Exports of goods in 2018-19 registered a 9.06 per cent growth to hit a new high of $331 billion, breaching the previous high of $314 billion clocked in 2013-14. Exports of goods in March was 11 per cent higher at $32.55 billion (the highest monthly performance) on the back of significant contributions from sectors such as engineering goods, chemicals, pharmaceuticals and petroleum products, according to an official statement. “Owing to a good catch-up in March, India’s exports have crossed $331 billion in 2018-19 with engineering exports registering an all-time monthly figure of $9.4 billion and annual $83 billion. However, 2019-20 appears to be a challenging one. The global economy and trade seem to be coming under pressure with issues like protectionism refusing to go,” Ravi Sehgal, Chairman, EEPC India. Imports in 2018-19 grew 8.99 per cent to $507 billion, but growth in March was 1.44- per cent lower at $43.44 billion with a fall in imports of machinery, transport equipment, electronic goods and coal and coke. Trade deficit in 2018-19 increased to $176.42 billion, compared to $162.05 billion in the previous year, but deficit in March shrunk to $10.89 billion compared to $13.51 billion in March last year. The healthy growth in exports came at a time when the World Trade Organization cut global trade forecast to 2.6 per cent for 2019, from 3 per cent in 2018, pointed out Ganesh Gupta, President, FIEO, adding that it was due to the hard work put in by the exporting community. FIEO reiterated its demand for “urgent and immediate’’ support, including augmenting the flow of credit, higher tax deduction for R&D, outright exemption from GST, online ITC refund, interest equalisation support to farm exports, benefits on sales to foreign tourists and exemption from IGST under Advance Authorisation Scheme with retrospective effect. India’s exports had taken a hit in 2014-15 due to poor global demand and rising protectionism in buying countries with exports falling sharply for two consecutive years and then recovering slowly. Oil imports in March 2019 at $11.75 billion were 5.55 per cent higher than the same month last year. Oil imports in April-March 2018-19 were at $140.47 billion, 29 per cent higher than in same period the previous fiscal. Import of gold in March was 40 per cent higher at $22.74 billion, compared to the same month last year.
Source: Business Line
Despite exports and imports growing at the same rate of 9 per cent, India’s trade deficit reached a record high of $176 billion in 2018-19. According to data released by the commerce and industry ministry on Monday, exports stood at $32.55 billion in March, taking the total tally in 2018-19 to $331 billion. While it is the first time that outbound trade has remained above $300 billion for two consecutive years, exports couldn't cross the government’s internal target of $350 billion. In the 2017-18 financial year, exports stood at $303.52 billion. On the other hand, a continuous shoot up in imports, which grew at double digit levels for 6 of the last 12 months, took cumulative imports to a soaring high of $507.44 billion. This was nearly $42 billion more than India’s total bill in the preceding year.
Shipments rise in March
New orders in key foreign exchange earning sectors such as gems and jewellery, engineering goods, and petrochemicals, meant export growth reached double-digit figures for the first time since October. March’s 11 per cent follows four straight months of low growth with export receipts rising by just 2.44 per cent in February. Of the 30 major product groups, 20 recorded a growth in March, up from 18 in February. Among the growth pullers, engineering goods rose by 16.2 per cent, after remaining sluggish after the marginal rise of 1.7 per cent in February. “The prospects look very challenging going forward, as cautioned by the IMF, the RBI and other agencies,” Engineering Export Promotion Council India Chairman Ravi Sehgal warned. The sector accounts for nearly one-fourth of the total foreign exchange earned through exports, and EEPC has suggested a strategic shift in export of particular products to improve growth. Readymade garments, the sector in which India’s export competitiveness has steadily fallen over the past financial year, showed signs of steady recovery with $1.71 billion worth of merchandise exported in March. Growth was up by more than 15 per cent in March after the 7.1 per cent growth in the previous month. However, drugs and pharmaceuticals exports went down in March with 13.59 per cent growth, down from the 16.11 per cent growth in February.
Source: Business Standard
India, South Africa and China are among those that have pushed back against a joint US-EU proposal to call out and punish countries that have not followed notification requirements under various World Trade Organization (WTO) agreements. The countries feel it is unfair to impose harsh requirements on developing countries facing deep capacity constraints, and are reminiscent of colonial era rules. As part of proposed reforms to the global trade body, the US and EU, along with Japan, Canada, Australia, Costa Rica, Argentina and Taiwan, on 11 April, sought to impose stringent notification requirements, including financial penalties, on countries for failure to comply. At the meeting of WTO’s Council on Trade in Goods (CTG), the US justified the proposal on grounds of “chronic low level compliance with existing notification requirements under many WTO agreements (by members)". It seeks to allow “a counter-notification of another member concerning notification obligations".Under this practice, deemed controversial by many countries, a WTO member can issue a counter-notification against a member, claiming the latter had breached its commitments under that specific WTO-agreement. Recently, the US had filed counter notifications claiming New Delhi’s subsidy schemes, especially minimum support prices for rice, wheat and cotton, breached India’s scheduled subsidy commitments to the WTO.India, however, rejected the US stand saying it was based on flawed assumptions and erroneous practices. The counter-notification by the US on Indian grains and cotton was based on data from American farm lobbies, which reckon India as a major threat to its subsidized-exports to countries, said a trade envoy, who asked not to be named. The sponsors also proposed “administrative measures" in case a member “fails to provide a required notification by the deadline provided under an agreement". These would kick in after a member fails to provide notifications within one year of the deadline, and would include barring representatives of the erring country from presiding over WTO bodies and even financial penalties. Administrative measures will also include naming and shaming provisions such as “the Member shall be designated as a Member with notification delay; (ii) representatives of the Member will be called upon in WTO formal meetings after all other Members have taken the floor, before any observers; and (iii) when the Member with notification delay takes the floor in the General Council, it will be identified as such." In an overwhelming rejection of the proposal, many developing countries rallied around India and South Africa, saying there was no place for such a proposal in the 164-member inter-governmental trade body. According to an Indian official who attended the meeting, India rejected the proposal saying it is “difficult to agree to such a proposal which provides for penalties and administrative actions in case of default, rather than making an effort to understand the difficulties, a large number of developing members are facing." India also sought to know why the sponsors were silent on complying with the notifications on trade in services, particularly filing notifications on the movement of short-term professionals under Mode 4 of the General Agreement on Trade in Services, and in trade-related intellectual property provisions.
Source: Live Mint
Rising oil prices and relatively higher trade costs would hamper oil importing emerging markets Calling it a “delicate year” for the global economy, the International Monetary Fund (IMF), in its ‘World Economic Outlook’, has warned against three key risks — growing inequality, weak investment, and rising protectionism in trade. A look at a group of countries across key macroeconomic indicators such as debt, savings and investments, inflation, income and trade shows India falls almost in the middle of this mix in nearly all parameters in the IMF estimates for 2019. While the US and Brazil lead in debt as a percentage of gross domestic product ...
Source: Business Standard
Japan is the 3rd-largest investor in India with a cumulative FDI of $26 billion in the period 2000-2017, constituting 8% of the total FDI in India. The ongoing contempt case in the Supreme Court by Japanese company Daiichi Sankyo against the former promoters of Ranbaxy has drawn considerable attention in the context of Japanese investment in India. In September 2014, in the first interaction with Prime Minister Narendra Modi, Japan’s Prime Minister Shinzo Abe had promised $35 billion in corporate investments and financing for infrastructure development in India. Mr Modi had assured special mechanisms to fast-track approvals for Japanese investors. Mr Abe had also set a target of doubling the Japanese companies operating in India in five years. The targets were ambitious and Japanese investments did show growth in the first three years after 2014. According to RBI’s Annual Report, FDI from Japan was $1.8 billion in 2013-14, $2 billion in 2014-15, $1.8 billion in 2015-16 and $4.2 billion in 2016-17; dropping to $1.3 billion in 2017-18. In 2018, Japanese portfolio investment was slack as the Indian economy grappled with rising current account as well as budgetary deficits. The net inflow from Japanese funds to Indian equities slipped to about $550 million in 2018 as compared to about $7.5 billion in 2017. Japanese fund managers felt that Indian firms had high valuations fuelled by large US-based pension and investment funds. The uncertainties of the unpredictable May 2019 parliamentary elections in India added to this caution on the part of Japanese investors. The number of Japanese companies grew by about 5 per cent per year rising from 1,156 in 2014 to 1,441 in 2018. The total number of all Japanese establishments grew from 3,961 in 2014 to 5,012 in 2018. Japanese investors and corporates are rather conservative by nature and risk-averse by tradition. In comparison, Korean Chaebol patriarchs are ready to take calculated risks and venture boldly into uncharted waters. Maruti-Suzuki, the first major Japanese investment in India in the early 1980s continues to be a shining example of successful operations by a large Japanese corporation in India. Toyota Motor Corporation’s partnership with the Indian group Kirloskar forged in 1997 has also been hugely profitable. However, some more recent major Japanese investments in India’s manufacturing and services sector have failed, making the Japanese boards hesitant. In 2008, Daiichi-Sankyo had acquired a 63.9 per cent stake in the pharma major Ranbaxy for $4.2 billion. As the company did not succeed in restoring compliance at Ranbaxy facilities as directed by US FDA, by 2015 the value of the Daiichi investments had halved. Daiichi sold its stake in Ranbaxy to Sun Pharmaceuticals in return for an 8.9 per cent stake in Sun Pharma. Subsequently, it exited from Sun Pharma, also selling its share for about $3.2 billion. The Japanese company incurred a loss of about 30 per cent in dollar terms, thus badly burning its fingers. Allegedly, the Indian owners had concealed critical information regarding the ongoing US FDA investigations in some of its most profitable formulations. The ongoing contempt case involves a payment of Rs 3,500 crores by Ranbaxy’s Singh brothers to Daiichi. In another negative development, the Japanese digital imaging equipment maker RICOH suffered a loss of more than Rs 1,000 crores allegedly due to falsification of accounts by the managers of their Indian branch. Reportedly, RICOH India owes related parties RICOH Japan and RICOH Asia-Pacific over Rs 1,500 crores. In 2009 the Japanese telecom giant NTT Docomo bought a 26.5 per cent stake in the iconic Tata group company Tata Teleservices with an investment of approximately $2 billion. The agreement stipulated that if certain performance benchmarks were not met, the Japanese could quit with a minimum recovery of roughly half of their investment. When in 2015, NTT Docomo exercised the option of quitting, it led to a legal battle with Tata Teleservices, ending in international arbitration in London. In 2016 the arbitration tribunal awarded Docomo damages amounting to $1.17 billion. The enforcement of the arbitration award was initially challenged by Tata Teleservices but following a Delhi high court verdict in favour of Docomo, the Tata group finally settled with their Japanese partners. However, the failure of this large investment and the consequent legal dispute cast a shadow on the sentiments of Japanese investors looking at the Indian market. Despite these setbacks, Japanese investments in India in 2016-17 rose to $4.7 billion, recording a significant increase from $2.6 billion in the preceding year. Japanese companies are now investing in diverse sectors like retail trade, textiles, consumer durables and credit card services. More investment from Japan is expected as work is on to establish 12 industrial parks dedicated to Japanese companies as part of economic corridors across various states. It is notable that Japan is the third-largest investor in India with a cumulative FDI of $26 billion in the period 2000-2017 constituting 8 per cent of the total FDI in India. A major Japanese fund Softbank is betting heavily on India’s start-up sector and has made significant investments in Flipkart, OYO, Paytm, Ola, Grofers, Snapdeal, etc. Other notable Japanese investor funds are Rebright Partners, Mistletoe and Dentsu Ventures. Of course, the high-speed train between Mumbai and Ahmedabad would be the future flagship of Japanese technical and financial assistance to India. Japanese corporate investment in India’s manufacturing sector is largely driven from strong political support by the two Prime Ministers. Japanese boards however continue to be cautious in opting for major green field projects in India. They are deterred by our work culture, unpredictability of tax and other rules and regulations and long timelines in project implementation. As the Japanese look for diversifying investment destinations, their choice has fallen on countries like Vietnam. In a recent survey of 630 Japanese firms, 35.7 per cent chose Vietnam as the most promising economy for investment with India at the second place preferred by 17.8 per cent of the respondents. It is sobering to note that Japanese FDI in Vietnam till 2018 was more than $58 billion constituting about 22.4 per cent of total FDI in Vietnam. Vietnam scores over India because of its high growth, disciplined work force and its emergence as a production hub in global value chains. India’s main attractions are its high growth potential and large consumer market. Japanese investments in India are on the right trajectory but much remains to be done to make India more attractive for higher investments, particularly in the manufacturing sector.
Source: Asian Age
Though both are the world's leading nation in terms of economic growth, the US claims they continue to enjoy special trade benefits that come with a 'developing country' tag. The United States (US) wants the Switzerland-based international trade body World Trade Organisation (WTO) to review the 'developing country' status of India and China, the two fastest growing economies in the world. Though both are the world's leading nation in terms of economic growth, the US claims they continue to enjoy special trade benefits that come with a 'developing country' tag. The developing nations in question, India and China, have in turn flagged several key factors, including per capita income and human development indicators, where they are still lagging and are far behind than the developed countries like the US, Singapore, South Korea, Saudi Arabia, etc. The economists are also divided over the issue, but many of them feel neighbouring countries like China, Singapore, South Korea, and Hong Kong are way ahead in economic prosperity than India, and that putting India on the same scale can't be justified. Let us first compare India's social and economic indicators with these rising Asian countries.
Social and economic indicators
As per the 2017 World Bank figures, the per capita national income in India was $1,800, while other countries like Singapore, South Korea, and China reported per capita national income of $54,530, $28,380, and $8,690, respectively, reported Financial Express. In terms of Human Development Index, India ranked at 103, while China, South Korea, Singapore, and the US rank at 86, 22, 9 and 13, respectively. While India had 21.2 per cent poor population (living on $1.90 a day as per 2011 purchasing power parity), China had 7.9 per cent population in the category, while Singapore and South Korea had almost negligible poor population. While India employed around 41.6 per cent of the population in agriculture, while China, South Korea, Singapore and the US had 16.4 per cent, 4.8 per cent, 0.1 per cent and 1.6 per cent population that depended on agriculture. Despite all odds, India is expected to remain the fastest growing emerging market economy and the economy is expected to grow at 7.5 per cent in the next three years.
What does 'developing' nation tag mean?
The World Bank classifies all countries of the world into one of the three broad categories: developed economies, economies in transition and developing economies. A developing nation tag means a country will get a certain advantage in terms of subsidies and tariff than a developed nation. The developing countries get a longer time to implement global initiatives and more flexibility in adopting measures to boost international trade. For example, a developing nation like India can provide larger input subsidies and MSP as compared to developed nations.However, comparing India with these nations is extremely iniquitous, says Abhijit Das, head of the Centre for WTO Studies at the Indian Institute of Foreign Trade. He told the daily: "It would be extremely iniquitous if India is to be treated on a par with the US (developed countries) at the WTO, given that the per capita income of the US is over 30 times higher than India's." Despite huge pressure from the US, China has also refused to shed the 'developing nation' tag. The US argues China shouldn't be categorised as a developing nation because it has seen almost two decades of unprecedented economic prosperity. China, however, maintains that though its GDP per capita of the country has risen up to $16,660 in 2017, it is still lower than the US, which has the GDP per capita of $59,501, so China will take some time before it fully accepts the developed nation tag. India, on the other hand, wants to achieve this feat as soon as possible. Prime Minister Narendra Modi, during the release of the BJP's 'Sankalp Patra' for the 2019 Lok Sabha elections recently, urged people to provide his party, the BJP, five more years to set India on the track of a "developed nation". "It is said that 21st century belongs to Asia and today I am asking why can't India lead... or should India lead or not? Our manifesto says when our country completes 100 years of independence in 2047, it should be transformed as a developed nation, moving on from the developing nation tag," he said.
Source: Business Today
To create, develop and sustain bilateral partnership in textile between US & India, the Indo-American Chamber of Commerce (IACC) will organise a conference on textiles. The conference titled 'America First and Make in India: Together Achieving $100 billion Trade in Textiles' will be co-hosted by the US Commercial Service, US Consulate, in Mumbai on April 24. The one-day conference will promote joint investment and support favourable trade partnership, with representations from the US, North Carolina & South Carolina. The event will bring together thought leaders, policy makers, textile stalwarts, and academicians to deliberate and create a road map to deepen trade and investments between nations, as well as creating textile ethos and ambience, IACC said in a press release. The objectives of the conference include developing sustainable bilateral trade partnership between India and US in textiles, identifying key sectors in Indo-American textiles, policy support in making textile industry competitive, understanding global scenarios and its legalities along with cross border investment opportunities and future trends in Indo-American textile trade. "Indian companies can learn and collaborate with US companies and participate in the US textile manufacturing opportunities involving FDI into the US Similarly, the Indian textile industry exhibits the rich cultural heritage of India and now with its newer modern manufacturing systems, achieving wider variety of fabrics, techniques and innovation in producing qualitative textiles. India’s competitive advantage in fibre to fabric, along with its many textile clusters, can meet the ever-growing demand of the American textile industry," the release added.
Source: Fibre2Fashion
The benchmark Shankar 6 variety of cotton jumped more than 10% to trade at Rs 12,907 a quintal on Friday. India is fast losing its cotton export market to Brazil due to a sharp increase in the fibre prices over the last six weeks which makes Indian shipments uncompetitive in world markets. The benchmark Shankar 6 variety of cotton jumped more than 10 per cent to trade at Rs 12,907 a quintal on Friday as against Rs 11,698 a quintal on February 28. With the Cotton Association of India (CAI) forecasting that India’s cotton output will remain lower during the current season, its arrivals have started declining gradually. Cotton harvesting ended early this season due to reports of crop damage in major fibre producing states including drought-hit Maharashtra and Gujarat. Apart from rising domestic cotton prices, the appreciating rupee has made actual realisation lower than the depreciating Brazilian real. While the rupee appreciated by 2.27 per cent to close at Rs 69.18 against the dollar on Friday compared to Rs 70.75 on February 28. In the same period, however, the Brazilian real – has depreciated by 3.88 per cent to 3.88 against a dollar from 3.76 against a dollar on February 28. “Indian cotton has become uncompetitive in the world market. The largest importer, China, has started importing cotton from Brazil as it has become a cheaper substitute,” said M B Lal, former chairman of the Cotton Corporation of India. India’s shipment of nearly 400,000 – 500,000 bales of cotton is under serious threat of delivery default as Indian exporters face higher procurement prices than contracted for cotton exports. The CAI in its latest report estimated the cotton crop for 2018-19 at 32.1 million bales of 170 kgs each which is lower by 0.7 million bales than its previous estimate of 32.8 million bales made in March. “Rising cotton prices may restrict India’s exports this year. India has exported around 4 million bales so far this year,” said Arun Sakseria, a veteran cotton exporter. Meanwhile, K V Srinivasan, Chairman, Cotton Textile Export Promotion Council (Texprocil) has urged the government to emphasise the need to boost exports of textile products not only to compensate the decline in cotton exports, but also to narrow the trade deficit with China. “Exports of cotton textiles had contributed to the reduction in trade deficit with China, the largest importer of India’s cotton. India’s exports of textiles and apparel posted an increase of 69 per cent to $1.5 billion between April 2018 and February 2019 compared to $919.76 million in the corresponding period last year. Export of cotton textiles can be increased further if the tariff disadvantage of 3.5 - 10 per cent suffered by India in comparison to Vietnam, Pakistan and Indonesia on textile products is addressed by making further special efforts,” Srinivasan added. China is an important trading partner for India with an import of $65.22 billion worth of goods and export of S$ 15.10 billion for the period April – February 2019., recording an all-time high in exports and sharp decline in imports from China.
Source: Business Standard
These posts are in revenue, financial services, economic affairs, agriculture and farmers welfare, road transport and highways, shipping, environment, forest and climate change, new and renewable energy, civil aviation and commerce departments. In a first, nine private sector specialists have been selected for appointment as joint secretaries in central government departments. Usually, the posts of joint secretaries are manned by the officers of Indian Administrative Service (IAS), Indian Police Service (IPS), Indian Forest Service (IFoS)) and Indian Revenue Service (IRS) among others who are selected through a three-phased rigorous selection process undertaken by the Union Public Service Commission (UPSC). The Personnel Ministry had in June last year invited applications for the joint secretary-rank posts through "lateral entry" mode. The lateral entry mode, which relates to the appointment of specialists from private sector in government organisations, is considered as an ambitious step of the Modi government to bring in fresh talent in bureaucracy. These posts are in revenue, financial services, economic affairs, agriculture and farmers welfare, road transport and highways, shipping, environment, forest and climate change, new and renewable energy, civil aviation and commerce departments. The deadline to apply for the posts was July 30, 2018. A total of 6,077 applications were received in response to the government's advertisement. However, the ministry had in December decided to entrust the task of selecting the candidates for these posts to the UPSC, that conducts civil services examination to select the country's bureaucrat, diplomats and police officers. Nine private sector specialists have been recommended for joint secretary posts by the UPSC, that announced the result on Friday. Those selected are Amber Dubey (for civil aviation), Arun Goel (commerce), Rajeev Saksena (Economic Affairs), Sujit Kumar Bajpayee (environment, forest and climate change), Saurabh Mishra (financial services) and Dinesh Dayanand Jagdale (new and renewable energy), it said. Suman Prasad Singh has been selected for appointment as joint secretary in road transport and highways ministry, Bhushan Kumar in Shipping and Kokoli Ghosh for agriculture, cooperation and farmers welfare, the UPSC said."The recruitment process for selection of candidate for joint secretary level post on contract basis (lateral entry) for the department of revenue, ministry of finance has become infructuous at the interview stage," it said without citing further details. Of the total 6,077 applications received by the government, only 89 were short-listed for the interview. They were then asked to fill up a Detailed Application Form (DAF) for further processing. Of these 89 candidates, 14 each are for the posts of joint secretary in agriculture cooperation and farmers welfare, and shipping, 13 for aviation, 10 for the department of financial services, nine each for the departments of revenue and new and renewable energy, eight for road transport and highways, seven for environment, forest and climate change, three for department of economic affairs and two for the commerce department. Government think tank Niti Aayog had in a report highlighted that it was essential that specialists be inducted into the system through lateral entry on fixed-term contract.
Source: Daily News & Analysis
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1327.94 |
USD/Ton |
0% |
4/15/2019 |
|
VSF |
1894.08 |
USD/Ton |
0% |
4/15/2019 |
|
ASF |
2501.08 |
USD/Ton |
0% |
4/15/2019 |
|
Polyester POY |
1362.39 |
USD/Ton |
0.38% |
4/15/2019 |
|
Nylon FDY |
2878.40 |
USD/Ton |
-0.52% |
4/15/2019 |
|
40D Spandex |
4757.57 |
USD/Ton |
0% |
4/15/2019 |
|
Nylon POY |
5637.49 |
USD/Ton |
0% |
4/15/2019 |
|
Acrylic Top 3D |
1583.87 |
USD/Ton |
0% |
4/15/2019 |
|
Polyester FDY |
2729.26 |
USD/Ton |
0% |
4/15/2019 |
|
Nylon DTY |
2684.52 |
USD/Ton |
0% |
4/15/2019 |
|
Viscose Long Filament |
1536.14 |
USD/Ton |
0% |
4/15/2019 |
|
Polyester DTY |
3161.77 |
USD/Ton |
0% |
4/15/2019 |
|
30S Spun Rayon Yarn |
2542.84 |
USD/Ton |
0% |
4/15/2019 |
|
32S Polyester Yarn |
2035.76 |
USD/Ton |
0% |
4/15/2019 |
|
45S T/C Yarn |
2893.32 |
USD/Ton |
0% |
4/15/2019 |
|
40S Rayon Yarn |
2833.66 |
USD/Ton |
0% |
4/15/2019 |
|
T/R Yarn 65/35 32S |
2445.90 |
USD/Ton |
0% |
4/15/2019 |
|
45S Polyester Yarn |
2177.44 |
USD/Ton |
0% |
4/15/2019 |
|
T/C Yarn 65/35 32S |
2550.29 |
USD/Ton |
0% |
4/15/2019 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
4/15/2019 |
|
32S Twill Fabric |
0.83 |
USD/Meter |
0% |
4/15/2019 |
|
40S Combed Poplin |
1.11 |
USD/Meter |
0% |
4/15/2019 |
|
30S Rayon Fabric |
0.63 |
USD/Meter |
0% |
4/15/2019 |
|
45S T/C Fabric |
0.71 |
USD/Meter |
0% |
4/15/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14914 USD dtd. 15/04/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Textile manufacturers losing domestic market has been a subject of worry for quite some time. Recent reports published in local dailies make it clear that the situation has assumed an alarming proportion due mainly to smuggling and other misdeeds taking too oppressive a toll on the capital-intensive industry. Some of these reports quoted textile manufacturers as complaining that the sector is losing domestic business worth a whooping $6.0 billion a year because of the government's failure to rein in errant practices such as smuggling of yarns and fabrics, misdeclared imports and abuse of bond facility. A spokesperson of the Bangladesh Textile Mills Association (BTMA) has been quoted as saying that more than 40 per cent of the spinning and weaving mills are now sitting on stockpiles of yarns due to lack of demand. Domestic market size of textiles, particularly yarns and fabrics, is estimated to be around 8.0 billion meters worth $12 billion annually. According to industry insiders, the share of local textile mills is 3-4 billion meters worth around $6 billion, while the rest is met by smuggled fabrics, illegal imports and misuse of bond facility. Given the insignificant volume of commercial imports of textile materials, it is clear that nearly half of the local demand is met mainly by smuggled goods. Misuse of bond as alleged by the industry people has also been echoed recently by none other the Chairman of the National Board of Revenue (NBR). Over and above, alleged illegal import through misdeclaration evading taxes also seriously hurts marketing of local produce. Understandably, had the foreign products been brought into the country through formal import channel, these could not compete with the local products in the mainstream marketplace because of high import duties, particularly supplementary duties meant to protect local textile mills. It has also been alleged that the border haats established to facilitate small-scale trading in the border belts of Bangladesh and India have turned out to be a source of smuggled textile products which, among others, include readymade apparels, especially women's wear, during festival seasons. Misuse of the border haats, as alleged, calls for urgent attention of the authorities concerned. Textile, being a heavily capital-intensive industry, and a relatively new phenomenon in the country taking off since the nineties in a big way with composite mills coming into operation, deserves to get utmost protection. But repeated alarm blips not just from the industry people but from other quarters as well have done little to underscore the dire consequences of neglect. Given that Bangladesh is a new entrant in textile manufacturing - that too with its total reliance on imported cotton, the industry is vulnerable to shocks of untoward market behaviour. And if the shocks are manmade and orchestrated to squarely harm the industry, no amount of efficiency or marketing drive is going to bring it good news. It all now rests with the government and all the relevant agencies to ensure that the industry built at high cost keeps going, for the greater benefit of the economy.
Source: Financial Express
Control Union, a founding member of Textile Exchange, has given five new standards to Textile Exchange for future growth and industry transformation, with a grant to support the initial review. Control Union is a strong promoter of the third-party assessment system, namely policy making, certification and accreditation organised by different parties. In 2011 Control Union gifted to Textile Exchange the Global Recycled Standard (GRS) and Recycled Content Standard (RCS) which now serve over 1,875 sites. These standards were developed by Control Union due to market demand and the ability to promote best practices within the community. These standards, Global Organic Latex Standard (GOLS), Sustainable Fiber Initiative, rTRIM Responsible Trim, Non-GMO Production standard and the Vegan Standard, will broaden and strengthen Textile Exchange’s existing suite of standards, which includes: Organic Cotton Standard (OCS); Responsible Wool Standard (RWS), Responsible Down Standard (RDS) and Global Recycled Standard (GRS). The five gifted standards were developed by Control Union due to market demand and the ability to promote best practices within the community. If taken over into Textile Exchange’s portfolio as per the Board’s approval, these standards would broaden and strengthen Textile Exchange’s existing suite of standardsTextile Exchange, a member of ISEAL, is looking for thought partnership to help determine the organisation’s role in each standard’s future. Each standard will be assessed separately with the engagement of appropriate content representatives. A recommendation for each standard will be reviewed by the Textile Exchange governance board.? The five gifted standards are in different stages of their lifecycle.
Source: Fibre2Faashion
Romania is a market of great potential to Vietnam’s exports like tropical fruits (fresh and canned), seafood (frozen and canned), coffee, pepper, cashew nut and pork, although the European country has a relatively developed agriculture, according to the Ministry of Industry and Trade. Besides the above-mentioned exports, others like machinery, electric and electronic equipment, furniture, textile products, footwear, synthetic yarn, construction materials and sanitary equipment from Vietnam are also enjoying good chances as Romania has a great need for those and Vietnam can compete with other providers in terms of both prices and quality, the ministry said. It pointed out another field Vietnam can capitalise on, namely labour, in the context that a large contingent of workers of Romany has migrated to other European Union (EU) countries. In the time to come, the European country will be short of about 1 million workhands. The recent amendment by the Romanian parliament of regulations on the minimum wages for non-EU workers as well as the signing of the bilateral memorandum of understanding on labour in November last year will facilitate Vietnamese workers in coming to work in the market, the ministry said. To further accelerate cooperation in the time to come, the two governments will strive to get the European Union – Vietnam Free Trade Agreement (EVFTA) signed and ratified. The two sides should also continue pushing up the exchange of high-level and ministry-level delegations to pave the way for bilateral trade, investment and labour export, ease the difficulties and remove bottlenecks for the businesses of the two sides, encourage and facilitate fact-finding tours and participation in fairs and expos in the time to come.
Source: Saigon
Vietnamese enterprises need to take advantage of tariff reductions under the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) to increase exports to Australia. Nguyen Thi Thu Trang, Director of the WTO Integration Centre under the Vietnam Chamber of Commerce and Industry (VCCI), made the statement at a conference on “Australia’s market potential from the CPTPP perspectives” in Hanoi on April 12. According to the centre, Australia is one of the 20 largest economies in the world, with outstanding potential in science and technology, mineral exploitation, high-quality services and agricultural products. Australia is also a market with high purchasing power and stability. Vietnam and Australia are both members of CPTPP, which will help promote trade and expand the scale of investment and cooperation between the two sides in the future. Although each side had its own potential, strengths and a variety of commodities, the value of Vietnam's exports to Australia was still modest, she said, adding that the main products shipped from Vietnam to Australia were footwear and cashew nuts. Vietnam could also strengthen cooperation with Australia by increasing imports, including technologies that Australia has advantages in as well as consultation services. When exporting to Australia, Vietnamese enterprises needed to understand the market trend, consumer tastes and regulations on food safety and origins to meet the requirements of importers, said Phung Thi Lan Phuong, head of the FTA Division of the WTO and Integration Centre of the VCCI. It is worth noting that Australian is one of the most fastidious importers in the world, Phuong said. The room for exporting Vietnamese products is still vast but not for all types of products. Consumer numbers are also smaller than other traditional export markets, she noted. Vietnamese enterprises needed to study carefully to penetrate the market by focusing on agricultural products such as dragon fruit, mango and key export products such as textiles, computers, wooden furniture and telephones, she said. Dinh Thi My Loan, Chairwoman of the Vietnam Retailers Association, stressed the strong competition in the import and retail areas in Australia, while suggesting Vietnamese firms building long-term business strategies which focus on product introduction and branding, trust creation and relationships to approach Australia's retail system. The quality of goods is still inadequate compared to competitors such as China, Thailand, Malaysia and Indonesia. In order to stand firm in the Australian market, Vietnamese enterprises must regard quality as the top priority rather than focusing on quantity and price, Loan said. Vietnam and Australia are both members of CPTPP, which is believed to help promote bilateral trade, investment and cooperation
Source: Saigon
Cheap labour force can help Pakistan attract foreign industrialists and encourage them to shift their units here, which will definitely ensure more profit margins for their products, said Task Force on Textile Chairman Salman Shah. Addressing a seminar on Pakistan’s textile sector held on the sidelines of TEXPO-2019, Shah said that the textile sector had great importance for Pakistan as it contributed around 57% in exports, while 51% of its economy related to textile industry, adding that cotton, as a major and basic input raw material, played 50% role in the country’s textile industry. In the seminar, people from the textile industry shared their views and gave recommendations for promotion of textile and its allied and value-addition industry. They also stressed the need for expansion of mutual trade with regards to export and import of textile products. The chairman said that wages of labourers were very high in China when compared to wages in Pakistan and we should take advantage of this in the China-Pakistan Economic Corridor projects. He said that various reports and surveys were being assessed and reviewed in order to improve the country’s overall exports volume. He said that Pakistan was faced with numerous economic challenges including promotion of trade and exports, for which all the stakeholder would have to play their due role to do away with these challenges. Shah was of the view that TEXPO-2019 would play a pivotal role in presenting the real and soft image of Pakistan to the world nations. He said that the four-day TEXPO was one of the mega exhibitions of Pakistan’s textile sector at government level. On the third day of mega exhibition of Pakistan’s textile sector, TEXPO-2019, business observers from 53 countries and 230 textile sector’s exhibitors and major textile products brands including readymade garments, bed-sheets, leather garments, fashion garments and other related products from across Pakistan ensured their active participation in the event.
Source: The Express,
The textile and garment industry, aiming to take advantage of free trade agreements (FTAs) with a focus on green manufacturing, is upbeat about earning US$60 billion from exports by 2025. Last year the industry earned $36 billion in exports, up 16 per cent year-on-year, making the country one of the world’s three biggest exporters of textiles and apparel, according to the Việt Nam Textile and Apparel Association (VITAS). Vũ Đức Giang, chairman of VITAS, said the association this year set a target of $40 billion in exports, up 11 per cent year-on-year. Speaking at the 2019 Global Textile and Apparel Supply Chain Conference held last week in HCM City, Giang said the industry was expected to enjoy a trade surplus of $20 billion, and employ 2.85 million workers. Textile enterprises have seen positive signs for orders this year, he said. “Many businesses have already received orders for the first six months of 2019 and even for the entire year,” he said. Because of increased capital flow to the industry, the country has gradually completed a textile and apparel supply chain, while the upcoming enforcement of new FTAs will also be a good factor for the industry this year. This year the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is expected to boost the development of many industries of Việt Nam, including the textile and apparel industry. The industry is also expecting more orders to shift from China to Việt Nam due to the ongoing US-China trade war.
Challenges
Việt Nam is participating in 16 FTAs. Ten out of 12 signed agreements have been enforced, including the ASEAN Trade in Goods Agreement, the ASEAN-China FTA and the ASEAN-Korea FTA, while the two remaining, the CPTPP and the ASEAN-Hong Kong FTA, have not yet come into force. Participation in various FTAs could help Vietnamese enterprises have more choices in exporting their products, but it also brings challenges to the industry, according to VITAS. The FTAs that Việt Nam has signed all have environmental barriers with higher green standards, which require enterprises to improve not only product quality but also production processes. If enterprises fail to do this, they will face a risk of having orders stopped or rejected, especially orders from major international garment brands. Most Vietnamese textile and apparel enterprises do outsourcing, so they rely heavily on orders from other countries. Customers worldwide are now more environmentally conscious, which has forced global brands to improve operations to include higher environmental and social standards.
Sustainable manufacturing
Giang recommended that Việt Nam should continue its efforts to ensure environmental protection in manufacturing to become a “sustainable supplier of choice” of textile and apparel. The country has committed to fully implementing 17 goals of the 2030 Agenda for Sustainable Development to ensure economic, social and environmental benefits, according to Giang. “Implementing a shared responsibility to respond to the 21st century's biggest global challenge, Việt Nam and the international community ratified the Paris Agreement on climate change in 2015. And the textile industry is part of that commitment,” he said. Nguyễn Thị Tuyết Mai, chief representative of VITAS office in HCM City, said that many provinces established their own industrial parks for textile and garment activities. The industrial zones have invested and put into operation wastewater treatment systems, helping businesses complete their responsibility to protect the environment during production. VITAS set up an Environment Committee three years ago and has taken part in an action programme for the Green the Textile and Apparel Industry group. In addition, last year VITAS and the World Wide Fund (WWF) for Nature launched a project to green the textile industry. The project aims to encourage players in the domestic textile sector to promote better river basin governance, water quality improvement and sustainable energy use. Marc Goichot from WWF-Greater Mekong said that greening the textile sector in Việt Nam would help achieve its wider goal of addressing river governance and energy sustainability, which are top global environmental concerns. With 6,000 factories nationwide, employing some three million people, the textile and apparel industry contributes 15 per cent of exports. The industry is, however, causing a serious environmental impact. Intensive water extraction, use and discharge of wastewater, and high-energy consumption for water heating and steam generation caused by the industry can seriously affect water resources and greenhouse gas emissions. As the industry continues to expand, improvement in practice will be required to reduce the impact. The UN predicts there will be a 40 per cent water shortage globally by 2030.
Source: Vietnam News
In a major development, European Union leaders agreed to extend the Brexit deadline until October 31, 2019, postponing the UK’s departure about six months from the scheduled April 12 departure date. While the political impact of Brexit on the United Kingdom and European Union has acquired prominence in discussions, there is another aspect of Brexit which needs to be discussed in the context of the UK’s relations with South Asia. More specifically, this aspect pertains to the questions on the future of trade of South Asian nations with the United Kingdom and the associated opportunities the exit presents. While some exporters are optimistic or indifferent, others hear the death knell. There appear to be mixed emotions amongst exporters regarding continuation of exports and opportunities present. As far as India is concerned, experts say that Brexit might have a short-term adverse impact but benefits lie in the long run. India has a strong trade relationship with US. Britain is among the top trading partners for India both in terms of inbound and outbound trade. While the UK ranks 12th in trade with India, the significance of the fact cannot be undermined that the UK is one of the seven large nations with whom India runs a trade surplus. India’s exports to the United Kingdom amounted to $9.8 billion or 3.0% of its overall exports. Its exports constituted a healthy mix of clothing, machinery, gems, precious metals, and pharmaceuticals, mineral fuels including oil, vehicles, footwear, and electronic equipment. Such diversification fetches more margins and ensures cushion against vagaries of weather and market forces. Even in terms of FDI, India is the third largest FDI investor in the UK, which is also the third largest FDI investor in India. The new procedures in offing post-Brexit worries textile exporters for probable new procedures. Previously, exports not marketable in an EU country could find its way into the UK and vice versa. New procedures could render conforming difficult. Unpacking cartons and changing stickers could be a lengthy, arduous and too difficult process. However, the optimists feel the Brexit may never happen. Even if procedures change, savvy exports, like water, could find their ways of compliance within new regulations. Even textiles exporters envision little change post-Brexit. Most countries within the EU, except the UK, adopt central buying. The orders for the UK outlets are handled separately from those going to other EU countries. So current export procedures will experience minimal disruptions. The UK government assured amidst Brexit confusion that countries availing the GSP plus scheme will continue to receive the same level of access. Such assurances pre-empt the need for any free trade agreement with the UK for preferential access. But exporters still fear new, unexpected regulations adversely impacting the trade balance and hope for incremental and gradual changes. From the date of Brexit to Dec 31, 2020, the UK and the EU have agreed that no major changes will take place to allow businesses to adjust. This transition period allows exporters to learn the ropes and adjust protocols accordingly. Imposition of tariffs by the EU on the United Kingdom could create new opportunities. It could marginally benefit some but may not dole out windfall to exporters. Countries depending heavily on agricultural items and textiles have a more or less commodity status, that’s less profitable. Countries with diversified exports e.g. China enjoy comfort. Aa regards Bangladesh, concerns have been allayed on a possible impact of a no-deal Brexit. In this case, analysts contend that certain development assistance would go down, remittances sent by the expatriates would reduce, investment would be affected, and prospects of employment of Bangladeshis in the UK curry industry would subside. Currently, the UK is the third largest export destination for Bangladesh after Germany and the US. So, any kind of financial uncertainty in the UK will hit Bangladesh hard, economists and exporters said. The Bangladeshi diaspora will feel the pinch too. A fall in the value of British pound could adversely affect the UK investment in Bangladesh, as it will make local procurement costly in GBP terms. Coming back to the impact on India-South Asia’s major economy-there have been concerns raised in some quarters about Brexit’s adverse consequences on Indian business firms operating in the UK. Their revenues may be hit if there is a weakening of the pound-sterling post Brexit. However, India may stand to benefit from Brexit in case EU-India FTA talks resume that have been stalled since 2013.
Source: New Delhi Times
The 125th China Import and Export Fair, also known as the Canton Fair, China's largest trade fair, will open on Monday in Guangzhou, capital of south China's Guangdong Province. The spring session of the biannual fair will be held in three phases. The export section will have 51 exhibition areas with 59,651 booths booked by 24,800 domestic enterprises. The first phase of the export exhibition held from April 15 to 19 will mainly showcase mechanical and electrical equipment, hardware, and building materials. The second phase from April 23 to 27 will showcase consumer goods and gifts. The third issue from May 1 to 5 will display textiles and clothing, luggage, culture and sports, food, medical supplies and medical health products. The import exhibition will be held in the first and third phases, with 1,000 booths booked by 650 enterprises from 38 countries and regions. The first phase of the import exhibition has 616 booths displaying electronics and home appliances, building materials and hardware and mechanical equipment. There will be 384 booths in the third phase, mainly displaying food and beverage products, household goods, fabrics and home textiles. Xu Bing, a spokesperson for the Canton Fair, said on Sunday that the 124th fair received exhibitors from ten countries and regions. According to Xu, a chamber of commerce from Istanbul said the fair had helped many Turkish enterprises explore the global market. "Design for trade" will be a highlight at the upcoming fair. About 100 design companies and institutions from 15 countries and regions, including the United States, Germany, France, Italy, Australia, the Republic of Korea and Japan, have registered to participate in the design exhibition at the fair.
Source: Xinhua
