Currently, there is a separate wing of logistics, headed by a special secretary in the commerce department. Measures to boost exports and promote start-ups are part of the 100-day programme prepared by the Commerce and Industry Ministry for the new government, an official said. The new government is expected to assume office by the end of this month. The ministry has proposed to set up a separate logistics department to be headed by a secretary with a view to enhancing growth of the sector, which is fundamental to boost exports, imports and overall economy. Extensive coordination among different stakeholders of the logistics sector including roads, railways, shipping, civil aviation, and states is required. Currently, there is a separate wing of logistics, headed by a special secretary in the commerce department.It has also proposed a new World Trade Organisation (WTO)-compliant export incentive scheme for goods shipments to replace the existing MEIS. At present, exporters of goods avail incentives under the Merchandise Exports from India Scheme (MEIS). In this, the government provides duty benefits depending on product and country. Since 2011-12, India's exports have been hovering at around USD 300 billion. During 2018-19, foreign shipments grew by 9 per cent to USD 331 billion. Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange. Similarly, the department for promotion of industry and internal trade has prepared a vision document to promote growth of start-ups and steps to further improve ease of doing business to attract both domestic and foreign investments. During April-December 2018-19, foreign direct investment into India dipped by 7 per cent to USD 33.5 billion. These proposals would be presented to the new government, the official added.
Source: Business Standard
Imports of raw materials and capital goods are duty-free till their final clearance. The Central Board of Indirect Taxes and Customs (CBIC) has set up a working group to look into export promotion policy, the impact of free trade agreements (FTAs) signed by India, tariff concessions vis-à-vis non-tariff barriers faced by exporters, and facilitating e-commerce exports. “We are looking into issues faced by exporters amid intense competition in the international market. The idea is to look at our policies comprehensively from the perspective of export, manufacturing, and trade facilitation,” a CBIC official said. The move comes as India’s ...
Source: Business Standard
Nations still differ widely on the key issues that will be discussed at the meeting being held in India on May 13 and 14. India wants the upcoming mini-ministerial in New Delhi to focus on ways to reduce protectionism in global trade and uphold the sanctity of the World Trade Organization (WTO). Come May 13, however, it will be hard pressed to also discuss global e-commerce rules, something it has avoided so far. After five rocky years of choppy global trade, increasing protectionism in most markets and little headway in key trade policy debates, the government is keen to end its term with a final push at the WTO. Subsequently, the commerce department obtained Election Commission approval to hold the ...
Source: Business Standard
India and the US Monday agreed to engage regularly at various level to resolve outstanding trade issues by exploring mutually beneficial suitable solutions, an official statement said. "Both sides agreed to deepen economic cooperation and bilateral trade by ensuring greater cooperation amongst stakeholders, including Government, businesses and entrepreneurs," said a statement after meeting between visiting US Commerce Secretary Wilbur Ross and Commerce Minister Suresh Prabhu. Ross is visiting India to attend the 11th Trade Winds Business Forum and Mission hosted by the US Department of Commerce. Without giving details, the statement said the both sides also discussed various "outstanding trade issues" and agreed to engage regularly at various levels to resolve them by exploring "suitable solutions, which are mutually beneficial and promote economic development and prosperity in both countries". Both the countries are locked in a tariff dispute with the US deciding to end preferential trade treatment to Indian exports, while New Delhi proposing to impose retaliatory duties on American goods. According to the statement, both sides expressed satisfaction over the progress made during the year 2018, with bilateral trade in goods and services registering a 12.6 per cent rise to USD 142 billion, compared to USD 126 billion in 2017. The two countries also complimented the new bilateral private sector led Small Business Interaction initiative, the US-India SME Forum, held today. This is the first event of its kind and it will pave the way for collaboration and partnership between the US and Indian small and medium enterprises (SMEs) in the areas of manufacturing and services, the statement said.
Source: Business Standard
Trump's tariff threat to China pulls down global commodity prices
Jitters already felt in crude, farm goods and base metals; US aims at heart of chinese economy; Beijing's retaliation could have tailspin effect on global tradePrices of industrial, farm and energy commodities declined sharply on Monday, amid fears of resumption of the global trade war, after United States president Donald Trump talked of raising tariffs sharply on Chinese goods this week and derailed trade talks between the world’s two largest economies. Commodity prices had fallen sharply last Friday as well. After hitting a month's low of $68.79 a barrel, Brent crude recovered marginally to trade at $69.78 a barrel on Monday. US West Texas Intermediate (WTI) crude futures declined by $1.11 to trade at $60.83 a barrel in the opening session. Apart from globally traded agricultural goods, industrial commodities, including base metals followed suit and declined by about one per cent on the Shanghai Futures Exchange other global exchanges today. Precious metals should have risen in view of accelerated global economic risk following trade war fears but that didn’t happen. The increase in tariff by the US hurts China’s economy where it hurts most, as it would either make Chinese goods more expensive and, therefore uncompetitive, or force manufacturers in that country to pare factory costs drastically. This, in turn, would have a tailspin effect on global commodities, of which China is the world's largest importer. Experts, however, believe that commodities with strong fundamentals would bounce back in the near term on investors’ shift from overvalued equity markets. Commodity prices have remained subdued globally for a fairly long time despite strong fundamentals. The fall in energy prices was largely dominated by the US non-farm payroll data released on Friday. “The renewed fear of a tariff war between the United States and China has created uncertainty in the market again, resulting in a decline in commodity prices,” said Naveen Mathur, Director, Anand Rathi Shares and Stockbrokers Ltd. The fall, which started in the beginning of the month, persists till date on the Multi Commodities Exchange of India (MCX). Crude oil prices have reported a decline of 4.7 per cent so far this month to trade at Rs 4,252 a barrel on Monday. Copper futures for near-month delivery shed 3.8 per cent to Rs 433 a kg. “With global economies under pressure, the new round of US tariff on China would create more negativity in the market, and would impact consumption. There's a sense among investors that the equity market has been overvalued, and investors could possible shift from stocks equity to safe-haven asset classes. Investors may take a bet in gold and cotton,” said Gnanasekar Thiagarajan, Director, Commtrendz Research. President Trump tweeted on Sunday that his administration would hike tariffs on Chinese goods this week, sparking fears of retaliation by Beijing. Trump’s twitter message also indicates talks between the US and China for easing the trade war have got derailed. If imposed, goods worth $200 billion imported from China to the US would suffer a fresh hike in import duty, raising fears of repercussion on global demand and supply of such goods. Industrial commodities and textile products. among others are likely to be hit with new US tariffs. In retaliation, China may curb imports of soybean and cotton from the US and buy these items from alternate sources. “The escalating trade war news is expected to have a negative impact on the base metal complex going forward. Copper and nickel may be exceptions as there is a mismatch between supply and demand favouring price rise. Overall, we expect to see increased volatility going forward,” said Pritam Patnaik, Business Head, Reliance Commodities Ltd.
Source: Business Standard
While our negotiators bargain hard for an inclusive and balanced Regional Comprehensive Economic Partnership, domestically we must focus on eliminating niggles our manufacturing sector and exports are facing. The first phase of ‘Make in India’ was promising. We saw eagerness from foreign companies setting up plants and assembly units in India. The next phase may well focus on transforming this initiative to ‘Make for India’ where the needs of the external market, but more importantly the domestic market, are met through production in India. The Regional Comprehensive Economic Partnership (RCEP)—the proposed free trade agreement between 10 ASEAN member states and their six FTA partners, namely India, Australia, China, Japan, New Zealand and South Korea—talks have been under way for over six years now, with over 25 rounds of negotiations between all FTA partner countries. The 16 member countries have now set a deadline of end-2019 to conclude the negotiations. The trade bloc comprising the ASEAN, Australia, China, India, Japan, South Korea and New Zealand accounts for 25% of global GDP, 30% of global trade, 26% of FDI flows, and 45% of the total population. From India’s point of view, RCEP is critical. RCEP countries account for almost 27% of India’s total trade. Exports to RCEP countries account for about 15% of India’s total exports, and imports from RCEP countries comprise 35% of India’s total imports. The negotiations, until now, have been fraught with difficulties, with India accused of being ‘conservative’ in its approach towards tariff negotiations, according to media reports. A final decision on RCEP is expected to come only post-elections under a new government at the Centre. Both Indian negotiators and the domestic industry have been vocal about their discomfort with respect to opening up of the domestic market to Chinese exports. This is understandable, given the massive Chinese overcapacity in key manufacturing industries, and major support programmes in the form of financial, non-financial and trade measures for the domestic industry, which give an edge to Chinese producers over other trade partners. In order to do an independent assessment of the impact of RCEP on the Indian industry, the government has roped in three premier think tanks to prepare the way forward for RCEP negotiations, which is a step in the right direction. A NITI Aayog note (A Note on Free Trade Agreements and Their Costs, Dr Saraswat, Priya, Ghosh 2018) co-authored by the writers of this article had earlier highlighted that India’s combined trade deficit with FTA partners like the ASEAN, Japan and South Korea has almost doubled in the last eight years. India’s trade deficit with the RCEP bloc of over $100 billion is almost 64% of its total trade deficit, of which China alone accounts for over 60% of the deficit. The report also highlighted that the quality of trade has deteriorated under the ASEAN-India FTA. According to the UN’s Harmonised system of product classification, products can be grouped into 99 chapters and further into 21 sections like textiles, chemicals, vegetable products, base metals, gems and jewellery, etc (similar to sector classification). The analysis shows that trade balance has worsened (deficit increased or surplus reduced) for 13 out of 21 sectors. This also includes value-added sectors like chemicals and allied, plastics and rubber, minerals, leather, textiles, gems and jewellery, metals, vehicles, medical instruments and miscellaneous manufactured items. Sectors in which trade deficit has worsened account for about 75% of India’s exports to the ASEAN. Apart from this, we would like to highlight some issues that need consideration of the policymakers and independent agencies undertaking the assessment. First, China’s manufacturing surplus and dumping of goods across the world is quite well known. China is the recipient of the highest number of Anti-Dumping Duty (ADD) measures in the world, with 926 ADD measures against it (1995-2017), which amounts to almost a quarter of all ADD measures globally. Most of these measures are concentrated in sectors where China has overcapacity, with more than a quarter of investigations in base metals (272), followed by chemicals (192), machinery and electric equipment (104), and textiles (75). Concomitantly, China’s penetration in the Indian market has been massive. China dominates both in terms of value-added import items as well as labour-intensive industry imports. Overall, India imports almost 20% of its non-oil imports from China. Almost 60% of India’s electric machinery imports, 36% of machinery and equipment imports, and 37% of organic chemical imports are from China. Due to its massive overcapacity and financial and non-financial government support, China is able to create a significant edge over its trading partners. A recent OECD report (2019) highlights that the Chinese aluminium industry received the highest amount of financial and non-financial support (from 2013-17), far ahead of its other global peers. Against this backdrop, India must have a plan to deal with this massive support that China offers its industries, leading to overcapacity and price undercutting post-RCEP. Therefore, we suggest that appropriate safeguard clauses need to be put in place within RCEP in case injury to domestic industry is found. A clause on provisional safeguard measures should also be introduced. Within the FTA, provision should be made for safeguard measures to be invoked if a volume or price trigger for the concerned products is reached. Second, given the current state of Indian industry, phased elimination of tariffs is necessary, especially with respect to some key manufacturing industries that have long gestation periods until they start running on full capacity. An example of this kind of negotiation was the India-Japan FTA where India negotiated for most of its tariff lines under sensitive track (almost 63% under sensitive track, 14% under exclusion). This was in contrast to the ASEAN-India FTA wherein 76% of the tariff lines were opened up for complete duty elimination. Therefore, at least a 15-25 years’ tariff elimination schedule should be negotiated for key sectors like chemicals, metals, automobiles, machinery, food products and textiles, which individually contribute more than 5% to India’s manufacturing GDP and employment, respectively. Thus, as suggested, phased elimination of few key manufacturing industries is absolutely essential with respect to China. Third, policymakers should be cognisant of the use of non- tariff barriers (NTBs) by China. According to reports, even though China has agreed to open almost 92% of their tariff lines, expecting India to reciprocate in the same manner, India’s concerns over China’s NTBs merit serious attention. China’s usage of NTBs like complex product certification process, labelling standards, custom clearance, pre-shipment inspection and import licensing has hindered India’s access to their markets. Dealing with NTBs is costly and, therefore, we must factor in this associated barrier before we move ahead with trade pacts, RCEP in particular. While our negotiators bargain hard for an inclusive and balanced RCEP, domestically we must fiercely focus on eliminating niggles our manufacturing sector and exports are facing. The first phase of ‘Make in India’ has been promising. We have seen eagerness from foreign companies setting up plants and assembly units in India, bringing in valuable foreign capital and technical know-how. The next phase may well focus on transforming this initiative to ‘Make for India’ where the needs of the external market, but more importantly the domestic market, are met through production in India. Not only will this produce meaningful jobs, but also add to India’s heft in trade treaties. These transformational plans will require support in the form of a new industrial policy that creates the necessary incentives for MSMEs to be an active part of this process. These are necessary complements for ensuring maximum leverage out of our trade deals, especially RCEP. Priya is a Mumbai-based economist and Ghosh is a Phd candidate at Johns Hopkins, US
Source: Financial Express
The U.S. Commercial Service will bring more than 100 U.S. companies to India as part of the U.S. Department of Commerce’s largest annual trade mission program, Trade Winds. Trade Winds Indo-Pacific features a three-day business forum in New Delhi, with additional trade mission stops in Ahmedabad, Chennai, Kolkata, Mumbai, Bengaluru, Hyderabad, and Bangladesh. At each mission stop, the attending companies will meet directly with government leaders, market experts and pre-vetted potential business partners, the U.S. Consulate said in a statement. “Our goal at the U.S. Department of Commerce is to use every available resource to ensure fair and reciprocal trade for U.S. businesses selling their products and services all over the world,” said U.S. Secretary of Commerce Wilbur Ross. “Trade Winds is an important component of these efforts.” Trade Winds, now in its 11th year, has directly supported more than $3.4 billion in U.S. exports in over 40 countries, and in 2018, U.S. exports of goods and services to the Indo-Pacific were more than $476 billion. In 2017, the mission brought 100 companies to Southeast Europe and accounted for more than $3 billion in U.S. exports. Thus far, Trade Winds has helped U.S. companies conduct over 4,000 pre-vetted, business-to-business meetings and over 6,000 government-to-business meetings around the world. “The potential for growth in U.S.-India trade is enormous given the size of our economies,” said Kenneth I. Juster, U.S. Ambassador to India. “Exports of U.S. goods and services to India reached $58.9 billion in 2018. I look forward to hearing of future successes from the companies taking part in Trade Winds.” Aligned with the Trump administration’s commitment to a free and open Indo-Pacific, this year’s Trade Winds mission will provide U.S.-based companies with the opportunity to explore and develop further business ventures with countries throughout the Indo-Pacific region.
Source: The Hindu
NEW DELHI: The US on Monday said it cannot ensure the sale of its crude oil to India at concessional rates to make up for the cheaper Iranian oil going out of the market. "Oil is owned by private people, so the government cannot force people to make concessionary price," US commerce secretary Wilbur Ross, who is here to participate in a trade forum, told reporters. India this month stopped importing crude oil from Iran following the US move to end sanction waivers. Iranian oil was a lucrative buy for Indian refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes -- Saudi Arabia, Kuwait, Iraq, Nigeria, and the US. Also, Iran made arrangements to ship the oil to India including providing insurance cover during transit. In the case of most other suppliers including the US, refiners have to make shipping arrangements and pay for insurance. "Iran is a problem, if you have seen recent terrorism incidents, and we should be doing whatever we can against terrorism," Ross told reporters after meeting finance minister Arun Jaitley. US Ambassador to India Kenneth Juster said, "The US working with other countries, including Saudi Arabia, to ensure an adequate supply of oil". New Delhi has lined up supplies from alternate sources such as Saudi Arabia, Kuwait, UAE and Mexico to make up for the lost volumes from Iran. India was the second-biggest buyer of Iranian crude oil after China. It bought some 24 million tonne of crude oil from Iran in the fiscal ended March 31. Iran supplied more than a tenth of its oil needs. US President Donald Trump last year withdrew from the 2015 nuclear deal between Iran and world powers and revived a range of sanctions against the Persian Gulf nation. It, however, granted a six-month waiver from sanctions to eight countries -- China, India, Japan, South Korea, Taiwan, Turkey, Italy, and Greece -- but with a condition that they would reduce their purchases of Iranian oil. The waiver began in November 2018 and expired on May 2. India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran in 2018-19 was its third-largest supplier after Iraq and Saudi Arabia, meeting over 10 per cent of total needs.
Source: Times of India
Mumbai: The rupee Monday fell by 18 paise to close at 69.40 against the US dollar as renewed trade war worries following US President Donald Trump's threat to raise tariffs on Chinese imports sent markets into a tailspin and triggered flight of capital to safe bets. Foreign investors were net sellers in capital markets Monday selling assets worth Rs 948 crore on a net basis, provisional exchange data showed. Forex dealers said that Trump's comment that he would raise taxes on USD 200 billion of Chinese products to 25 per cent from 10 per cent from Friday affected investor sentiment in the currency market. Gold and Japanese yen, considered as safe haven investment in times of crisis, gained Monday while Chinese currency yuan fell to the year's low level against the dollar. Other currencies such as the Turkish lira, the Mexican peso, and the Australian dollar declined up to 0.5 per cent on trade worries. The rupee opened weak at 69.38 and fell further to the day's low of 69.46 at interbank forex market. The local currency, however, pared losses to close at 69.40, down 18 paise from the previous close. The rupee had strengthened by 15 paise to close at 69.22 against the US dollar Friday. Crumbling domestic equity markets also impacted the trading pattern in the forex market, dealers added. Similarly, the NSE Nifty dived 114 points to settle below the 11,600-level. Meanwhile, the Dollar Index which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 97.57. Brent crude futures, the global oil benchmark, fell 0.40 per cent to trade at USD 70.57 per barrel on fears that the trade war between the US and China could impact the demand for crude oil. Meanwhile, Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.3558 and for rupee/euro at 77.6360. The reference rate for rupee/British pound was fixed at 90.9980 and for rupee/100 Japanese yen at 62.62.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1282.78 |
USD/Ton |
0% |
5/6/2019 |
|
VSF |
1855.88 |
USD/Ton |
0% |
5/6/2019 |
|
ASF |
2529.93 |
USD/Ton |
0% |
5/6/2019 |
|
Polyester POY |
1254.57 |
USD/Ton |
-0.59% |
5/6/2019 |
|
Nylon FDY |
2820.93 |
USD/Ton |
0% |
5/6/2019 |
|
40D Spandex |
4691.65 |
USD/Ton |
0% |
5/6/2019 |
|
Nylon POY |
2672.46 |
USD/Ton |
0% |
5/6/2019 |
|
Acrylic Top 3D |
2746.70 |
USD/Ton |
2.78% |
5/6/2019 |
|
Polyester FDY |
1388.19 |
USD/Ton |
-0.53% |
5/6/2019 |
|
Nylon DTY |
3088.18 |
USD/Ton |
0% |
5/6/2019 |
|
Viscose Long Filament |
5612.17 |
USD/Ton |
0% |
5/6/2019 |
|
Polyester DTY |
1492.12 |
USD/Ton |
0% |
5/6/2019 |
|
30S Spun Rayon Yarn |
2553.68 |
USD/Ton |
-0.29% |
5/6/2019 |
|
32S Polyester Yarn |
2011.77 |
USD/Ton |
0% |
5/6/2019 |
|
45S T/C Yarn |
2887.74 |
USD/Ton |
0% |
5/6/2019 |
|
40S Rayon Yarn |
2820.93 |
USD/Ton |
-0.52% |
5/6/2019 |
|
T/R Yarn 65/35 32S |
2420.06 |
USD/Ton |
0% |
5/6/2019 |
|
45S Polyester Yarn |
2167.66 |
USD/Ton |
0% |
5/6/2019 |
|
T/C Yarn 65/35 32S |
2538.84 |
USD/Ton |
0% |
5/6/2019 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
5/6/2019 |
|
32S Twill Fabric |
0.82 |
USD/Meter |
-0.36% |
5/6/2019 |
|
40S Combed Poplin |
1.08 |
USD/Meter |
0% |
5/6/2019 |
|
30S Rayon Fabric |
0.64 |
USD/Meter |
0% |
5/6/2019 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
5/6/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14847 USD dtd. 06/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Secretary Commerce, Sardar Ahmad Nawaz Sukhera on Monday said that the government and trade bodies must join hands to take advantage from the second phase of China Pakistan Free Trade Agreement (FTA-II) recently signed in Beijing. He was giving his comments with respect to CPFTA-II in the context of consultation with Federation of Chamber of Commerce and Industry (FPCCI) at a meeting of Senate Standing Committee on Commerce and Textile, presided over by Senator Mirza Muhammad Afridi. The FPCCI was represented by its Chairman Engineer Daroo Khan Achakzai. Secretary Commerce maintained that there should be a policy/data analysis wing in each Ministry, contending that he had not witnessed any public policy analysis during his 35 years in government service. Policy analysis wing should be available at each level, he emphasized, and assured the committee that he would extend all possible cooperation to the FPCCI and other trade bodies/ Associations. Leader of the House in Senate, Shibli Faraz said that decisions at the government level are not being taken in light of available data analysis, adding that the Senate has already passed a resolution to establish data analysis wing in each Ministry and that he personally included the name of Commerce Division in the list. Senator Dilawar Khan enquired if the Commerce Division had informed the incumbent government of the financial loss inflicted on Pakistan due to FTA-I and whether it gave any suggestions to avert losses faced by the country due to FTA-I; and the government's response. The officials of Commerce Division explained the achievements of FTA-II. Dilawar Khan asked what the local textile industry would do if yarn is exported to China. One of the senators responded that cotton yarn is not exported to China yet. Senator Dilawar Khan argued that the country has gone towards trading from industrialization. The Chairman Committee enquired from Secretary Commerce about the whereabouts of Commerce Advisor, who indicated his ignorance on his whereabouts prompting the Chairman to warn that he would not allow the meeting to proceed next time if the Advisor's presence is not ensured. Senator Shibli Faraz argued that local industry and associations should be taken on board prior to seeking concessions from any country. He also enquired as to who prioritized the three items - yarn, sugar and rice - worth $ 1 billion of which the share of yarn was projected at $ 700 million. Senator Nauman Wazir Khattak informed the committee that during a visit of PM's Advisor on Commerce, Textile, Industries and Production, the Chinese asked about items off the cuff. Secretary Commerce, Sardar Ahamd Nawaz Sukhera who undertook two visits to China within a couple of weeks to finalise and sign FTA-II explained that only surplus cotton yarn will be exported to China. He said SROs are a big hurdle in the establishment of business, adding that 45 SROs are required to start a business. President FPCCI, Engineer Daroo Khan said that FTA-II with China is better than FTA-I, adding that renegotiations can be held in case of any reservations on any clause. Senate Standing Committee on Commerce and Textile Industry in its meeting has called for uniform criteria for all provinces in terms of election and representation in the Federation of Pakistan Chambers of Commerce and Industry. The Committee observed that the tenure of one year for the president of FPCCI is insufficient and almost all the time is spent in the next election campaign. The Committee members maintained that the chambers of commerce have to be vibrant and they have the primary task of promoting business and trade. The FPCCI was asked to come up with its proposal on the matter. The committee was given a detailed briefing on the role and functions of FPCCI. The need to have a data and policy analysis wing and a formal mechanism to share recommendations between FBR and FPCCI and the commerce industry was emphasized. The members asked the FPCCI about the frequency of sharing recommendations and proposals and their acceptance percentage. Members agreed that before entering into any agreement engagements and sessions should be held with chambers, associations and all stakeholders to get their concrete proposals before finalising the agreement. The meeting was given a briefing on the China Pakistan Free Trade Agreement Phase-II by the Ministry of Commerce and Textile industry and the duty free access granted by China to Pakistan. The Committee was told that extensive sessions with local industry and associations were held and opinion from all stakeholders was taken. The FTA-II not only gives free access to a huge market but also has provisions for protecting our local industry. Senator Dilawar Khan remarked that an industrial unit in Pakistan has claimed that it is producing a self-destructing syringe, not available in many countries, and has won the UNO tender. The Committee noted that in cases like these where local industry is producing efficient products, it should be protected, and imports of similar items should be banned to promote indigenous people and employment. Under the CPFTA-II China has provided immediate liberalisation on 313 tariff lines which goes to $ 64 billion of China's global imports and 83% of Pakistan's global exports. The meeting was attended among others by Leader of the House Senator Shibli Faraz, Senators Nauman Wazir Khattak, Mian Ateeq Shaikh, Dilawar Khan, Ghous Muhammad Niazi, Ahmed Khan, Secy Commerce Ahmed Sukhera, President FPCCI, Executive Director SLIC, Acting CEO NICL and officials from the ministry and bodies.
Source: Brecorder
Govt. should have one "Export Policy" to facilitate exporters from all sectors of industry instead of coming up with policy specific to traditional exporters in textiles, leathers, sports, surgical goods and carpets. In the first week of January 2019, Govt of Pakistan offered reduced electricity tariffs and uninterrupted supply of RLNG (Re-Liquified Natural Gas) to five key export-oriented industries. Asad Umar, the then finance minister, took the step to facilitate and boost exports. Five industrial sectors that are considered “Zero Rated” were facilitated; these included Textiles, Leathers, Sports, Surgical Goods and Carpets. Now other sectors of industry want similar treatment. They argue that Govt should have a generalized “Export Policy” applicable to all sectors instead of traditional five areas. The Power Division of the Ministry of Energy had notified, in January 2019, reduction in the power tariff by three rupees per kilowatt hour for the above mentioned five zero-rated industries. Notification by the government bound all power producers including the Karachi Electric (K-Electric). The zero-rated five industries are now getting electricity supply at the rate of Rs. 7.5 per kWh (kilowatt hour). Standard domestic industry is, however, getting electricity at the rate of Rs. 22/kWh (per Kilowatt hour). The decision of government was lauded by the Pakistani exporters. Chairman of All Pakistan Textile Manufacturers Association (APTMA), Gohar Ejaz appreciated the step taken by the government and said that the promise Prime Minister Imran Khan had made has been fulfilled. Ejaz said that the govt was bound to act because numerous industries were shut down in Punjab due to expensive gas and electricity. He hailed the govt’s decision and wished it to go a long way in providing relief to the industrial sector.
Need for a generalized Export Policy?
However, there are other sectors of industry trying to build export markets. They now demand a uniform export policy for all industry instead of the one that has a narrow focus on some sectors. Rashid Ahmed Siddiqui, Chairman of Afeef Group, Karachi, spoke with Global Village Space. He argues that if the PTI government is serious in facilitating exports then it must come up with an Export Policy to facilitate all sectors. Afeef Group currently owns three industrial units manufacturing packaging materials mainly for food industry. Afeef Packages Pvt Ltd the main concern is one of the largest in Pakistan. It is the biggest packaging unit in terms of product variety. Its competitors include well-known industry names like Packages (pvt) Limited from Lahore and Saima Packages, Yaqeen Art Press and Merit Packages in Karachi.
Export of packaging material to GCC countries & EU
Afeef Zara Packages is a new addition to the Afeef Group; established in the last 2 years it has managed to raise its exports from a mere Rs. 25 million to Rs. 700 million in just over two years. It now aims to raise it further to Rs. 1.5 billion per year within the next 12 months. Siddiqui, Chairman Afeef Group, explains that Group’s export markets are in GCC countries (Middle East) and Europe. In GCC they face competition from India and China and across Europe they face competition from India and Turkey. But they are at a disadvantage because Indian manufacturers are getting electricity at the rate of Rs. 0.08 per kWh (Single Digit rates) as compared to Rs. 0.22 per KwH in Pakistan. (Double Digit Rates). Afeef Zara Packages is also exporting food packaging products for Pizza Hut in United Kingdom. Siddique demands that the government needs to bring out an Export Policy facilitating special electricity tariffs for all potential exporters instead of just five traditional sectors (Textiles, Leather, Sports, Surgical Goods and Carpets) covered in the notification of January 2019.
Procedure and policy against Export Certificates issued by Customs
Siddique points out that the govt can have a very simple procedure to implement this policy initiative. He suggests that the government notification, under Export Policy, to electricity providers like K-Electric should permit concessional rates for all industry units that provide export certificates issued by the Customs. Such Export Certificates contain all necessary details required under the regulations of Federal Board of Revenue (FBR) and the exporters can submit proof of exports by the State Bank of Pakistan clearly stating all the export remittances that took place. Exporters of the five traditional industries are already availing the concessional rates upon producing the said certifications. All that is needed is to broaden the policy to include all exporting units – irrespective of the sector.
Source: Global Village Space
Myanmar will hold a regional investment forum in Yangon, the commercial capital of Myanmar, later this week, in order to increase investment and attract more investors in the region, according to the Yangon region government on Monday. The two-day Yangon Investment Forum-2019, scheduled to be held on Friday and Saturday, will unveil the projects in the region under the Myanmar Sustainable Development Plan. The forum will include speeches from senior government officials, presentations by government authorities on the investment legal framework and panel discussions focused on Myanmar's industry, finance, logistics, industrial zones, agribusiness, garments, textiles and manufacturing. Participants are arranged to make field visits to Yangon's Thilawa Special Economic Zone and Hlaingtharya Industrial Zone. According to data, in the first seven months of fiscal year 2018-19 which began in October, 2.54 billion U.S. dollars of foreign direct investment flowed into Myanmar. Currently the Yangon region accounts for 23 percent of the country's gross domestic product.
Source: Xinhua
Negotiators add the chemical to annex A of the Stockholm Convention.
International negotiators at the meeting of the UN Conference of the Parties in Geneva have unanimously agreed a global ban on the use of perfluorooctanoic acid (PFOA), with some exemptions. Delegates at the meeting agreed on Friday to add the chemical, along with its salts and PFOA-related compounds, to Annex A of the Stockholm Convention on persistent organic pollutants (POPs). This requires countries to take action to "eliminate the production and use" of the chemical. PFOA is widely used in industrial sectors and manufacturing processes for its resistance to water and oil. PFOA-related compounds are used as surfactants and surface treatment agents in textiles, papers and paints and firefighting foams. The substance has been identified as persistent, bioaccumulative and reprotoxic by the EU. PFOA and other per- and polyfluoroalkyl chemicals (PFASs) have come under fire in recent years amid mounting public concern and political controversy. The chemicals have been found in one-third of drinking water in the US. Earlier in the week a press conference at the event heard calls from firefighters and fire safety experts to ban fluorinated chemicals in firefighting foam. Several five-year exemptions to the ban were approved for the chemical, including in:
For the exemption on firefighting foam, special additional controls were included, with governments prohibiting the production, export or import and use in training of PFOA- containing foam. The final decision also said alternatives to PFOA-containing foam should be used "where available, feasible and efficient," and added that other flourine-based firefighting foams "could have negative environmental, human health and socioeconomic impacts due to their persistency and mobility." Iran, China and the EU each requested exemptions at the event, instead of through the usual channel of the Stockholm Convention's scientific review committee. Ipen, an international network of NGOs, protested against the late addition of exemptions. Dr Mariann Lloyd-Smith, National Toxics Network and Ipen advisor, said that although the "global ban on PFOA and the warning about not using PFAS alternatives starts a new era in addressing this entire class of persistent, toxic chemicals ... some governments betrayed the treaty’s scientific review process by suddenly adding vast, wide-ranging loopholes that continue PFOA’s cycle of harm." Most of the 182 countries that have ratified the Stockholm Convention have 12 months to implement the ban. The US is not a party to the Convention, so the ban does not apply to it. However, the US is considering domestic restrictions on PFOA and other fluorinated substances in parallel. In February, the EPA published a federal plan to manage the risks posed by PFASs. This was touted by the agency's acting administrator as the "most comprehensive cross-agency action plan for a chemical of concern ever undertaken by the agency."
PFOS exemptions ended
Delegates at the Stockholm Convention meeting also agreed to tighten a restriction on PFOS, another fluorinated chemical that was added to Annex A in 2009 with several exemptions. The following exemptions were ended:
The use of PFOS in firefighting foams was also given a five-year deadline, and its production, export or import and use in training was disallowed.
Source: Chemical Watch
Textile exports value decreases while the amount increases. Turkish textile manufacturers were able to earn less compared to the same period of the previous year in the first quarter of the year. In the January-March period of 2019, textile exports declined by 7% on value basis and increased by 3.9% on quantity basis. The export unit value of the ready-to-wear industry declined by 10.1% to 14.4 dollars per kg. According to Exporters’ Associations figures, Turkish textile and raw materials industry was able to reach up to 2.5 billion dollars in exports in the first quarter of 2019 with a 7% shrinkage. On the other hand, ready-to-wear and apparel industry’s exports amounted to 4.5 billion dollars with a very small growth rate of 0.1%. Textile exports, which decreased by 7% in value terms in the first quarter of the year, increased by 3.9% to 583 thousand tons in terms of quantity. The export unit prices of the ready-to-wear industry declined by 10.1% to 14.4 dollars/kg. This shows a market situation in which we earn less by selling more in both industries. Turkey’s total exports increased by 3.3% to 44.6 billion dollars over January-March 2019 period in which textile exports have declined, while apparel exports made no headway. In light of this data, the share of textiles and raw materials industry in Turkey’s total exports, can be observed as decreasing to 5.6% from 6.3% compared to the same period of last year. The share of the ready-to-wear industry in total exports decreased from 10.5% to 10.1%.Textile exports value decreases while the amount increases: exports numbers decreased in major marketsIn the first 3 months of the year, the most exported market was the EU region, which covers 28 countries with a share of over 50%, as was the case for many years. However, exports to the largest market with a serious decline of 10.9% was able to reach the value of 1.3 billion dollars. Exports to African countries, which have a share of 10% in textile exports, were realized as 252 million dollars with a decrease of 2.1%. Another serious decline was the decline of 10.4% in Middle Eastern countries. The export value in this market reached 235 million dollars. The most significant increase in the January-March period was in Asia and Oceania with 5.5%. Exports to this region amounted to 151 million dollars, while the second increase was 1% for the former Eastern Bloc countries. In January-March 2019, the most textile and raw materials was exported to Italy. Exports to Italy, which has a share of 9.6% in our textile exports, declined by 11.9% to 216 million dollars. Germany, our second market, had a share of 8% in our textile exports; and exports to this country declined by 10.9% to 200 million dollars. Our textile exports to the US, which is in the third place decreased by 3.6%, while our exports to Bulgaria decreased by 19.6%. The only market with a net increase in the first 10 markets was the UK with an increase of 4.8%, while exports to Egypt increased by 0.1%.The first quarter figures of the ready-to-wear and apparel industries confirm similar decreases. Exports to Germany, the largest market in the industry, decreased by 11.8% to 771 million dollars. Exports to Spain in the second row increased by 5.5% to 570 million dollars. Exports to the UK, which is in the third place, amounted to 464 million dollars, down 3.6%; while exports to the fourth placed Netherlands amounted to 464 million dollars, down by 0.05%. Woven fabric is the most important export product of textile. The most important export product group of the textile industry consists of woven fabrics. In the first quarter of the year, 23% of total textile exports were created by this product. The woven fabric exports decreased by 10.5% to 593.6 million dollars. The second important product group of the sector is yarn with a share of 19.1%. Yarn exports amounted to 478.6 million dollars with a 3.7% decline in this period. The third product group, the share of knitted fabrics in the total number of textile exports was 15.1%. Exports of knitted fabrics decreased by 5% to 379.3 dollars. Exports of fiber, which has a share of 7% in total textile exports, increased by 13.2% to 176.4 million dollars.
In the first quarter of 2019, knitted garments was the most important export product of ready-to-wear and apparel industries. This product group achieved 2.3 million dollars in exports with a loss of 0.9%. Exports of woven apparel and accessories in the second row increased by 4.2% to 1.7 billion dollars. In the other ready-made goods group, including home textile products, exports decreased by 9.4% to 464 million dollars.
Home textile industry also experienced a decline
Turkey’s home textile fabrics exports were valued at 107 million dollars with a 14.9% decline over the same period. In this group, the drapery was in the first place with a share of 70% and achieved a 16.6% decline in exports. It was followed by upholstery with a 25.4% share and a 3% share of terrycloth. Meanwhile, the home textile industry’s finished product exports decreased by 8% to 432 million dollars. The main product group in home textile exports were towels and cleaning cloths with a share of 34.8%. This product group achieved a value of 150 million dollars with a 6.1% decline in exports. In the second row, the bed linen achieved a value of 110 million dollars with a 5.7% decline in exports. Turkish textile industry’s technical textiles export decreased by 3.9% to 438 million dollars. According to the Republic of Turkey Central Bank data; the capacity utilization rate of the ready-to-wear and apparel industry was 82.9%; while the capacity utilization rate of the textile industry was around 77% during the January to March of 2019 period.
Source: Textilegence
Foreign direct investment (FDI) is increasing day by day in Bangladesh. The FDI is an investment in the form of controlling ownership in a business in one country by an entity based in another country. FDIs offer two win-win benefits- economic development for host states and profit maximization for foreign investors.
FDI in Bangladesh
Kazi Aminul Islam, executive chairman of Bangladesh Investment Development Authority (BIDA), said “Our doors are open for FDI, and foreign investments will jump by a significant margin in the coming days.” Attracting foreign direct investment for developing countries generally, contribute to the development of countries. Developing countries have many objectives for that, such as, creating new jobs and attracting more businesses. At the same time, these investments may have the potential of harmfully affecting the net capital flow of the economy. Shafiul Islam Mohiuddin, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said, “To attract more FDI, the government has to first attract local investment as the foreign investors consider the trend of local investment before making any investment decision.” The local economy might profit from the initial foreign investment, but if the investing company sends all the profits to investors in another country for years on end that could be a drag on for the host economy in the long run. The present global order is extensively interconnected and the developing country like Bangladesh caters to the so-called developed nation’s ever-increasing demand with cheap human resources and dwindling natural resources. However, sometimes the FDI that comes from a developed country can shake up an existing industry because they’re bringing competition for the domestic companies that already exist. In this regard, the government needs to be careful to protect the country’s economy from any unexpected catastrophe that can happen for unplanned FDI. To receive any FDI, the government should ensure below things:
National interest
Arriving FDIs must be in line with national interests, which should include the net economic benefit and policy compliance. A screening and approval manual with a list of criteria along the line of the regulatory directives in section 3 of FPIA to avoid dictatorial and non-transparent decision-making should be made readily available to potential investors and use to regulate net economic benefits and policy conformity. The net economic benefit must assess whether the proposed FDI would:
FDI proposals must be compliant with the constitution and its state policies, and laws and policies on the environment, occupational health and safety, taxation, labor, security, defense, heritage, and natural resource exploitation.
Protectionism of local trade
As FDI comes with heavy finance with state of the art technology, efficient management, and squeeze out maximum efficiency from workers, in contrast, local investors, who have a limited investment, ad hock basis management, lack of leadership skill, can’t bring out standard workers efficiency, on top of that, limited knowledge on international trade, ethics and norms will surely go to peril. In most cases, Bangladeshi businessman fight against all odds to keep afloat their business. Where scarcity of loan prevail, mediocre mid-level management with premature leadership skill, etc. small and medium businesses will be overly exposed against top-notch foreign investors. “Most of the times we cannot delegate much to our mid-level management because we have not been able to train them up as well. So most of the times, when there are some problems or disturbance in the factory its mostly coming from the challenges of mid-level management not being able to address the concerns of the workers properly.” “Most of the times we cannot delegate much to our mid-level management because we have not been able to train them up as well. So most of the times, when there are some problems or disturbance in the factory its mostly coming from the challenges of mid-level management not being able to address the concerns of the workers properly,” said Rubana Huq, President of BGMEA. Keeping this grievous perspective under a magnifying glass. The government and the local trade bodies can play the life support role for the local businessmen, who are keeping the wheel of trade in motion.
Tax holidays are a key cause of consecutive revenue losses due to their exploitations by foreign investors taking advantage of long duration, lack of effective control, and administrative corruption. Various direct and indirect tax incentives lead to huge tax expenditure often offsetting the expected revenue.
Safeguarding workers interest
The world has a black history of exploitation of workers by the elite. As we have seen in a renaissance in Europe, the East-India company in the Indian subcontinent, etc. Ensuring a strong liability from foreigners is a major obstacle. As foreign investors are backed by their countries, influential lobbyists, and local corrupt collaborators is a cause of great concern. And Bangladesh has a poor track record of upholding workers’ rights, worker union, etc. and exploitation of workers by the foreign owners will add another throne in the already overburdened workers. Government has to take proper initiative to safeguard the workers from exploitation by foreign investors.
Source:Textile Today
