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MARKET WATCH 14 MAY, 2019

NATIONAL

INTERNATIONAL

Cotton shortage prompts spinning mills to switch to man-made fiber

Cotton prices have jumped to Rs 13,200 per quintal now from Rs 11,800 per quintal about a month ago. In a major boost to synthetic textile players, spinning mills have started increasing the use of man-made fibre to keep their fabric cost immune to rising cotton prices. Industry sources estimate that India’s use of man-made fibre in fabric blends has increased to 45 per cent over the last few months from 40 per cent earlier. The use of cotton in fabric blends has declined to 55 per cent from 60 per cent earlier. Despite the shift, India is far below the global average of man-made fibre use of 70 per cent in blended fabrics. Cotton prices have jumped to Rs 13,200 per quintal now from Rs 11,800 per quintal about a month ago. Comparatively, manmade fibres are 30-40 per cent cheaper. India is gradually catching up with the global trend of a bigger share of man-made fibres than natural fibres in textile blends. This will boost textile exports -- especially in the sportswear segment in which the country has been almost absent and small countries have gained a large market share. Madhu Sudhan Bhageria, Chairman and Managing Director, Filatex India, said “The preference of consumers is moving from cotton to man-made fibres like polyester, given the increasing demand for casual-wear and sports-wear. The decreasing acreage of cotton cultivation in the country is also contributing towards the shift. Recent capacity addition by synthetic textile players is the biggest proof of an increase in demand for polyester from both domestic and international markets.” Echoing Bhageria's view, R K Dalmia, President, Century Textiles and Industries, said “India is a cotton growing country with a favourable tropical weather. Hence, the use of cotton in India is high compared to the rest of the world. Now, there's an increasing demand for synthetic textiles among consumers, which is driving mills to produce more of man-made fibre blended products.” Cotton Association of India (CAI), the apex industry body, has revised downwards India’s 2018-19 cotton output for the fourth time to 31.5 million bales (of 170 kgs each), which is a decline of 14 per cent from the output of 36.5 million bales reported last year. Atul Ganatra, President, CAI, said “Scarcity of water in states like Maharashtra, Madhya Pradesh, Telangana and Andhra Pradesh, and uprooting of cotton plants by farmers in about 70-80 per cent area without waiting for third and fourth round of pickings are the main reasons for the decline in cotton crop output this year. With overall cotton consumption estimated at 31.5 million bales, exports and carryover stocks are set to be managed from carry forward stocks from the last year and imported." Availability of quality cotton has been a major issue for Indian spinning mills due to lower production in India following drought in its major cultivating states including Maharashtra, Gujarat, Telangana and Andhra Pradesh last year. A lack of moisture forced farmers to suspend picking of cotton in the field after the second of four rounds. Quality of cotton was very poor due to sporadic picking in the third round in some parts of the drought-ridden states. Man-made fibre is derived from crude oil and, therefore, abundantly available across the world. Moreover, man-made fibre is substantially cheaper than cotton. Consumers opting for fabrics with synthetic blends find them cheaper. Ujwal Lahoti, Chairman, Cotton Textile Export Promotion Council (Texprocil), said, “Some spinning mills in the South Indian states including Tamil Nadu have started using manmade fibre again after a wide gap of several years. Traditionally, they were using manmade fibre but had shifted to cotton about a decade ago. They have again switched to manmade fibre.”

Source: Business Standard

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Inaugural Session of WTO Ministerial Meeting begins in New Delhi

Commerce Secretary, Dr.AnupWadhawan, welcomed senior officials of participating delegations from Developing and Least Developed Countries (LDCs) who are meeting in New Delhi over two days to discuss key issues and challenges facing the multi-lateral trading system. Speaking at the inaugural session, Commerce Secretary said that the existential challenges to the multilateral rules based trading system are manifestina spate of unilateral measures and counter measures, deadlock in key areas of negotiations and the impasse in the Appellate Body. The logjam in the Appellate Body is a serious threat to the dispute settlement mechanism of the WTO and the implementation function of the Organization. The fundamentals of the system are being tested through a tide of protectionism around the worldvitiating the global economic environment. The situation does not bode well for developing countries, including the LDCs. The harm that the institutional failure due to the collapse of the Appellate Body will cause will be felt more in Developing Countries including LDCs who needthe protection of the rules based system more than developed countries. There is an urgent need to engage constructively to preserve the system and come up with constructive solutions to the problem. The situation in the WTO has spurred a strong discourse for reforming the WTO, which unfortunately is characterised by a complete lack of balance. The reform agendabeing promoted does not address the concerns of the developing countries. The discussions in the meeting being held in New Delhi give a chance to reaffirm the resolve to keep development at the centre of the reform agenda. The reform initiatives must promote inclusiveness and non-discrimination, build trust and address the inequalities and glaring asymmetries in existing agreements. These asymmetries are against the interest of developing countries including LDCs. There is a need to work together to put issues of importance for developing countries and their priorities in the reform agenda. There has been no active engagement or movement on key issues of concerns for developing countries including LDCs in the negotiating agenda. Agriculture remains a key priority for a large membership of WTO representing the developing world. However, there is a strong push to completely relegate existing mandates and decisions and work done for the past many years, to the background. Discipline on fisheries subsidies are currently under negotiation at the WTO with intense engagement to understand the issues and work out a meaningful agreement by December 2019. The MC11 decision on fisheries subsidies clearly mandates that there should be an appropriate and effective special and differential treatment for developing countries. It is important for developing countries including LDCs to collectively work for a fair and equitable agreement on disciplines in fisheries subsidies, which takes into consideration the livelihood needs of subsistence fishermen and ground realities in our countries, and protects our policy space to develop capacities for harnessing our marine resources. India believes that developing countries need to work together to protect their interests in the WTO negotiations through preservation of the core fundamental principles of the WTO. The two-day meet gives an opportunity to the participating countries of developing a shared WTO reform proposal on issues of priority and interest for developing countries. This will help in building a common narrative on issues of importance for Developing Countries including LDCs. In two-day meeting following issues are likely to be discussed:

  • Finding a solution to the ongoing impasse in the Appellate Body on an urgent basis.
  • Issues of importance and priority for developing countries including LDCs in the reform agenda.
  • How to reinvigorate negotiating agenda on issues of critical importance for developing countries?
  • How to ensure effective S&D for all developing countries including LDCs?

Today’s senior officials ‘discussions will feed into the Ministers’ deliberations tomorrow,on 14th May 2019. The two-day meeting is an effective move by developing countries to positively influence the outcome of WTO reforms by making development at its core and exploring all means of saving multilateralism.

Source: PIB News

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Industrial output may not see quick recovery, say economists

Signs of slowdown in Indian economy have been visible for a few months now, with automobile sales hitting speed bumps and volume growth slowing even in fast moving consumer goods. India's factory output turning negative sends further signals of a slowdown in consumption and investment, and analysts don't see a quick turnaround. Data released by the Central Statistics Office shows the index of industrial production in March contracted 0.1 per cent. In February, IIP had grown at just 0.1 per cent. Manufacturing contracted 0.4 per cent in March. Capital goods production contracted 8.7 per cent. "Contraction in capital goods and intermediate goods is worrisome as it is indicative of the investment activity in the economy. Both the segments have been witnessing negative growth rates since November 2018," said Manisha Sachdeva, associate economist at CARE Ratings. Consumer durables growth also contracted, symptomatic of the weak demand conditions in the country. A liquidity crunch, making credit availability difficult is one of the reasons behind falling industrial production, say economists. "While bank credit to industry has accelerated during FY19 (6.9 per cent in March 2019, versus 0.7 per cent in March 2018), it remains well behind the overall credit growth (13 per cent on 26 April 2019). Credit growth is particularly unfavourable for MSME (micro, small and medium enterprises) and medium industries (0.7 per cent and 2.6 per cent respectively in March," said Sujan Hajra, chief economist at broking firm Anand Rathi. Non-banking finance companies account for a sizeable portion of funding in sectors like automobiles. Several of these NBFCs faced liquidity challenges in the backdrop of defaults at IL&FS. There is an expectation that there will be another round of interest rate cut by Reserve Bank of India in a bid to boost growth and investment, as inflation remains well below the central bank target. However, Hajra feels that an interest rate cut may not be too helpful in lifting industrial output as a slower deposit than credit growth is preventing transmission of rates to the credit market. Upasna Bhardwaj, senior economist at Kotak Mahindra Bank feels growth prospects may remain muted in the current financial year ending March 2020. "Growth in the economy had been supported primarily by consumption and government's focus on affordable housing, roads and infrastructure...However, the fiscal scope to support capex in FY2020 will be constrained given the tall ask from GST collections and higher revenue expenditure," said Bhardwaj, adding, private sector investment was also unlikely to see a sharp recovery given their weak balance sheets. Sachdeva of CARE is not expecting any pickup in industrial output for at least a few months due to increased likelihood of lower investment activity amid uncertainties surrounding the general elections.

Source: The Week

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Automated GST refund for exporters by next month

Exporters of goods and services as well as suppliers to SEZ units are likely to get GST  automatically from June as the revenue department plans to introduce faceless scrutiny of refunds and faster claim settlement, an official said. Under GST, every person making a claim of refund on account of 'zero-rated' supplies has two options. Either he can export without payment of integrated tax under Bond/ LUT and claim a refund of accumulated Input Tax Credit (ITC) or he may export on payment of integrated tax and claim refund thereof. Currently, the facility of automatic refund is available only for those exporters who have paid Integrated Goods and Services Tax (IGST) while exporting goods. Since the GST Network (GSTN) systems are integrated with Customs, hence, refunds are generally transferred to the bank accounts of such exporters within a fortnight. However, manufacturing exporters and suppliers to SEZ, who want to claim a refund of ITC, have to file an application in Form GST RFD-01A on the common portal and thereafter manually submit a print out of the form along with other documents to the jurisdictional officer. Once implemented, the time period for such refunds will come down to about a fortnight from months at present. "The revenue department and GSTN is working to make the process of seeking tax refund by all exporters faceless by next month. It would make the process faster and also help in eliminating fake refunds," an official told PTI. GST refunds of exporters run into thousands of crores and any delay in the processing of refund claims blocks working capital of exporters. AMRG & Associates Partner Rajat Mohan said fully computerized tax refund in case of export of services would be based on a comprehensively integrated GSTN system which connects with RBI servers to track the receipt of payments and link them automatically with invoice level information. "Tax refunds for inverted duty structure could also be copiously automated in future, however, it would require GSTN system to be loaded with HSN-enabled invoice level information by every vendor, so that only eligible tax credits could be processed without any human intercession," he added.

Source: Live Mint

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India's manufacturing cost up in January-March: Survey

India's production cost as a percentage of sales has risen during the January-March quarter, as per the quarterly survey conducted by the industry body and released late Sunday. The rise is seen due to increased cost of raw materials, wages, power cost, rising crude oil prices, increase in finance cost and rupee depreciation. The quarterly survey is conducted to assess the sentiment drawn from responses of over 300 manufacturing units from both large and small segments with a combined annual turnover of over 50 billion U.S. dollars. As per the survey, 72 percent respondents saw a rise in manufacturing cost during the quarter compared to 62 percent respondents last year. High raw material prices, cost of finance, uncertainty of demand, shortage of skilled labor, high imports, requirement of technology up-gradation, low domestic and global demand, excess capacities among others were the reasons behind the rising production cost, the release said. Overall, India's cement and ceramics along with textiles are expected to report strong growth while automotive, electronics, and leather and footwear will see low growth in the quarter, as per the survey. The rest of the sectors mentioned in the survey including chemicals, fertilizers, pharmaceuticals, capital goods, metals and metal products, paper products and textile machinery will see moderate growth during the quarter.

Source: Xinhua

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China may route its commercial presence in India through Bay of Bengal

 “Krishnapatnam port is the logical logistics solution for Andhra Pradesh, Telangana and Karnataka cargoes.” India’s outreach to the East and an escalating trade war between China and the United States is helping to turn the Bay of Bengal coastline into a new and attractive growth engine. In the backdrop of Shanghai, Guangzhou and Shenzhen — coastal cities which propelled China’s rise as the workshop-of-the world — India too appears to be stepping up its game of coast based manufacturing, focusing intensely on its eastern shores. “We have traditionally concentrated on the west coast because our economic engagement was mainly with the West. But with the global economy gravitating towards the Indo-Pacific, our east coast must also develop and ride Asia’s economic boom,” says Anil Yendluri, the Chief Executive Officer of Krishnapatnam port in Andhra Pradesh, in a conversation with The Hindu. But Mr.Yendluri, who was in Shanghai to co-host the India-China logistics forum, nevertheless, stressed that many overseas shippers were still not ready to take advantage of cost effective transit to growth hubs such as Hyderabad or Bengaluru from new ports cropping up along India’s east coast. “Krishnapatnam port is the logical logistics solution for Andhra Pradesh, Telangana and Karnataka cargoes. It is right in the center with Visakhapatnam port, further north and Chennai to the south,” said Mr. Yendluri. Besides, the port has a natural geographical advantage as it is not is the eye of cyclones that brew periodically in the Bay of Bengal. Anil Kumar Rai, India’s Consul General in Shanghai concurs with the assessment. “It is worthwhile to mention that these states (Andhra Pradesh, Tamil Nadu and Telengana) are important destinations for investments from China. Efficient container handling by Navyuga container terminal (at Krishnapatnam) may spur rapid economic growth, speedy industrialisation and better integration with the overseas supply chain,” he observes. Mr. Rai told The Hindu, that ports, including Krishnapatnam, that fall under the Sagarmala project — India’s integrated plan to build and revive sea and river ports connected with rail and road feeder lines to the hinterland — had taken a leaf out of China’s play book. “Initially ports were seen as handling bulk cargo. But if you see China’s growth story, the bulk cargo got converted to containerised cargo and vessel cargo. They (the Chinese) started deepening their sea ports so that bigger mega-size ships could enter, increasing cost-efficiency and reducing turnaround time,” Mr. Rai said. He added: “So similar kinds of things are taking place in India, and in the spirit of south-south cooperation, we have learnt from our development partner, China.” Mr. Rai diplomat spotlighted that there were bright prospects of Chinese companies, especially those making Active Pharmaceutical Ingredients (API) — the precursors for making medicines — contributing to a new phase of industrialisation along India’s east coast. “As of now many pharma companies, particularly those in the API space are closing shop or moving out of China. So, it may be a good option for us in India, if we can attract them to invest in Greenfield pharma-zones along the east coast,” Mr. Rai noted. He pointed out that development of the east coast is integral to India’s Act East policy. “Development of East coast is a way to integrate us with ASEAN, and of course the journey starts with our neighbours...If we get transshipment from Bangladesh bound for Myanmar, it would be much cheaper, and we would be better off to route cargo through the eastern ports rather than go through Singapore,” said the diplomat. Looking at the big picture, some Chinese businessmen view the escalating trade war between China and the United States, as a major factor that could inevitably deepen India-China ties. “If the trade deal (with the U.S.) fails to materialise, I am sure China will have to refocus on its global relationships. China will then find in India, a country that has the potential to compensate some of the financial impact of this disruption, in comparison to other markets in the world,” says Stanly K.L.Tsang, Managing Director of Ben Line Agencies (China) Ltd. — a global shipping company headquartered in Singapore. But he insisted that that extensive preparations, initiated by the two governments, were still required, to elevate China-India economic ties to an altogether new level.

Source: The Hindu

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US-China trade war: Why it is a double whammy for Indian markets

As predicted by IMF, the threat to the global economy seems real now. President Trump's focus will also shift to target other countries for such tariff hikes and India will be no exception. Escalating tensions between the US and China along with rising geopolitical tensions led to depressed sentiment across the global markets. Markets were rattled after a tweet by President Trump last Sunday stating that he would increase the tariff to 25 per cent from 10 per cent on $200 billion worth of Chinese goods and this was implemented during the week. He also threatened to impose 25 per cent tariffs on an additional $325 billion of Chinese goods "shortly." To which China said it would take 'necessary retaliatory measures' if U.S. tariffs are raised. The IMF said the worsening dispute posed a threat to the global economy. Closer home, the ongoing Lok Sabha elections are entering the final phase prior to the counting of votes and results on May 23rd. The various predictions about the fate of the incumbent Government too led to further nervousness on the street. The trade talks between US and China have now ended up with a “No Deal” and President Trump upped the rhetoric warning that China could face a far worse deal if the negotiations continue to the “second term” of President Trump in 2020, thus indicating that China should not hope and wait for a possibility of a Democrat President in 2020. As predicted by IMF, the threat to the global economy seems real now. President Trump’s focus will also shift to target other countries for such tariff hikes and India will be no exception. President Trump has stated that “India is a high tariff nation” and that he would consider imposing a reciprocal tax. On the other hand, China would get into a retaliatory mode which could finally extend to the allies of the warring nations leading to a full-fledged economic war. Thus, India carries the risk of getting affected directly as well indirectly. However, whether this gloomy scenario turns out to be an opportunity or a long-term risk for India is yet to be seen. Manufacturing in China could become more expensive going ahead, hence we could witness shift of manufacturing capacities to more conducive geographies, especially those with American parentage.

Could India be one among them?

Probably, if we get our act in place beyond the slogan of “Make in India” by providing a holistic solution, which would include ‘right skilled’ labor as well as labor and land policies, logistics and infrastructure, stability of the currency. Merely moving up the world rankings need not convert into action on the ground as those putting their money in India look deep beyond the headlines. Therefore, the policies of the new Government would be tracked closely by these groups who are looking to move their manufacturing base from China to India. Markets will, however, take into account the near-term negatives of the trade war along with the uncertainties the impending election results could throw up, leading to a volatile scenario. This could provide opportunities for long-term investors, especially those who have a vision and clarity beyond the haze.

Source: Business Standard

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China, South Africa keen on India's WTO proposal

It comes at a time when G-20 countries will meet in June with a focus to make global rules in e-commerce, that India is opposed to. China and South Africa have expressed keen interest in India’s proposal to safeguard the right of special provisions for developing countries, which have been challenged by the US. India’s proposal, that seeks to amend laws on unilateral action by members on trade issues, was circulated in Geneva among the 22 member countries who are participating in New Delhi’s mini ministerial meeting on Monday and Tuesday. “South Africa and China are excited about our proposal and the meeting,” said an official in the know of the details, adding that India may modify its proposal as per other countries, if need be. South Africa’s trade and industry minister Robert Davies and a 14- member delegation the largest- from China, led by assistant minister of commerce Ren Hongbin, will attend the meeting. These special provisions for developing countries, called special and differential treatment (S&DT) allow them longer time periods to implement agreements and commitments, measures to increase trading opportunities, provisions to safeguard their trade interests and support to build capacity to handle disputes and implement technical standards. The US has proposed withdrawal of such special rights and exemptions for emerging economies which are members of the Organisation for Economic Cooperation and Development (OECD), Group of 20 (G20), classified as “high income” by the World Bank or account for more than 0.5% of global merchandise trade.

DEVELOPMENT AT CORE

India’s mini ministerial meeting coincides with the beginning of text based negotiations, under a plurilateral arrangement among 77 counties, to develop global rules for ecommerce. China is a part of that group. It also comes at a time when G-20 countries will meet in June with a focus to make global rules in e-commerce, that India is opposed to. G-20 talks are a key input for the multilateral trade talks at the World Trade Organisation (WTO). Besides safeguarding the eligibility for S&DT, India’s proposal aims to resolve the impasse of appointment of judges at WTO. “We want to have development through S&DT as the core of WTO reform, along with appellate body appointments. We will also discuss ways to address asymmetries in various global trade agreements especially on agriculture,” the official added. As per a Delhi-based trade expert: “There is a clear realisation within developing countries that they will not be heard unless they stand together. This is an opportune time.”

Source: Economic Times

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'Manufacturing sector's sentiment positive in Q4 FY19'

The overall sentiment in the manufacturing sector was positive during the January-March quarter of financial year 2018-19, a FICCI report said on Sunday. Capacity utilisation in the manufacturing sector rose by 80 per cent during the fourth quarter (Q4), said the 'Quarterly Survey on Manufacturing'. "Overall sentiment in the manufacturing sector remains positive as the proportion of respondents reporting higher output growth (around 54 per cent) during the January-March 2018-19 has remained same as compared to Q3 of 2018-19," it said. On the hiring front in the sector, the report noted that the outlook for near future seemed to have marginally improved. "While in Q4 of 2017-18, 70 per cent respondents mentioned that they were not likely to hire additional workforce, this percentage has come down to 62.5 per cent for Q4 of 2018-19. Going forward it is expected that hiring scenario will improve further. Around 37.5 per cent in Q4 of 2018-19 as compared to 30 per cent in Q4 of 2017-18 are looking at hiring more people now." In the survey, the industry body assessed the sentiments of manufacturers Q4 2018-19 for twelve sectors including automotive, capital goods, cement and ceramics, chemicals, fertilizers and pharmaceuticals, electronics and electricals, leather and footwear, metal and metal products, paper products, textiles, textile machinery and tyres. Responses were drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.56 lakh crore, FICCI said. In terms of order books, 44 per cent of the respondents in January-March 2019 are expecting higher number of orders against 43 per cent in October-December 2018-19. The cost of production as a percentage of sales for manufacturers in the survey has risen for 72 per cent respondents against 62 per cent during the same period the previous fiscal, according to the report. "This is primarily due to increased cost of raw materials, wages, power cost, rising crude oil prices, increase in finance cost and rupee depreciation," said the report. On the outlook for investments, the report estimated "moderate" investment levels but said that it would improve marginally.

Source: Business Standard

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Need to breathe life back into WTO

Rich countries are pushing their agenda in areas such as e-commerce. Developing country interests should be safeguardedThese are challenging times for developing countries at the WTO. Ministers and officials of 23 Developing and Least Developed Countries (LDCs) will bear the brunt of the Delhi heat on May 13-14 to brainstorm trade issues of long-term consequences. India is hosting this informal ministerial of select WTO members. The four significant issues of concern to developing countries are: (i) Push for a new decision making model at the WTO — from the current all-member consensus principle to small group-based plurilaterals; (ii) Push for negotiations on e-commerce where understanding is limited; (iii) Push for abolishing flexibilities available to developing countries; (iv) Prevent the Dispute Settlement Mechanism (DSM) from becoming dysfunctional. Let us understand the key arguments of each issue. Plurilaterals: WTO members at the launch of the Doha Round in 2001 agreed for an ambitious development-centric negotiation agenda on agriculture subsidy, market access and services. However, big countries seem to have lost interest in these issues and are pursuing new subjects of interest to their corporates. This is the background for their pursuing plurilaterals. But could consenting members coming together to sign plurilateral agreements be an alternative to the consensus-driven decision making at the WTO? Even plurilaterals should be introduced only by consensus of all WTO members. Developed countries do not agree. They took the first step and proposed four plurilaterals in the last WTO Ministerial meeting at Buenos Aires in December 2017. Areas are e-commerce, investment facilitation, MSME and gender. As many as 70-100 members support these. But, should large participation legitimise the action? Developed countries can quickly get such numbers. Fifty LDCs with little domestic capacity say yes to them. Add OECD countries including 28 EU members and number crosses 100. Looking at the push from developed countries, many feel days of multilateral level rule-making may be numbered. And Agreement on Fishery subsidy slated for next year could be the last Multilateral Agreement of the WTO. The real game is between developed countries on one side and large developing countries such as India, Brazil, South Africa, and Indonesia, etc. on the other. China has already joined most plurilaterals. E-Commerce: This sector has most dollars at stake and hence is turning out to be the most heated. Large US technology firms dominate the digital economy space. Google and Facebook deal with data and services while Amazon sells goods. With a technology lead backed by deep pockets, they have no rivals in any country. Except for China, which followed a three-pronged strategy. It did not allow entry to Google or Facebook and gave a tough time to Amazon. It also developed national champions like Baidu and Tencent. China also introduced cybersecurity laws and other necessary regulations creating a robust ecosystem. Only after fortifying its interests, China has joined the e-commerce plurilateral negotiations. It is now in a position to negotiate global markets for Baidus and Tencents while preventing the free run of Google or Facebook. India has taken steps to introduce e-commerce policy framework, online data protection and data localisation rules. These need to be expanded and woven into a central law. India also needs to promote national champions. But nurturing firms needs active government support. Imagine one obscene or hyper-national rant on an Indian platform and the promoter lands in jail. Who bothers about such things on Google or Facebook? On their part, the US, EU, and Japan are in a great hurry to have WTO rules on e-commerce. The US wants no restrictions to data flow, the EU wants full protection of personal data, while others like India, countries of Africa and Indonesia feel it’s too early to make global rules at the WTO. Members that are interested may sign FTAs. Countries are still grasping the significance of issues like data flow, server localisation, mandatory disclosure of source code, etc. Here is an example, how half-baked understanding does not help. One country prescribed disclosure of source code as a necessary condition for grant of business. Firms from most countries declined. Finally, a Chinese firm shared the code and got the business. It turned out that the code was dynamic and changed every moment. Signing a deal without complete understanding will throw such surprises. It would turn the world into a passive consumer with no place for domestic firms. Special and Differential Treatment: SDT are flexibilities allowed by WTO to developing countries and LDCs in implementation of the WTO agreements. A few examples are (i) higher domestic support for agriculture, (ii) Export subsidy not to be treated as prohibited subsidy for developing countries with less than $1000 per capita income, (iii) longer implementation period under various WTO agreements like TRIPS. How SDTs were incorporated in the WTO agreements is interesting. Developed countries accepted SDT elements in return of developing countries agreeing to developed countries’ proposals on introducing non-trade subjects like intellectual property in the WTO. But now the US, EU and Japan argue that developing countries are sufficiently developed and do not need SDT which should be limited to LDCs alone. Most developing countries including India, China, and countries of the African group oppose this move. They argue that gap in the standard of living between developed and developing countries has only increased over the years and hence SDT must continue. Also, SDTs are part of the WTO agreement, so any change would require negotiations among all members. Dispute Settlement Mechanism: DSM has proven to be the most useful of the WTO bodies, settling over 500 trade disputes. But it is at risk of being dysfunctional with the US stopping the appointment of Appellate Body members. The US probably foresees that most of Trump’s action would fail the DSM test. It will stop functioning from December 2019 with the retirement of last of the three members. Without DSB, the WTO will lose its bite as countries cannot not be tried for violating WTO rules. WTO has been a fertile ground for the power play. But the developing countries secured a reasonable deal in the past by having a common position. Time will tell if they are lucky again.

Source: The Hindu Business Line

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Raymond looks to cash in on trade war; may raise garmenting capacity

Gautam Hari Singhania-led textile major Raymond is exploring the possibility of enhancing its garmenting capacity as the ongoing trade war between the US and China opens up fresh opportunities for Indian textile companies. Raymond Group, which manages garmenting business through its wholly-owned subsidiaries — Silver Spark Apparel (suits), EverBlue Apparel (jeans wear) and Celebrations Apparel (shirts) — is exploring opportunities in Andhra Pradesh, Telangana and Jharkhand based on the incentives these States offer.

New segments

The company has lined up a capital expenditure of ₹ 250 crore for this financial year and entering into new segments such ethnic wear through khadi brand and women’s workwear. The company recently completed a project to produce 4.2 million metres linen fabric per year in Amravati. Sanjay Behl, Chief Executive Officer, Raymond, in an interaction with BusinessLine, said the company has bagged an order from one of the US’ largest bespoke players that had moved 20-25 per cent of its production from China. The supply started three months ago and will be scaled up in the coming months, he said. “I am actively evaluating Telangana and Andhra Pradesh for garmenting. About 95 per cent of garmenting labour is done by women and it becomes the second income in a household. A small facility can generate jobs for 3,000-5,000 women and it is good for the State,” he said. Jharkhand offers attractive incentive for garmenting industry and a few competitors have moved in and Raymond is also evaluating it, he added. Though, he said, the focus now is on up-selling present capacity and improving value realisation. “As we are doing this, we are evaluating some more capacity if it comes at a lucrative economic proposition,” he said.

Exports looking up

Portfolio buying for US retailers earlier was 90 per cent China and 10 per cent the rest of the world but this has started moving to 65 per cent China and 35 per cent others, said Behl. India has managed to beat competition from countries such as Bangladesh, Vietnam and Sri Lanka, which enjoy duty-free access to the US market. Behl said the minimum wage in Bangladesh was almost half of that in India, but in last six months it has gone up by 55 per cent. So, the relative advantage of duty is somewhat negated, he added. On the other hand, here the government has given 4-6 per cent export incentives to the garmenting industry in the last two months. Earlier, this was subsumed into GST but now it is given as incentive.

Source: The Hindu BusinessLine

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Global Textile Raw Material Price 13.05.2019

Item

Price

Unit

Fluctuation

Date

PSF

1241.64

USD/Ton

0.12%

5/13/2019

VSF

1779.00

USD/Ton

0%

5/13/2019

ASF

2527.21

USD/Ton

0%

5/13/2019

Polyester    POY

1207.97

USD/Ton

0%

5/13/2019

Nylon    FDY

2694.13

USD/Ton

-2.13%

5/13/2019

40D    Spandex

4612.23

USD/Ton

-0.32%

5/13/2019

Nylon    POY

2708.77

USD/Ton

0%

5/13/2019

Acrylic    Top 3D

1347.06

USD/Ton

0%

5/13/2019

Polyester    FDY

3016.25

USD/Ton

0%

5/13/2019

Nylon    DTY

5534.68

USD/Ton

0%

5/13/2019

Viscose    Long Filament

1456.88

USD/Ton

0%

5/13/2019

Polyester    DTY

2591.63

USD/Ton

-1.12%

5/13/2019

30S    Spun Rayon Yarn

2496.46

USD/Ton

0%

5/13/2019

32S    Polyester Yarn

1969.35

USD/Ton

0%

5/13/2019

45S T/C    Yarn

2847.87

USD/Ton

0%

5/13/2019

40S    Rayon Yarn

2372.00

USD/Ton

0%

5/13/2019

T/R    Yarn 65/35 32S

2108.45

USD/Ton

0%

5/13/2019

45S    Polyester Yarn

2503.78

USD/Ton

0%

5/13/2019

T/C    Yarn 65/35 32S

2781.98

USD/Ton

0%

5/13/2019

10S    Denim Fabric

1.35

USD/Meter

0%

5/13/2019

32S    Twill Fabric

0.80

USD/Meter

0%

5/13/2019

40S    Combed Poplin

1.07

USD/Meter

-0.14%

5/13/2019

30S    Rayon Fabric

0.62

USD/Meter

0%

5/13/2019

45S    T/C Fabric

0.69

USD/Meter

0%

5/13/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14642 USD dtd. 13/05/2019). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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China slaps tariffs on $60 billion in U.S. goods

China has announced it is raising tariffs on $60 billion in U.S. goods in retaliation for the latest levies on its exports announced last week by the Trump administration. The Chinese finance ministry said Monday that it, effective June 1, it will impose duties of 5% to 25% on hundreds of U.S. products. American-made goods subject to the tariffs include batteries, household appliances, spinach, coffee, construction equipment, rubber, and leather and cotton textiles. That followed Trump's increase Friday of duties on $200 billion of Chinese imports from 10% to 25% in a dispute over Beijing's technology ambitions and trade surplus. According to Morgan Stanley economists, the tariff hike could trim China's annual economic growth by 0.5 percentage points. That impact could grow if uncertainty prompts companies to cut jobs or postpone investment, they said. Stocks dive as trade dispute flaresU.S. stock markets tanked in opening trade Monday, following a downdraft in global financial markets. The Dow dived 511 points, or nearly 2% with the broader S&P 500 and tech-heavy Nasdaq sinking more than 2%.The dispute between the world's two largest economies is likely to get worse before it gets better. Goldman Sachs analysts think the Trump administration will propose another volley of tariffs on more than $300 billion in Chinese imports. But they note the process to implement the measures would take roughly two months to complete, offering a window for U.S. and Chinese negotiators to conclude a trade deal. "Trade talks between the U.S. and China are likely to continue, despite the resumption of tit-for-tat tariffs," Freya Beamish, chief Asia economist for Pantheon Macroeconomics, said in a research note. President Donald Trump say Americans benefit from such tariffs, crediting them in a tweet on Monday for boosting U.S. economic growth. Over the weekend, however, White House chief economic adviser Larry Kudlow conceded that U.S. companies and consumers will also feel the pain. "Both sides will suffer on this," Kudlow said on "Fox News Sunday." Tariffs imposed by the Mr. Trump over the last year could cost an average family of four around $767 a year, one study from advocacy group Trade Partnership estimated in February. The "costs of the tariffs have fallen entirely on U.S. businesses and households," Goldman Sachs said in a client note.

Source: CBS News

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Trump warns China: Trade deal will be ‘far worse’ after 2020

President Donald Trump warned China on Saturday that it should strike a trade deal with the United States now, otherwise an agreement would be “far worse for them if it has to be negotiated in my second term”. Washington and Beijing are locked in a trade battle that has seen mounting tariffs, sparking fears the dispute will damage the global economy. Two days of talks ended on Friday with no deal. China’s top negotiator said the two sides would meet again in Beijing at an unspecified date, but warned that China would make no concessions on “important principles.” “I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win -- in which case they would continue to rip-off the USA for $500 Billion a year,” Trump said in a tweet Saturday.  “The only problem is that they know I am going to win (best economy & employment numbers in U.S. history, & much more), and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!” Trump had accused Beijing of reneging on its commitments in trade talks and ordered new punitive duties, which took effect on Friday, on $200 billion worth of Chinese imports, raising them to 25 per cent from 10 per cent. He then cranked up the heat further, ordering a tariff hike on almost all remaining imports -- $300 billion worth, according to US Trade Representative Robert Lighthizer -- from China. Those tariffs would not take effect for months, after a period of public comment. Trump also said on Saturday that firms could easily avoid additional costs by producing goods in the United States. “Such an easy way to avoid Tariffs? Make or produce your goods and products in the good old USA. It’s very simple!” he tweeted, echoing a similar message he sent Friday -- and even retweeted. Only a week earlier, the United States and China had seemed poised to complete a sweeping agreement. Washington wants Beijing to tighten its intellectual property protections, cut its subsidies to state-owned firms and reduce the yawning trade deficit; China wants an end to tariffs as part of a “balanced” deal. While supporters laud Trump as a tough negotiator, free-trade-minded Republicans have warned that the tariffs could do real damage to the economy, and many farmers -- including Trump supporters -- say the tariffs have hit their bottom line. As the trade war spread, China imposed $110 billion in duties on farm exports and other US goods.

Source: The Hindu Business Line

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Vietnam's cloth import up 8 pct in 4 months

Vietnam poured nearly 4.1 billion U.S. dollars into importing cloth in the first four months of this year, posting a year-on-year rise of 8 percent. Its largest cloth import markets included China, South Korea, and Japan, according to the Vietnamese Ministry of Industry and Trade on Monday. In the four-month period, Vietnam also imported 530,000 tons of cotton worth 988 million U.S. dollars, down 2.5 percent in volume and down 0.6 percent in value. Meanwhile, the country's yarn import totaled 800 million U.S. dollars, surging 11.2 percent on-year. In 2018, Vietnam poured 12.9 billion U.S. dollars into importing cloth, up 13.5 percent; over 3 billion U.S. dollars into importing cotton, up 28.5 percent; and 2.4 billion U.S. dollars importing yarn, up 32.7 percent. Vietnam reaped 30.4 billion U.S. dollars from exporting garments and textiles last year, up 16.6 percent against 2017, mainly to the United States, Japan and China, according to the country's General Statistics Office.

Source: Xinhua

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Gov’t urged to implement law on local fabrics use

ON Philippine exporters are pushing for a law on tropical fabrics that has not been implemented for more than a decade now, saying it could help revive the country’s textile industry. This was expressed by an official of the the Philippine Exporters Confederation Inc. (Philexport), who cited the lack of political will behind the implementation of the Philippine Tropical Fabrics Law NT Also known as Republic Act 9242, the 2004 law required the government to use Philippine tropical fabrics—such as from abaca and pineapple—for the uniforms of government officials and employees “It had no impact, no continuity. For some reason, they killed it immediately. It was implemented but it was suddenly gone,” Robert Young, Philexport trustee for textile, yarn and fabric sector, said in a phone interview In a separate statement, he said the law’s implementation would translate to more than 1.3 million metric tons of extracted tropical fabric, excluding cotton. Tropical fabrics, he explained, are harvested from plants, which are then mixed with cotton in order to manufacturer textiles. These textiles are used to make garments. A number of factors had played a part in the demise of the local textile industry, which is linked also to the fall of the local garment industry. These factors included the removal of quotas in textile and clothing trade, which scrapped the import quota allocated for these Philippine products since 1995. Young, who is also president of the Foreign Buyers Association of the Philippines (Fobap), recalled that the export of garments reached its peak during the early 1980s. However, textile imports later became tax-free, he said, which kept companies from using local textiles instead. “Eventually, this was abused by selling around 30 to 40 percent of the textiles to the local market, coupled with the rampant smuggling by independent importers. And so the end of the textile era,” he added.

Source: Business Enquirer.net

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Consumers may pay more for clothing, other textiles made in China due to tariffs

On Friday, the Trump administration raised tariffs on Chinese imports from 10% to 25%. China responded by placing similar tariffs on U.S. exports such as batteries, spinach, and coffee on Monday morning. Ben Brown, manager of Ohio State's Ohio Farm Management Program and expert on the continuing trade war, has followed the trade war very closely because of his work with Ohio’s farmers. He says consumers may eventually have to pay the price. "We also know that some of those costs have been passed on to to us as consumers," Brown said. "We haven't seen a huge price increase of goods so far, but going from 10 percent to 25 percent is a pretty sizeable leap.” The biggest hit to our wallets, likely won't be at the grocery store, but at the mall. Textile items with that ‘Made in China’ tag could be the most noticeable items to go up. "Clothing and material, anything to build and make fabrics is something that's heavily impacted by this," says Brown. When it comes to grocery shopping, you don't have to worry about fruits and vegetables costing more, since they don't come from China. "A lot of our produce we grow comes from the United States," says Brown. "If it's not coming from the United States, it's coming from Mexico or South America.” However, it's possible that other grocery store items could increase, but it's hard to say exactly what and when. “In the short term, if goods are coming from the Chinese and they're faced with this higher tariff, then I think we could see an increase in the grocery store for those goods," adds Brown. "It's a matter of where they come from.” One item that will increase, is pork, but that's not because of the trade war. Brown says it's because up to 40% of China's hog population is infected by the African Swine Fever. "We might see some increases in pork due to the decrease in world supply,” he said. Electronics like cell phones aren't included in this latest round, but Brown says he'd expect them to be included in the next one, which may have the biggest effect of all on American wallets.

Source: Fox28

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MINTEX pays Rs52.5bn to textile sector under PM exports enhance package

The Ministry of textiles has so far paid Rs 52.5 billion to the local textile industry under Prime Minister’s Exports Enhancement Package since July 2017, to help boost exports from the country, senior official in the ministry told APP. During the last 10 months, the ministry paid Rs10.5 billion to the textiles industry while it intends to pay more Rs10 billion during the couple days, the official said. During the upcoming year, the government would pay further Rs40 billion to the textile sector for value addition, which the official said would boost country’s external trade. The Exports Enhancement Package was aimed at bridging gap between exports and imports by encouraging the export oriented industry and incentivising the industrial sector for introducing the innovative, modern and cost cutting technologies, particularly in the textile industry. Replying to a question, he said that so far State Bank of Pakistan (SBP) has received the Rs 26 billion refund claims under the package, which he said would be processed accordingly He said in last seven months, the government had paid Rs 52.5 billion in terms of outstanding claims, adding that pending liabilities of Rs. 20 billion would be paid off in coming months. “The government is committed for the execution of PM export enhancement package for development and growth of the textiles sector for increasing country’s export,” the official added. He further said that increasing country’s exports and creating job opportunities for the people were the top most priorities of the government.

Source: Business Recorder

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What to know about the Pakistan-IMF deal

Islamabad has once again been forced to approach the lender but the loan is a stopgap measure and Prime Minister Imran Khan’s government has to take difficult steps to resurrect the economy. After months of back and forth talks, Pakistan has finally secured a badly needed $6 billion ‘bailout’ loan from the International Monetary Fund (IMF). While exact details of the deal haven’t been spelt out, the lender wants Islamabad to confront longstanding issues like low tax revenue collection and power sector reforms. The government of Prime Minister Imran Khan, who took office last August, has been criticised for dilly-dallying on IMF’s help for months in hopes that preferential loans and aid from allies can avert a balance of payment crisis. That didn’t work. Pakistan’s economy has slowed, prices of fruits and vegetables have shot up and exporters in the key textile sector have struggled. In sweeping changes to his cabinet last month, Khan removed finance minister Asad Umar, a close aide, and replaced him with a technocrat Abdul Hafeez Shaikh. This is the 13th time since the 1980s that Pakistan has entered an IMF programme, which will run a course of three years. Shaikh says Pakistan needs to come up with $12 billion this year to bridge the gap between its foreign currency holdings and what is required to pay for loans and imports.

Beyond the fund

Compared to Pakistan’s total foreign debt of $90 billion, the IMF loan comes to just around $2 billion a year, which doesn’t add up to much. But Saad Bin Ahmed, head of equities, at a Karachi-based brokerage house, says the deal helps restore the confidence of foreign investors, which is more important than the actual amount to be received from the fund. “Entering the programme was essential because it would allow you to raise money from the other avenues,” he told TRT World. “It gives an assurance to all the other players in the market that now you can support Pakistan because it’s getting disciplined.” IMF loans usually come with stringent conditions. Officials indicate that Islamabad would have to phase out subsidies from its power sector, go after influential tax evaders and curb financing of militant organisations. “Pakistan offers an opportunity to foreign investors in sectors such as food processing, energy and autos. Demand for these products hasn’t receded,” Ahmed says. Shaikh, the finance advisor, had taken Pakistan through its most successful privatisation period in the early 2000s when he was responsible for divesting government's stake in state-owned companies.

Raise the tax

One area where the IMF has put a lot of focus is tax collection. Pakistan has for years struggled to raise its tax revenue and bring more people and organisations under the tax net. In the six months between June and December 2008, its fiscal deficit—the shortfall in government revenue—increased to 2.7 percent of the GDP from 2.2 percent in same period of previous year. That was mainly because Islamabad is using more than half of its revenue to pay for loans and defence spending, which are a major burden on the economy. The deficit in the second half of last year was around $7 billion, which the government bridged by borrowing from local banks and friendly countries such as Saudi Arabia and China. The reliance of Khan’s government on domestic borrowing not just crowded out the private sector but also stoked inflation to more than 8 percent, which has raised tempers in the month of Ramadan. Earlier this month, Khan replaced the head of the country’s tax body, the Federal Board of Revenue, and appointed a reputed tax consultant to oversee the system.

Let it float

Under the agreement, the IMF is pushing Pakistan to let market forces decide the value of the rupee against the US dollar. The Pakistani Rupee has lost more than a third of its value in the past year. For two years, the State Bank of Pakistan has intervened in the foreign exchange market - buying and selling foreign currency - to artificially inflate the rupee, which badly affected exports. “And now we don’t know what the exchange rate is going to be in the next couple of weeks. There’s total confusion,” says Shabir Ahmed, a leading bedwear exporter. A sudden depreciation in the rupee’s value in recent months had added to an increase in the price of products such as baby milk, which the country imports. Yet a complete free float is not possible as the market doesn’t has the depth to manage the large difference between foreign currency that comes in and goes out of the country, says Saad bin Ahmed.  “IMF has been demanding this for years but I don’t see any major shift from how the rate is managed at the moment,” he says. Multiple IMF programmes, including the last which ended in 2016, haven’t helped Pakistan deal with weaknesses that have led to the balance of payments crisis. The last programme did help boost foreign exchange reserves for a time and made Pakistan’s capital markets attractive to foreign investors. However, that didn’t motivate the government to address more pressing issues. “Just like the previous government ( of ex Prime Minister Nawaz Sharif), this administration has not bothered to ask what we, the exporters, want,” says Shabir Ahmed. “I don’t see things getting better any time soon.”

Source: TRT World

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Nepal, Vietnam sign visa exemption agreement

Nepal and Vietnam have signed an agreement on visa exemption for diplomatic and official passport holders. The two countries have also signed a memorandum of understanding on establishment of bilateral consultation mechanism between the two ministries of foreign affairs and a letter of intent on negotiating and signing the framework agreement on trade and investment cooperation, reads a 16-point joint statement issued today after Nepal’s Prime Minister KP Sharma Oli held talks with his Vietnamese counterpart Nguyen Xuan Phuc in Vietnam. According to the joint statement, both sides underlined the need for establishing direct air service between the two countries and instructed the concerned ministries to consider an agreement on air services at the earliest to promote trade, investment, tourism and people-to-people contacts between the two countries. The Vietnamese side expressed its support to Visit Nepal Year 2020 saying it would send more tourists to Nepal, including Buddhist pilgrims to Lumbini. PM Oli and his Vietnamese counterpart discussed all aspects of bilateral relations, and exchanged views on regional and international issues of mutual interest. According to the joint statement, PM Oli expressed his admiration for Ho Chi Minh and congratulated Vietnam on its tremendous achievements in socio-economic development. PM Nguyen Xuan Phuc expressed his gratitude to PM Oli for having chosen Vietnam as his first destination in Southeast Asia since he took office in February 2018, underlining that the first visit of a Nepali prime minister to Vietnam would contribute to strengthening the multifaceted relations between the two countries in the coming days. The Vietnamese PM congratulated the people of Nepal for the historic political achievement and for its unique and homegrown peace process and its institutionalisation through a democratic constitution and the formation of a stable government. He lauded Nepal government’s efforts to bring about visible transformation in the living standard of Nepali people and expressed his best wishes for the realisation of the government’s vision of ‘Prosperous Nepal, Happy Nepali.’ Both leaders underlined cultural and historical similarities between their countries, and recognised the importance of Buddhism as a strong chord that bound the people of the two countries. The two leaders noted that both Vietnam and Nepal had to undergo various kinds of struggles to protect sovereignty, territorial integrity and national independence. Both sides welcomed practical commemorative activities to be held in 2020 for the 45th anniversary of their diplomatic relations and shared the view that PM Oli’s visit would pave the way for a new stage and an enhanced level of cooperation in tourism, trade and people to people contacts. Acknowledging the remarkable progress in bilateral relations on the basis of mutual understanding and trust, the two leaders shared the vision of further widening and deepening Vietnam-Nepal friendship. Recalling their meeting on the sidelines of the World Economic Forum in Davos in January 2019, the two leaders agreed to enhance mutual visits and exchanges at all levels between their political parties, governments, legislative institutions, local bodies and people. Both leaders shared the assessment that their bilateral economic and trade cooperation remained far below their potentials and strengths. They welcomed the renewal of the MoU on cooperation between Vietnam Chamber of Commerce and Industry and Nepal Chamber of Commerce in April 2018, and tasked their authorities concerned with exploring ways to establish bilateral economic and trade cooperation mechanisms, encouraging their businessmen to survey each other’s market and participating in trade promotion activities, particularly in areas such as electric appliances, coffee, tea, seafood, textile and leather footwear. The two leaders also agreed to explore new areas of cooperation, including energy, renewable energy, high-tech agriculture and tourism. Both leaders agreed to look into proposals of market access for agricultural products that held competitive edge; encourage information exchange and cooperation in agricultural science and technical research, and promote exchange of agricultural experts. Recognising the desire of Nepal to graduate from least developed country status at an early date, the Vietnamese side welcomed further imports of Nepali products to Vietnam’s market and agreed to encourage Vietnamese investors and entrepreneurs to invest in productive sectors in Nepal. Likewise, both sides agreed to exchange experience of law enforcement, information on criminals and consider negotiation and signing of agreements in order to create legal framework for their cooperation in combating crimes, and for criminal justice, with immediate priority given to the signing of an agreement between the Ministry of Public Security of Vietnam and the Ministry of Home Affairs of Nepal on preventing crime and combating it.

Source: Himalyan Times

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Pak-Turkey FTA to be signed by mid of June

The Free Trade Agreement (FTA) between Pakistan and Turkey is likely to be signed by mid of June, a senior official in Ministry of Commerce said. The decision in this regard was made after the conclusion of 9th round of negotiation between the two sides. Talking to APP, the official informed that during the last round of negotiation, the two sides agreed on final list of tariff lines and Turkey also agreed to give duty free access to local textile product in its market. The dialogue on FTA between the Pakistan and Turkey would conclude in June, followed by a final agreement to boost bilateral trade, he said. The official said that Pakistan would finalise the FTA with Turkey under the Pakistan-Turkey Strategic Economic Framework (SEF) plan of action. He added that the proposed sectors for enhancing the cooperation include textile, tourism and culture, investment in industrial cooperation, auto industry, agriculture, banking and finance. Turkey, he said was also agreed on treatment basis of offering lowest tariff on all tariff lines which was given to the other trading partners in the past. The ministry official further said that through the FTA, both sides agreed to increase business to business relations for enhancing cooperation between the business communities of the two countries. Replying to a question, he said that industrial and investment cooperation was also on the card through the Memorandum of Understanding (MOU) between the boards of investment of Turkey and Pakistan for cooperation and facilitation in local Special Economic Zones (SEZs). He informed that the two countries can increase bilateral trade to $6.5 billion in the short term from the existing level of $6 billion. Pakistan’s top 20 high-potential exports can go up from $400 million to $2.6 billion, while Turkey’s top 20 high potential exports to Pakistan can be enhanced to $2.6 billion from $200 million. The country’s major exports to Turkey included denim PET, ethanol, cotton yarn, fabric and rice, garments, leather, carpets, surgical instruments, sports goods, and chemicals.

Source: Pakistan Today

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