All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said. The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up, they added. “E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal,” an official told PTI. The move will help in curbing Goods and Services Tax (GST) evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal. “Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000. Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high. Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice. The e-invoice generation method will be similar to the one being followed for e-way bill on the ‘ewaybill.nic.in’ portal or payment of GST on the GSTN portal. A 13-member officers’ committee, comprising central and state tax officials as well as the GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline generation of invoices and easing compliance burden. The committee will finalise its interim report this month. The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance. There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.
Source: Financial Express
DPIIT, under the commerce and industry ministry, has also proposed other measures such as tax incentives to promote budding entrepreneurs as part of the vision document. With a view to facilitate fundraising by start-ups, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying forward of losses, sources said. These suggestions are part of ‘Startup India Vision 2024’, prepared by the DPIIT for the new government to promote growth of budding entrepreneurs, who face difficulty in raising finances. As part of easing regulatory requirements for start-ups, the DPIIT has recommended amendments in Section 54GB (capital gain on transfer of residential property not to be charged in certain cases) and Section 79 (carry forward and set off of losses in case of certain companies) of the Income Tax Act. It has suggested changes in Section 54GB of Income Tax Act to exempt proceeds on sale of residential properties from capital gains tax if it is used to fund a start-up. “Budding entrepreneurs often sell their residential properties to support their business activities,” one of the sources said. As part of the amendment of this section, it has also proposed to reduce founders’ shareholding requirements from 50 per cent to 20 per cent and mandatory holding period from 5 years to 3 years as it would enhance flexibility of founders to raise capital by selling the properties. Regarding Section 79, it suggested relaxation in shareholding requirements to carry forward the losses. “Start-up promoters presently need to hold 100 per cent shares for carrying forward of losses. The requirement needs to be reduced to 26 per cent, as it will encourage new investors to invest in start-ups,” they said. DPIIT, under the commerce and industry ministry, has also proposed other measures such as tax incentives to promote budding entrepreneurs as part of the vision document. The document aims at facilitating setting up of 50,000 new start-ups in the country by 2024 and creating 20 lakh direct and indirect employment opportunities. The other proposals include setting up of 500 new incubators and accelerators by 2024, 100 innovation zones in urban local bodies, deployment of entire corpus of Rs 10,000 crore Fund of Funds, and expanding CSR funding to incubators. Startup India, the flagship initiative of the government, was launched in January 2016 and intends to build a strong ecosystem for the growth of start-up businesses to drive sustainable economic growth and generate employment opportunities. The Startup India action plan provides tax and other incentives. So far, as many as 18,151 start-ups have been recognised by the department.
Source: The Hindu business Line
With March 2019’s collections the highest ever, this means monthly collections in FY19 were, on average, 7% more than those in FY18, and the figure is 13% higher when you compare the January to March 2019 collections with those in January to March 2018. The fact that GST collections for March 2019 touched Rs 1.14 lakh crore, up 10% over that in the same month a year ago, augurs well for the future. There is little doubt, though, that there are several one-offs that have boosted the performance—the best since India first started collecting GST in July 2017. There is, for example, the quarter-end bump that is seen regularly—March 2019 collections were the highest in the previous three months, December 2018 in the three months prior to that, September 2018 in the three months prior to that, etc; this could have to do with the fact that firms try to boost sales before the quarter ends or the fact that the smaller firms have to file their GST returns every three months. There is also the year-end effect where, apart from trying to boost sales, firms work hard to ensure that all vendors upload their GST returns so that they can avail input tax credits. This time around, the impact was even higher since march 2019 was the last month to claim tax credits for 2017-18. With more firms filing GST returns—the number of filings is up from 5.9 million in July 2017 to 6 million in March 2018 to 7.2 million in March 2019. With March 2019’s collections the highest ever, this means monthly collections in FY19 were, on average, 7% more than those in FY18, and the figure is 13% higher when you compare the January to March 2019 collections with those in January to March 2018. The two main reasons for the increase in collections and compliance suggest the system is stabilising. For one, as the growth in the number of filings show, big firms are clearly ensuring their vendor base is fully GST-compliant. And though the government keeps postponing the date for implementing the invoice-matching function of GST which increases the compliance levels quite dramatically—this was supposed to kick in on April 1 this year, but will now have to await the new government—the fact that the eway bill has become compulsory for transporting goods of over a certain amount has also played a big role in raising compliance. While the monthly run-rate of GST collections in FY20 is Rs 1.14 lakh crore, a dip from March 2019 numbers in the rest of the year implies that, as in FY19, there will be a shortfall in collections in FY20 as well; in FY19, the shortfall was `1 lakh crore on account of GST alone. Greater GST compliance will also help raise both corporate as well as personal income tax collections as, once firms have no option but to declare their actual turnover to GST authorities, they will have to do so for the income tax authorities as well. Indeed, last week, the income tax and GST authorities signed an information-sharing agreement for precisely this reason of boosting income tax collections. This is important because, as FE reported last week, there has been a contraction, albeit a small one, in the number of e-returns filed for personal income tax in FY19 after averaging more than 25% over the three years prior to this. Indeed, when you compare the number of actual tax filings to the number of registered taxpayers, the ratio is down to 79.1%, a number not seen in the last 5-6 years. It is due to this that direct tax collections fell short of projections for FY19 by as much as `50,000 crore, all of this was in personal income taxes since there was no shortfall in corporate taxes. While there has been an impressive jump in the direct tax-to-GDP ratio from 5.6% before the NDA came to power to 6% in FY19, the big jump—from 2.1% in FY16 to 2.4% in FY17 for personal income taxes—due to demonetisation looks like it has played out unless the tax notices sent out to those who deposited unusually large sums of cash during the post-demonetisation phase result in a sharp jump in taxes once the scrutiny of their replies is over. The GST link and the gains from Project Insight—this links various databases like those from credit cards, jewelers, real estate firms, etc—are expected to lead to the next big jump in tax collections.
Source: Financial Express
Amid Prime Minister Narendra Modi’s chest-thumping on inclusive economic growth, data on overall inclusive development from emerging economies shows India in poor light. According to data computed by the Indian Council of Research on International Economic Relations (ICRIER), India is far behind neighbours China and Indonesia on all major counts of inclusiveness such as education, skills, employment, labour compensation and asset building. The data from India’s economic think-tank comes at a time when the country is in the midst of elections. The BJP, which won 2014 parliamentary elections on a development plank, in its 2019 manifesto highlighted inclusive development as a key goal for the next five years if it returns to power.
Least inclusive
Even among the BRICS countries, India is the least inclusive economy. Russia’s rank in the overall inclusive development index (IDI) is 9. According to ICRIER, India’s bottom-most ranking among BRICS is a matter of “great concern”. According to the data, among seven emerging economies of China, Argentina, Brazil, South Africa, Indonesia and Turkey, India is behind six of them on education and skill parameters and behind five of them, excluding Turkey, on asset building and entrepreneurship. On employment and labour compensation, India is behind China, Brazil and Argentina but ahead of South Africa, Turkey and Indonesia. While South Africa’s and Brazil’s performance is comparatively uniform on most of the indicators, China has done well on employment and skill pillar (mainly because of very high worker population ratio and low dependency ratio) and on asset building pillar, helping it score an overall higher rank on inclusive growth. China’s ranking is 8th on IDI, which is the highest among emerging nations and BRICS. The data compiled for six years between 2012-13 to 2016-17, covers four years of NDA rule. India is at the bottom on education, securing 18th rank, with ICRIER suggesting that a country like India, which still has limited access to education, should first focus on it before spending its limited resources on quality and digital literacy.
Source: Deccan Herald
Foreign investors pulled out a net Rs 1,255 crore from the domestic capital markets in just two trading sessions in May after remaining net buyers for the previous three months. According to the latest depositories data, foreign portfolio investors (FPIs) pulled out a net sum of Rs 367.30 crore from equities and Rs 888.19 crore from the debt market during May 2-3, taking the total net outflow to Rs 1,255.49 crore. Markets were closed on May 1 on account of Maharashtra Day. Prior to this, FPIs infused a net amount of Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February in the capital markets (both equity and debt). “It is too early to take a call on the trend in May. It is possible that FPIs might pause a bit in view of the election outcome,” said V. K. Vijayakumar, chief investment strategist at Geojit Financial Services. Indian capital markets have been receiving their share of the capital flows into the emerging markets, after leading central banks took a dovish monetary stance, experts said. Vidya Bala, Head - Mutual Funds Research at FundsIndia, said, “In April FPI inflows into India were less robust than March, coming on the back of a continuing rise in crude. FPIs continued buying selectively in banking and financial services and specifically in the insurance sector, besides oil and gas and utilities, according to data from NSDL.” However, the month of May could see some volatile movements as election results come out. The currently weak macro-economic numbers too will be further watched, she added.
Source: The Hindu business Line
Motivated allegations weaken institutions as much as government interference. A constructive economic agenda is called for It is unfortunate that debate even on economic issues such as GDP growth and measurement has become politicised, thanks to the election. What one government can achieve depends on what past governments were able to do. For India a long view shows there was macroeconomic over-stimulus after the Global Financial Crisis and a policy over-reaction in the opposite direction after that. The financial regulatory regime showed a similar excessive pro-cyclical tightening after laxity during the infrastructure bubble. Even with the latest round of revisions, growth of industry was 3 per cent lower in the period after 2011. This reduces job growth. So past governments have to share the blame for low employment growth.
Sharing responsibility
While it was necessary to correct inherited macroeconomic fragilities, including large balance of payment and fiscal deficits, over-strictness also creates stress. With low growth and high interest rates it is difficult for firms to service debt and NPAs increase. It is true re-capitalisation of banks had to be delayed until the Bankruptcy Code was set in motion so that losses did not devolve only on the taxpayer. That promoters stood to lose assets created better incentives to repay banks. This was part of the over-reaction to the crony capitalism that had marked the last years of the UPA rule. It also became possible to tap into global initiatives for data sharing against asset stripping and tax evasion. But after a long period of stagnation and regulatory tightening the financial sector is in a parlous state and requires counter-cyclical regulatory hand holding, without compromising incentives for good behaviour. It is not clear as yet if the financial sector has seen adequate fundamental improvements in corporate governance and intermediation to survive a series of shocks. The new government must move towards more balance as the outgoing government had already started doing.
Looking forward
After stagnation since 2011 private investment was showing some signs of revival in 2018 but has slowed again recently. Hopefully it will revive after the election results, but macroeconomic policy must support such a revival. A similar brief revival after the 2014 elections was killed by the highest real interest rates India had ever seen as policy rates were not cut following the crash in oil prices. There is evidence of high interest sensitivity of demand for consumer durables, housing and investment. Savings tend to rise with investment and growth, while interest rates largely affect their allocation. India was pushed to becoming a consumption led society, with high net imports. A monetary stimulus is only possible if supply-side policies continue to reduce costs and improve public services and capacity throughout the country. Building strength and independence is better than encouraging potential workers to try and qualify for doles. Well targeted and non-discretionary transfers must be restricted to the really distressed. A bitter and negative election season can be left behind for a constructive and healing agenda. Motivated ideological advice either for more or for less market freedom together with redistribution will not suit the Indian context and potential. This requires a balanced focus on what is feasible given current trends along with openness to good ideas and debate wherever they come from. Diversity is creative. Less commodity price volatility and inflationary pass through in the future will help. Institutions form the backbone of an economy and have to be respected and strengthened. But suspiciousness and motivated allegations can weaken them as much as government interference.
Suspicion versus interference
For example, consider our statistical agencies. Election season battles have undermined their credibility. In an economy that is doing much better compared to its past and transforming structurally, it becomes necessary to use better data bases and to move to international measurement concepts. This is exactly what the shift to the new GDP base has done. Moving from a 4,000-firm sample to the MCA 21 database with lakhs of firms must be welcomed. Frequent revisions in the process of making backdated series available have been questioned. But a back series based on new and better data has to be preferred to the econometric projection, first made available. Unorganised sector and trade estimates used to be based on projecting forward dated surveys with an index. Sales tax data, which since became available, was used in the revisions. It shows a credible fall in growth just after the global financial crisis while survey-based projections were higher. It also matches well with updated surveys. Telecom growth used to be based on the number of subscribers, where there is known to be a lot of duplication. The backward revision used a more credible measure — minutes of usage — leading to an acceptable fall in tertiary sector growth rates. Another example is the bitter controversy over employment data. Macroeconomists had long been asking for high frequency employment data. In its absence, India must be the only major country where policy rates are decided without looking at employment trends. There was resistance from development economists who did not want the 5-yearly NSS employment survey to be diluted. The quarterly periodic labour force survey was finally started. But major changes take time to settle. It can be used only after it has been tested against a broad range of experts, suitably fine-tuned and a number of surveys are available for comparative purposes. Two National Statistical Commission (NSC) members resigned because they had approved the survey yet it was not released. But the NSC was supposed to have seven members with the relevant range of expertise. It had only three, with no macroeconomist. The profession must demand strengthening of the NSC. It is only because government data goes through a robust process that it is credible. There are many private measures of unemployment available, based on different concepts, but no consensus on the preferred measure. The motivated political use of the leaked periodic survey, before it had been vetted sufficiently, justifies the delay in giving it the official certificate of approval. Estimates have been compared with the earlier 5-yearly surveys although the sample and questionnaire design are completely different. Survey questions asked from the educated must distinguish between desk jobs they may aspire to and other jobs they may have. Unemployment based on aspirations may differ from that based on actual work done. As technology changes the structure of future labour markets aspirations will also adjust over time. Health insurance and ease of living will encourage risk-taking and improve the quality of jobs even if the employer is not the government or a big corporate. Encouraging inclusive innovation from India’s restless educated young can help the country ride the technology wave to prosperity and equality. The writer is Professor, IGIDR, and Member EAC-PM
Source: The Hindu Business Line
Madurai–Thoothukudi Industrial Corridor, envisioned to attract ₹1.90 lakh crore of investments over a 10-year period, remains only on paperThe nine southern districts, which account for roughly one-fourth of the State’s population according to the 2011 Census, have been consistently ignored in terms of industrial development. Madurai, in particular, despite being one of the four major cities in Tamil Nadu, has considerably lagged behind the other three cities of Chennai, Tiruchi, and Coimbatore in attracting industrial investments. The fact that the southern districts have in recent years developed power generation capacity through a variety of renewable and non-renewable sources, far higher than the other regions of the State, has not helped in bringing industrial projects to the region. Owing to persistent demand, mainly from different industrial bodies in Madurai, the State government announced the creation of Madurai–Thoothukudi Industrial Corridor (MTIC). This was intended to be a big ticket infrastructure investment that would provide an impetus to industrial development in Madurai and nearby regions. However, despite an announcement and a feasibility study done nearly seven years back, the project is still in limbo.
Background
When the then Minister of Finance O. Panneerselvam, in the State Budget for 2013-14, announced the proposal for the corridor, trade bodies in south Tamil Nadu were elated to hear some good news at last. The project, with tall promises, was envisioned to attract ₹1.90 lakh crore of industrial investments over a 10-year period. The project was included in a series of high priority fast track projects in February 2013 during the first board meeting of Tamil Nadu Infrastructure Development Board. Approval for the MTIC was provided through a Government Order dated December 19, 2014. The project, also part of Tamil Nadu’s Industrial Policy 2014, was said to be an ‘Industrial Corridor of Excellence,’ providing facilities such as excellent road and rail connectivity, specific investment regions and other industrial and social infrastructure such as townships, schools and hospitals. As per the second phase of Vision Tamil Nadu 2023 document, released by late Chief Minister Jayalalithaa, the project was to entail 18 ‘Trunk’ infrastructure projects and a series of ‘Link and Internal Infrastructure’ projects. The ‘Link and Internal Infrastructure’ was to include industries from different sectors such as textiles, garments, leather, cement, plastic, electrical and auto component industries, particularly in Madurai. The trunk investment projects include the expansion of roads, establishing Madurai-Coimbatore High Speed Rail Link Project (230 km), expansion of Madurai airport and establishing Madurai as a special tourism zone. The trunk investments also focus on health through the establishment of quality nursing and paramedical training institutes, specialised centre of excellence in cancer treatment and additional medical facilities. They also look to hone local talent through skill development institutes and employment development centres. After more than five years in waiting, in November 2018, Minister for Industries M.C. Sampath announced at a meeting that the MTIC would now be an ancillary project of the much larger Chennai-Kanniyakumari Industrial Corridor. He said that the project would include two nodes – Madurai–Virudhunagar–Dindigul–Theni (MVDT) and Tirunelveli–Thoothukudi (TT). Mr. Sampath said that Asian Development Bank had already begun the process of sanctioning funds for the initiative and that the government was planning to acquire 19,615 acres of land. He added that the acquisition process for 5,000 acres was already under way.
Predicaments
Senior president of Tamil Nadu Chamber of Commerce and Industry S. Rethinavelu says lack of political pressure from MPs and the State government for establishing the corridor has led to the project remaining a non-starter. Delay in implementation of Madurai airport expansion project with extended runway and poor international connectivity have also resulted in Madurai region not attracting big investments. K. P. Murugan, president of Madurai District Tiny and Small-Scale Industries Association (MADITSSIA), says the land acquisition process is slow. “Madurai-Aruppukottai-Ettayapuram-Thoothukudi stretch does not possess much cultivable lands. Land acquisition should not pose a problem as most of the lands are government poramboke,” he says. Confederation of Indian Industry (Madurai Zone) chairman K. Nagaraj say work on the project is slowly and steadily progressing. However, he adds that more fiscal incentives need to be provided to entice foreign investors. There is a need for better social infrastructure – schools, conference halls, colleges and hospitals to attract more talent to settle here. “It’s a chicken and egg kind of situation though. Some others believe that the presence of industries will bring more such infrastructure,” he says. The slow pace of the project has resulted in migration of talent to Chennai, Bengaluru and other industrial cities such as Tiruppur and Coimbatore, says Mr. Murugan. Another cost of the snail-paced implementation is that Madurai continues to lag behind other major cities in Tamil Nadu, says Mr. Rethinavelu. “It seems like there is a lobby working against Madurai. This can only be fixed if there is enough representation from our politicians,” he feels. Mr. Murugan adds that appointing a dedicated IAS officer for the project till its completion will help in fast tracking it.
Source: The Hindu
India has officially requested Australia to restart trade negotiations for the proposed Comprehensive Economic Cooperation Agreement after a long lullAt the fag end of the current government’s tenure, the commerce department has reached out to Australia, classified as a trade partner with immense potential by New Delhi, to restart long stuck talks. India has officially requested Australia to restart trade negotiations for the proposed Comprehensive Economic Cooperation Agreement (CECA) after a long lull. Discussions on market access for Australian dairy products and meat, apart from Australia’s discomfort with opening up services exports, have proved to be major sticking points in the deal, talks on which had begun in ...
Source: Business Standard
Textile traders in the city have started to get orders from political parties in West Bengal and Odisha for low-cost saris. They expect to get huge orders for low-cost saris priced between Rs 150 and Rs 300 particularly from Odisha where Cycone Fani had wreaked havoc on Friday night. The traders community is worried about the people in cyclone-hit states even as they are gearing up to supply low-cost saris there. Though profit is not on their minds, the city traders are bound to make lots of money because charitable organizations, political parties and textile businessmen are expected to place orders for saris in huge quantities for distribution among poor people hit by the natural disaster, sources said. The Election Commission of India has lifted model code of conduct at many places to facilitate relief and rescue operations in the affected states. Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agarwal said, “Odisha is the biggest market for low-cost saris for Surat. The Cyclone Fani is all set to increase the demand for saris. Many traders have already started receiving orders.” Odisha is the biggest market for low-cost saris after Uttar Pradesh and Bihar. The low-cost saris are supplied to wholesalers and they sell them to traders in retail markets in villages. The traders supply saris worth Rs30 crore per month, which includes saris costing Rs150 to Rs300, sources said. FOSTA office-bearers said transport vehicles had stopped supply of textile goods to West Bengal and Odisha two days ago in view of Cyclone Fani. The cyclone already has made landfall and transportation can now resume from Sunday. Surat Textile Goods Transporters Association president Yuvaraj Deshle said, “We had suspended supply of textile goods to Odisha and West Bengal due to cyclone. Godowns of transporters are piled up with goods bound for Odisha. The transportation service will resume from Sunday.” Rakesh Agarwal, a textile trader, said, “Our firm has bagged orders for supplying 50,000 low-cost saris to Odisha and one lakh saris to West Bengal. This is the biggest order that we had received in the last five months.” Devkishan Parihar, textile trader, said, “Some political parties have given orders for supply of 50,000 low-cost saris to cyclone-affected villages of Odisha. The consignment will be leaving from Surat on Monday. We hope to receive a few more orders in the coming days.”
Source: Ahmedabad Mirror
In a major setback to valley's handicrafts sector, USA has not put the label of Kashmiri Pashmina in the list of its imported items. Recently, the Federal Trade Commission of America had notified under the Cachet of Cashmere: Complying with the Wool Products Labeling Act that the products of Pashmina including the intricate handmade Pashmina shawls from Kashmir will be labelled as "Cashmere" but not as Pashmina. The ban on Pashmina label for import by US has caused worry among the Kashmiri traders and artisans of pure handmade Pashmina. A dealer and manufacturer of Pashmina shawls, Tariq Ghani told Rising Kashmir that the Pashmina label ban in foreign will have a negative impact on the craft and Artisans of Kashmir. He fears that Pashmina might face the fate of Shahtoosh. "It is a serious issue. The government is doing nothing about it." Ghani said the government's silence over banning the Pashmina label is criminal. "We are losing our handicrafts due to the negligence of Jammu and Kashmir government. At the time of Shahtoosh ban, the government failed to protect it. Now, they are repeating the same mistake. But we will not remain silent. " He said that it is very unfortunate that some officers don’t know the importance of Pashmina which is handmade, real and pure only in Kashmir. Ghani said that he has inherited the Pashmina trade from his ancestors and he is running the unit since 1974. "I am running a manufacturing unit under the name of Pashmina Ghar. Why would i replace Pashmina and sell it as Cashmere. The pure Pashmina which can be passed through a ring is made in Kashmir only," he said. He said other countries like China are copying the Kashmiri Pashmina products “but duplicate products cannot match the original ones”. "Nepal, China, and others are using different wool and is machine made. China is using Merino wool. There is no comparison of Pashmina which is made in Kashmir to other places. I am selling pashmina items in foreign countries including America," he said. State Convener of Indian National Trust for Art and Cultural Heritage (INTACH) Saleem Beg told Rising Kashmir that it is a big disappointment that America has banned use of pashmina as a label for import. He said now, the traders have to export pashmina and sell it under " Cashmere" lebel. He held traders and the government responsible for it. "They should have saved the Pashmina label but they have not gone and get it registered on time." Beg said the Pashmina items made in Kashmir have been given a Geographical Indication (GI) certificate to differentiate them from machine-made pashmina." "We are the originators of Pashmina Shawls and this Pashmina name is being used by Nepalis and Italians. The dealers of Pashmina in Kashmir are not aware of the regulations of European Union and USA. In these foreign countries, every brand or product has to be registered in proper name, " he said. Beg said, Nepali Pashmina has been recognized as a brand by 47 countries all over the world. "Nepali Pashmina has reached where we should have been long back. They had to coin a logo 'chyangra' for their pashmina. we have it for centuries." Pashmina product exporter Mubi Shaw told Rising Kashmir that he along with other traders tried to counter the US ban on pashmina label but to no avail. He said when there was boom of cheaper Pashmina silk combo shawls, exported from Nepal and India. Secretary of Artisan Forum of Kashmir Bashir Ahmad told Rising Kashmir that they are following the issue of Pashmina label ban and have held meeting over the issue. The Artisans and traders requested the governor to intervene in the matter. Director J&K Handloom Development Department Rubina Kousar told Rising Kashmir that Pashmina items made in Kashmir has been given a Geographical Indication (GI) certificate. "We have a GI recognition to Pashmina shawls. It would not affect the Kashmiri Pashmina shawls or other items," she said. However, Director, IICT, Zubair Ahmad told Rising Kashmir that the ban on label Pashmina is not shocking as there is no Pashmina word in the dictionary. Zubair said the Pashmina is not only made in Ladakh. “It is also made in China, Nepal and Mongolia.” "Below 60 micron Pashmina can be from China, Ladakh, Nepal and Magolia. The word Pashmina has been banned in US a long time ago and i am aware of it," he said. Kashmir Chamber of Commerce and Industry (KCCI) President, Sheikh Ashiq Ahmad told Rising Kashmir that nobody can snatch the name pashmina from Kashmir. "Our pashmina is patented and we have a birth right on it. Some people are creating confusions about pashmina. There are non patented items which are being sold on the name of Kashmir. That is not our fault," he said. He said that the state government should take this matter to the government of other countries. He said that the KCCI will take up this matter to Ministry of textiles.
Source: Rising Kashmir
Traders in the State on Sunday demanded major changes in the Goods and Services Tax (GST), including removal of collection of 18% as charge for bank transactions and bringing petrol and diesel under the GST. Shops across the city had downed shutters as part of Traders Day celebration on Sunday when thousands of traders, along with their families, attended the 36th annual conference at the YMCA grounds in Royapettah. In a set of resolutions passed here at the meeting, the Tamil Nadu Vanigar Sangankalin Peramaippu also called for exemption of GST for agriculture products, textiles, sports goods and food items. Peramaippu president A.M. Vikramaraja said the upper limit for e-way bills under GST should be increased to ₹5 lakh which would benefit small traders. “GST rates should be brought down according to international standards and there should only be two rates - 5% and 12%,” he added. “If the government that comes to power at the Centre does not implement our demands, traders plan to gherao Parliament,” he said. N. Senthilnathan of Thanjavur said the model code of conduct should be brought to a close in the State since the voting was over.
Source: The Hindu
Prime Minister Narendra Modi may have set a target to cut India's oil import dependence by 10 per cent but the country's reliance on foreign oil for meeting its energy needs has jumped to a multi-year high of nearly 84 per cent, latest government data showed. Speaking at the 'Urja Sangam' conference in March 2015, the Prime Minister had said that India needs to bring down its oil import dependence from 77 per cent in 2013-14 to 67 per cent by 2022 when India will celebrate its 75th year of independence. Further, the dependence can be cut to half by 2030, he had said. But with consumption growing at a brisk pace and domestic output remaining stagnant, India's oil import dependence has risen from 82.9 per cent in 2017-18 to 83.7 per cent in 2018-19, according to the oil ministry's Petroleum Planning and Analysis Cell (PPAC). Import dependence in 2015-16 was 80.6 per cent, which rose to 81.7 per cent in the following year, PPAC said. The country's oil consumption grew from 184.7 million tonnes in 2015-16 to 194.6 million tonnes in the following year and 206.2 million tonnes in the year thereafter. In 2018-19, demand grew by 2.6 per cent to 211.6 million tonnes. In contrast, domestic output continues to fall. India's crude oil output fell from 36.9 million tonnes in 2015-16 to 36 million tonnes in 2016-17. The trend of negative growth continues in the following years as well as output fell to 35.7 million tonnes in 2017-18 and to 34.2 million tonnes in the fiscal year that ended on March 31, 2019, PPAC data showed. The government is focusing on measures like increasing domestic production, promoting the use of biofuel and energy conservation to reduce dependence on imported crude oil. It changed exploration rules multiple times during the last five years to get the elusive private and foreign investment. The previous New Exploration Licensing Policy (NELP) was changed to Hydrocarbon Exploration and Licensing Policy (HELP) promising pricing and marketing freedom. HELP brought in open acreage licensing policy that gave companies freedom to choose areas they want to explore. Discovered oil and gas fields, taken away from state-owned firms, were also auctioned but neither this nor the open acreage policy managed to get big names to invest in exploration and production of oil and gas. According to PPAC, India spent $111.9 billion on oil imports in 2018-19, up from $87.8 billion in the previous fiscal year. The import bill was $64 billion in 2015-16. For the current fiscal, it projected crude oil imports to rise to 233 million tonnes and foreign exchange spending on it to marginally increase to $112.7 billion. State-owned Oil and Natural Gas Corp's (ONGC) output fell to 19.6 million tonnes in 2018-19 from 20.8 million tonnes in the previous year. ONGC's oil production was 20.9 million tonnes in 2016-17 and 21.1 million tonnes in 2015-16. Output from fields operated by private firms has dropped from 11.2 million tonnes in 2015-16 to 9.6 million tonnes in 2018-19.
Source: Financial Express
At the WTO mini-ministerial meet, developing countries must make a case for stable and transparent multilateral trade. India will host the second mini-ministerial meet of the World Trade Organisation (WTO), on May 13-14, 2019. To discuss the interests of developing and least developed countries in global trade, this informal meet will also focus on the accusation by the U.S. that these economies benefit from exemptions meant for the poorer nations. Overall, it could be a preparatory meeting to set a common agenda at the 12th Ministerial Conference, scheduled for June 2020 at Astana, Kazakhstan. The 11th Ministerial Conference (Buenos Aires, December 2017) collapsed despite efforts by 164 WTO members to evolve a consensus on several issues. The U.S. has refused a reduction in subsidies and also pulled back on its commitment to find a perennial solution to public stockholding — an issue central to developing and less developed countries. In fact, the deadlock left many trade analysts wondering whether this was the beginning of the end for the WTO. Despite the earlier outcomes of the ministerial meetings, the Delhi meet has created some hope of it being a platform to resuscitate the WTO. The issues under discussion will relate to protectionist measures, digital trade, fisheries, subsidies, environmental goods, standardisation and implementation of sanitary and phytosanitary measures, and other matters ripe for negotiation and agreement, mainly investment facilitation. From a plurilateral approach toward multilateralism, members may also ensure the sanctity and ‘drivability’ of the WTO. It is, therefore, indispensable to bring mutual accord, mainly on the timelines, to implement policies as an outcome of talks.
Bridging the gaps
It may be useful to recollect that the WTO replaced the General Agreement on Tariffs and Trade (GATT) as an international organisation mainly to overcome tussles over trade interests. The economies of the developing and less developed world (with little bargaining power) were unable to gain market access in most of the developed economies (which were influential in negotiations), especially when it came to agricultural commodities. The deadlock on the issue of agricultural trade negotiations, first in the late 1980s and then in 2017, was no surprise. The disagreements between developed countries (the European Union and the U.S.) and developing countries (Malaysia, Brazil and India) to discipline the farm regime in their favour continue, thereby threatening the WTO’s comprehensive development agenda. The expectations of developing countries from trade also get belied due to sizeable support by the developed nations to their farmers in a situation of market failure and other uncertainties. The support through subsidies tends to bring distortions in commodity prices. The Organisation for Economic Cooperation and Development estimates the quantum of subsidies by developed nations to vary from $300 to $325 billion annually, which is much higher than that estimated for developing countries. This has become a bone of contention in trade talks as farm lobbies in the U.S., Europe and Japan have steadily exercised political clout to influence officials and lawmakers to continue giving subsidies to farmers.
Another point of concern is that developed countries design and implement stringent non-tariff measures (NTMs) which exacerbate the problems faced by poor countries that are willing to export. NTMs significantly add to the cost of trading. However, the costs of acquiescence with many NTMs are asymmetrical across exporters because compliance depends on production facilities, technical know-how and infrastructure — factors that are usually inadequate in developing economies. These countries are, therefore, unable to compete in international markets and hardly gain from sectors with comparative advantage such as agriculture, textiles and apparels. Developing countries are willing to break the deadlock on these issues and are preparing a common ground to jolt the mandate of the global trade body. India, in particular, seeks amendment of laws on unilateral action by members on trade issues and a resolution of the WTO’s dispute settlement system. The expectation is that the meeting may lead to policy guidance on issues such as global norms to protect traditional knowledge from patenting by corporates, protection through subsidies, e-commerce, food security and continuation of special and differential treatment to poor economies.
Breaking the deadlock
Importantly, if the interests of developing and less developed countries are not addressed, ceteris paribus, jargon, convoluted negotiations and dictums will become trivial now and in the future. For example, the 10th Ministerial Conference (Nairobi, December 2015) laid emphasis on agriculture trade. But it was a setback to most agrarian economies, including India and in Africa, when developed countries directly challenged their models of food security designed for the poor. The outcome eloquently showed the constraints of a ‘multilateral negotiation system where the need for agreement and not compromise prevails and allows any member, no matter how small, to block any progress on all issues. In what has become an increasingly politicised environment, members with wide and divergent interests have simply halted the process and refused to negotiate in good faith across a spectrum of issues’. There was a similar outcome at Buenos Aires in 2017. Developed nations created alliances to prepare the ground to push nascent issues such as investment facilitation, rules for e-commerce, gender equality and subsidy on fisheries, while most developing nations were unable to fulfil or implement rudimentary dictums. For instance, e-commerce has been a key agenda following the second ministerial conference, in Geneva in 1998. It was agreed to ‘establish a work programme to examine global e-commerce, with a focus on the relationship between e-commerce and existing agreements. It generated a sizeable debate on the fringes of the conference as many accredited NGOs opposed it and raised concerns that it was a push by dominant global players. The underlying fear was it might allow unfettered access to data, which could then be processed and exploited for profit’ by developed nations, mainly the U.S. The Delhi meeting can be a breakthrough if members negotiate these issues in a convergent manner. The time is opportune for developing countries to voice their concerns and push for a stable and transparent environment for multilateral trade. India must do its homework to focus on the unresolved issues and address the newer ones which are of interest to developed nations, mainly investment facilitation. The WTO needs to be sustained as countries need an international platform to formulate trade rules and bring convergence on divergent matters. Seema Bathla and Abhishek Jha are Professor and research scholar, respectively, at the Centre for the Study of Regional Development, Jawaharlal Nehru University, New Delhi
Source: The Hindu
President Donald Trump and Chinese President Xi Jinping will decide after negotiations this week in Washington whether they’ll meet to sign off on a pact. White House spokeswoman Sarah Sanders said Thursday that the US sees such a meeting as likely. Concluding a deal will hinge on the two sides resolving the stickiest issues in their dispute. They include an enforcement mechanism to police the agreement and a decision over whether tariffs will be removed or stay in place, according to people briefed on the talks. “A Sino-US deal would be a positive for the global economy, when the outlook is dimming and the US is threatening to raise trade tensions with the European Union,” said Chang Shu, chief Asian economist at Bloomberg Economics. “A deal would also certainly help to relieve the short-term stress on the Chinese economy, as well as facilitate structural reforms.” For central bank watchers there are monetary policy decisions being made across the world as most turn more dovish. Here’s our weekly rundown of key economic events:
US and Canada
The consumer price index, to be released on Friday, will test Federal Reserve Chairman Jerome Powell’s assessment of tepid inflationary pressures as “transitory.” A rebound in apparel prices will likely bring the pace of monthly gains in the rate back into 0.2 percent territory and push the year-over-year pace up to 2.1 percent, according to Bloomberg Economics. Surging gasoline prices is seen driving headline CPI inflation higher. The producer price index is published the day before. Bank of Canada Governor Stephen Poloz speaks on Monday.
Asia
Central banks in Australia, New Zealand, Malaysia, Thailand and the Philippines will all decide monetary policy amid gathering signs the region is going to soon start cutting interest rates. Reductions in the Philippines and Malaysia are likely and the Australians and Kiwis could act too. For emerging Asia, that would mark a change in course from last year, when countries like Indonesia and the Philippines were among the world’s most aggressive movers as the Fed tightened policy. The Fed’s policy pause has created room to shift interest rates lower, but with higher oil prices and Powell pushing back against pressure to cut borrowing costs, that window for action may begin to narrow. In China, export data will be closely watched on Wednesday for more signs the economy is stabilizing.
Europe, Middle East and Africa
German industrial production and factory orders reports will help determine just how strong the euro area is after data last week showed most of the region surpassing forecasts in the first quarter. Industrial production, which is released on Wednesday, is though predicted to have declined in March. Concurrent with those data, the final outlook on eurozone growth and inflation from the European Commission before the bloc’s Parliamentary elections will be released on Tuesday. Also on Tuesday, the Norges Bank could signal plans to raise interest rates. In the UK, Friday sees the publication of gross domestic product for the first quarter and a monthly number for March, when the economy faced a potential precipice as the Brexit deadline loomed. President Cyril Ramaphosa will look to strengthen his grip on power at elections in South Africa Wednesday as he seeks a mandate to rejuvenate the economy.
Latin America
Three Latin American central banks are expected to remain on hold this week. On Wednesday, Brazil will likely keep its key interest rate at an all-time low of 6.5 percent, as uncertainty about the approval of government reforms constrains its ability to cut despite a weak economy. On the following day, Chile is forecast to leave its benchmark at 3 percent after halting a monetary tightening cycle that had started in October. Also on Thursday, Peru is predicted to keep borrowing costs at a record low of 2.75 percent for a 14th straight month as its economy grows below potential.
Source: Financial Express
China is considering to cancel the high-level trade talks with the US, multiple media reports have said, hours after President Donald Trump threatened to impose more punishing tariffs on USD 200 billion worth of Chinese products. President Trump’s remarks came on Sunday as the two countries locked in a longstanding trade war seemed near to striking a trade deal. A high-level Chinese delegation led by Vice Premier Liu He was scheduled to be in Washington this week to resume talks aimed at resolving the trade war that has cast gloom over the world economy. “China is considering cancelling trade talks that are to resume in Washington starting Wednesday,” The Wall Street Journal reported Sunday quoting unnamed sources. “There has been widespread expectations in recent days that an accord could be reached by Friday,” it said. Quoting an unnamed source, CNBC News said the Chinese Vice Premier will likely cancel the trip he had planned for himself and a 100-person delegation for the final round of talks. The US officials had previously said that a deal could be reached by Friday. But Trump’s tweets surprised many and appear to reflect on the difficulties in the US-China trade negotiations that have been going on since December when the US president and his Chinese counterpart Xi Jinping agreed to work on a trade deal within a time frame of 100 days. “For 10 months, China has been paying tariffs to the USA of 25 per cent on 50 billion dollars of High Tech, and 10 per cent on 200 billion dollars of other goods,” Trump said in a series of tweets on Sunday. These payments are partially responsible for America’s great economic results, he said. “The 10 per cent will go up to 25 per cent on Friday. 325 billions dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25 per cent,” he said. Trump said the tariffs paid to the US have had little impact on product cost, mostly borne by China. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” he tweeted. The Wall Street Journal report said that Trump’s tweet had taken Beijing by surprise. “China shouldn’t negotiate with a gun pointed to its head,” an unnamed Chinese person was quoted as saying in the report. A decision on whether to go ahead with the talks this week has not been made, the report said. The Chinese officials have said Beijing would not bend to pressure tactics. By potentially scotching the trip, Beijing would be following up on its pledge to avoid negotiating under threat, it said. Trump’s latest move will raise duties on more than 5,000 products made by Chinese producers, ranging from chemicals to textiles and consumer goods. The US president originally imposed a 10 per cent tariff on these goods in September that was due to rise in January, but postponed this as negotiations advanced. In Argentina, Trump agreed not to increase the import tariffs on Chinese products till an agreement is reached in 100 days. The deadline ended in March, which was extended by Trump and he did not increase the import tariffs. Last month, Trump said the US and China could wrap up trade talks within four weeks after making quick progress on the potentially “epic” deal. “We will probably know over the next four weeks. It may take two weeks after that…. It’s looking very good,” Trump had said. He said a deal would allow a summit between him and Chinese President Xi. Since last year when Trump launched a trade war with China, the US and China have imposed slapped tariffs on USD 360 billion in two-way trade. The US has imposed tariffs on USD 250 billion of Chinese goods, having accused the country of unfair trade practices. Beijing hit back with duties on USD 110 billion of US goods, blaming the US for starting “the largest trade war in economic history”. Both the US and international firms have said they are being harmed by the trade war. Fears about a further escalation caused a slump in world stock markets towards the end of last year. The IMF has warned a full-blown trade war would weaken the global economy.
Source: Financial Express
Mr. Rouhani's comments, carried live on Iranian TV, came a day after Washington acted to force Iran to stop producing low-enriched uranium and expanding its only nuclear power plant, intensifying a campaign aimed at halting its ballistic missile programme and curbing its regional power. President Hassan Rouhani said on Saturday Iran must counter U.S. sanctions by continuing to export its oil as well as boosting non-oil exports. Mr. Rouhani's comments, carried live on Iranian TV, came a day after Washington acted to force Iran to stop producing low-enriched uranium and expanding its only nuclear power plant, intensifying a campaign aimed at halting its ballistic missile programme and curbing its regional power. “America is trying to decrease our foreign reserves ... So we have to increase our hard currency income and cut our currency expenditures,” Mr. Rouhani said. “Last year, we had we non-oil exports of $43 billion. We should increase production and raise our [non-oil] exports and resist America's plots against the sale of our oil.” Friday's move, which Mr. Rouhani made no direct reference to, was the third punitive U.S. action taken against Iran in as many weeks. Last week, it said it would stop waivers for countries buying Iranian oil, in an attempt to push Iran's oil exports to zero. The United States also blacklisted Iran's elite Revolutionary Guard Corps. Efforts by the Trump administration to impose political and economic isolation on Tehran began with last year's U.S. withdrawal from the nuclear deal it and other world powers negotiated with Iran in 2015.
Source: Financial Express
All Chinese industrial units established in Pakistan will be given the status enjoyed by factories set up in the Special Economic Zones (SEZ) regardless of the part of the country where such units are set up, announced Adviser to Prime Minister on Commerce, Textile, Industries, Production and Investment Abdul Razak Dawood. He made the announcement while speaking at a seminar titled “Business opportunities under the China-Pakistan Free Trade Agreement” on Saturday. “Projects under the China-Pakistan Economic Corridor were initiated on a government-to-government basis, but they have now transformed into a business-to-business model,” he said. “Although SEZs have not yet been completed in Pakistan, Chinese investors are free to establish their factories anywhere in the country and I will grant the status of SEZ to all these factories.” He voiced hope that the second phase of the China-Pakistan Free Trade Agreement would be implemented from July 2019. He pointed out that through the FTA, China provided Pakistan access to its markets on the same terms as those offered to the Association of Southeast Asian Nations (Asean) member states and called for reaping maximum benefits.He requested all the chambers of commerce and industries nationwide to thoroughly examine the FTA and make recommendations to the ministry for further improving it. “If any Pakistani industry suffers damage due to the FTA, we will utilise the ‘safeguard’ clause under the agreement,” Dawood remarked. Under the agreement, the additional 313 tariff lines of Pakistan, which have been given duty-free access, have a total value of $64 billion in China. “If we are able to get even 10% share in the $64-billion market, our exports will surge sizably,” Dawood said. Currently, China’s overall imports amount to $2.1 trillion and according to Chinese President Xi Jinping, the number can swell to $5 trillion by 2023. The PM adviser was of the view that Pakistan had a great opportunity to enhance exports to China in the areas of textile, leather, seafood, electronics and others. However, he added, in order to capture China’s market, Pakistan had to improve quality of its products, “only then it will be able to enhance export revenues.” Talking about the upcoming budget, the adviser informed the audience that the government was not considering any import or regulatory duty relief on finished products “However, we are working on reducing import duties on raw material, but it is premature to comment how much reduction is on the cards,” he said. “I will meet officials of the Federal Board of Revenue on Tuesday to discuss the issue.” Dawood regretted that in the past 10 years, the country underwent a de-industrialisation phase and former finance minister Ishaq Dar never took notice of it. “The country has to take care of local industries as it does not want to join the club of import-oriented economies,” he added.
Source: The Tribune
US President Donald Trump announced Sunday that the United States would raise tariffs on USD 200 billion of Chinese goods to 25 per cent this week, because trade talks are moving "too slowly".Trump's action came as a major Chinese delegation is expected to arrive Wednesday in Washington for the latest round of talks to end the trade war between the world's two biggest economies -- a round billed as the last one and possibly leading to a deal to end the conflict. "For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted. "The 10% will go up to 25% on Friday," he said. The two sides have imposed tariffs on USD 360 billion in two-way trade since last year. But Trump and Chinese leader Xi Jinping agreed to a truce in December to refrain from further escalation. As recently as last week, the US had depicted the trade talks as going well. "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump complained Sunday. Trump says he wants to reduce the huge US trade deficit with China, which in 2018 totalled $378.73 billion if you include trade in services. Besides a greater opening of the Chinese market to US goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing US companies that operate in China to share their technology. Trump is also demanding that China halt theft of intellectual property and subsidies to state-owned companies. To pressure China, Trump has even threatened to slap tariffs on all Chinese products entering the US -- they were worth USD 539.5 billion last year.
Source: Economic Times
Phạm Thiết Hòa, director of the HCM City Investment and Trade Promotion Centre (ITPC), told Việt Nam News that an increasing number of international buyers were sourcing products from Việt Nam because supply chains for locally made products had improved and the country had joined more FTAs. Competitive labour costs and preferential policies will continue to help Việt Nam become an ideal destination for investors in this sector, he said. Participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will benefit the country in the long term, helping the garment and textile sector expand market share in Canada, Mexico, New Zealand and Australia and many other countries. In addition, the EU-Việt Nam Free Trade Agreement (EVFTA) is expected to have a positive impact in the medium to long term. The legal review for EVFTA has been completed and it is undergoing its members’ approval process. It is likely to be approved by Việt Nam’s National Assembly in June. The EU is the second largest export market for Việt Nam’s garment and textile sector, with more than 40 per cent of tariffs applied to garment and textile products expected to be reduced to zero per cent when the EVFTA agreement takes effect. “FTAs play an important role in helping Việt Nam move up the value chain in the garment and textile industry,” he said. “FDI companies have so far invested about US$17.5 billion in the industry,” he said. More than 30 leading Vietnamese manufacturers of garments, textiles, handicrafts and fashion accessories displayed their goods at the Global Sources Fashion show held last week in Hong Kong. Many of the exhibitors are members of the Việt Nam Textile and Apparel Association (VITAS), Việt Nam National Textile and Garment Group, and Handicraft and Wood Industry Association of HCM City. Vietnamese exporters are expected to increase export orders from major buyers at the fair such as Auchan, Best Buy, Carrefour, Fossil, Hong Kong Disneyland, K-Swiss, Li & Fung, Marks & Spencer, Quiksilver, Swarovski, Target and Tesco, among others. Livia Yip, president of Global Sources Fashion Group, said the event promotes industry development and facilitates international design exchange, providing designers with a platform for reaching buyers and suppliers. Bùi Thị Mỹ Hạnh, an exhibitor which took part in the trade show, told Việt Nam News that most Vietnamese exhibitors lacked marketing skills as well as information about export markets. “To fully take advantage of the event, exhibitors should be trained by ITPC to become to be an effective exhibitor.” Hạnh said that ITPC should act as a bridge connecting overseas trade officials with exporters so that local exporters can better understand export markets. Vietnamese exhibitors also expect more orders to shift from China to Việt Nam due to the ongoing US-China trade war, she said. Vũ Đức Giang, chairman of VITAS, said Vietnamese textile enterprises this year have seen positive signs for orders, he said. “Many businesses have already received orders for the first six months of 2019 and even for the entire year.” Last year, the industry earned $36 billion from exports, up 16 per cent year-on-year, making Việt Nam one of the world’s three biggest exporters of textiles and apparel. This year, the textile and garment sector has set a target of $40 billion in exports, up 11 per cent year-on-year. The industry has set a target of more than $60 billion worth of exports by 2025.
Source: Vietnam News
Mas Holdings Singapore, a Sri Lankan apparel and textile manufacturer, says it will create job opportunities for 3,100 Kenyans once it starts operation in Athi River, Machakos County. With an investment of Sh1.5 billion, Mass Holdings Singapore Pte EPZ Ltd leapfrogs Hela Clothing as the largest apparel and textile manufacturer in the country. Hela employs 1,500 workers. The enterprise was approved on Friday and is expected to begin operations in June. Operating under the preferential export processing zone, Mas Holding will export apparel products to the US, United Kingdom, and the Netherlands. “EPZA received an application for the above EPZ Enterprise (Manufacturing) license on April 26th, 2019. All the required documents submitted together with the required non-refundable application fee of Sh25,000 ($250) (Receipt N. 44689 & 0215180) by April 2019,” read an internal memo by the Export Processing Zone Authority (EPZA). Official figures show that the number of local employees engaged by EPZ enterprises increased by four per cent to 56,945 in 2018 from 55,486 in 2017. “Total sales by EPZ enterprises increased by 14.7 per cent to Sh 77.2 billion in 2018 from Sh67.3 billion in 2017,” according to the 2019 Economic Survey. Mas Holdings which has a presence in 16 countries is expected to increase local value from $978,000 (Sh97 million) in the first year to $9.24 million (Sh924 million) in the third year of operation. The directors of the firm have also promised to enhance national exports by $4.7 million (Sh470 million) in the first year to Sh4.4 billion ($44 million) in the third year. The company has received financing of Sh1.1 billion, including Sh900 million in foreign loans, Sh181 million in paid-up capital from shareholders, a similar amount of money in authorized capital. President Kenyatta has earmarked textile and apparel as one of the sectors that will drive his plan to create jobs in the manufacturing sector. The President expects to create over 500,000 cotton jobs and another 100,000 new apparel jobs. This will be achieved through policy review that will attract investments of between $350 million (Sh35 billion) and $2 billion (Sh200 billion) into the entire textile and apparel value chain. The Government, in the 2019 Budget Policy Statement, has noted that it is in the process of improving infrastructure at the Athi River textile hub, KIRDI Kisumu, South B Branches, and Rivatex East Africa Ltd. “Rivatex East African Ltd is being modernised to enhance its competitiveness to absorb local cotton and produce high-quality textiles,” read part of the Budget Policy Statement. The State has also approved commercialisation of genetically modified cotton such as Bacillus Thuringiensis (BT) cotton seeds to be availed to farmers. The plan is to put 200,000 hectares of land under BT Cotton. The hybrid cotton is expected to boost production due to its resistance to bollworm which has adversely affected yields from the traditional breeds in the past. “In addition, the revival of conventional cotton will be supported in 21 cotton-growing counties targeting 549,000 acres to ensure self-sufficiency in cotton for our textile industries.”
Source: Standard media
Nearly 5,000 exhibitors from the areas of textiles and garments, shoes, cases and bags, recreational products, medicine and healthcare products and food recently offered a detailed overview of their evolving global trade as part of Phase 3 of the 125th China Import and Export Fair (Canton Fair). The fair which opened on April 15 concluded on May 5, and was held in Guangzhou, China. Maggie Pu, deputy director general of the foreign affairs office of the Canton Fair, noted that facing pressure from uncertainties related to global trade and stricter import standards, Chinese companies’ constant efforts in innovation and improvement of product performances guarantee an increasingly global market share. In response to an expanding market and the continuously evolving specialist tastes of consumers, top Chinese textile and garments companies are not only offering high-quality products but also actively pursuing customisation and the development of new techniques. Tianshan Wool Tex, the leading Chinese cashmere brand and exhibitor, known for its creation of a new-standard in Chinese cashmere, has maintained its competitive edge by tailoring production techniques to different countries' consumption habits, winning international recognition such as the Spanish International Textile and Apparel Quality Gold Award and the 15th Paris Quality and Technology Award. Latest statistics data from General Administration of Customs, People's Republic of China shows that the exports of Chinese garments, toys and seven additional labour-intensive products in the first quarter 2019 increased a combined total of 6.5 per cent more than last year. Aiming to increase global market potential, Chinese textile and garment companies are gaining increasing market competitiveness on the world stage with comprehensive research and development capability, quick response and service support. Hebei Bailixin, China's leading home textile manufacturer, which produces a total of 3,200 tonnes of a variety of towels annually, exports to 34 countries and regions in Southeast Asia, Europe, North America and Japan. Through cooperation with design teams in Japan and Italy, the company is introducing two to three new products every week, with annual export volume reaching $14.9 million in the global market.Company manager Liu Hong said: “We might face pressure and a more competitive global market this year. But we are optimistic and expect greater demand from emerging markets.” In addition to showcasing Chinese manufacturing, the Canton Fair also strives to introduce leading international brands into the Chinese market. The fair features Gohar Textiles and Cotton Empire from Pakistan, the century-old houseware brand, R L Khanna and Shiv Shakti Exports from India, and companies from Turkish textiles and apparel center Denizli, it stated.
Source: Trade Arabia News
