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MARKET WATCH 13 MARCH, 2019

NATIONAL

INTERNATIONAL

 

Tax refunds to boost textile exports

The textile industry expects exports to increase with the government extending refund of State and Central taxes on shipments of apparels and made-up goods. The Cabinet, last week, approved the scheme to offer rebate on both the State and Central embedded taxes for the apparel and made-up goods such as towels, bed-sheets, blankets and curtains. KV Srinivasan, Chairman, Cotton Textiles Export Promotion Council, said rebate will improve the competitiveness of made-up products in the export markets. Compared to competing countries, export of made-ups, especially home textiles from India, was facing huge challenges due to high import duty. The scheme will go a long way in helping exporters in overcoming this disadvantage and increase exports, he added. He urged the government to cover yarn and fabrics too under the tax refund scheme as these value-added products also face heavy tax incidences. BK Goenka, Chairman, Welspun Group and President of Assocham, said the rebate will make exports of textiles truly zero rated, at a par with other countries. The decision to enhance the rebate on apparels and made-ups will give a fillip to these segments, which together account for 55 per cent of India’s total textiles export, he said.

Source: The Hindu Business Line

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Govt decides to return to drawing board on proposed industrial policy

The new policy is expected to tie in existing government initiatives and serve as a focal point for various industry-wise policiesThe government has decided to return to the drawing board on the proposed industrial policy, despite announcing about two years back that the current policy framework could be overhauled. The primary reason behind this remains the lack of a proper draft. However, sources said, the decision has little to do with the announcement of Lok Sabha elections and the model code of conduct. Despite repeatedly insisting that the draft is ready, it appears that the Commerce and Industry Ministry is yet to agree on the broad contours of the policy, a senior government official said. In the meantime, the government has continued to refer to an initial 14-page discussion paper on the proposed policy — released in August 2017 — as the draft. The ministry had then announced that this final draft will be put out by January 2018. The new policy is expected to tie in existing government initiatives and serve as a focal point for various industry-wise policies. “It will absorb the 2011 national manufacturing policy and focus on technological issues of Industry 4.0, apart from furthering the government’s push of the Digital India initiative,” a senior official from the Department for Promotion of Industry and Internal Trade (DPIIT) said.

Back and forth

This initial document focused on the creation of jobs, promotion of foreign technology transfer, the growth of micro, small, and medium enterprises (MSME), and the establishment of a goal to attract $100 billion foreign direct investment annually. “However, subsequently, the DPIIT later decided to cut down the plan to create fixed targets for job growth in specific sectors and instead, was focusing on ‘wide growth’ for the next two decades,” a source in the Prime Minister’s Office said. A lack of high-quality job creation data kept the government from mapping the potential of various sectors, a government official said. The proposed policy has borrowed heavily from the Make in India initiative, which aims to increase the share of the manufacturing sector to gross domestic product (GDP) to 25 per cent by 2022 from the current 16 per cent, he said.

Export push

The $36-billion textile export sector, the third-largest foreign exchange earner for India after petroleum products and gems and jewellery, clocked only 0.75 per cent growth in 2017-18, after a contraction in the past two years. On the other hand, outbound trade of leather articles rose 3.46 per cent to $2.42 billion, recovering from the contraction witnessed in 2016-17. The policy is also expected to reaffirm the government’s belief in export-led growth and as a result will have an extensive impact on overall trade norms, with ease in trade and diffusion of export hubs among the government’s top priorities, a commerce department official pointed out. Last year, the Economic Survey pointed out that the five states of Maharashtra, Gujarat, Karnataka, Tamil Nadu, and Telangana account for 70 per cent of India’s exports. “The Centre plans to stop this ghettoisation of exports through incentives as well as channel digital technology to extend exports from rural and traditionally backward areas,” he added.

Source: Business Standard

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Indian textiles minister launches 3 NIFT projects

Inaugurating the renovated Handloom Haat in New Delhi’s Janpath recently, Indian textiles minister Smriti Irani launched three projects of the National Institute of Fashion Technology (NIFT)—VisionNXT-Trend Forecasting Initiative; Indian Textiles and Craft Repository; and Design Innovation and Incubation. She released a booklet, ‘World Handmade Textile Biennales’. The Haat, set up by the ministry of textiles, will offer marketing opportunities to authentic handloom products from various states, public sector undertakings and cooperative societies. Its main objective is to provide infrastructure support to handloom agencies to augment their sales of handloom products and to showcase the exquisite variety of handloom products produced all over the country, according to an official release. The trend innovation lab ‘VisionNxt’ in the Haat building will create an indigenous fashion forecasting service that aims to design seasonal directions for India. The trend forecasting service would be aligned to India’s the country’s national and sub-national socio-cultural constructs and market requirements. It will help handloom sector in production of handloom products as per market requirement in terms of trends, design and colour forecast. The body of textile and craft knowledge generated through the Craft Cluster Initiative will be channelled into a national knowledge portal titled Indian Textile and Craft Repository. This repository will also house the virtual registers of the textiles and crafts resources, which are available in the weaver service centres, the various crafts museums, similar institutions and private collections. The repository will develop a virtual museum of textiles, and textile crafts, a designer archive, indigenous case studies, and also act as aggregator of online information on related research. Design Innovation and Incubation (DII) is intended to support young entrepreneurs, artisans, start-ups, NIFT alumni and students. It will also facilitate collaborations relevant for business development.

Source: Fibre2Fashion

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Incentives for new textile units revised

The move aims at attracting such units in industrially backward regions including Vidarbha. Base rate of power per unit to be Rs 3 for industries coming up in D, and D+ regions. State’s Energy Department has redacted the incentives provided for establishing new textile units in industrially backward regions of Vidarbha, Marathwada and North Maharashtra by capping the concessions to ensure a level playing field across all regions of Maharashtra. The notification issued by Industry, Energy and Labour departments stated that the State Government, after providing incentives and concessions from Department of Textile and Energy, has said that the minimum rate of power per unit would not be below Rs 3 for industries coming up in D, and D+ regions. In the same vein, the notification also capped the rate for industries coming in developed parts of the State to Rs 4 per unit. The new power rates comes into effect from retrospective date -- January 1, 2019, onwards. The timing of notification ahead of general elections indicates quick thinking by the State Government to showcase its balanced development approach. The incentives for new textile units have helped in establishing new units in Textile Zone in Amravati district’s Nandgaonpeth Industrial area. However, representation from units in the other region led to commissioning of internal study that revealed that the power rate being provided to new textile units in backward regions was coming even low than the one applicable to agricultural consumers. This was due to combining of incentives from Textile Department and concession from Energy Department. Another reason advocated by Energy Department for upward revision of power rates is that they feared that if such concessional power continued to be provided the textile units would not switch over to solar energy within three years as was envisaged when providing rebates in energy rates to them. Similarly the balancing act between different regions also ensures that textile sector in developed area does not switch in wholesale manner to seek concession and stay afloat.

Concessional power tariff to continue till March 31

Maharashtra Government has extended the order of concessional power tariff to industries in backward regions of Vidarbha, Marathwada and North Maharashtra till March 31, 2019. The industries in these regions would continue to avail rebate in fuel adjustment cost, on industrial power connected loan and incentive for establishing new industries. The policy was adopted by Bharatiya Janata Party (BJP) Government from April 1, 2016, onwards with a focussed view to promote industrialisation in these backward regions and bring them at par with developed parts of the State. As per the State Government record, only 14 per cent industrial units of Maharashtra are located in Vidarbha and In Marathwada region. The concessions in power tariff in last three years did not result in any substantial gains and hence Energy Department has decided to continue with incentive scheme. However while extending the concession it was also decided that the total outlay for the same is capped at Rs 1,200 crore. Also, the cabinet sub committee that was set-up to study the issue of lopsided industrial development and suggested measures would now have Finance Minister as the Member. The decision on extension of concessional power tariff should be approved by the sub-committee. Another important decision taken by Energy Department is to include Foundry industries located in Kolhapur region under the ambit of concessional power tariff and further they should be provided the concessions from year 2019-20 till 2023-24. Also Maharashtra State Electricity Distribution Company Limited (MSEDCL) will be reimbursed through general budget for losses sustained due to continuation of the scheme.

Source: The Hitvada

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Textile industries hail rebate on state and central embedded taxes on apparel and made-up textile segments

In a bid to boost the textile sector and make it globally competitive, the Cabinet has approved a scheme to rebate all state and central embedded taxes on apparel and made-up textile segments making them zero-rated. Ministry of Textiles in a statement said "Rebate of all embedded state and central taxes/levies for apparel and made-ups segments would make exports zero-rated, thereby boosting India's competitiveness in export markets.” Welcoming the Cabinet decision on approving the scheme to rebate state and central embedded taxes to support the textile sector, National President of the Textile Association (India), T.K. Sen Gupta told KNN India that the move is a good booster for apparel and garment industry. He said “India's exports of apparel and garments have fallen down in last 2-3 years. We are now at the 5th position in exports of apparel and garment in the world.” He stated that China is number one exporter of apparel and garment, followed by Bangladesh, Vietnam, Combodia and then India. Bangladesh exports of apparel and garments are worth USD 32 billion while that of India is at USD 17 billion. With this decision, government has given a very good impetus to the industry which will benefit all states’ small and medium garments manufacturers, he added. The Past National President of the Textile Association, Arvind Sinha also appreciated the move and said that the move will improve the cash flows. However, he claimed that the markets are in recession, whole system is in a recession, but this step of the government clearly indicates that the government means business. Now, industry should focus on the business, he added. One of the leading industry chambers of the textile and clothing sector of India, Confederation of Indian Textile Industry (CITI) in a statement thanked the Union Cabinet chaired by Prime Minister, Narendra Modi for approving the scheme as it will enable the Government to take various measures for making exports of apparel and made-ups free of any embedded Central and State levies. He said, “The proposed measures will boost India’s competitiveness in export markets and ensure equitable and inclusive growth of apparel and made-ups sector.” The Cabinet decision provides for a scheme to rebate all embedded State and Central Taxes/levies for apparel and made-ups which have a combined share of around 56% in India’s textile export basket. Rebate of taxes /levies has been permitted through an IT-driven scrip system at notified rates. CITI Chairman pointed out that the new scheme only covers apparels and made-ups but does not cover other important sectors of fabric and cotton yarn. To ensure that no taxes are exported and to make Indian cotton yarn and fabric globally competitive, CITI requested the Government to include cotton yarn and fabric in the new proposed scheme. It will not only help to boost cotton yarn and fabric exports but also increase the employment opportunities and inclusive growth in the entire textile value chain, he added.

Source: KNN India

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Ensure continuance of MEIS: TEA tells govt

The Tiruppur Exporters’ Association (TEA) has urged the Indian government to ensure continuance of incentive at 4 per cent under the Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy of India (FTP 2015-20). TEA has sought continuance of the scheme until the government signs free trade agreements (FTAs) with the EU, Canada and Australia. In May 2018, the Directorate General of Foreign Trade (DGFT), under the ministry of commerce and industry, had extended the incentive under the MEIS beyond June 30, 2018. However, there was no mention of the period till when it was extended. So, there is ambiguity about the continuance of MEIS further to complaint lodged by US, EU and Russia with the World Trade Organization (WTO), TEA president Raja M Shanmugham said in a press release. “The US government has already started taking steps for protection of its industry and also promotion of its exports and economy,” Shanmugham said. In this scenario, TEA has requested the textiles minister Smriti Irani to spearhead the initiative to protect India’s textiles industry and for sustenance of its exports, since the discontinuance of MEIS will make it difficult for the exporting units to sustain in the market. “We need a level playing field to enhance our share in the major markets. As the garment exporting units are deprived of getting competitiveness, we request the minister to kindly use her good offices with the Union minister of commerce and industry and ensure the continuance of MEIS till FTA is signed with the EU, Canada and Australia,” Shanmugham said. He added that TEA members are taking various measures to enhance their efficiency and simultaneously cutting down the cost wherever possible in their functional areas.

Source: Fibre2Fashion

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Assessees can view, download month-wise report on liability declared, credit claimed on GST portal

Goods and Services Tax Network (GSTN), the IT backbone of GST, on Tuesday announced unveiling of a facility that will allow taxpayers to view and download month-wise report on tax liability, declared and paid. There will also be information regarding input tax credit (ITC). This functionality has been provided in Returns dashboard on the GST portal to taxpayers under the headings ‘Comparison of liability declared and ITC claimed’. The data can also be downloaded in Excel file for viewing and comparison later on. “This facility will help taxpayers in reconciling their liability and ITC details quickly,” Prakash Kumar, CEO, GSTN, said adding that taxpayers can view the monthly comparison as well as cumulative comparison up to the month, on the portal in the tables provided. “This will help them in taking corrective steps,” he claimed. At present, there are over 1.10 crore assessees under GST filing returns on monthly or quarterly basis. According to a GSTN statement, regular taxpayers file Form GSTR-1 on monthly or quarterly basis, depending upon their turnover, to show their outward tax liability on the supplies made by them. This includes B2B (business to business) invoice data, which is used by the system to generate Form GSTR 2A of the receiver taxpayers (recipients). These taxpayers (recipients) are also required to file Form GSTR 3B on a monthly basis, to discharge their tax liability where they show liability and ITC at summary level. Since GSTR-1 and GSTR-3B are filed independent of each other, a need was felt to provide a view of liability declared in both the forms at one place. The new facility enables the taxpayers to view the two liabilities in one table for each return period at one place, which can be compared. This will enable taxpayers to make good of any differences between the two forms filed by them on GST portal, the statement mentioned. Taxpayers have also been provided information regarding data of ITC as claimed in their Form GSTR 3B and as accrued in Form GSTR 2A. Taxpayers claim their ITC on supplies received by them during the month, in their Form GSTR 3B and use it to offset their tax liability during the month. Further, when their suppliers upload their Form GSTR-1, the data flows into receiver taxpayer’s (recipient’s) Form GSTR 2A. Thus, Form GSTR- 2A shows the details of supplies made to receiver taxpayers (recipient) along with tax details, which is nothing but ITC available to receiver taxpayers. Now taxpayers can see both these data sets and compare the input tax credit availed by them. Similarly, taxpayers have been provided with a facility to view the liability paid due to reverse charge as declared & paid in Form GSTR 3B and as accrued in Form GSTR 2A, due to uploading of such details by the supplier in Form GSTR-1. Also, taxpayers can view and compare the liability related to exports & SEZ supplies as declared in their Form GSTR-3B during the month and liability as declared in their Form GSTR-1 (Zero rated supplies).

Source: The Hindu Business Line

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CBIC moves to paperless transactions

Under iCODE, the department will send the Bills of Entry and Shipping Bills electronically to importers and exporters. In a move towards paperless transactions between the Customs department and the trade, the Central Board of Indirect Taxes and Customs (CBIC) is replacing paper copies of Bill of Entry (import goods declaration) and Shipping Bills (export goods declaration) with electronic versions. The CBIC has announced two new initiatives. One is for electronic communication/ transmission of Customs documents to the trade under the name ‘iCODE’ (Indian Customs Original Document of Electronic Data Interchange) and the other is ICEDASH — an “Ease of Doing Business” dashboard to monitor daily clearances at each port. ICEDASH has already been made available in the Customs IT system, ICES. Under iCODE, the department will send the Bills of Entry and Shipping Bills electronically to importers and exporters. The documents digitally signed will have QR codes for authentication and sent through email to the registered email IDs of respective Customs brokers. These electronic (PDF) copies will replace the paper copies signed by “Out of Charge” officers (who give ‘let export’ orders) currently to make entire clearance process faster and greener, says a CBIC circular. At present, the importer clearing the goods for domestic consumption needs to file four copies of the Bill of Entry; the original and the duplicate are meant for Customs; the third copy is for the importer; and the fourth is for the bank for making remittances. The exercise is similar in the case of shipping bills. These will now be done electronically. However, under iCODE, generation and transmission of first copy of Bills of Entry (copy after assessment, presented for examination) in PDF has now been made operational. As of now, the PDF Bills of Entry have QR codes but do not have the digital signatures.

Convenient format

Welcoming the new initiative of the CBIC, an official of an Custom House Agent (CHA) said there are teething problems with the print format. Under iCODE, the importer just need to register with the CBIC to get a printout in real time electronically and take the print out if he so desired in his office rather than going to the Customs department. Further, CHAs cannot cover up their delays citing printer malfunction or unavailability of Customs officials to sign the printouts, he said.

Source: The Hindu Business Line

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Export index for states on anvil to boost competition

Government think tank Niti Aayog and the commerce ministry are working on an index to rank states on their readiness for exports and promote a healthy competition among them, senior officials said. The export index will rank states on half-adozen key parameters, including their policies, ease of doing business, infrastructure NSE 0.29 % , access to finance, and output, which will assess the overall export market and exports from each state. A senior government official said there will be 30-40 parameters under the six main subheads, based on international trade parameters but tweaked to Indian scenario. “The government is seized of the fact that if India intends to increase its exports and subsequently its share of global trade, we will have to improve the export readiness of states,” he told ET. “Hence, the whole idea of an export index is to make states more competitive.” According to the official, export policies of various states are being studied to identify the best practices. “We will also collate the best practices as part of the first report to help other states benefit,” he added. The commerce department has identified indicators to reflect issues such as truck stoppages, anti-competitive practices and role of intermediaries affecting exports. These preliminary indicators will be based on efficiency in processes, ease of arranging logistics, quality of infrastructure, adherence to time lines, competence and quality of logistic operators. They will provide qualitative and quantitative assessment of the logistics available to export consignments. The draft logistics policy also seeks to ease bottlenecks. While computing the index, Aayog will seek inputs from trade bodies like Export-Import Bank of India, and Indian Institute of Foreign Trade, besides different divisions of the commerce ministry including Director General of Foreign Trade. Aayog has been aggressively moving towards outcome-based monitoring and has been in the process of ranking states on key indices like health, education, water composite index, and agriculture, much in line with its role of promoting competitive and cooperative federalism. The government expects India’s merchandise exports to grow 7.3% year on year to $325 billion in 2018-19. The growth rate would be lower than 9.8% clocked in 2017-18 due to factors including muted growth of traditional exports such as gems and jewellery, farm and engineering, a liquidity crunch, and global factors. India’s exports stood at $303 billion in 2017-18Trade has been a top priority for the government. However, infrastructure bottlenecks, high transaction costs and manufacturing constraints continue to be big challenges for exports. With the implementation of goods and services tax, however, India has become a unified market, subsuming more than a dozen federal and provincial levies, freeing up trade.

Source: Economic Times

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India-Africa biz conclave: Policymakers to discuss strategies to scale up trade ties

Key policymakers from India and African nations will brainstorm on strategies for scaling up bilateral trade volume to USD 150 billion in the next few years at the India-Africa Project Partnerships Conclave to be held here between March 17-19. "The event will mark the deepening of India-Africa economic and business ties and pave the way for a whole range of cross-border project partnerships," the Commerce and Industry Ministry said. The conclave coheres into the Indian government's broader vision of long-term engagement with Africa and its unflinching commitment to expanding the canvas of India-Africa economic partnership which is evident from the increase in bilateral trade between India and Africa by nearly 22 per cent from touching USD 62.66 billion in the year 2017-18, it added. Senior ministers from 21 African nations will participate in the 14th CII-EXIM Bank Conclave, which will also see the presence of India's Commerce and Industry Minister Suresh Prabhu. Mahamudu Bawumia, Vice President of Republic of Ghana, Dr. Ibrahima Kassory Fofana, Prime Minister of Republic of Guinea, MonyaneMoleleki, Deputy Prime Minister of Kingdom of Lesotho will be present in the conclave. The deliberations at the Conclave will be guided by long-term goals and objectives including encouraging Indian exporters to access the African countries and increase their presence in the region. Other key areas of discussions are enabling geographical and product diversification of Indian exports to Africa, enhancing manufacturing exports of Africa by optimal utilisation of Duty Free Tariff Preference scheme and capacity building support from India; expanding Indian investments in areas like infrastructure, agriculture and food-processing, energy, services, IT and knowledge industries. "The Conclave will mark the pre-eminence of India-Africa partnership in the area of 'South-South Cooperation', at a time when the global economy is faced with intractable challenges that stem from rising protectionism and trade conflicts," the Commerce and Industry Ministry said. The India-Africa bilateral partnership is augmented by India's ascendency as the fastest growing major economy, as well as Africa's new economic dynamism illustrated by some of the Sub-Saharan economies which are among the top 10 fastest growing economies in the world. The annual Conclave, since its inception in 2005, brings senior Ministers, policy makers, officials, business leaders, bankers, technologists, start-up entrepreneurs and other professionals from India and Africa on a common platform in a spirit of partnership. The knowledge sessions at the Conclave will focus upon the potential areas for bilateral economic and business partnerships, core capabilities of Indian and African enterprises and opportunities for joint ventures thereof, innovative financing of significant development projects, skill development and capacity building. The conclave is expected to see the participation of 400 plus delegates from Africa and around 300 delegates from India. The B2B meetings at this conclave are expected to be held on more than 500 project proposals from Africa.

Source: Business Standard

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Industrial growth slows to 1.7% in January 2019

Industrial output growth stood at 1.7 per cent in January on account of slowdown in the manufacturing sector. Factory output as measured in terms of the Index of Industrial Production (IIP) had grown by 7.5 per cent in January 2018. During April-January 2018-19, industrial output grew at 4.4 per cent as against 4.1 per cent in the same period previous fiscal, according to the data released by the Central Statistics Office (CSO) on Tuesday.

Source: The Hindu

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DPIIT extends deadline for public comments on draft e-commerce policy

The deadline for public comments on the draft national e-commerce policy has been extended till March 29, according to the Department for Promotion of Industry and Internal Trade (DPIIT). The earlier deadline was March 9. “Comments/suggestions on the draft policy are hereby invited from stakeholders, with the last date for receiving comments being March 29, 2019,” DPIIT, which comes under the Commerce Ministry, said. The draft seeks to provide a policy framework that will enable the country to benefit from rapid digitisation of the domestic, as well as global economy, it said. The draft addresses six broad issues of the e-commerce ecosystem -- data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.

Source: The Hindu Business Line

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Trade face-off

The US is a major trade hub for India and exports are valued at around $50 billion. The Trump administration’s decision to take India off preferential trade list has triggered the talk of India imposing retaliatory duties on US goods. Care ratings chief economist Madan Sabnavis feels India must not take decision without understanding the consequences. The Generalised System of Preferences (GSP) is a set of trade laws in the United States of America introduced some four and a half decades back in 1974. Under the GSP, the US allows imports of various goods from a set of over 120 developing countries at zero tariffs. The idea was two-fold. The first was to enable developing countries to increase their exports and growth and second to get in cheaper imports that would lower domestic cost of production as the goods covered were mainly raw materials and intermediate goods. It was hence a win-win situation for all. India has been singled out by President Donald Trump for keeping tariffs on US goods high and making laws restrictive in terms of fostering trade and investment. In fact when Mr Trump took over as the President his trade related objective was to straighten out such unequal practices of trading partners and while China was the main target, India did not escape notice. While the initial objection was on export of automobiles to India (the Harley Davidson case), it came down to medical products, dairy goods etc. among others. While the FDI rules relating to ecommerce did not get specific mention, the US is not too happy over the new rules which affect Amazon. By taking India off the list, exports of $5.6 billion would be affected in leather products, carpets, textiles, gems and jewellery etc. The US is a major trade hub for India and exports are valued at around $50 billion. The government has argued that this is just 10 per cent of exports to the US and the cost would be $190 million which is not much when we look at the larger picture. Individual industry units would get affected by this move of the US even though aggregate exports may not get impacted significantly. The argument is that with the tariffs coming in, their relative export competitiveness would get affected which can make other country imports to US cheaper. This cannot be ruled out. And given that these products typically have inelastic demand, getting replacement markets will not be easy. How is one to look at this issue? To begin with it must be said that getting extra privileges under the GSP is quite anachronistic as India is no longer the country it was in 1974. We do lay claims to being the fastest growing economy and along with BRICS have sufficient economic clout in the world economy as well as at WTO. Therefore, it is time we moved out of this shelter. Second, being a sovereign nation, India has a right to decide on its trade rules and hence should not bend back for the US. This was a case of standing by our principles and not getting pushed around. This is important because when GSP was introduced at no stage did the US talk of reciprocal rights. This has been an addition brought by Mr Trump and hence was new. Third, Indian exporters too need to be pushed to become more competitive and look for more markets rather than depend on the US only. As long as there is an implicit protection, there would be less drive to become self-reliant. On the other side from the point of view of exporters which would tend to be in the SME sector, this comes as a shock. Although this was on the cards, it was assumed that it would be excused just as China has been given some more time for negotiation. The 60 days period for us is too short to expect any change of stance. The Indian exporters have always been crying for relief from the government as they have several disadvantages in the international market. Therefore instead of getting support, they have to fend for themselves and would expect the government to come up with some alternative package for them just like they do for other sector like textiles or sugar or steel. It may pointed out that most of the goods affected are labour intensive and hence can lead to some employment challenges if these exports are not made up. Also, for the present China can leverage this loss of GSP status for India to push their goods to the US at a lower cost. The US position is also quite singular. At a time when it is fighting a hard trade battle with China, it may have been expected that it would cosy up to India. But it does appear that President Trump is more keen on furthering his policy of equal trade treatment by its partners. India may not be a big exporter for the US at around $50 billion but there is a deficit run (around $24-27 billion) which makes it important. At the broader level, India may have to be more flexible with the trade relations with the US as GSP has to be seen with respect to both political issues as well as future investment. At the political side, the US need to be made an ally especially with hostile neighbours which includes China. While non-alignment is the stated policy, taking a flexible stance on issues like tariff could help India in the long run. The other part is that if there is any thought of retaliation with the US on the trade front, it would affect us more as it is our major export market and with India competing with countries like Bangladesh, Sri Lanka, China, and East Asia, there could be further repercussions. On the investment front too, India may have to relook at its policies as we need more of such flows and the policies pursued in the past have been less friendly at a time when funds have other options. Therefore, there is a view that we should also be ready to talk rather than be brash about FDI in the name of protectionism especially in case of ecommerce as it sends wrong messages which can take the flows away from the country. While compromising domestic industry should certainly not be allowed taking a stance of hubris may also be detrimental especially at a time when the world is getting closed with protectionism as limited growth in the last decade has made countries more inward looking. Therefore, before we really consider retaliation, it may be useful to understand the consequences as another event called Brexit is on the anvil which has consequences that are not evident to us presently. But one can never tell.

Source: Asian Age

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Women get a special focus under Skill India Mission

Since its inception, Ministry of Skill Development and Entrepreneurship has undertaken several initiatives to achieve women empowerment through skill development. Increase of women participation in workforce can give further boost to our economy and Skill India mission is committed to facilitate this through equipping women with market relevant skills and lead them to a path of self-sufficiency through entrepreneurship. Following initiatives have been undertaken to facilitate skill development among women and spur entrepreneurship.

1. Long Term Skill Development Training via Industrial Training Institutes (ITIs)

Through a wide network of 15,042 ITIs, spanning the country, over 22.82 lakh candidates have been enrolled (in the trades of one year and two-year duration) and special focus is laid on enrolment of women. There is nearly 97% increase in admissions in 2018 as compared to 2014 to reach 173,105 women trainees from 87,799.

2. Short Term Skill Development Training

The flagship program of the Ministry, Pradhan Mantri Kaushal Vikas Yojana strives to promote increased participation of women in the workforce through appropriate skilling and gender mainstreaming of skills. Close to 50% of the candidates enrolled and trained under PMKVY are women; out of the total 56 lakh candidates who have benefited from the scheme. The efforts are made to continually revise job roles taking into account market demand and are cognizant of industry requirements for female professionals. Skill India has partnered with Government Initiatives like Ayushman Bharat, Swachh Bharat Mission, Smart City Mission etc. to align skill development efforts to these national missions by ensuring a steady flow of skilled workforce.

3. Recognition of Prior Learning (RPL)

Under the Recognition of Prior Learning (RPL), more than 4 lakh women candidates have been oriented in different skill areas, recognizing their existing skills through a formal certificate and giving them a means to earn better livelihood.

4. Apprenticeship Training

The comprehensive reforms that have been made to the Apprenticeship Act 1961 has opened up opportunities for apprentices in the service sector. Skill India, through NSDC, is conducting focused pilot program with UNDP and Society of Development Alternatives (DA), to benefit more than 50,000 women in 7 states/UTs over a duration of 15 months.

5. Policy Interventions

The National Skill Development Policy focuses on inclusive skill development, with the objective of increased women participation for better economic productivity. To achieve this, emphasis has been laid on creating additional infrastructure both for training and apprenticeship for women; flexible training delivery mechanisms such as mobile training units, flexible afternoon batches along with on local need-based training to accommodate women; and ensuring safe and gender sensitive training environment, employment of women trainers, equity in remuneration, and complaint redressal mechanism. Besides these, the Common Norms approved by Ministry for various skill development programs provide special support for women candidates such as provision of boarding and lodging facilities.

6. Special Women-Centric Projects

NSDC, through its training partners such as Mann Deshi Foundation, Shri Mahila Sewa Sahkari Bank Limited and Sri Sarada Math Rasik Bhita are working exclusively on skill development of women, especially in rural areas. The training constitutes imparting digital, accounting and entrepreneurial skills so as to facilitate the possibility of setting up their own business. NSDC in collaboration with the Ministry of Drinking Water and Sanitation is also driving skill development of workers for Swachh Bharat Mission.

7. Partnerships with Private & Non-Government Organizations to boost skill development

Some of the collaborative efforts with private players include organizations such as Airbnb to support homestay services by providing training in hospitality and tourism sectors. Under a PMKVY project, Amrita Vishwa Vidyapeetham is targeting remote villages to foster women empowerment through skill development and creation of occupational opportunities. The project is focused towards vulnerable and marginalized groups and tribal population. With over 50% participation from women, the project has been implemented in Chhattisgarh, Odisha, Jharkhand, Kerala and Tamil Nadu. Partnership with HumaraBachpan Trust in Odisha aims to give employment & entrepreneurship opportunities to about 1500 women belonging to the economically disadvantaged sections. Partnership with Industree Crafts Foundation, a formation of producer group companies, is helping in training and supporting women targeted to benefit 1500 women in Karnataka. Partnership with Youthnet Home Stay Project in North East (Nagaland and Arunachal Pradesh) is improving the quality of homestays and providing a source of income to 200 residents.

8. Projects in Pradhan Mantri Mahila Kaushal Kendra (PMMKK)

Recently, more than 6000 training targets have been allocated to train women in 4 PMMKKs. The crèche facility is also available at these centers so as to facilitate the new mothers to take up skill training. Trainings are being conducted for Self Employed Tailor, Beauty Therapist, Customer Care Executive, Hair Stylist, Yoga Trainer, etc.

9. Future jobs and industry-oriented courses

Aligned to NSQF, there are nearly 450 job roles which are concentrated towards skill training of women. Skill India is encouraging participation of women in new-age job roles aligned to Industry such as Artificial Intelligence, 3D printing, Data Analytics etc. and has witnessed increased participation of women in hard skills like welding, automobile mechanics etc. Skill India has also partnered with global industry leaders like SAP, Adobe, IBM to create skill development programs aligned to the needs of Industry.

10. Entrepreneurial Initiatives

MSDE is committed to facilitate growth of women entrepreneurs in the country. NIESBUD under the MSDE has designed Entrepreneurship Development Programs for the rural women, with the objective to inculcate entrepreneurial values, attitude and motivation among the Rural women to take up challenges to set up an enterprise/Group Enterprises. The Livelihood Business Incubation (LB I) approach is also used to promote woman entrepreneurs by the Institute. National Entrepreneurship Awards recognized entrepreneurial journeys of women at them. Out of 33 companies which received awards, 12 were solely owned by women and in another two, a woman was a co-founder. Linkage of Skill India and Mudra Yojana has been achieved. Since, women comprise about 78% of the beneficiaries of Mudra Yojana, this linkage will further give boost to aspiring women entrepreneurs.

Source: PIB

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Global Textile Raw Material Price 12-03-2019

Item

Price

Unit

Fluctuation

Date

PSF

1329.76

USD/Ton

0%

3/12/2019

VSF

1899.87

USD/Ton

-0.93%

3/12/2019

ASF

2439.51

USD/Ton

0%

3/12/2019

Polyester POY

1315.64

USD/Ton

0%

3/12/2019

Nylon FDY

2898.87

USD/Ton

0%

3/12/2019

40D Spandex

4712.52

USD/Ton

0%

3/12/2019

Nylon POY

3121.86

USD/Ton

0%

3/12/2019

Acrylic Top 3D

5619.35

USD/Ton

0%

3/12/2019

Polyester FDY

1568.36

USD/Ton

0%

3/12/2019

Nylon DTY

2690.75

USD/Ton

0%

3/12/2019

Viscose Long Filament

2601.55

USD/Ton

0%

3/12/2019

Polyester DTY

1494.03

USD/Ton

0%

3/12/2019

30S Spun Rayon Yarn

2690.75

USD/Ton

-0.55%

3/12/2019

32S Polyester Yarn

2014.34

USD/Ton

0%

3/12/2019

45S T/C Yarn

2869.14

USD/Ton

0%

3/12/2019

40S Rayon Yarn

2170.44

USD/Ton

0%

3/12/2019

T/R Yarn 65/35 32S

2571.82

USD/Ton

0.58%

3/12/2019

45S Polyester Yarn

3002.93

USD/Ton

0%

3/12/2019

T/C Yarn 65/35 32S

2527.22

USD/Ton

0%

3/12/2019

10S Denim Fabric

1.37

USD/Meter

0%

3/12/2019

32S Twill Fabric

0.83

USD/Meter

0%

3/12/2019

40S Combed Poplin

1.11

USD/Meter

0%

3/12/2019

30S Rayon Fabric

0.65

USD/Meter

-0.46%

3/12/2019

45S T/C Fabric

0.70

USD/Meter

0%

3/12/2019

Source: Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.14866USD dtd. 12/03/2019). 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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U.S. says seeking to cut tariff, non-tariff barriers in UK trade deal

The United States on Thursday laid out objectives for a trade deal with the United Kingdom that would ensure fair and balanced trade, cut tariff and non-tariff barriers for U.S. industrial and agricultural goods and reduce regulatory differences. The negotiating objectives, required by Congress under the “fast-track trade negotiating authority law, will seek to boost trade between the countries by eliminating tariff and non-tariff barriers,” the U.S. Trade Representative’s office said. President Donald Trump has demanded better terms of trade, saying poor deals have cost the United States millions of jobs. Last year, the United States agreed to a reworked trade deal with Canada and Mexico. In October, USTR Robert Lighthizer told Congress it intended to open talks with the United Kingdom, the European Union and Japan. The United States is seeking to entirely eliminate or reduce barriers for U.S. agricultural products and secure duty-free access for industrial goods. The plan would also streamline regulatory differences and customs requirements between the United States and Britain to boost trade. The United States will aim to “reduce burdens associated with unnecessary differences in regulation,” USTR said in the document. Now that the U.S. objectives have been published, the USTR may be ready to formally launch negotiations in as little as 30 days, though an exact timeline remains unclear as Britain is still scrambling to secure a plan for its exit from the European Union next month. Last year, USTR said it planned to launch talks with Britain after Britain’s exit from the EU on March 29. Just over a month until the deadline, Prime Minister Theresa May is still seeking changes to her Brexit deal in order to win the backing of parliament. The United States is also seeking commitments from the United Kingdom to establish “state-of-the-art” rules to ensure cross-border data flows and not to impose customs duties on digital products. USTR also said it would try to boost services opportunities by improving transparency and predictability in regulations. U.S. goods and services trade with the United Kingdom totalled an estimated $231.9 billion (£174.8 billion) in 2017 and the U.S. goods and services trade surplus was $14.2 billion, according to USTR.

Source: US Fashion Network

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GOTS certified facilities rise 14% across globe in 2018

In 2018, the number of GOTS (the Global Organic Textile Standard) certified facilities showed an increase of 14.6 per cent from 5,024 to 5,760 facilities. Certified facilities are now located in 64 countries around the globe. GOTS certification covers the processing of certified organic fibres along the entire supply chain from field to finished product. The progress is seen in both production and consuming regions. Countries and regions with the largest growth in percentage in 2018 in GOTS certification are Bangladesh (+29 per cent), North America (+25 per cent), Pakistan (+23 per cent), and South Korea (+23 per cent). In terms of total numbers, the highest increase is reported from India (+315), followed by Bangladesh (+155), and Europe (+98), according to a GOTS press release. The top ten countries in terms of total number of certified facilities are India (1973), Bangladesh (689), Turkey (519), Germany (500), Italy (340), China (301), Pakistan (238), Portugal (215), USA (127), and South Korea (85). The 18 GOTS accredited independent certification bodies reported more than 2.02 million people working in GOTS certified facilities.  “The increasing number of certified facilities aligns with the common desire to solve sustainability related problems. It confirms that GOTS is seen as part of the solution. Company leaders use GOTS as risk management tool and as market opportunity. Consumers value the verifiable certification from field to finished product,” GOTS managing director Claudia Kersten at the GOTS annual meeting in Izmir, Turkey said. The number of chemicals in the positive list shows an increase of 13 per cent to 20.231 from 778 suppliers. The GOTS positive list contains trade names of approved chemicals that must be used by all textile processors for their GOTS certified production.

Source: Fibre2Fashion

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Vietnam earns bigger garment export in 2 months

Vietnam gained nearly 4.9 billion U.S. dollars from exporting garments and textiles in the first two months of this year, up 19 percent year-on-year, according to the country's Ministry of Industry and Trade on Tuesday. Between January and February, products witnessing significant export growth included fabrics made from natural fibers (up 14 percent), fabrics from synthetic fibers (up 14 percent) and clothing (up 11 percent). The revenue surge was mainly attributable to strong market demand, with many orders already placed for the first six months of this year or even the whole year, said the ministry. By the end of this year, total export turnovers of the industry may reach 40 billion U.S. dollars, the Vietnam Textile and Apparel Association forecast. Vietnam, among the world's five biggest exporters and producers of garments and textiles, posted garment and textile export turnovers of over 30.4 billion U.S. dollars in 2018, up 16.6 percent from 2017. However, Vietnam had to spend more than 12.9 billion U.S. dollars importing cloth last year, up 13.5 percent, the association said, noting that most of local cloth has yet to satisfy quality requirements of the country's key garment export markets.

Source: Xinhua

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Export mantra in Vietnam: Lessons for Sri Lanka

Vietnam was very much like Sri Lanka. It went through a 20-year war and was one of the poorest countries in the world, but it refused to bow down and made some social-oriented market reforms called Doi Moi Reforms in 1986. Today, the nation is growing at the fastest pace in eight years, with a GDP growth rate comparable to China’s. Its exports are worth 99.2% of its GDP. What is the secret of its success? A recent study by the World Bank suggested that Vietnam’s economic growth is the result of three major changes: Embracing free trade policies, reducing overregulation and costs of doing business, and investing in human capital and infrastructure. Trade liberalisation opened the door to new agreements, lowering taxes for international commerce operations and increasing regional competitiveness. To date, Vietnam has successfully signed 16 bilateral and multilateral free trade agreements, and it has become a member of the World Trade Organization, the Association of Southeast Asian Nations (ASEAN), and the Eurasian Customs Union. Anything from Nike sportswear to Samsung smartphones are manufactured in this ASEAN nation. Such is the success of the country, Sheng Lu, an assistant professor at the University of Delaware told the Financial Times that there are few spare workers or production facilities left.

Lessons for Sri Lanka

1. Trade liberalisation and FTAs

Vietnam achieved this miracle mainly due to trade liberalisation and avoiding protectionism. Sri Lanka has signed a few FTAs with India, Pakistan and Singapore; more progress needs to be made. The FTAs with India and Pakistan provide for duty-free entry as well as duty preferences for manufactured goods. Sri Lanka aims to attract foreign investors interested in entering the Indian and Pakistan markets to establish operations in Sri Lanka under the FTAs, but progress has been slow. Trade between Sri Lanka and India has substantially increased since the beginning of the FTA, although Sri Lanka has yet to realise the full potential of the FTA. Sri Lankan exporters still face significant non-tariff barriers. Tariff concessions for Sri Lankan products include zero tariffs on 4,235 items; 50 to 100% reduction for tea and garments under quota; 25% reduction for 553 textile items; and no reduction for 431 items on India’s ‘negative list’. Discussions are underway to reduce the negative lists of both countries. Sri Lanka is currently negotiating an Economic and Technology Agreement (ECTA) with India. Under the Pakistan-Lanka Free Trade Agreement, Pakistan offers duty-free entry to all Sri Lankan exports, except for items on a negative list. Pakistan’s negative list contains 541 items with no duty concessions. Sri Lanka has offered duty-free entry to 102 items from Pakistan. Sri Lanka’s negative list contains 697 items. 2 Investment in Human Capital. Vietnam invested billions of dollars in human capital and they did that as more than half their population was under 35. Sri Lanka has a young population and an average age of 30 and we have a young and energetic youth and the Government although investing in primary education must look at investments in IT infrastructure which is how Vietnam was able to attract major corporates like LG and Samsung to set up factories in Vietnam. Investment in this area may even reduce the outflow of domestic workers who are vital human capital leaving the nation due to lack of opportunities. 3 Venture into new export arenas. Vietnam achieved this export boom not only via garments and electronics exports but also by investing in young entrepreneurs and AI startups. Vietnam’s dynamic startup landscape is creating a unique opportunity for blockchain startups to establish their operations in the country, especially considering the rising number of highly-skilled engineers. Every year, nearly 40,000 information technology graduates join the employment pool. According to a recent report by the consulting firm AlphaBeta, Vietnam ranks second-best in terms of tech investment climate in the Southeast Asia region and third in digital talent. Sri Lanka too can learn from this and although we have an emerging start up culture there is a lot more that needs to be done if we are to truly emerge as a nation that can nurture world class tech entrepreneurs. Sri Lanka is in the right track with an export focussed Government and with policies being introduced to enhance the process of attracting FDI but all that is needed is adequate implementation. It is a good time to study the case of Vietnam and learn from the success story of this once impoverished nation.

Source: Financial Times

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US warns of WTO action over 'discriminatory' new digital taxes

The US is weighing a complaint at the World Trade Organisation against "discriminatory" new taxes on digital giants such as a Facebook and Google which are being planned by France and other EU nations, a top US trade official said Tuesday. "Various parts of our government are studying whether that discriminatory impact would give us rights under trade agreements and WTO treaties," Chip Harter, a Treasury official and US delegate for global tax talks, said in Paris.

Source: Business Standard

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APTMA signs MoU with Union of Private Sector Development of Tajikistan

The All Pakistan Textile Mill Association (APTMA) has signed a MoU with the Union of Private Sector Development of Tajikistan for an intensive week-long business tour of the Tajikistan textile delegation to Pakistan, aimed at establishing business contacts, learning best practices and experiences, and developing long-term collaborations. Central Chairman APTMA Syed Ali Ahsan, Chairman APTMA Punjab Adil Bashir and other office bearers of the Association were present on this occasion. APTMA gave a presentation on the textile industry structure, strength and opportunities and the way forward for achieving various goals for doubling investment, production, exports and employment. The presentation also highlighted prospects of cooperation at Association level with Tajikistan textile industry. It may be noted that a delegation consisting of managers and representatives from 13 textile and clothing (T&C) companies, two consulting companies, two universities, as well as the Union of Private Sector Development and the Ministry of Industry and New Technologies of Tajikistan is visiting Lahore and Faisalabad during a business study tour starting from last Saturday. This is the first time ever that Tajik T&C companies have such a tour to Pakistan, which is among top 10 textile producers in the world. This is the first time ever that Tajik T&C companies have such a tour to Pakistan, which is among top 10 textile producersThe study tour was organized with the support of the Government of Switzerland through the International Trade Centre (ITC)’s Global Textiles and Clothing Programme (GTEX) in close cooperation with the USAID funded project “Pakistan Regional Economic Integration Activity” (PREIA). The USAID Pakistan Regional Economic Integration Activity (PREIA) is a five-year project instituted to further the development of Pakistan’s trade sector by improving Pakistan’s competitiveness in regional and international markets. Achieving this objective necessitates the establishment of linkages between private business organizations from Pakistan and the CARs. The main objectives of the study tour are to gain exposure to the textile value chain in Pakistan, including the use of technology, manufacturing practices, to establish business contacts and to explore the possibility of sourcing materials and understand the retail environment.

Source: The Nation

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Kenya and Sri Lanka to formalize political consultations

Sri Lanka and Kenya agreed to formalize political consultations between the two Foreign Ministries, which would provide a framework for discussing new areas of cooperation, the Foreign Ministry said today. This follows a meeting in Colombo between Foreign Minister Tilak Marapana and Cabinet Secretary for Foreign Affairs of Kenya Monica Juma on Friday 8th March at the Foreign Ministry in Colombo. Foreign Minister Tilak Marapana highlighted the importance of identifying priority areas so that discussions can be focused, sustainable and targeted at achieving specific objectives. Noting that Kenya could provide a gateway for Sri Lanka to access the larger African market, the Kenyan Minister invited Sri Lanka to invest in Kenya. Minister Marapana noted the importance of re-activating the Joint Trade Committee between Sri Lanka and Kenya which could pave the way for greater economic and trade relations. Sri Lanka emphasized its increased focus on Africa and the continent’s untapped potential. The two countries committed to consolidate the longstanding relations that go back to 1970, with political consultations and renewed economic cooperation. Cabinet Secretary Juma added that her country looked forward to welcoming President Maithripala Sirisena in Nairobi this week, for participation in the 4th UN Environmental Assembly. The two Ministers and discussed specific areas that could contribute towards optimizing the bilateral relations for the mutual benefit of the two countries. Recalling their meeting in Nairobi when Foreign Minister Marapana visited Kenya in June 2018, the two Ministers reiterated agriculture, sports, agro forestry, textiles and manufacturing as some of the key areas which could greatly contribute towards enhanced bilateral cooperation. The Kenyan side expressed interest in possible research collaboration on rice and exchange of experience and technical expertise in value addition on tea and coconut. Kenya was further interested to learn from the Sri Lankan experience in textile manufacturing. Sri Lanka conveyed its interest to learn from Kenya’s best practices in agroforestry and possible research collaboration, particularly through the World Agroforestry Centre (ICRAF) which is headquartered in Nairobi. Discussing multilateral cooperation, the two Ministers agreed to collaborate in combatting terrorism, address the challenges of transnational crime, the importance of its littoral countries addressing the issues concerning the Indian Ocean, and wider South-South cooperation. It was further underlined that air connectivity was an important factor in promoting more people-to-people links and promoting tourism. Both sides agreed that the Indian Ocean is a connector and a common heritage, and it was upto the littoral countries to negotiate collectively on preserving its independence and the sustainable use of its rich marine resources. Secretary to the Ministry of Foreign Affairs Ravinatha Aryasinha, Additional Secretary (Bilateral) Sumith Nakandala and Director General of the Africa Affairs Division Himalee Arunatilaka were associated with Minister Marapana at the meeting. Cabinet Secretary Juma was accompanied by senior officials of the Kenyan Ministry’s Asia Affairs Division.

Source: Colombo Gazette

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China plans new foreign investment law

Bill seeks to assuage concerns about the country’s business environment. China’s Parliament took up on Friday a draft foreign investment law that could help smooth out trade talks with the U.S. as the world’s top two economies angle towards a deal. The legislation was presented at a session of the National People’s Congress in Beijing and is expected to be approved on March 15, the last day of the annual parliamentary meeting. The Bill will ban the illegal transfer of technology and “illegal government interference” in foreign businesses, a key point in Washington’s contention that Beijing steals American technology. The law aims to assuage concerns about China’s business environment for foreign firms, but earlier versions of the draft drew criticism from some business groups.

‘No forced tech transfer’

The law “clearly stipulates that the state protects the intellectual property rights of foreign investors and foreign-invested enterprises and bars the use of administrative means to force technology transfer”, said Ning Jizhe, Vice-Chairman of China’s state planner, the National Development and Reform Commission. “This will certainly provide a more comprehensive and more powerful rule of law guarantee for foreign investment interests,” Mr. Ning told reporters earlier this week. Beijing sees the law as a tool to attract more foreign investment as its economy slows. China’s Premier Li Keqiang on Tuesday laid out a lower growth target of 6% to 6.5% this year, down from 6.6% growth in 2018. Official data on Friday showed China’s exports and imports plummeted much more than expected in February, adding to worries. U.S. President Donald Trump said on Thursday that trade negotiations were “moving along pretty well”.

Source: The Hindu

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Turkey gains scope as European textile hub while entering recession

The Gross Domestic Product (GDP) of the country registered in the fourth quarter of 2018 a fall of 2.4% compared to the previous quarter, falling into technical recession for the first time since 2009. Turkey consolidates its role in the European fashion sourcing while its economy weakens. The county, which has entered a technical recession, shot up last year its exports of textile and fashion goods to Europe, relying mainly on the devaluation of the local currency. Now, in this new period of recession, everything indicates that the situation will persist. Turkey’s Gross Domestic Product (GDP) registered a 2.4% fall in the fourth quarter of 2018 compared to the previous quarter, entering technical recession for the first time since 2009, according to data published yesterday by the Turkish Statistical Institute (Turkstat). In Inter-on-year terms, the country’s GDP recorded a 3% drop. Despite the setbacks of the Turkish economy in the last two quarters of the year, 2018 as a whole had a positive performance, with an annual increase of 2.6% compared to 2017. However, the rise was well below that registered one year ago, when it stood at 7.4%.For the time being, the Turkish Minister of Finance and Treasury, Berat Albayrak, stressed yesterday the temporary nature of the economic slowdown and explained that the country has started a moderate recovery driven by exports and tourism income. Part of this recovery is based on the devaluation of the local currency executed last year on several occasions by the Turkish Government in order to gain competitiveness in foreign markets. The textile, highly sensitive to production costs, took advantage of such devaluation to increase purchases to the country. In 2018, the European Union raised by 2% its purchases to the Turkish textile industry, which establishes itself as the third largest hub in the European sector, according to the latest data by Icex. In the specific case of Spain, in 2017 Turkey had already overtaken Bangladesh as the second supplier of textiles, clothing, accessories and footwear. Turkey was the only proximity sourcing of the European Union which increased its sales to the region last year, when in Italy fell by 2.2%, in Check Republic had a drop by 5.6% in and Portugal plummeted by 10.2%.In the specific case of Spain, in 2017 Turkey had already overtaken Bangladesh as the second supplier of textiles, clothing, accessories and footwear, and in 2018, it even increased the gap between them. Two years ago, the Spanish market rocketed by 16% its Turkish textile purchases while imports from Bangladesh only grew by 8%. Also in the case of the fashion industry in Spain, Turkey has distorted the sourcing map of the sector in proximity. Thus, while the Eurasian country has increased its sales of fashion items to the Spanish market at a double digit rate between 2017 and 2018, Portugal’s textile industry has registered drops of 23.5% in 2017 and 13.9% in 2018. As for Italy, Spanish purchases also shank in the last year, with a decrease of 4.2%, while those of Morocco moderated the growth rate, going from 23.3% in 2016 to 8 % in 2017 and 5.9% in 2018.

Source: Themds

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Exchange Rates