The commerce ministry is considering a major export promotion scheme to ensure expeditious refund of central and state taxes and levies to boost shipments in the wake of global challenges at trade front, an official said. The proposal is part of a 100-day action plan prepared by the ministry for the new government which will take office on May 30. A new export promotion scheme has become necessary as the existing merchandise exports for India (MEIS) scheme is being opposed by the US in the World Trade Organisation (WTO), stating it is not in compliance with global trade norms, the official said. The new scheme could be named as Central and State Taxes and Levies Scheme. According to the proposal, the new scheme would ensure refund of all un-rebated central and state levies and taxes imposed on inputs that are consumed in exports of all sectors. Major un-rebated levies are - state VAT/ central excise duty on fuel used in transportation, captive power, farm sector; mandi tax; duty of electricity; stamp duty on export documents, purchases from unregistered dealers; embedded CGST and compensation cess coal used in the production of electricity. Initiatives by Commerce and Industry Minister Suresh Prabhu has helped in taking exports to an all-time high of USD 331 billion in 2018-19. The ministry has also proposed to Introduce a WTO compliant production-based support scheme to increase outbound shipments. The department of commerce is consulting with all the concerned stakeholders to frame this scheme to promote high potential sectors like electronics, telecom, hi-tech engineering, medical devices, pharmaceuticals, and technical textiles. "We are consulting the stakeholders to propose production-based government assistance. We will finalise the architecture of the scheme very soon," the official said. Any government support which is subject to export performance becomes a prohibited subsidy under WTO norms. The ten-point action plan has also proposed the launch of a new five-year foreign trade policy (2020-25) on September 1 this year and promote shipments of the services sector. The current policy will end in March 2020. The policy provides guidelines for enhancing exports with the overall objective of pushing economic growth and generating employment. "The new policy would include new export schemes while retaining important existing schemes. It will also include modern IT system with end to end IT enablement of all interfaces and processes of DGFT (directorate general of foreign trade) with exporters and other ministries/ agencies," the official said. The other proposals include resolution of WTO issues like on agriculture sector; steps to revive special economic zones (SEZs), implementation of agriculture export policy; disbursal of funds under Trade Infrastructure for Export Scheme and promotion of Government e-marketplace (GeM) portal for public procurement. For SEZs, the ministry has proposed measures such as uniformity in administrative and financial matters among all zones; an integrated online portal for processing new investment requests, easy operational and exit-related matters, procedural relaxations. Besides, the commerce ministry would consider allowing alternate sectors to invest in sector specific SEZs, the flexibility of long term lease for developers and tenants, facility of sub-contracting for customers outside these zones and flexibility in usage of non-processing area by developers. "We need bold measures to revive investment, promote manufacturing and exports from SEZs. The new SEZ policy needs to be future ready, investor-friendly and correspond to global market needs," the official added. The ministry has also planned to roll out national logistics policy, multi-modal logistic policy, integrated national logistics action plan, and logistics planning and performance management tool. "Multi-Modal Transportation of Goods bill will be introduced in Parliament. The new bill will replace the existing MMTG Act, 1993. The new Bill introduces new concepts like regulation of self-regulatory agencies etc," the official said. Prabhu has taken a series of steps to cut logistics time and cost to push both domestic and foreign trade.
Source: Business Today
The textile industry body said that while the ongoing US-China trade war presents an opportunity to Indian textile manufacturers to enhance their exports to the US, China too would be looking for new markets for its products. Confederation of Indian Textile Industry (CITI) has cautioned the government to tread carefully while negotiating for the proposed Regional Comprehensive Economic Partnership (RCEP) trade agreement and not to cede space to China in the global textiles and clothing (T&C) sector. “India's trade deficit with China in the textiles and clothing sector is likely to be widened once RCEP is concluded and could be detrimental for its domestic textile manufacturers,” said CITI Chairman Sanjay Jain. The textile industry body said that while the ongoing US-China trade war presents an opportunity to Indian textile manufacturers to enhance their exports to the US, China too would be looking for new markets for its products. “The RCEP trade scenario reveals that India must tread cautiously, particularly with China, as half of India’s T&C trade in RCEP is with China, with which it had a big trade deficit of almost $1 billion in 2018”. This is critical as China is already re-routing its textiles into India through Bangladesh and Sri Lanka. India registered trade deficit in 2018-19 with as many as 11 Regional Comprehensive Economic Partnership (RCEP) member countries - including China, South Korea and Australia - out of the grouping of 16 nations that are negotiating a mega trade pact since 2012, The RCEP bloc comprises 10 ASEAN members and their six FTA partners - India, China, Japan, South Korea, Australia and New Zealand. There is pressure on India to conclude the pact this year amid domestic industry especially steel, aluminium, copper and dairy opposing it.
Source: Economic Times
The commerce ministry under outgoing trade minister Suresh Prabhu has come up with a World Trade Organization (WTO)-compliant export promotion scheme along with a production based support scheme to boost Make In India as part of its 100-day action plan ahead of prime minister-designate Narendra Modi’s swearing in ceremony on Thursday. The new export promotion scheme may replace the existing Merchandise Export from India Scheme (MEIS) as the US has challenged India’s existing export subsidy schemes at the WTO on the grounds of its incompatibility with multilateral rules. “The new scheme will be on the nature of refund of all un-rebated central and state taxes and levies scheme on inputs consumed in exports in all sectors," a commerce ministry official said on condition of anonymity. The major un-rebated levies are state value added tax/ central excise duty on fuel used in transportation, captive power and farm sector, mandi tax, duty on electricity, stamp duty on export documents, purchases from unregistered dealers, embedded central goods and services tax (CGST) and compensation cess, coal used in production of electricity. The production-based support scheme will also aid Indian exporters in the absence of an export subsidy scheme and promote Make In India. “Promotion of certain high potential sectors like electronics and telecom, hi-tech engineering products, medical devices, pharmaceuticals, technical textiles is very essential. We are consulting the stakeholders to propose a production-based government assistance. We will finalize the architecture of the scheme very soon," the official said. Under the special and differential provisions of the WTO’s Agreement on subsidies and countervailing measures, so-called least-developed countries and developing countries whose gross national income (GNI) per capita is below $1,000 a year at the 1990 exchange rate are allowed to provide export incentives to any sector that has a share below 3.25% in global exports. However, they need to stop all export incentives if per capita GNI crosses $1,000 for three straight years. According to a notification by the committee on subsidies and countervailing measures in 2017, India’s per capita GNI crossed $1,000 for three consecutive years in 2015. India has argued that as countries that were already above $1,000 were given eight years to adjust to the new regime, it should also get similar time to change its exports policy. The commerce department has also started work on launching a new five-year foreign trade policy on 1 September as the term of the current policy is set to end on 31 March 2020. “The thrust of the new foreign trade policy would be to boost exports of goods and services which are bought in large values by the world and where India has strong competitiveness. The launch of the new foreign trade policy will also include the state of art information technology (IT) systems with end-to-end integration with all agencies," the official said.
Source: Live Mint
The Commerce Ministry has come out with a comprehensive draft of the export policy which includes product- specific rules with a view to provide a ready reckoner for exporters. “Based on inputs received from various partner government agencies, it is proposed to bring out a comprehensive exports policy for all ITC (HS) tariff codes (including items which are ‘free’ for export and do not currently exist in the policy), covering conditions/restrictions imposed by partner government agencies on exports,” the Directorate General of Foreign Trade said. The draft policy aims at consolidating the export norms for each product as applicable at different government agencies. ITC-HS Codes are Indian Trade Clarification based on Harmonised System of Coding. It was adopted by India for import-export operations. Every product has been accorded eight digit HS codes. The compendium will help an exporter know all the applicable norms pertaining to a particular product, helping him/her understand policy conditions for that item.
Consolidating norms
This exercise is for consolidating the norms and not for making any changes in the existing export policy of the country. The DGFT said that the updated draft had been prepared by including all existing policy conditions, all notifications and public notices issued after January 2018. Besides, it also includes non-tariff regulations imposed by different government agencies. Commenting on the move, exporters body Federation of Indian Export Organisations (FIEO) said that it would provide a “ready reckoner” for traders and help in digitisation. “It will help exporters in understanding export norms and conditions for items,” FIEO director general Ajay Sahai said. The directorate had sought the views of all stake holders on the draft. A similar policy exists for import purposes also. While Schedule 1 deals with imports, Schedule 2 deals with export related matters.
Source: The Hindu
India Inc on Monday pitched for lower tax rates for individuals and corporates in the first Budget of the new Narendra Modi Government. The Budget is likely to be presented during the first fortnight of July. A delegation from industry chamber Confederation of Indian Industries (CII) under the leadership of its President, Vikram Kirloskar, met Revenue Secretary Ajay Bhushan Pandey and submitted its pre-Budget memorandum. Earlier, another industry chamber, FICCI presented its pre-Budget memorandum. The CII said the Budget should announce the direction of the taxation policy. The government must ensure consistency, certainty and continuity of taxation policies for the next five years. India currently has one of the highest corporate tax burden among comparable economies. In addition to corporate tax and dividend distribution tax, MAT (Minimum Alternative Tax) is also levied. A lower tax rate is the need of the hour for growth and investment, the CII said. The chamber emphasised that GST data could be leveraged to further widen the direct tax base, using big data. Several suggestions were made on direct tax structure. It said the dividend distribution tax should be rationalised to 10 per cent and should be taxed at the hands of the recipient. Long Term Capital Gains tax on equities and MAT should be removed, it said. FICCI advocated lowering of the corporate tax rate for all companies to 25 per cent, as had been proposed earlier. This will enable industry to remain globally competitive, especially in the wake of significant cut in corporate tax rates by countries like the US and France. It also recommended that the direct income tax slabs for individuals be revised upwards. The highest tax rate of 30 per cent should be applicable only for income above ₹20 lakh. The investment limits under Sec 80C, Sec 80D and deduction for interest paid on housing loan under Sec 24, etc must be enhanced. These measures would put more disposable income with households and boost overall consumption.
Employment
The CII President said employment creation needs a strategic boost, including from the lens of revenue generation. The key sectors to be propelled for more job generation include the tourism ecosystem, the textiles to garments value chain, and farm-to-fork supply in the agriculture and food processing sector. “End-to-end supply chains in the auto industry, construction sector and retail sector also require strong policy attention,” he said, calling for a mission mode approach to generate jobs in these sectors. According to FICCI, creating employment should be an intrinsic factor while preparing the Budget. Greater public investments across sectors like infrastructure will create significant employment opportunities. The chamber called for greater budget allocation in these areas. “Additional fiscal incentives should be provided to sectors with potential of creating large employment opportunities such as textiles, leather, food processing, gems &jewellery, footwear, tourism, real estate, etc,” it said.
Financial sector
For revitalising the financial sector, the CII recommended allocation of sufficient resources for bank recapitalisation as this will improve banks’ capacity to lend and meet credit demand. The government stake in public sector banks should be reduced from 70 per cent to 51 per cent to enable capital infusion and promote efficiency in public sector banks.
Source: The Hindu Business Line
The ‘Social and Labor Convergence Programme (SLCP),’ an initiative to have a standard-neutral, converged assessment framework for the textile and clothing industry, will be launched in India shortly. According to K.V. Srinivasan, chairman of The Cotton Textiles and Export Promotion Council (Texprocil), the issues of social and labour compliance had become highly relevant in labour-intensive industries, including in the textile and clothing sector. The SLCP is not a code of conduct or compliance programme. The converged assessment framework is a tool developed by the SLCP, which provides a data set with no value judgment or scoring. It is, however, compatible with existing audit systems and codes of conduct. This means that the same data set can be used by a wide-range of stakeholders. It eliminates the need for repetitive audits to be carried out on the same facility. A statement said the initiative is led by world’s leading manufacturers, brands, retailers, industry groups, non-governmental organisations and service providers. The objective of the initiative Its aim is to improve the working conditions in textile units by allowing resources that were previously designated for compliance audits to be redirected towards the improvement of social and labour conditions. This is a voluntary adoption by the textile and clothing makers. For the exporting units, it will reduce the number of social audits and facilitate measuring of employment practices, thus improving working conditions and employee relations. It also redeploys resources towards improvement actions and fosters collaboration between supply chain partners. The SLCP would be holding free seminars at Mumbai, Bengaluru, Tiruppur, and New Delhi and will launch operations in India, China, Sri Lanka and Taiwan this month.
Source: The Hindu
Deshpande urged the PM to encourage establishing of industries like textiles, toys and those in the services sector that are labour-intensive. Revenue minister RV Deshpande on Sunday urged Prime Minister Narendra Modi to respond to the slowing economy by slashing goods and services tax (GST) rates, which he said, will give a leg-up to the manufacturing sector in these times of serious crisis. The PM’s steps on the GST front will have a positive effect on employment as youths are getting desperate with the economy adding no new jobs. The minister, who has written a letter to the Prime Minister congratulating him on the NDA’s win, told ET that the GST slabs are just one or two in many parts of the developed world. Minimum number of slabs will help tax administration and compliance, he said. India currently has four slabs of 5%, 12%, 18%, and 28%. “We have the peak rate of 28% which I think is very high. The economy is in a bad shape today and the manufacturing sector is in deep pain. And high GST rate is hurting the industry,” he said. The Prime Minister, he added, has implemented GST which was conceived during the UPA regime, and now he must carry forward bold reforms on the GST front. “I hope the PM will recognise slowing down economy and liquidity issues the industry is facing,” he said. Deshpande urged the PM to encourage establishing of industries like textiles, toys and those in the services sector that are labour-intensive. The Centre, he said, could link incentives and concessions for these sectors to their employment generation capacity. The minister also urged the PM to pay urgent attention to handling natural calamities and devise lasting solutions by moving away from temporary measures, as a response each year. He gave the example of Karnataka, which in the last 18 years had sufficient rainfall only for four years, but severe drought for 14 years. Normally, states are relying on temporary measures to mitigate disastrous situations such as drought and floods. But no state has given the priority to find permanent remedy such as diversion of river, rejuvenation, preservation and inter-linking of water bodies, forest conservation, etc, Deshpande said.
Source: Economic Times
A bilateral trade pact will be skewed against India’s interests. A better option is to address the current trade irritants. While the government formulates its policy priorities for NDA-II, grappling with the challenges confronting India-US trade ties is likely to be high on the agenda. How this thorny issue is addressed by the government could have far reaching implications for India’s economic growth. India’s list of grievances against the US include problems encountered by its exporters of IT services, tariffs imposed by the US on exports of steel and aluminium products and the threat of the US to remove India from the list of developing countries enjoying preferential access to its markets. US complaints include perceived barriers erected by India to its exports, India’s recent measures related to e-commerce and its perennial criticism of India’s intellectual property laws. At the WTO, the two countries have divergent positions on many issues, including the crisis at the dispute resolution mechanism and WTO reform. In order to iron out the trade friction between the two countries, some strategic experts and foreign policy analysts have suggested that India should work towards a comprehensive bilateral trade deal with the US. No doubt it should be a high political priority for India to have an enduring and mutually beneficial trade link with the US. However, any move by India for a comprehensive trade deal with the US should come only after a detailed examination of the fundamental reasons bedevilling trade relations between the two countries. Despite the gradually deepening links between India and the US on geo-political issues, why have the two countries failed to forge deeper trade ties? Even a superficial analysis of the interests of the two countries would make it obvious that the path to strengthened trade relations is fraught with hurdles, many of which are insurmountable. How does the US wish-list stack up against India's interests and concerns? At least six grounds of concern arise from an India-US trade deal. First, as the average tariffs in the US is 3.4 per cent, India’s exports are unlikely get any significant boost, even if the US were to reduce its existing tariffs to zero. Second, India would be conceding considerable market access to the US by reducing/eliminating its tariffs from the existing average level of 13.8 per cent. As India is not price competitive in a large number of products, the country may find it extremely difficult to face import competition under a zero-duty regime. This would pose severe risk to the manufacturing sector and could frustrate the Make in India flagship initiative of NDA-1.
Farmers at risk
Third, on the agriculture front, India’s farmers will be continuously exposed to the risk of being knocked out of the market by cheap and subsidised imports from the US. Tariff as a policy instrument would not be available to the government to regulate such imports. The consequences of such a situation can be extremely alarming. In particular, the horticulture sector, dairy sector and wheat would come under extremely intense pressure from US imports. Prospects of doubling farm income is likely to get dented by a comprehensive trade deal with the US. Fourth, on the IPR front, India will get confronted by US to agree to its onerous demands, particularly for extending the monopoly protection enjoyed by the US pharmaceutical companies in India. This would require India to make crucial changes to its domestic laws and regulations, which would eventually destroy the generic pharmaceutical industry in the country. This would result in sharp increase in prices of medicines, thereby compromising the health of the sick and the needy in India. Fifth, the India-US trade deal would significantly erode the policy space currently available to the government to nurture the fledgling domestic digital economy in India. We are already witnessing a strong backlash unleashed by the US-based digital giants against some of the recent actions of the government, including data localisation for credit cards and the press note seeking to contain the unfair practices indulged in by retail platforms. The trade deal will certainly be used by the US-based digital giants to ensure that their interests in India are strongly protected. This will compromise the digital future of our country. Would the trade deal help India secure greater market access for its exports of services to the US? If the past FTAs of the US are an indicator, the US is extremely unlikely to agree to India’s demands for more access for its professionals under Mode 4 of Services. Further, given the strong emotions unleashed in the US against immigration, the US is not likely to show any flexibility to India in allowing seamless movement of professional. On the other hand, India would be required to grant considerable access to US firms in many sectors, including for financial services.The proponents of the India-US trade deal are also optimistic on two issues, both of which need careful scrutiny.
Tech bogey
First, some experts have claimed that the trade deal will enhance India’s access to high technology. This is not only incorrect, but also goes against the grain of the consistent stand of the US at various inter-governmental forums that technology transfer is governed by patents; and that it cannot direct its firms to share high technology. In short, the trade deal will certainly not have provisions that would facilitate technology transfer. Another aspiration being articulated by some supporters of the trade deal is that it will enhance US investments in India. However, the link between bilateral investment protection treaty (BIT) and investment inflows is extremely weak. On the contrary, based on a rigorous empirical exercise, UNCTAD’s Trade and Development Report (2014) has concluded that “BITs appear to have no effect on bilateral North-South FDI flows”. It is, thus, unlikely that the India-US trade deal will result in enhanced investment inflows from the US into India. In conclusion, the stark reality is that a bilateral trade deal with the US would be extremely skewed and loaded against India's economic interests. The injurious consequences for India would far outweigh the export gains of a few billion dollars. The proponents of the trade deal need to examine the nuts and bolts of a potential treaty and objectively assess its economic impact on the country. India must not fall into the dangerous trap of initiating negotiation for a comprehensive trade deal with the US. Instead, the two countries must continue to talk and address individual irritants in trade ties. The time for a comprehensive India-US bilateral trade deal has not yet come. The writer is Head of Centre for WTO Studies, Indian Institute of Foreign Trade.
Source: The Hindu Business Line
Domestic crude oil production during April stood at 2.71 million tonnes while gas production was at 2655.89 million standard cubic meters (mscm). According to data shared by the Ministry of Petroleum and Natural Gas, India’s crude oil production during April was 6.94 per cent lower than April 2018 levels. Natural gas production was at 0.26 per cent lower than April 2018 production. Refinery production was at 20.70 million tonnes, 4.28 per cent higher compared to April 2018 production.
Source: The Hindu Business Line
India needs to focus on becoming a new powerhouse as a global hub for exports to cash in on US-China trade war. In the major trade standoff between China and the US, US President Donald Trump is steadfast in his approach of raising tariffs and using other policies for pressurising China. On his part, China’s President Xi Jinping has indicated that China will not give in to pressure from the US. “We are now embarking on a new Long March, and we must start all over again,” Xi stated recently. Even if solutions emerge, the problem will keep festering. Thus major international firms that invest in China are examining options to spread their risks and shift some of their existing and new investments to other countries. Several persons have written about the possibility of India benefiting through increasing exports to the US and a shift of foreign direct investment (FDI) to India. However, to substantively benefit from this situation, India requires a strategic approach to convert this opportunity into a major gain. India needs to focus on becoming a new powerhouse as a global hub for exports, with a major positive impact on competitiveness and job creation. China’s merchandise exports are almost the same as India’s GDP. Even a 10% shift from Chinese exports to Indian exports would imply over 75% increase in Indian exports. India needs to develop a strategy and vision for itself and the world to make this a reality. Its recent tepid export performance suggests that investment from large global companies is the transformative path for India, provided certain key points are kept in mind.
Moving Up The Value Chain
First, India is only one among the alternative countries being considered by major international companies as an investment destination. Indonesia, Malaysia, Mexico, Thailand and Vietnam all have relatively easier access to large markets. Second, India’s domestic market is large, but the focus of most large firms with major international brands and global presence is on exports and maintaining their global value chains (GVCs). China’s 2018 exports to the US at $560 billion were nearly double of India’s total exports. According to United Nations Conference on Trade and Development (Unctad), multinational companies account for 80% of GVCs. Third, India’s aspirations to double its exports and create jobs depend on its success to link up effectively with GVCs. As the seventh largest global economy and the 20th largest goods exporter, India is not yet a significant presence in GVCs. Fourth, to establish domestic capacity for export hubs and GVCs, strong presence of ‘lead firms’ that manage the GVCs becomes essential. These ‘lead firms’ are usually those with major global brands that can place their exports in most markets of the world. Fifth, for competing with other nations to attract major investments away from China, India needs to emphasise and improve implementation of support policies, with a new flagship programme, ‘India: Making for the World’. Major global companies make investment decisions significantly based on ease of operational conditions and stable policy regimes. All alternative countries under consideration focus on creating and effectively implementing investment-friendly regimes - that is, taking a step beyond policy announcement. It is noteworthy that even China, in these difficult times, is increasing its incentives and project support to retain and attract additional investment. Even with a trade war, US investment in China during January 2019 reportedly doubled, with foreign capital in China’s hi-tech industry increasing by 41%.
Create Export Hubs
Against this background, India needs to take its vision of ease of doing business and Make in India to the next level, devising its strategy for ‘India: Making for the World’. Very soon, an announcement should be made to commence with an initial 100 days plan. The 100- day period would quickly signal to global firms making investment decisions and provide a broader platform for meeting major ‘lead firms’ when attending major meetings such as G20, UN, World Bank/IMF meetings during Q3 2019. To give specific focus, certain selected sectors significant for employment, technology and exports should be identified for launching the programme. These ‘champion’ sectors could be textiles and apparel, automotive products and electronics (with emphasis on mobiles), to be supplemented with a few other sectors later. These three sectors in India are likely to contribute over $1 trillion by 2025. India should identify about five key companies - lead firms - in each sector and open immediate negotiations with them to facilitate either shifting or adding new capacity in the country to boost exports. These policies which would pave the way for export hubs in India, need to be administered by relevant government agencies, A new mechanism, approach and political commitment at the highest levels would be required. A senior official or minister reporting to/in the PMO should coordinate, monitor and manage effective implementation of the supporting policies and timelines. GVCs work only with timely and consistent high-quality response from different producers linked to the value chain The coordinated approach must focus on addressing in a timely manner value chain. The coordinated approach must focus on addressing in a timely manner the actual operational problems identified through feedback from exporters. Dasgupta & Singh are former Indian ambassador and former deputy director general, World Trade Organization, respectively.
Source: Economic Times
The increase in duty imposed on goods entering India through Attari integrated check post (ICP), the first land port set up to facilitate faster movement of the trade between India and Pakistan, was a punitive measure adopted by the Centre on February 16, two days after the Pulwama terror attack. The economic fallout of the imposition of 200% customs duty on goods imported from Pakistan is a major issue many Amritsar traders are grappling with. The increase in duty imposed on goods entering India through Attari integrated check post (ICP), the first land port set up to facilitate faster movement of the trade between India and Pakistan, was a punitive measure adopted by the Centre on February 16, two days after the Pulwama terror attack wherein more than 40 CRPF men were killed in Jammu and Kashmir. The decision resulted in closure of the import as the traders were unable to afford the exorbitant duty. As per an estimate provided by the Confederation of International Chambers of Commerce and Industries, the closure of the import has rendered more than 5,000 people jobless, including 1,600 porters and labourers working at the ICP for loading and unloading of goods, over 2,000 drivers and cleaners for 1,000 trucks operating at the border for the transportation of goods along with clearing-house agents and others employed at the check post. Ashok Sethi, director of the confederation, said the economic impact can be gauged by the fact that the increase in customs duty has dealt a serious blow to the economy of the city as a whole and for Punjab, which was reaping benefits of this big-ticket business with Pakistan. “The second biggest import was of cement, about ten lakh bags per month valued at Rs 300 crores annually. The other imported items included lime stones, bauxite, dry dates and chemicals,” Sethi said. “The Indo-Pak trade, especially the import component, was resulting in the income generation to the extent of Rs 15 to Rs 20 crore monthly to the city traders through this ICP before this complete and sudden stoppage of import from Pakistan,” he added. “It is imperative for the country not to allow trade ties to become hostage to hostilities as it is important to build up people-to-people contact through this confidence-building measures so that the holy city’s economic situation gallops back to its old glory,” Sethi said. Rajdeep Uppal, another trader and a senior functionary of the confederation, said Rs 2,500-crore plus annual trade with Pakistan has been greatly affected by this duty raise and resulted in huge unemployment among the border rural youth. A leading clearing-house agent based here, Dalip Singh, said the trade through ICP was generating employment in the city, but now has rendered many jobless. He said after the imposition of 200% duty, more than two lakh bags of cement, along with goods worth several crores including dry dates, have not been lifted. “These have now been completely damaged, causing a huge loss to the importers,” Uppal added.An importer, Pardeep Sehgal, pointed out that all Pakistan textile associations have requested their government to impose similar duty on Indian exports, including yarn, laces, herbs, spices, dyes, chemicals and other non-traditional items as a reciprocal step.He said this hasty and punitive duty levied on Pakistani goods has hit the economy of the city badly, while rendering huge labour force jobless. He urged the government to take a holistic view of the economic growth of the country and allow trade ties with Pakistan to flourish in order to ensure growth that will eventually lead to the benefit of the people.
Source: The Hindustan Times
These sectors deserve consistent support over time to compete internationally since India is lagging behind. Manufacturing contributed in 2017 only about 16% to India’s GDP, stagnating since economic reforms began in 1991. By contrast, in east and south-east Asia, the industry share has exceeded 30-40% while manufacturing is 20-30%. India’s manufacturing share of GDP has not moved up at all, though between 2004-05 and 2011-12 manufacturing employment growth was reasonable (grew by 6 million, using NSS). However, total manufacturing employment has fallen significantly between 2011-12 and 2015-16 by 10 million in just four years (Annual Survey Labour Bureau data, with a sample size same as NSS), especially in labour-intensive manufactures. This is the opposite of what was achieved in Japan, Korea, Taiwan and China. All these countries restructured agriculture after the Second World War, focused their modernisation efforts on manufacturing, and made their financial systems slaves to these two objectives. The result was rapid absorption of surplus agri-labour in labour-intensive manufacturing first, which then enabled them to move up the manufacturing value chain to more capital-intensive manufacturing, making them the factory of the world. By contrast, in India the labour intensive manufacturing sectors like food processing, tobacco, textiles, apparel, leather, wood and furniture have seen a decline since 2012. The tobacco and textiles sub-sectors within manufacturing have seen a fall in their share of total manufacturing employment in India (though total jobs grew slightly). The fall in the textiles’ share requires policy attention, while the fall in tobacco is consistent with government policy to reduce tobacco consumption. Packages for Specific Industries (not enterprises): The most labour-intensive manufactures are food processing, leather and footwear, wood manufactures and furniture, and apparel and garments. These product groups account for 50% of manufacturing employment in India (total manufacturing is 60 million of the total employment in India of 475 million in 2011-12). Unfortunately, however, it is the unorganised segment of these labour-intensive manufacturing firms that employ most workers, not the organised segment. Perhaps this could be one reason for their relative policy neglect. Another could be the rise in rural share observed in manufacturing. Between 1970-71 and 2011-12, the rural share in output of manufacturing doubled (from 25% in 1970-71 to 51.3% of manufactured output) and exceeded the manufacturing production in urban areas. In addition to the usual problems that beset all manufacturing (e.g. poor infrastructure, uncertain electricity, the poor record on ease of doing business), each of these sectors have special problems and each deserve individual attention through a government package of policies in specific states where these activities are concentrated. Thus drawing upon World Bank employment elasticities, rapid export growth in garments sector could generate about half a million additional direct jobs every year. Nearly every successful economic growth take-off in post-war history in East Asia was associated with rapid expansion in apparel exports in the early stages. The ratio of jobs to investment is as follows: in apparel 31.1, in autos only 2.6, and in steel 1.0 (based on Annual Survey of Industries, 2013-14). India could take a part oof the market share that China is losing in international markets due to rising Chinese wages. But India is losing to Bangladesh, Vietnam, and even Myanmar and Ethiopia. Why?
Source: Hindustan Times
Welspun India Limited (WIL), part of the $2.3 billion Welspun Group, has registered 46 per cent year-on-year growth during Q4 FY19 in domestic branded business with focus on ‘Spaces’ and ‘Welspun’ brand targeting different market segments. The company continues to focus on innovation and 38 per cent of its sales were through innovative products. In the fourth quarter of fiscal 2018-19 that ended on March 31, WIL’s total income stood at ₹16.009 billion, registering a growth of 4.3 per cent over total income of ₹15.349 billion in the corresponding quarter of the previous fiscal. However, EBITDA margin for the quarter was lower by 327 bps year-on-year, mainly due to higher raw material costs. During the quarter, WIL was recognised as Giga-Guru by Walmart for sustainability processes. Giga-Gurus are the suppliers who are demonstrating results through Project Gigaton, Walmart’s initiative to reduce emissions in the global value chain by 1 billion metric tons—a gigaton—by 2030. “We have launched our mass market brand ‘Welspun’ to tap the enormous domestic market potential. We are now confident of building a strong B2C presence in the domestic market. Our new initiatives such as flooring solutions, advanced textiles, e-commerce and hospitality are adding to this, to achieve a sustainable growth. Branding, innovation and sustainability continue to be the pillars of our differentiation strategy,” said Welspun Group chairman BK Goenka. (RKS)
Source: Fibre2Fashion
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1114.20 |
USD/Ton |
-1% |
5/27/2019 |
|
VSF |
1695.21 |
USD/Ton |
-1% |
5/27/2019 |
|
ASF |
2500.80 |
USD/Ton |
0% |
5/27/2019 |
|
Polyester POY |
1086.68 |
USD/Ton |
0% |
5/27/2019 |
|
Nylon FDY |
2506.60 |
USD/Ton |
0% |
5/27/2019 |
|
40D Spandex |
4506.08 |
USD/Ton |
0% |
5/27/2019 |
|
Nylon POY |
5476.84 |
USD/Ton |
0% |
5/27/2019 |
|
Acrylic Top 3D |
1340.23 |
USD/Ton |
-1% |
5/27/2019 |
|
Polyester FDY |
2376.20 |
USD/Ton |
-2% |
5/27/2019 |
|
Nylon DTY |
2680.47 |
USD/Ton |
0% |
5/27/2019 |
|
Viscose Long Filament |
1231.57 |
USD/Ton |
-1% |
5/27/2019 |
|
Polyester DTY |
2825.36 |
USD/Ton |
-0.51% |
5/27/2019 |
|
30S Spun Rayon Yarn |
2448.64 |
USD/Ton |
0% |
5/27/2019 |
|
32S Polyester Yarn |
1818.37 |
USD/Ton |
-1% |
5/27/2019 |
|
45S T/C Yarn |
2767.40 |
USD/Ton |
-1% |
5/27/2019 |
|
40S Rayon Yarn |
2738.42 |
USD/Ton |
0% |
5/27/2019 |
|
T/R Yarn 65/35 32S |
2260.28 |
USD/Ton |
-1% |
5/27/2019 |
|
45S Polyester Yarn |
1984.99 |
USD/Ton |
-2% |
5/27/2019 |
|
T/C Yarn 65/35 32S |
2405.17 |
USD/Ton |
-1% |
5/27/2019 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
-0.11% |
5/27/2019 |
|
32S Twill Fabric |
0.78 |
USD/Meter |
-0.18% |
5/27/2019 |
|
40S Combed Poplin |
1.05 |
USD/Meter |
-0.14% |
5/27/2019 |
|
30S Rayon Fabric |
0.62 |
USD/Meter |
0% |
5/27/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
5/27/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14489 USD dtd. 27/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Leaders of the textiles and clothing sector's trade bodies on Monday sought 5.0 per cent cash incentive against export of apparel products for the next five years to sustain the industry production and maintain its edge in global arena. They said the sustainability and competitiveness of the country's textile and clothing industry have been affected due to rising production cost driven by a wage hike, energy cost hike, compliance cost and declining international market price of local apparel items. The business leaders came up with the call at a joint press conference of Bangladesh Textile Mills Association (BTMA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association BKMEA (BKMEA) held at a city hotel. "The government should offer a 5.0 per cent cash incentive against exports of apparel goods both in traditional and non-traditional markets for the next five years in the next budget to enable the garment makers to sustain with the rising cost of production," BGMEA President Rubana Huq said this while speaking at the press briefing. She said the sustainability and competitiveness of local apparel industry is being hampered due to rising production cost amid implementation of the new wage in the industry. "So, the industry is needed the government support in form of cash incentive for certain period to cope up with the challenges," Rubana Huq stated. Highlighting the present crisis in the industry, she further said that the country's apparel sector is now passing through a transition period owing to several internal and external factors. "About 22 factories have been closed in the last one month and 10,000 workers lost their jobs. These factories have failed to sustain their production amid rising production cost and cost of compliance. More factories would face similar fate if the government does not offer support to the industry," she added. Rubana Huq stated that if there were no help the sector would be in great trouble. A 5.0 per cent cash incentive for the next five years will help the apparel makers to overcome the present crisis. She said that the government will require Tk 11,724 crore if it extends a 5.0 per cent cash incentive to the apparel industry, which accounts for more than 80 per cent of the country's export receipts. BTMA President Mohammad Ali Khokon and BKMEA Vice-President Monsur Ahmed also spoke at the press briefing. Echoing with the BGMEA president, they also demanded cash incentives in the upcoming fiscal year to tide over the rising costs in the industry.
Source: New Nation
Trump said American tariffs on Chinese goods 'could go up very, very substantially, very easily'. The US isn’t ready to make a trade deal with China, President Donald Trump said while on a state visit to Japan.
“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference in Tokyo alongside Japanese leader Shinzo Abe. “They would like to make a deal. We’re not ready to make a deal.” Trump said American tariffs on Chinese goods “could go up very, very substantially, very easily.” His comments came after trade talks between the two countries stalled earlier this month. Each side has since blamed the other, and Trump has threatened billions more in tariffs. Trump said businesses were leaving China for countries without tariffs, including the US and Asian neighbors including Japan. Still, he also expressed optimism that the world’s biggest economies would eventually reach an agreement. “I think sometime in the future China and the United States will absolutely have a great trade deal, and we look forward to that,” Trump said. “Because I don’t believe that China can continue to pay these, really, hundreds of billions of dollars in tariffs. I don’t believe they can do that.”
New Rhetoric
For some time, the US “has had various voices on China-US trade talks. Sometimes it is said that an agreement will be reached soon, and sometimes that it is difficult to reach an agreement,” Chinese Foreign Ministry spokesman Lu Kang said in Beijing Monday when asked about Trump’s comments. “In the same period of time, China’s position has always been the same,” Lu said. “China has always believed that the differences between any two countries should of course be resolved through friendly consultations and negotiations.” Over the weekend, China pushed back at the perception that Trump’s tariffs are hurting its economy. Higher tariffs will have a “very limited” impact, and would hurt the US about as much, according to Guo Shuqing, head of China’s banking and insurance regulator. Guo is the highest-ranking Chinese financial official to publicly comment on the trade standoff since talks deteriorated. A commentary published by the official Xinhua News Agency accused the US of “scapegoating” China for its trade imbalance and even some domestic economic issues, as Chinese state media urges unified resistance to foreign pressure. “The United States is attempting to squeeze an unequal trade deal out of China, using measures such as tariff hikes and targeting its tech companies,” it said, while praising Beijing’s “utmost sincerity” in the negotiations. China has escalated its anti-US discourse since the talks faltered and Trump blacklisted Huawei Technologies Co. and scores of its affiliates earlier this month in a bid to stymie its access to the US market. His administration is considering restrictions on as many as five other Chinese tech companies.
Source: Business Standard
Cameroonian Minister of Mines and Technological Development, Gabriel Dodo Ndocke (photo), issued a list of five chemicals the use of which is now banned in textile manufacturing in the country. The products are said to have a negative impact on both the environment and consumer health. These are azo dyes (used in dyeing), Formaldehyde (colorless gas), Alkyl phenol (nonylphenol ethylate, nonylphenol), phthalates (substances mainly used in plastics), and heavy metals (lead). “The distribution of non-compliant products [...] is therefore prohibited throughout the national territory. Any offender to this regulation will face sanctions provided for by the law in force,” threatens Mr. Dodo Ndocke. The minister is urging particularly administrations in charge of fraud control and repression, textile production and processing companies, importers and retailers to comply with the decision. He said the ban is in line with Cameroonian standards specifically related to loincloths and household linens.
Source: Business Cameroon
Washington/Tokyo: The US and Japan will work with countries like India, Australia, ASEAN, UK and France to "forcefully" promote the idea of a free and open Indo-Pacific, Japanese Prime Minister Shinzo Abe said Monday, amidst China flexing its muscle in the strategically important region. Over the past few years, in particular under the Trump administration, a free and open Indo-Pacific has emerged as an important aspect of the relationship between the US and Japan and other like-minded nations in the region. These countries believe that a military build-up by China and its aggressive behaviour in the region poses a threat to a free and open Indo-Pacific, which in the recent past has emerged as a key hub for global trade, economic activity and maritime security. "Going forward, we will walk hand in hand and promote the cooperation for the realisation of this common vision of our two nations. We will be promoting the idea forcefully," Abe told reporters at a joint news conference in Tokyo with President Donald Trump, who is on a four-day state visit to Japan. "With countries concerned -- like Australia, India, ASEAN, UK, and France -- we will fortify the cooperation toward the realisation of a free and open Indo-Pacific. We will enhance and expand our efforts. We agreed on that," Abe said. "In today's summit meeting, we welcomed the steady progress of US-Japan cooperation, looking toward the creation of free and open Indo-Pacific, including the areas such as energy, digital, and infrastructure," said the Japanese prime minister. The Indo-Pacific is a biogeographic region, comprising the Indian Ocean and the western and central Pacific Ocean, including the South China Sea. The US has conducted a series of "freedom of navigation" exercises in the disputed South China Sea, triggering protests from Beijing over what it says is infringement of sovereignty. China claims almost the entire South China Sea, while Brunei, Malaysia, the Philippines, Vietnam and Taiwan are also claimants.The growing presence of the Chinese navy in the Indian Ocean where it already acquired a logistic base at Djibouti has aroused concerns in India besides acquisition of the Hambantota port in Sri Lanka on a 99-year lease.
Source: NDTV.com
The fourth edition of Denimsandjeans Vietnam, which is scheduled for June 12-13, 2019, in Ho Chi Minh City, has released the list of exhibitors. Over 40 denim companies from 10 countries will exhibit at the event, which will also have participation of several reputed garment exporters. Two design houses from China will also be present at the show. Five garment exporters from Vietnam—TCE Vina Denim, T&T Garments, Navi Jeans, Resource Garments, and Knit Indigo—will exhibit their A/W 20/21 collections at the show. “Vietnam has gained more importance in the last few months not only because of business treaties including Europe-Vietnam Free Trade Agreement (EVFTA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but also due to ongoing tariff trade war between China and the US,” the event organisers said in a press release. For China, Vietnam seems to be a good market, as it is facing heat from the US due to increased duties, and also due to the rising labour cost there. Leading denim fabric suppliers from China and Hong Kong, including Prosperity, Blackpeony, Foison Textile, XDD Textile, Chanzhou Thome Textile, Zhejiang Xinlan Textile, and Guangzhou Indenim Textile are participating in the next month’s event. Prosperity Textile has recently built a factory in Vietnam and has started operation. India has also got a great advantage as its fabric has only 7.5 per cent duty in Vietnam. Further, the duty is expected to cut in the coming time due to good diplomatic relationship between the two countries. From India, Arvind Limited, KG Fabriks, Bhaskar Denim, Anubha Industries, Malwa and Ramsons are exhibiting at the show. Vietnam is one of the most strategically growing markets for Pakistan as well, as it has been increasing its exports to the US. From Pakistan, the show will have Artistic Milliners, Kassim Denim, Crescent Bahuman, Soorty, Indigo Textile and US Denim Mills would be showcasing their products at the show. All these companies have been catering to some of the most niche denim brands/retailers including Levis, H&M, Tesco, Inditex, C&A, PVH, GAP and Li & Fung. Turkish denim mill Kilim Denim is going to launch its special 1986 collection at the show, while JS.Viet from Vietnam will present its special A/W 20/21 collection at the show. Sri Lankan chemical manufacturer S and D Chemicals will showcase its range of sustainable chemicals at the show. Apart from fabric and garments, the show will have the presence of leading industrial thread supplying company Coats, which is going to launch some special innovation at the show. The participation of accessories suppliers including Copen United, Swarovski, Polsan Buttons, and Kwong Ngai complete the presence of all the stakeholders from denim supply chain. The show this time will also witnesses two design houses—Ciecro Design and DNA1964—from China showcasing their latest denim design. A special traditional fashion show, Ao dai Denim Show, has also been scheduled on the very first day in the evening. It will bring the traditional dresses of Vietnam in the denim form.
Source: Fibre2Fashion
