 2,000 factories in Bangladesh and helped draw up plans to fix 150,000 structural and fire hazards. Some 90 percent of those issues have since been addressed, although many that remain are major problems. The Bangladeshi High Court has ordered the Accord's Dhaka office to close due to a complaint from a factory owner who was prevented from working with Accord brands after he was accused of falsifying test results on concrete strength in his building. The Accord will keep operating from the Netherlands and remains legally binding on its member companies, but it has warned signatories they may have to stop sourcing from about 500 factories with safety problems if it can no longer inspect them. The Accord and its signatory firms, along with European politicians and campaign groups, have been lobbying the Bangladesh government for help to lift the court order, but with little effect so far. "We don't need them anymore," said Bangladesh's Commerce Minister Tofail Ahmed, adding that the government is capable of monitoring factories itself and noting that there is no such international oversight in countries like China or India. However, many experts and campaigners say the Bangladesh regulatory body is not yet ready to take over. Some question whether it will ever be effective given endemic corruption in a country where many politicians also own garment factories. "If they go, Bangladesh's garment industry will go back to square one. Workers' rights and safety will not be protected," said Babul Akhter, president of the Bangladesh Garment and Industrial Workers Federation. Paul Barrett, deputy director for the Center for Business and Human Rights at the NYU Stern School of Business, said threats by retailers to move elsewhere might not be credible. "I don't think the big Western brands want to leave. They've committed themselves to improving safety," he said. "Various brands are exploring Ethiopia but there isn't the capacity to rival what goes on in Bangladesh." Sweden's H&M, one of the biggest buyers of garments in Bangladesh and the first Accord signatory, said it will keep up efforts to improve factory safety but will not pull out if the Accord has to close in Dhaka. "We believe any sudden withdrawal from the Bangladesh market would negatively impact the livelihood of the families that depend on the textile industry," a spokesman said.
Source: Business Standard
The US economy could grow at a slower pace next year, due to reduced stimulus from tax cuts and the Federal Reserve's interest rate hikes, among others, economists predicted. A group of 10 economists have an average forecast of 2.4 percent for US economic growth in 2019, and some foresee a recession by 2020, according to a CNBC survey released Wednesday. Economists said that the previous positive boost from tax cuts is expected to fade in the coming months, which could in turn hurt corporate profit growth, and to some degree, drag the economic growth down. In a more pessimistic view, Goldman Sachs said Sunday that US GDP growth will slow to below 2 percent in the second half of 2019, as the Fed continues to raise interest rates and the effects of tax cuts fade. JP Morgan economists expected the US economy to grow at a pace of 1.9 percent in 2019. The US economy grew at an annual pace of 3.5 percent in the third quarter and 4.2 percent in the second quarter this year, according to the Bureau of Economic Statistics. The Fed has raised its benchmark interest rate for the third time this year in September, and it has also indicated another possible rate hike in December. Last week, Atlanta Fed President Raphael Bostic said that the federal funds rate is "not too far" from neutral.
Source: Xinhua
Foreign-invested companies in the southern region are speeding up investments and preparing for opportunities as Vietnam is poised to join the Comprehensive and Progressive Agreement for Tran-Pacific Partnership (CPTPP). “North America and Japan have been our key export markets in recent years, accounting for 40 percent of export turnover. We have a huge opportunity in textiles and garments after Vietnam joined the CPTPP,” Nguyen Chi Thanh, deputy general director of the French group Scavi JSC, told Dau Tu (Vietnam Investment Review) newspaper. The company has proposed building the Phong Dien garment and textile supporting industrial zone in the central province of Thua Thien – Hue to attract investment. It opened its fourth factory earlier this year. “We have met with 30 domestic and foreign material suppliers to discuss incentives and how to attract investment to the supporting industrial zone,” he said. “This move will help Scavi achieve its goal of becoming one of the world’s top enterprises in lingerie, swimwear and sportswear by 2022, with annual revenue of 200 million USD.” Another giant in the industry, the Republic of Korea-based Hyosung Corporation, is preparing to expand its operations in Vietnam. The corporation has already invested 1.5 billion USD in the southern province of Dong Nai and plans to expand its fibre manufacturing projects. “We would like to invest more at the Dong Nai-based Nhon Trach 5 Industrial Zone but local authorities have rejected us because there is no more available land,” said managing director Yoo Sun Hyung. Another RoK-based Hi Knit Company Limited was recently granted an investment licence at the Nhon Trach 6A Industrial Zone with total registered capital of 40 million USD. The company will produce textiles and non-woven fabric for export. The textile and garment industry will not be the only sector to benefit when Vietnam officially joins the CPTPP, as aquaculture, timber manufacturing, logistics, real estate and agriculture also see bright prospects. Feed manufacturers Cargill and CJ have been opening factories in the southern region. The largest Cargill factory, with total capital of 28 million USD, is located on a land area of 48,000sq.m. It will produce 240,000 tonnes of hog and poultry feed annually. Meanwhile, numerous FDI enterprises in other sectors are completing investment procedures to start projects. For example, in Dong Nai province, Taiwanese group Kenda has extended its production with an additional 56 million USD for its factory in Giang Dien Industrial Zone to increase its tyre manufacturing capacity for domestic and export markets. The southern province of Binh Duong recently granted a licence to Taiwan-based Vietnam Waytex International Company Limited for its 25 million USD furniture manufacturing project in Bau Bnag Industrial Zone. In mid-November, Japanese firm Yuwa Vietnam Company Limited officially launched its second factory on a land area of 2.2ha in this province’s VSIP II. Its first factory, also in Binh Duong, was built with 4 million USD in 2009 and produces moulded electronic plastic components. “More and more Japanese enterprises will continue investing in the southern region to take advantage of CPTPP,” said Kadowaki Keiichi, the president of the Japanese Business Association in HCM City
Source: Vietnam Net
Dr. Okechukwu Enelamah, Minister, Industry, Trade and Investment signed on behalf of the Federal Government, while Mr. Li Yong, the Director-General, UNIDO signed for his organisation. The Federal Government and the United Nations Industrial Development Organisation (UNIDO) have signed a $60 million new country programme for inclusive and sustainable industrial development in Nigeria for 2018- 2022.
The programme is to guide UNIDO’s programme/projects interventions in Nigeria during the period; build on the cumulative achievements of past Country Programme implemented by Nigeria/UNIDO; and to strengthen synergies by collaborating with other development partners, state and non-state actors, including the private sector. Dr. Okechukwu Enelamah, Minister, Industry, Trade and Investment signed on behalf of the Federal Government, while Mr. Li Yong, the Director-General, UNIDO signed for his organisation. The new country programme, the second in the series of UNIDO’s support to Nigeria, is aligned to the priorities of the Federal Government as outlined in the Nigeria’s Economic Recovery and Growth Plan (ERGP) and the Nigeria Industrial Revolution Plan. It covers industrial governance, research and statistics; Micro, Small and Medium Enterprise development; Special Economic Zones, Industrial Parks & Private sector development; innovation science and technology management. Other key areas covered are agro industry and agribusiness development; minerals and metals development; trade capacity building; renewable energy development; and environmental management programme. Enelamah, who expressed gratitude of the Federal Government and his ministry for UNIDO’s collaboration said the programme was designed to build on the cumulative achievements of the past Country Service Frameworks and Country Programme implemented by UNIDO. He said that UNIDO was encouraged by the success of the first Country Programme which paved way for the new programme. He listed some of the achievements of the first programme, which ended in June 2018, as:
The minister promised effective collaboration with UNIDO for the success of the programme, which will enhance the implementation of the ERGP which started well and for which concerted efforts are being made to ensure it ends well. Earlier, Yong said that the signing of the agreement was important for Nigeria as the country strives toward achievement of the Sustainable Development Goal (SDG) 9 which focuses on building resilient infrastructure, promoting inclusive and sustainable industrialisation.
He promised that UNIDO will collaborate with the ministry to mobilise funds and resources required to successfully implement the programme. Welcoming the Yong earlier on, the Minister of State, Industry, Trade and Investment, Alhaja Aisha Abubakar, said his acceptance to personally come for the signing ceremony, even at short notice, underscores the strategic place Nigeria has in UNIDO’s agenda for eradication of poverty and inclusive growth. “As you are aware, once Nigeria gets it right, the entire Africa Continent is in good stead to achieving UN Sustainable Development Goals,” she added.
Source: Nigeria
Pakistan and Thailand will hold talks next month to finalize lists of goods for tariff concessions to pave the way for the signing of Free Trade Agreement (FTA). Both sides had already exchanged the final offer lists of items for free trade, including automobile and textile sectors in order to remove the reservations of both sectors, a senior official of the Ministry of Commerce and Textile told APP on Thursday. Replying to a question, he said that Pakistan would get benefits of $250 million after signing the FTA with Thailand. He said that Pakistan wants concession on 115 products in the textiles, agro-products, plastic and pharmaceuticals sectors as the same was granted by Thailand to other FTA partners. He said that Pakistan had relative advantages over Thailand in some 684 commodities including cotton yarn and woven textiles, ready-made garments, leather products, surgical instruments and sports goods. While talking on second phase of Pak-China FTA, he said China had agreed to provide market access to 60 items, shared by Pakistan besides providing concession on all items included in the offer list. We want the concession on 70 export oriented items and low tariff line on products to ensure further trade liberalisation in second phase of FTA between the two countries, he added. The official said that Pakistan was desirous to have duty relaxation on 70 products before launching the phase-II as the same was given by China to Association of South East Asian countries. Replying to another question, he said the government is working on the National Tariff Policy for the coming five years as part of the Strategic Trade Policy Framework 2018-23 for reviewing tariff lines to enhance country’s trade.
Source: Dawn
Outstanding loans to private sector businesses amounted to Rs4.801 trillion at the end of October, 2018, which was 21 percent up from the same period a year ago, the central bank data showed on Tuesday. The uptick in economic activity and low financing cost increased the demand for bank lending from the private corporates in the period under review. The country achieved a 13-year high real gross domestic product growth rate of 5.8 percent in the last fiscal year, as industries increasingly resorted towards bank borrowings to finance their expenses. A large number of sectors, especially textiles availed working capital and fixed investment loans to meet their financial requirements. Low interest rate environment, increased production capacities, and buoyant industrial activities helped boost the private sector credit demand. Banks’ inclination for high yielding earning assets in the wake of shifting pattern of government borrowing from commercial banks to the central bank contributed to rising financing demand. October loan data revealed that a larger part of the loans to private businesses were availed by the manufacturing sector, within which the most active borrowers were the producers of textiles. Bank outstanding loans to manufacturing sector increased to Rs2.832 trillion at the end of October from Rs2.298 trillion in the corresponding period of last year, the State Bank of Pakistan (SBP) data revealed. Textile companies obtained Rs952.2 billion from financial institutions, compared with Rs753.7 billion a year earlier. The SBP’s subsidised financing schemes for export-oriented sectors played an important role in encouraging capacity expansion activities in the textile sector. Analysts say encouraging October loan data points to further increase in the economy in the coming months. However, tough credit conditions due to recent tightening in monetary policy could have negative implications for the private sector borrowings. “The room for further policy tightening is still there as the central bank remains concerned about rising inflation and higher current account and budget deficit,” said an analyst. “The IMF has also linked the new bailout package with increase in interest rates.” The central bank increased its policy rate by a cumulative 275 basis points since January, 2018. The SBP, in its, half-yearly performance of the banking sector for the period ended June 30, 2018 said that private sector advances were likely to increase in the second half of this year due to seasonal factors, capacity enhancement, and boost in investors’ confidence after peaceful political transition. “Growing inflationary pressures due to rising aggregate demand and expected bullish trend in global oil prices may translate into higher demand for working capital financing needs. However, increase in SBP policy rate and rising global trade disputes, could moderate the demand for advances,” it added. The SBP and international lending and rating agencies have forecasted slowdown in economy in the current fiscal year. The SBP projects the real GDP growth in the range of 4.7 to 5.2 percent for FY19 against the government target of 6.2 percent. The GDP growth will slow over the coming quarters and clock in at 5.4 percent during the ongoing fiscal year from 5.7 percent last year, according to a latest report published by Fitch Solutions’ Analysis on Pakistan’s economy.
Source: The News
Vietnam earned 88.05 million USD from exports to the Czech Republic in September, raising the figure for the first nine months of this year to 775.94 million USD, up 10.8 percent year-on-year, according to the Czech Statistical Office. Meanwhile, exports of the Czech Republic to Vietnam hit more than 106 million USD in the first nine months of 2018, up 51.6 percent against the same period last year. The growth surpassed the 100 million USD mark in nine months for the first time. In the nine months, bilateral import-export exceeded 880 million USD, rising 14.6 percent year-on-year. A growth of more than 10 percent has been maintained annually since 2015. During the period under review, Vietnam mainly shipped audio visual and devices to the Czech Republic, raking in 267.4 million USD, followed by footwear with 187.8 million USD. Other exports of Vietnam included rubber products, leather and chemicals, garment-textile materials, interior furniture, farm produce, tea, coffee and handicrafts, among others. Meanwhile, the country mostly imported electronic and mechanical devices, glass and crystal products, military equipment, seeds, pharmaceutical products and more. The upcoming seminar on the Czech Republic–Vietnam economy, set to take place in early December in Prague, is expected to bolster cooperation and investment between the two countries’ firms
Source: Vietnam Plus
