This was Sitharaman’s first such meeting after she took charge as the finance minister. Finance minister Nirmala Sitharaman on Wednesday reviewed the current economic situation with all sectoral regulators and held discussions on the forthcoming budget at the Financial Stability and Development Council (FSDC) meeting. In a statement, the finance ministry said the current global and domestic economic situation as well as financial stability issues, including, inter alia, those concerning banking and non-banking finance companies (NBFCs), were reviewed. “All the regulators presented their proposals for the Union Budget 2019-20,” the statement said. This was Sitharaman’s first such meeting after she took charge as the finance minister. FSDC is the apex body of sectoral regulators, including the Reserve Bank of India, headed by the finance minister. The budget will be presented on July 5.
Source: Economic Times
Surat: The production of polyester fabric in the country’s largest man-made fabric (MMF) centre has been affected with the power loom, embroidery and textile processing units facing acute shortage of workers for the past few months. Industry sources said that majority of textile workers, who had gone to their native villages in Uttar Pradesh, Odisha, Bihar and other states to attending marriages, sowing seeds in their fields and casting votes between January to April, are yet to return. The MMF sector in the city employ about 15 lakh in power loom weaving units, embroidery units and textile processing units. About eight lakh workers are employed in power looms alone. The production of polyester fabric is pegged at four crore metres per day. Due to the shortage of workers, the production is reduced by almost 1.5 crore metres per day. President of Pandesara Weavers Association, Ashish Gujarati said, “Fabric production has dipped by almost 30% in the last few months due to the shortage of workers in the weaving units. Many small units in the industrial estates across the city are either closed or operating at less than 60% of their capacity” According to Gujarati, most of the textile workers moved out from the city between April and May to vote during the Lok Sabha election in the states like Odisha and Bihar. Rajnish Lilha, who owns 30 embroidery machines in Udhna told TOI, “Against the requirement of 20 workers to run 30 embroidery machines, I have just four at my disposal. My workers went to native places to cast their votes and they are yet to return. About 20 embroidery machines are shut down since April.” On the other hand, the textile processors are also facing shortage of workers and the unit owners are operating at less than 40% of their efficiency. President of South Gujarat Textile Processors Association (SGTPA), Jitu Vakharia said, “Workers shortage is only adding to our troubles. After implementation of GST, the textile sector is in doldrums. Also, the 0% most favoured nation policy is hurting the sector as the fabric dumping from other countries has increased. At present, the units are operating four days a week to cut down on production.”
Source: Financial Express
The government has ruled out the possibility of a regulator for the ecommerce sector as it prepares to finalise a national policy on e-commerce. Commerce and industry minister Piyush Goyal has told small traders and retailers to explore ways to benefit from ecommerce platforms but turned down their demand for a regulator for the sector. “Traders wanted a regulator or separate law for the e-commerce sector but the minister said that will not solve their problems,” said an official aware of the details of the meeting that Goyal had with representatives of small traders on Wednesday. The Department for Promotion of Industry and Internal Trade (DPIIT) has made public a draft national e-commerce policy in which it has proposed regulating cross-border data flows, locating computing facilities within the country to ensure job creation and setting up a dedicated ‘data authority’ for issues related to sharing of community data. It has stated that the data generated in the country is a national asset, and citizens and the government have a sovereign right over it. However, it does not call for a regulator, unlike a draft policy released last year by the commerce department which did. The Confederation of All India Traders (CAIT), which participated in the meeting had proposed a regulatory mechanism to monitor the compliance of the policy. “The government has very little knowledge about the actual numbers of e commerce portals working in the country since their registration with any authority is not mandatory,” CAIT said in a statement. Representatives of the associations of kirana stores, traders and retailers discussed the need for a level playing field and the impact of anti-competitive practices like predatory pricing and other discriminatory methods that are being faced by them from foreign competition “The government is working on a law on data and a policy for the ecommerce sector is also underway which will look at any malpractices,” the official added. Goyal had met representatives of Indian and global e-commerce and information technology companies on Monday and asked them to share their comments on the policy in ten days. He also suggested another meeting with them in case their lawyers sought. “Minister explained that by bringing in greater controls through rules and laws will only help up to a certain point, but for long term gain, short term pain will have to be borne and India cannot remain in isolation and will have to be part of the global value chain in order to become a $5 trillion economy,” the ministry said in a statement. Goyal further said that the aspect of data in the law is being addressed by the Ministry of Electronics and Information Technology (MeitY) and asked the representatives of associations of kirana stores, traders and retailers to send all suggestions for the draft ecommerce policy in the next five days.
Source: Economic Times
Tax and legal consultants Wednesday complained about the time-limit of three months given to file the GST returns for 2017-18 as hundreds of amendments, notifications and circulars have made the Act very complex. Tax and legal consultants Wednesday complained about the time-limit of three months given to file the GST returns for 2017-18 as hundreds of amendments, notifications and circulars have made the Act very complex. Officials of the Tax Bar Association, a body of over 400 members of chartered accountants, company secretaries, cost advocates and tax consultants, said that the government has made the entire GST procedure and filing of returns very “confusing with hundreds of changes in the rules and taxes”. “The government made available GST annual returns 9, 9A and 9C for 2017-18 online in March, 2019 and offline in April, 2019, after nearly 20 months and they are giving only three months to understand and file the most complex return form in the history of Indian taxation,” Tax Bar Association (TBA) president Gopal Singhania said at a press conference here. To add to this, the taxpayers and consultants are also required to keep in mind the hundreds of amendments and clarifications issued by the government since the inception of GST in July 2017. “To illustrate the intensity, it may be noted that besides major amendment in the GST Act in February 2019, over 200 tax notifications, including amendments in rules, about 180 tax rate notifications, over 100 circulars, 20 orders, over 125 press releases and over 50 FAQ series and flyers have been issued till the date,” Singhania said. Further, the press releases and clarifications on certain points “lack clarity” and at some places, these are “against the GST laws” and need reconsideration, while some clarifications have “even increased the confusion” already prevailing in the minds of taxpayers, tax consultants and auditors, he added. Singhania suggested that a one-time revision of monthly or quarterly returns is a crucial need for proper filing of annual return and the due date of filing of GSTR 9, 9A and 9C for 2017-18 and 2018-19 should be notified to be kept together so that a total reconciliation can be done for both the years. “This will help in better compliance and reporting, especially the SMEs who have been struggling with increased accounting needs after GST. Alternatively, the due date for filing GSTR-9, 9A and GSTR-9C for the year 2017-18 should be extended by at least four months till October 31, 2019,” he urged, adding the problems should be resolved with clear instructions in line with the prescribed law. TBA Vice President Sanjay Kumar Sureka said, “It is very crucial for the government to understand that the present form and law are not in agreement at certain places and are cumbersome as well as ambiguous to some extent. “It is practical as well as reasonable to appreciate the fact that as these forms and expectations there under are unreasonably complex and prone to error and mistake, hasty and unclear filing will only deteriorate the present situation that was created due to the chaos that occurred in 2017-18. “The association’s Indirect Taxes Committee Chairman Bikash Agarwala said that the data auto-populated in GSTR-9 does not match with monthly GST returns at many places and the form is also asking for the details, which were never required to be maintained since the inception of GST. Explaining it further, he said: “Many details asked for in the annual return and audit report are confusing in nature and despite repeated representations, no clarification has been issued by the government till date. Unlike other tax returns, there is no option to revise monthly or quarterly returns under GST which is the main cause of the entire prevailing situation. “It has not even been clarified as to what should be the basis of filing the annual return, GSTR 3B or GSTR 1 or books of accounts, Agarwala claimed. TBA member Raginee Goyal stated that the audit report in Form-9C is asking the auditor to certify “true and correct” instead of “true and fair”. “So the age-old concept of audit under indirect taxes has now undergone a significant change in the form GSTR-9C. Hence, it is not justified to get the certification from the auditor that the records are true and correct. ‘To err is human’ and the government must understand this fact that auditors are humans,” she added. Goyal demanded that the concept of ‘true and fair’ must be brought back, at least till the GST law stabilizes.
Source: Financial Express
The Prime Minister’s Economic Advisory Council (PMEAC) has released a detailed note enumerating its objections to former Chief Economic Adviser Arvind Subramanian’s paper on India’s GDP growth. The note said that Mr. Subramanian’s paper “lacks rigour” and would not stand up to academic scrutiny.
Lower GDP
The paper, released in Harvard University, postulated that the GDP growth between 2011-17 was significantly lower than the 7% shown by the official figures. “Having closely read the paper and taking into account all information available until June 19, 2019, the primary contributors of this note reject the author’s methodology, arguments and conclusions in the said paper,” the note by the PMEAC said. “A critique of official GDP estimates must specifically critique coverage or methodology, the author does neither.” “Given the fact that his paper lacks rigour in terms of specific data sources and description, alternative hypothesis, rationale of equation specifications, use of dummies, and robustness-check diagnostics of estimated equations, and choice of countries in the sample and a specific list, it would not stand the scrutiny of academic or policy research standards,” the note added. The Council, however, said this did not mean that the paper should not be taken seriously, but that “to believe it as gospel truth is equally problematic.” In a detailed rejoinder, it said the 17 indicators “cherry-picked” by the former CEA were sourced from the Centre for Monitoring Indian Economy (CMIE), which was not in itself a primary source of information. “Further, a cursory look at the indicators suggests a strong link with industry indicators (a sector that contributes an average of 22% to India’s GDP), while the representation of services (60% of GDP) and agriculture (18% of GDP) is as good as missing,” the PMEAC said. “It is difficult to believe that indicators in the services sector would not correlate with Indian GDP.” The note pointed out that while Mr. Subramanian had stated in his paper that he was not including tax collection data in his analysis because their relationship to GDP was unstable, the fact is that tax collections are hard data that are not based on surveys and should not have been ignored. “Unlike many indicators, tax data is not collected through surveys or by agencies through arcane techniques. These are hard numbers and should be an important indicator of growth,” the note said. “Further, there have been no major changes in tax laws until the end period in the author’s analysis (March 31, 2017). GST was introduced on July 1, 2017.” “The author’s logic of not using tax data appears to be a convenient argument meant to avoid inconvenient conclusions based on hard facts,” it added.
Source: The Hindu
Commerce Minister Piyush Goyal on Wednesday reiterated that the central government will not allow foreign direct investment in multi-brand retail, and also assured small traders that he would not allow predatory pricing by multinationals. “Commerce and Industry Minister again reiterated that India will not allow multi-brand retail by foreign companies and on the pretext of B2B, no entry will be allowed for multi-brand retail,” the Commerce Ministry said in a release following a meeting between Mr. Goyal and representatives of kirana store owners and traders. “He also asserted that predatory pricing will not be allowed and necessary action will be taken against defaulters.” Representatives of the associations of kirana stores had raised the issues of the need for a level playing-field and the adverse impact of anti-competitive practices such as predatory prices by foreign companies. “Piyush Goyal urged small retailers, kirana stores to make use of modern technology and avail benefits of Government of India schemes like MUDRA to improve their business, spruce up their shops, improve stocks by storing high quality products and pass on the benefits to people employed by them,” the release added. The Confederation of All India Traders (CAIT) submitted a memorandum to the Minister demanding that the same restrictions and conditions imposed on global e-commerce players be made applicable to domestic e-commerce companies also.
Source: The Hindu
The eight-member committee was set up to review the framework for the micro, small and medium enterprises, and suggest long-term solutions for the economic and financial sustainability for the sector. The Reserve Bank has said the expert committee on the MSME sector, set up in January under the chairmanship of former chairman of Sebi UK Sinha, has submitted its report to the governor Shaktikanta Das. The eight-member committee was set up to review the framework for the micro, small and medium enterprises, and suggest long-term solutions for the economic and financial sustainability for the sector also to study the impact of the recent economic reforms on the sector and identify the structural problems impacting its growth. PTI had inadvertently reported on Tuesday that the panel was set up that day, while in fact the committee had submitted its report on June 18. "The committee held its deliberations including consultations with various stakeholders and has submitted its report to the governor," RBI had said in a statement Tuesday. The central bank has not shared the report. One of the objectives of the panel was to examine the factors affecting the timely and adequate availability of finance to MSMEs. The members of the committee included development commissioner for MSME Ram Mohan Mishra; joint secretary at the department of financial services Pankaj Jain; SBI managing director PK Gupta; ICICI Bank executive director Anup Bagchi; IIM-Ahmedabad professor Abhiman Das; Ispirit Foundation founder Sharad Sharma and Dvara Trust chairperson Bindu Ananth.
Source: Business Standard
For more than a decade since globalisation, the central government’s textile committee was the quality regulating agency for all textile export goods in the country. But now, the committee’s inspection (https://timesofindia.indiatimes.com/topic/inspection) services have almost no takers in the textile industry. With around 30 offices across the country, the textiles committee which comes under the union textiles ministry, was functioning with many objectives. While hosting one of textile power centers, Tamil Nadu alone has six textiles committee offices, barring another one closed in Salem a year ago. More than 20 quality assurance officers were associated with the offices. “Earlier, one of the major goals was to regulate quality of all goods exported from textile units because the government wanted to ensure that the quality should not become an issue. But in 2004, the government took decision of leaving the quality as a matter between the foreign buyers and the exporters, so the mandatory regulation was dropped,” said a senior official associated with the textiles committee. However, the committee had started to offer inspection services as it can act as a third party between the buyers and the manufacturers. The committee has adequate infrastructure including textile labs and technically sound employees but do not have many takers. “We were not approached for the services by the industry despite having all the capacities. Many private quality assurance agencies filled up almost whole space of offering inspection services,” the official said.
Source: Times of India
Ministry of Micro, Small and medium Enterprises (MSME) will be organizing the 2nd edition of International SME Convention 2019 from 28-29 June 2019 in the national capital. The International SME 2019 convention will give a platform for intensive business discussions & interactions on the Indian Market opportunity. International SME Convention is the foremost International platform for discussing & sharing best practices for enterprise development, facilitating business discussion and encouraging trade partnerships by and between innovative, progressive and sustainable small and medium enterprises, from all over the world. The last edition held in Delhi in the month of April 2018 had 35 International trade development organizations, 160 entrepreneurs and 27 experts from 39 countries, in the three day event where issues of international best practices on SME development and cooperation, global business opportunities for SMEs & problems faced by women entrepreneurs were among the topics discussed. Poland, with 15 delegates, had the largest delegation, followed by Uzbekistan with 8 SMEs and Ghana with seven. More than 400 selected SMEs participated and signed 17 agreements with enterprises of UK, Russia, Uzbekistan, Poland, Bhutan, Austria, Czech Republic, Cameroon and Sri Lanka. These agreements were in 12 sectors covering food processing, agriculture, textiles, defence, ammunition, waste management, dairy products, coal, jewellery, health care and education. The convention was hosted by the federal MSME) of the Government of India and co-organized by the India SME Forum.
Source: KNN India
Demand for logistics and warehousing space in India outstrips supply, reveals JLL’s latest report, titled ‘Indian Logistics and Warehousing: Tracing the Lifecycle’. According to the report, the annual demand of around 32 million square feet has outstripped the supply of 31 million square feet. This has happened for the first time in the last four years. With the January-March period of 2019 witnessing 8.4 million square feet of absorption, it is expected to clock around 38 million square feet by end of 2019. “With high demand, lease transactions have remained high so far,” the report said. “Alongside the rise in transactions, the share of Grade A spaces leases have also gone up in the past four years,” it added. Of the total 32 million square feet of industrial and logistics leases in 2018, 56 per cent were Grade A spaces.
‘Huge potential’
Sectors such as 3PL/logistics, engineering, auto & ancillary, e-commerce, FMCG, retail, and telecom and white goods have remained the biggest demand drivers. As a result of the high demand, logistics sector is expected to grow to $215 billion by 2020. Ramesh Nair, CEO & Country Head, JLL India said, “Favourable investment regulations have made the deployment of development funds a lot easier than it used to be in the past. Moreover, the infrastructure status has added strength to the development pace. GST implementation has brought in a uniform tax regime and has removed the challenges relating to logistics supply chain, making it easier for operators in the space to expand across geographies.” Yogesh Shevade, Head, Industrial Services, JLL India, said, “There is huge potential in the logistics and warehousing sector. With high demand for high-quality logistics facilities and increasing market maturity, the space is set to grow from this stage. However, development side continues to witness challenges on account of problems such as land aggregation, tax parity etc.” “Hopefully, we will witnessing easing of these challenges with further reforms,” Shevade added.
Source: The Hindu
Mumbai Customs has seized around 500 parcels of Sino India Etail, the official Indian seller for Chinese apparel and lifestyle etailer Shein, and sealed a company warehouse in the city, after officials found it undervaluing and wrongly declaring goods, ET has learnt. This is part of a crackdown on Chinese ecommerce imports into India by the Mumbai courier terminal against around a dozen companies for allegedly paying much lower customs duties. The seizure orders, copies of which ET has access to, details the players against whom action has been initiated and the modus operandi of such operators. These players have become more active after the government took action against Chinese ecommerce sellers who were routing orders as duty-free “gifts and samples”, Customs officials said. India exempts items valued up to .₹ 5,000 from all taxes to allow Non-resident Indians to send gifts to families back home. ET reported on June 13 that the government has begun reviewing changes to the gifts guidelines and this may be introduced in the upcoming budget. “It appears that the packing of goods is of B2C model… but the clearance is being sought for B2B model," the seizure order against Sino India Etail reads. Apart from Sino India Etail, a smaller number of parcels of Globemax Commerce India have also been seized. Globemax is the local unit of another Chinese etailer Club Factory, and lists CEO Vincent Yun Lou, as one of its whole-time directors. Chinese ecommerce firms employ importers such as Sino India Etail and Globemax to bring in goods ordered by their customers into India in bulk, allowing them to bypass the cumulative 42.08% duty levied on individual imports.They use the CB-13 low-value consignment route, which calls for very little disclosure. In an emailed response to ET, Sino India Etail said: “We have always abided by the laws and paid all our taxes correctly and timely”. It also said it assists brands in distribution of clothing and accessories and has been in the business for a few years. Globemax Commerce India did not respond to ET’s queries. A top ranking Mumbai customs official told ET that these firms were front organisations for Chinese ecommerce companies and that they evade taxes by undervaluing goods. The Mumbai terminal has now begun alerting other ports to potential malpractice by uploading the details of such firms on the National Risk Management portal, an alert system for evaders. “Items are packed and shipped for individual customers, similar to how you get a package from Amazon at home. But these companies act as a bulk purchaser in which the value declared is 300400% less than the actual value of items,” he said on the condition of anonymity. Earlier this year, RSS affiliate Swadeshi Jagran Manch and social platform LocalCircles had sent letters to the finance ministry highlighting the issue of Chinese ecommerce players evading taxes. They said this gave Chinese sellers a price advantage over local counterparts. While there have been calls for stricter enforcement at all of India’s customs ports, similar to the action Mumbai customs has taken, this isn’t a long-term solution, said Sachin Taparia, CEO of LocalCircles. “A more permanent solution could be having the payment gateways levy a flat customs plus IGST charge for cross-border ecommerce shipments,” said Taparia. “Such a model will make things transparent for consumers and cross-border sellers, and help minimise evasion.” A company warehouse in the city was also sealed after officials found it undervaluing and wrongly declaring goods
Source: Economic Times
This decision is expected to help jute farmers and the jute mills of West Bengal which are ailing or running in a very low capacity. India has imposed anti-dumping duty on the import of jute sacking cloths from Bangladesh which will have a positive impact on West Bengal's ailing jute sector. "Anti-dumping duty on sacking cloth from Bangladesh was our long standing demand to save the Indian jute sector. With active efforts of Union Textile Minister Smriti Irani, this has been achieved," jute industry veteran Sanjay Kajaria said in his reaction. "It will be applicable for 5 years effective from June 18, 2019," he said. This will help jute farmers and the jute mills of West Bengal which are ailing or running in a very low capacity, Kajaria said. The IJMA had filed an application for initiation of anti-circumvention investigation concerning import of the product exported from Bangladesh. It has requested for extension of the existing anti- dumping duties on the imports, alleging circumvention of the duty. Countries carry out anti-dumping probe to determine whether their domestic industries have been hurt because of a surge in cheap imports. Jute sacking accounts for the lion share of the total jute goods. The notification showed anti-dumping duty imposed between USD 125.21 and 138.97 per tonne. Currently, the duty exists on jute yarn, sacking bags and hessian fabric (made from skin of jute plant) and imposed in the range of USD 6.3-351.7 per tonne.
Source: Business Today
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1063.81 |
USD/Ton |
0.14% |
6/19/2019 |
|
VSF |
1604.39 |
USD/Ton |
0% |
6/19/2019 |
|
ASF |
2515.00 |
USD/Ton |
0% |
6/19/2019 |
|
Polyester POY |
1130.30 |
USD/Ton |
1.96% |
6/19/2019 |
|
Nylon FDY |
2327.09 |
USD/Ton |
0% |
6/19/2019 |
|
40D Spandex |
4336.20 |
USD/Ton |
0% |
6/19/2019 |
|
Nylon POY |
1257.50 |
USD/Ton |
1.16% |
6/19/2019 |
|
Acrylic Top 3D |
2572.81 |
USD/Ton |
-1.11% |
6/19/2019 |
|
Polyester FDY |
5463.61 |
USD/Ton |
0% |
6/19/2019 |
|
Nylon DTY |
1351.45 |
USD/Ton |
0.54% |
6/19/2019 |
|
Viscose Long Filament |
2197.01 |
USD/Ton |
0% |
6/19/2019 |
|
Polyester DTY |
2673.99 |
USD/Ton |
0% |
6/19/2019 |
|
30S Spun Rayon Yarn |
2341.55 |
USD/Ton |
0% |
6/19/2019 |
|
32S Polyester Yarn |
1683.89 |
USD/Ton |
0% |
6/19/2019 |
|
45S T/C Yarn |
2616.17 |
USD/Ton |
0% |
6/19/2019 |
|
40S Rayon Yarn |
1864.57 |
USD/Ton |
-0.77% |
6/19/2019 |
|
T/R Yarn 65/35 32S |
2312.64 |
USD/Ton |
0% |
6/19/2019 |
|
45S Polyester Yarn |
2659.54 |
USD/Ton |
-1.08% |
6/19/2019 |
|
T/C Yarn 65/35 32S |
2153.65 |
USD/Ton |
0% |
6/19/2019 |
|
10S Denim Fabric |
1.32 |
USD/Meter |
0% |
6/19/2019 |
|
32S Twill Fabric |
0.76 |
USD/Meter |
0% |
6/19/2019 |
|
40S Combed Poplin |
1.03 |
USD/Meter |
0% |
6/19/2019 |
|
30S Rayon Fabric |
0.61 |
USD/Meter |
0% |
6/19/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
6/19/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14454 USD dtd. 19/06/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Textile millers yesterday demanded the government exempt them from 5 percent value-added tax on the sales of yarn in the local market with a view to becoming more competitive. Export-oriented yarn producers are exempted from payment of VAT. But, the finance minister has proposed to impose 5 percent VAT on the sale of yarn in the local market in the budget unveiled last week. Yarn-makers who cater to the local market will have to pay Tk 24 as VAT on the sale of a kilogramme of yarn if the fiscal measure remains unchanged. “Because of the VAT, the mills will face tough competition from their competitors in countries such as China and India,” said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA). “As a result, yarn users will not feel encouraged to buy the local variety and the yarn market will again be dominated by foreign yarn.” He spoke at a press conference on the proposed budget at the Pan Pacific Sonargaon Hotel in Dhaka. Khokon also says local mills would face closure and the price of clothing items, especially lungi and sari, will go up in the domestic markets, putting consumers under pressure. The association urged the government to continue the 0.25 percent source tax on the export receipts. The tax is expected to expire at the end of June. It called for withdrawal of the 5 percent advance tax on the import of textile machinery, spare parts and other raw materials. Polyester, viscose and tencile, the most important raw materials, have been importing tax-free for the last five years. Still, the customs department is deducting the advance tax which is unjustified, Khokon said. “A big opportunity has been created for us owing to the US-China trade war. The government needs to give us export incentive in the US markets so that we can export more to the country.”
Source: Daily Star
NDO – Vietnam’s textile and garment sector posted a total export revenue of US$11.43 billion in the first four months of this year, a year-on-year increase off 9.56%; however textile and apparel products were exported mainly to traditional markets. In order to take full advantage of any opportunities, particularly from member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), enterprises should take initiatives in preparing sources of raw materials as well as improve their competitiveness to develop new potential markets.
Taking initiatives in preparing sources
According to Chairman of the Board of Directors of Hung Yen Garment Corporation (Hugaco) Nguyen Xuan Duong, the corporation’s member companies have had stable orders and actively expanded production to strive to earn VND550 billion in total revenue and VND65 billion in profit before tax. The company also continued to expand several new markets, towards original design manufacturing (ODM) and original brand manufacturing (OBM) models in order to increase the products’ values and improve the competitiveness. General Director of Phong Phu Joint Stock Company Pham Xuan Trinh also affirmed that to boost the efficiency of production and business activities in time to come, the corporation has innovate modern technology and equipment, proceeding to automate each stage, following the trend of the industrial revolution 4.0. According to statistics of the Vietnam Textile and Apparel Association (VITAS), the total export turnover of the sector reached US$11.43 billion in the first four months of this year, a year-on-year increase of 9.56%. The US remained the largest importer of Vietnamese garments and textiles, accounting for 39.6% of total export turnover, followed by CPTPP members (over 17%), EU (nearly 13%) and the Republic of Korea (nearly 10%). Despite the positive results, Vietnam’s textile and apparel products have been exported mainly to traditional markets, but not strongly promoted in new markets, particularly CPTCPP member countries. Executive Director of Vietnam Textile and Garment Group (Vinatex) Cao Huu Hieu said that after four months of CPTPP taking effect, the country’s textile and garment exports to internal markets have not shown any signs of growth. Currently, CPTPP is valid for seven of the 11 member countries including Japan, Singapore, Canada, Mexico, Australia, New Zealand and Vietnam. In 2018, the export revenue of Vietnamese textile and apparel products to these countries reached around US$5.3 billion, including US$4 billion from Japan.
Taking full advantage of opportunities
Among CPTPP member countries, Canada and Australia are ideal markets for the Vietnamese textile and garment sector to boost its exports in the near future. In addition, Vietnamese enterprises are looking forward the EU-Vietnam Free Trade Agreement (EVFTA) that is expected to take effect this year. If it goes smoothly, Vietnam’s total export turnover to the EU market will increase by around US$16 billion. One of the difficulties that the Vietnamese textile and garment sector is facing is its dependence on raw and auxiliary imported materials. Meanwhile, in order to take full advantage of any opportunities, enterprises should take initiatives in preparing domestic and intra-regional materials in order to meet the requirements, particularly from new generation FTAs such as CPTPP and EVFTA. Vinatex’s Executive Director Cao Huu Hieu said that in order to enjoy tax incentives from CPTPP, Vietnamese textile and apparel products must meet the strict yarn-forward rule, meaning they must be produced in Vietnam and other CPTPP countries from yarn forward. However, internal countries meet only 7% of Vietnam's demand for imported yarns and fabrics. In fact, it would be nearly impossible for Vietnamese textile and garment enterprises to meet the rules of origin. To make the best use of advantages from CPTPP and reduce import tax rates from 18% to 30% in some new markets that have not signed any FTAs, such as Canada, Mexico and Peru, they should promote investment in the yarn-forward chain with an appropriate roadmap and steps. Businesses should also flexibly grasp some exceptions on the rules of origin. On the other hand, they should pay much attention to trade promotion and directly work with customers to avoid unnecessary intermediate costs. Moreover, enterprises need to promote the joint ventures and links to invest in chains. It is crucial to build centres to supply raw materials for textile and garment enterprises in all regions and areas. The export results of the textile and garment sector in recent time has shown that without the preparation of the suitable equipment, the skill level of workers,, the management methods and the initiatives in raw and auxiliary materials, opportunities from the CPTPP will turn into challenges. Therefore, businesses must pay attention to meeting the standards of foreign markets. Meanwhile, state management agencies should have policies to support enterprises as well as practical measures to remove barriers for administrative reforms and improving their business environment.
Source: Nhan Dhan
As the US-China trade war intensifies, pundits on both sides of the Pacific and elsewhere are wondering: who is the real winner? Interestingly, it is not China or the United States, but countries like Bangladesh, Vietnam, and Chile that may reap the most benefits from a widening trade dispute between the world’s two biggest economies. The impending effect of the trade war on supply chain dynamics and investment patterns could help Bangladesh emerge as a potential winner from the conflict. China and the United States have been stable trade partners to Bangladesh for decades. The volume and value of trade Bangladesh has with both countries are significant. However, the nature of trade with both countries is different. Bangladesh’s top import partner is China, with Bangladesh importing over USD 15 billion in Chinese goods as of 2017. Meanwhile, the United States is the second largest destination for Bangladesh’s exports, taking in more than USD 5.8 billion in 2017 (Germany was the largest destination at just over USD 6 billion). The changes in the geopolitical relationship between the United States and China through this trade war have alarmed many countries that have trade stakes with these two nations—though this raises hope for Bangladesh. As the Asia Development Bank’s chief economist Yasuyuki Sawada argues, “Trade war to generate additional USD 400 million exports for Bangladesh.” The garment sector is expected to reap the most benefits, as it accounts for 80 percent of Bangladesh’s total exports. As the trade war escalated, the country’s garment industry observed significant growth as American retailers are placing more work orders with Bangladesh in order to offset increasing tariffs. According to the US Office of Textile and Apparel (OTEXA), Bangladesh enjoyed a 6.46 percent growth in share in the United States’ market during the first three quarters of 2018. In 2012, a report by McKinsey forecasted that as ready-made garments from China declined, Bangladesh would become the next hotspot for textile manufacturing, and the Bangladeshi market would triple in value by 2020—up from USD 15 billion in 2010. This forecast entails China’s gradual phasing out from labour-intensive industries to a higher value-added, high-tech, capital-intensive manufacturing sector and a greater Bangladeshi stake in labour-intensive industries such as the textile industry. To avoid higher tariff, factories are relocating from China to elsewhere in Asia. Bangladesh has more competitive advantages than its competitors such as Cambodia and Vietnam. Due to the presence of strong unions, setting up factories in Cambodia is more challenging these days. Moreover, in contrast to 160 million Bangladeshis, Cambodia has a population of just 16 million, which gives Bangladesh a competitive edge for this labour-intensive industry. Due to higher wage and production costs, Vietnam also looks less attractive to investors. The minimum wage in Bangladesh is currently USD 95 per month, which is almost half of USD 182 per month in Cambodia and USD 180 per month in Hanoi and Ho Chi Minh City. Unlike Chinese foreign direct investment (FDI), Bangladesh can also benefit by increasing imports from the United States. According to the American Farm Bureau Federation, soya bean exports to China have declined by 97 percent after China’s tariffs on American soya beans came into effect. Currently, Bangladesh imports 2 million tonnes of crude vegetable oil, of which 30 percent or 600,000 tonnes is soya bean; 98 percent of those soybeans come from Argentina, Paraguay, and Brazil. If the country can redirect its supply chain from Latin America to the United States, it may have the potential to supply oil to consumers at cheaper prices without sacrificing profits in the long run. Moreover, being the 51st largest trading partner of the USA, Bangladesh enjoys USD 4.0 billion trade surpluses. As President Trump is going after one trade-surplus country after another, Bangladesh, by importing soya bean from the USA, can be benefited both by getting it at a cheaper rate and reducing the trade deficit that may ultimately contribute to stronger bilateral relations. Furthermore, Bangladesh and other low-income countries in South Asia face US duties of 15.2 percent of the total value of exports, which has a possibility to ease if the US wants to increase imports from these countries to minimise its gap from China. The majority of steel demands of Bangladesh come from importing scrap iron from the United States and its domestic ship-breaking industry. However, the US imposed a 25 percent tariff on all steel imports in March 2018, in efforts to revitalise its declined steel industry. This action led the US suppliers of scrap iron to store their reserves in anticipation of higher tariffs. Consequently, Bangladesh has seen a significant rise in the price of rod, an important product required for its many infrastructure projects. In 2017, Bangladesh scrapped 25 percent of the ships dismantled worldwide and it is considered as a prospective industrial sector. In light of growing development projects, the country might craft an industrial policy to develop its shipbreaking yards, hoping to source a greater amount of cheaper steel domestically, which is already providing more than half of the country’s steel supply. Although Chinese policymakers are seeking to tighten capital flows in hopes to prevent a depreciation of the yuan, China’s increasing involvement in various projects of Bangladesh may mean these constraints will not be as effective in the case of Bangladesh. Additionally, Bangladesh sees an increase in foreign direct investment (FDI) from China to be higher than forecasted through factory relocations, especially in the growing export processing zones (EPZs), as the trade war increases the costs of doing business in China. Furthermore, since Bangladesh is a member of the Belt and Road Initiative (BRI), it is more meaningful for China to increase the investment in sectors of Bangladesh that are affected in China by the trade war. Beijing’s support of Bangladesh was evident in the 27 agreements for investments and loans signed by the two countries—amounting to USD 24 billion—when President Xi Jinping visited Dhaka in 2016. The net FDI from China into Bangladesh exploded after Xi’s visit. It increased to USD 506 million in the 2017-18 financial year, which was only USD 68.5 million in 2016-17, according to The Financial Express. Putting all these together, it clearly appears that the unwarranted trade war between the United States and China opens a sudden window of opportunity for Bangladesh. However, whether the country can reap those benefits will depend on a host of factors. Bangladesh is struggling with a crumbling infrastructure, a weak rule of law regime, and a poor business environment. Many observers are also alarmed that Bangladesh government’s excessive and reckless borrowing from Chinese credits may put the country in a longer-term debt trap, like some other countries. It is, therefore, critical for Bangladesh to work on a favourable policy regime to seize new opportunities as they come by, and to provide enabling conditions for more foreign direct investments—all by avoiding unintended risks and consequences.
Source: Daily Star
The United Nations Economic Commission for Africa (UNECA) on Wednesday hailed the launch of the China-Africa Economic and Trade Expo as a platform that will further boost trade and economic ties between the two sides. The inaugural expo is scheduled for June 27-29 in central China's Hunan Province. The bi-annual expo has been established under the framework of the Forum on China-Africa Cooperation as a new mechanism for economic and trade cooperation between China and African countries. UNECA Southern Africa Office director Said Adejumobi told Xinhua in an interview that the expo will provide African countries with an opportunity to explore trade and economic opportunities in the vast Chinese market. "It's an opportunity to expose the goods and services. It's an opportunity to broker networks, form partnerships and to really be able to learn lessons from the Chinese experiment," Adejumobi said. "China is perhaps the only country that has had the fastest transformation in the world. In less than 50 years, China's economy was dramatically transformed and I think African businesses going for the expo will be able to gain from the exposure, the interaction and the partnerships." He said the success story and dramatic transformation of China's tech giant, Alibaba, which now controls close to 40 percent of global online consumer shopping, should inspire many African participants at the expo. Adejumobi said the launch of the expo, which coincides with the coming into force of the African Continental Free Trade Area (AfCFTA), will add further impetus to trade promotion and growth between the two sides. "I think the AfCFTA provides a good opportunity for Africa to relate with China from a relative position of strength and a position in which China itself can also explore ways to support the AfCFTA," he said. However, the two sides should also discuss and address concerns from African businesses of unfair competition from cheap Chinese goods, he said. He said Africa should also clamor for more Chinese investment in the manufacturing sector, especially the textile industry. "We should be able to see if it's possible for China to produce from Africa, whether it is possible for China to support Africa in terms of skills and entrepreneurship development, research and development and in terms of technology transfer in infrastructure development rather than China having to do it for Africa." The UNECA official said China should encourage Africa to search for technology from all over the world to independently build its economies, rather than having China itself implementing the technology in Africa. "What China did for its own transformation was to learn by doing, and not by others doing it for her. China was able to search for technology from all over the world to do what it needed to do and I think the same approach is what China should encourage Africa to do," Adejumobi said. He said it is in the best interest of China for Africa to develop, noting that Africa's development will ensure that China has a good partner to work with. "Raising the standard of living in Africa is in the interest of China because African people will have more disposable income to buy goods and services. So it's a win-win situation for China and a win-win position for Africa." It is therefore prudent, according to Adejumobi, for Africa to engage with China in a way that will be transformative for the continent. He noted that Africa has benefited from its relationship with China when it is able to assuage the recent economic crisis because it has diversified its trade with China. "In the long-run, the game changer will be how China works with Africa to transform African economies. Technology transfer and support to SMEs are critical areas that China will have to work hand in hand with Africa for Africa to move to the next stage," Adejumobi said.
Source: Xinhua
The Senate Standing Committee on Finance, revenue and Economic Affairs Wednesday reviewed the Finance Bill 2019 as well as the clauses proposed by the representatives of different industrial sectors. The members of the senate also proposed the recommendation for changing in different clauses in Customs Act 1969 and Sales Tax Act 1990 of Finance bill 2019. Chairman Federal Board of Revenue (FBR) Shabbar Zaidi briefed the Committee which met here with Senator Farooq H Naik in the chair to deliberate on the Finance Bill 2019. On the occasion representatives from different industries including textiles, Pakistan Cotton looms Association, Ship breakers, Fertilizers, Timber Association, Wood Products and Islamabad Estate Agents Associations expressed their reservation over different clauses of Finance bill and highlighted issues of relevant sectors for proposing amendment in the this regard. Chairman Counsel All Pakistan Textile Association Zubair Motiwalla while briefing the committee informed that the government would have to pay the Rs 200 billion refunds of textile sector pending for years. He said that Kids’ fabrics have been imported from the foreign countries and the institution should play their role for stopping the smuggling and under invoicing in the country. He said “We are already facing 16 different taxes and 17 % of new sales tax was imposed on the industry in Finance bill 2019. He said that the textile sector was the backbone the country’s economy but now our cotton production has been reduced from 14 million bales to 10 million bales since couple of years. While responding to a question from textile sectors’ representatives, Chairman FBR Shabber Ziadi accepted the issues of refunds of textiles sector and said that now refunds would connect to the exporters. He informed that the government is committed to stop smuggling from the country. In response, the members of committee unanimously directed for maintaining the facility of zero rating for the textiles and other prime industrial sectors. Meanwhile, the committee also directed FBR for resolving other sectors’ issues including the Ship breakers, Timber and Fertilizers Association and Islamabad Real Estate Association. The committee also approved the proposal of Senator Mirza Muhammad Afridi for exemption of Federal Excise Duty on the industrial sector of merged Federally Administrated Areas (FATA). Senator Afridi proposed the committee to extend the tax exemption for merged FATA region for next five years to provide level playing field to the local industrial sector. The committee approved the recommendation of Syed Shibli Faraz , and proposed to abolish the Riba at earliest and at least 0 % of banking sector should be replaced according to the Islamic banking system. The committee also approved the proposed recommendation of Senator Kalsoom Parveen on 0 percent adhoc relief may be given to all the federal government employees of grade 17 and above.While in the meeting Senator Muhammad Talha Mahmood recommendation was also approved by the committee on tax rate on divided income. Talha Mahmood said that 15 % rate for individual is very high and it should be reduced to 10 % as provided earlier. Senators Mohsin Aziz,Syed Shibli Faraz , Ayesha Raza Farooq , Dilawar Khan, Muhammad Talha Mahmood, Imam uddin Shouqeen and representatives of the Ministry of Finance and Revenue and Ministry of Commerce attended the meeting.
Source: Business Recorder
FAISALABAD: Textile exporters have suggested paying 7.5 per cent sales tax instead of 17 per cent, and warned if 17 per cent sales tax is imposed on the textile sector, it would block their Rs 500 billion refund capital inside the market that would cause a surge in unemployment and sharp drop in exports. This suggestion was presented to Prime Minister’s Advisor on Textile Sector Razzaq Dawood and State Minister for Revenue Hammad Azhar by Textile Exporters Association of Pakistan Chairman Khurram Mukhtar during a meeting on Wednesday. The representatives of the Pakistan Hosiery Manufacturers Association, All Pakistan Textile Processing Mills Association, All Pakistan Bed Sheets and Upholstery Manufacturers Association and Power Looms Association were present. Khurram Mukhtar told the ministers if the government wanted to generate 80 billion rupees sales tax on textiles, it should impose tax on at least 100 large traders and middlemen who are not registered in the FBR despite that they purchase yarn and cloth, stitch it on contract and sell garments worth billions of rupees in the local market. He demanded that the exporters should be exempted from sales tax on electricity and gas and the state bank should be allowed to make ‘direct refund’ under an automatic system. He demanded that exporters should be paid 95 per cent refund as soon as the shipments are made, while the remaining five per cent should be paid after completion of audit. The ministers and the government side termed certain suggestion practicable but the negotiations would continue on Thursday (today) on the remaining suggestions.
Source: International News
Seiko Epson Corporation (Epson), the global technology leader, has opened a new textile solutions center called ‘TSC Asia’ at its Fujimi Plant in Nagano prefecture, Japan. Designed to accelerate global expansion of digital textile printing business, TSC Asia can handle every step in the textile printing process including textile pre- and post-treatment. Like the Epson Group’s textile solutions center operating in Como, Italy, since 2014, TSC Asia will support digital textile printing by conducting research and development and by using actual textile printers to produce samples for customers in Japan and throughout Asia, said Epson in a media statement. Epson is currently strengthening its production and sales organisations to position it to provide products and services globally from both Japan and Italy. Epson started producing some models in the Monna Lisa series in 2018 at its Hirooka Plant in Nagano prefecture. The company will be expanding its prototyping and volume production operations for large industrial printers, including the Monna Lisa series, with the completion of a new facility in Hirooka, Innovation Center Building B, at the end of March 2020. In 2019, Epson will begin selling these products through its global sales network, which will also offer enhanced customer proposals and broader support. TSC Asia was opened prior to the completion of Building B in order to respond to growing demand from Asia. “I am pleased that we can now fully support the introduction and use of digital textile printing by an even larger audience thanks to the establishment of TSC Asia,” said Koichi Kubota, representative director, senior managing executive officer and chief operating officer of Epson’s Printing Solutions operations division. “We will contribute to the development of digitisation in the textile field with Epson’s inkjet technology and will make Epson indispensable for the textile world.” Commercial and industrial printing, including digital textile printing, are one of the strategic areas of focus cited in the company’s long-term corporate vision, Epson 25. Epson will broaden the world of digital printing in these areas, further accelerating innovation with inkjet technology. Epson was among the first inkjet printer manufacturers to put its inkjet technology to use in digital textile printing. Joined by its Italian subsidiaries ForTex Srl and Fratelli Robustelli Srl, Epson has been researching and developing digital textile printing as well as producing the Monna Lisa series of inkjet digital textile printers. (PC)
Source: Fibre1fashion
