Even though the Union Budget is to be presented only on Friday, July 5, and there’s a lot of confidentiality maintained as far as Indian budgets go, some clues are available from answers the Finance Minister has given in the Rajya Sabha. Furthermore members of Parliament asked questions and Nirmala Sitaraman has submitted a written response to one such question on the economy by an MP in the Rajya Sabha. Reportedly one of the key takeaways from the Finance Minister’s reply to the question is the seriousness being attached at the top levels of the Indian government to the issues of encouraging investments, particularly in sectors that can create more employment. Meanwhile the budget therefore may have something special for sectors like textiles and real estate, considered largest employers in the country. Currently the government has been holding discussions with experts from diverse fields to gather their opinions on what all can be done to kick-start the economy and the minister has also referred to the five-member cabinet committee on investment and growth chaired by the Prime Minister that has been constituted to address the issues. Moreover on the issue of willful defaults, the reply placed in the Rajya Sabha by Finance Minister Nirmala Sitaraman says Rs 1.5 trillion worth of loans have been classified as “willful defaults" in FY19 by the state run banks, with the SBI accounting for as much as Rs 46,158 crore of this amount. PNB and Bank of india stand second and third in terms of loans defaulted from their books.
Source: Ap-Herald
Textile dyeing units in Tirupur have urged the Union government to reduce GST on service provided by CETPs (common effluent treatment plants) from 12% to 5% in the coming budget. The CETPs were meant for implementation of zero liquid discharge (ZLD) norm in the apparel industry as they would treat effluents sent from the dyeing units and send recycled water to the dyeing units. In a memorandum submitted to the Union finance minister Nirmala Sitharaman, Dyers Association of Tirupur president S Nagarajan said, "Considering the important role played by CETPs in environmental protection and water conservation, tax was exempted for their service in both occasions in 2005 and 2011 respectively. But when GST was introduced, 18% tax was imposed on the service, and it was later reduced to 12% but we have been insisting the government to make it 5%." He said, "12% service tax levy on members of CETPs are non-refundable. Because of this, the processing cost in the dyeing units was increased by 3% to 4%, and subsequently increased the cost of garments manufactured in Tirupur, in comparing to countries like Bangladesh, Vietnam, Sri Lanka and Pakistan, where there is no ZLD system in place."
Source: Times of India
"As the previous government comes into power for the second time, the ambiance is strife with intrigue as to what new announcements would be made. With the onset of budget looming around the corner, many reforms are said to upli the very framework of a business that one conducts business in, "Monica Oswal, Executive Director, Monte Carlo said. The interim budget hadn’t brought great cheers to the textile segment- Finance Minister Piyush Goyal had initially proposed Rs 5,831.48 crore budgetary allocations for the textile ministry for 2019- 20. This came as 16.01 percent lower than the current fiscal, worrying the textile players. One can hope that the recent budget would bring more financial allocations to bolster the industry, " Oswal added
Source: Deccan Herald
Terming port development crucial for economy, the Economic Survey 2018-19 Thursday said the government has accorded topmost priority for capacity augmentation of the sector through initiatives like Sagarmala. Ports handle around 90 per cent of EXIM Cargo by volume and 70 per cent by value. "Port sector development is very crucial for the development of any economy...In order to meet the ever increasing trade requirements, expansion of Port Capacity has been accorded the highest priority with implementation of well-conceived infrastructure development projects like sagarmala, project Unnati etc," the Economic Survey, tabled by Finance Minister Nirmala Sitharaman in Parliament, said. As per the Port Performance Benchmarking & Performance Index published by Logistics Data Bank for February, 2019, Gateway Terminals India is in the top performing category and International Container Transhipment Terminal, Kochi in the low performing category, the survey said. Towards facilitating Ease of Doing Business, the shipping ministry has identified various parameters for reducing dwell time and transaction costs at the major ports, which include elimination of manual forms, accommodation for laboratories to participating government agencies, direct port delivery, installation of container scanners, e-delivery orders, radio frequency identification-based gate-automation System, etc, it added. These initiatives have already been implemented at Jawaharlal Nehru Port Trust and are being taken up at other major ports, the survey pointed out. Stressing that "shipping plays a pivotal role in India's trade dynamics", it said, "As on January 31, 2019, India had a fleet strength of 1,405 ships with dead weight tonnage (DWT) of 19.22 million (12.74 million GT) including Indian controlled tonnage, with Shipping Corporation of India (SCI) having the largest share of around 30.52 per cent. Of this, around 458 ships of 17.58 million DWT (11.26 million GT) cater to India's overseas trade and the rest to coastal trade". India had a fleet strength of 1,400 vessels with gross registered tonnage (GRT) of 12.68 million in 2018, as compared to fleet strength of 1,371 vessels with 12.35 million GRT at the end of December 2017. About the Inland Water Transport, the survey said India's first inland waterway multimodal terminal (MMT) at Varanasi was inaugurated in November last year by Prime Minister Narendra Modi and the first container consignment on Ganga, which had sailed from Kolkata, was received at Varanasi MMT on the same day. "The main focus of MMT is to promote inland waterways as it is cheap and environment friendly. To enhance the access and establish alternative connectivity to the North East through Indo-Bangladesh Protocol route, dredging works between Ashuganj and Zakiganj, and Sirajganj and Daikhawa in Bangladesh through 80:20 sharing (80 per cent by India and 20 per cent by Bangladesh) have been awarded," it said. In October 2018, a Standard Operating Procedure of MoU on Passenger and Cruise service on the Coastal and Protocol routes between India and Bangladesh has been signed to enhance bilateral movement of passengers /tourists. The cargo traffic on National Waterways was 55 million tonnes in 2017-18 and has increased by 31 per cent in 2018-19.
Source: Business Standard
Senior officials of India and the European Union would meet here next week to discuss trade related issues, including the long-stalled proposed free trade agreement, sources said. Chief negotiators of the free trade agreement are expected to deliberate upon ways to resume the talks. Negotiations for the pact, officially dubbed as the Bilateral Trade and Investment Agreement (BTIA), have been held up since May 2013 and have witnessed many hurdles. Further, senior officials from ASEAN are also likely to hold discussions with Indian authorities on the proposed mega free trade agreement RCEP. The Regional Comprehensive Economic Partnership (RCEP) bloc comprises 10 ASEAN group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six free trade agreement (FTA) partners -- India, China, Japan, South Korea, Australia and New Zealand. The talks assume significance as member countries are targeting to conclude the negotiations by the end of this year. RCEP negotiations, which started in Cambodian capital Phnom Penh in November 2012, aim to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. A US official delegation will also meet officials here for trade-related issues. This will be the first India-US meeting after America's decision to roll back export incentives under their GSP programme.
Source: Business Standard
RCEP is a proposed regional economic integration agreement among the 10 Asean countries and its six free-trade agreement partners—Australia, New Zealand, Japan, China, South Korea and India. Trade ministers of Indonesia and Thailand, accompanied by the Asean Secretary General, will meet commerce minister Piyush Goyal early next week to hear India’s concerns and expedite negotiations for the proposed Regional Comprehensive Economic Partnership (RCEP). This comes on the heels of Prime Minister Narendra Modi’s meetings with Southeast Asian (Indonesia-Thailand-Singapore) leaders on the sidelines of the G20 summit in Osaka on June 28-29, where the issue of concluding an agreement by the end of the year figured prominently. Over the past two years, key SE Asian leaders have raised the issue with Modi, who has a favourable view of what would be the world’s largest trading bloc, ET has learnt. “The minister will meet his counterparts from Thailand and Indonesia, but the agenda of the meetings is yet to be firmed up,” a commerce and industry ministry official said. While Thailand is the current Asean chair, Indonesia is the coordinator for RCEP. RCEP is a proposed regional economic integration agreement among the 10 Asean countries and its six free-trade agreement partners—Australia, New Zealand, Japan, China, South Korea and India. Intense negotiations are slated for this year, with one meeting held in Australia and another scheduled later this month in China. A ministerial meeting is scheduled in China in August. India’s textile and automobile industries are wary about competition from China. The aluminium and copper industry associations have raised concerns over issues such as the likely widening of India’s trade deficit with China due to an “alarming” spike in imports and a potential threat to the ‘Make in India’ initiative. India registered a trade deficit in 2018-19 with as many as 11 RCEP member-countries including China, South Korea and Australia. The grouping has been negotiating the trade pact since November 2012. “These meetings could be a pressure tactic to keep India in the trade agreement as China recently proposed an Asean-plus-three pact without India, Australia and New Zealand,” said Biswajit Dhar, a professor at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University. According to Dhar, through Asean-plus-three, the other members are responding to India’s negotiating strategy. “However, if they are not willing to discuss services, there is no point of a deal,” Dhar said. “RCEP is an opportunity and India must sign it, keeping adequate safeguards. Not signing RCEP means economic and strategic isolation in our immediate backyard,” Prabir De, head of the India-Asean Centre at Research and Information System for Developing Countries, told ET. India’s major proposals, which RCEP countries have rejected due to their fears over migration and loss of jobs, include a more business-friendly visa regime through a fee waiver on a common reciprocal basis and a business travel card to facilitate the movement of professionals and tourists in the region. The pact may boost India’s service exports by $2 billion-$10 billion, although it won’t compensate for the higher amount of goods imported, according to one of three government-appointed think tanks studying the agreement. India recently protected its interests by managing to fight off patent provisions on generic medicines and seeds in negotiations for RCEP. New Delhi’s concerns of a widening trade deficit, especially with China, have prevented the deal from getting finalised, many members have said. However, experts said India’s ability to extract concessions highlights the willingness of other states to accommodate New Delhi’s demands to involve the country in a final agreement.
Source: Economic Times
The US has alleged that the duties imposed by India appear to be inconsistent with two norms of GATT. The US on Thursday dragged India to the WTO by filing a complaint against New Delhi's move to increase customs duties on 28 American goods, alleging the decision is inconsistent with the global trade norms. According to a communication of the Geneva-based World Trade Organisation (WTO), the US said that the additional duties imposed by India "appears to nullify or impair the benefits accruing to the US directly or indirectly" under the GATT 1994. The General Agreement on Tariffs and Trade (GATT) is a WTO pact, signed by all member countries of the multi-lateral body, aims to promote trade by reducing or eliminating trade barriers like customs duties. The US has alleged that the duties imposed by India appears to be inconsistent with two norms of GATT. The US has stated that India does not impose these duties on like products originating in the territory of any other WTO member nation. "India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India's schedule of concessions," the communication said quoting the US application. The duties are inconsistent because "India fails to extend to products of the US an advantage, favour, privilege or immunity granted by India with respect to customs duties and charges of any kind imposed on or in connection with the importation of products originating in the territory of other members...," the US has alleged. As part of the dispute, the US has sought consultations with India under the aegis of the WTO's dispute settlement mechanism. "We look forward to receiving your reply to the present request and to fixing a mutually convenient date to hold consultations," it said. As per the WTO's dispute settlement process, the request for consultations is the first step in a dispute. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel. This case assumes significance as officials of both the countries would be meeting next week here to discuss trade related issues. The two countries are also at loggerheads at the WTO on other issues. The US has challenged certain export promotion schemes of India, while India has challenged USA's unilateral hike on customs duties on certain steel and aluminium products. The US has rolled back export incentives from India under its GSP programme and New Delhi has imposed higher customs duties on 28 American products including almond, pulses, walnut, chickpeas, boric acid and binders for foundry moulds. The other products on which duties were hiked include certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets. The duties were hiked as retaliation to the US move to impose the highest customs duties on certain steel and aluminium goods. India's exports to the US in 2017-18 stood at USD 47.9 billion, while imports were at USD 26.7 billion. The trade balance is in favour of India.
Source: Business Standard
The Commerce Ministry's trade investigation arm, DGTR, is developing a web application for online submission of petitions and information related to anti-dumping and countervailing probes, Economic Survey 2018-19 said Thursday. The application would help the industry participate in these investigations which are important trade remedial measures. The Directorate General of Trade Remedies (DGTR) is an arm of the Commerce Ministry which carries probe on alleged dumping of goods from other countries. If it is established in the probe that dumping has caused material injury to domestic players, it recommends anti-dumping duties to guard the interest of industry. "DGTR is in the process of developing a web application for online submission of petitions, information submissions, rejoinders etc. related to anti-dumping/ countervailing/ anti-circumvention investigations, for convenience of the industry...," the survey said. India conducts anti-dumping investigations on the basis of applications filed by the domestic industry with prima facie evidence of dumping of goods in the country. The probe is a quasi-judicial process and is allowed under the World Trade Organisation (WTO) rules. India is a member of WTO which frames laws for global exports and imports. During the period from April 2018 to March 2019, DGTR had initiated 24 anti-dumping (both fresh and review) investigations, and issued final findings in 50 such cases. In 2018-19, it started five countervailing duty probes, while one safeguard measure investigation was also finalised during the period.
Source: Business Standard
‘But policy stability and an industrial regime that nurtures innovation is the key’. India’s exports may get back on the fast track in the current fiscal after slowing down last year, as global output is projected to accelerate in the second half of 2019. However, if exports and investments are to become the “new drivers of the Indian economy” and help contain the current account deficit (CAD) this fiscal — as suggested by the Economic Survey — the government needs to take seriously the Survey’s thrust on policy stability and also look at sustainable ways to push exports.
Pressure on crude prices
The oil-import bill is expected to keep rising this fiscal, but an increase in exports could help balance the situation, the Survey, prepared by Chief Economic Advisor (CEA) Krishnamurthy Subramanian, said. “There could be pressure on crude prices to increase, as world output grows. Yet, that may not impact India since growth in world output will also favourably impact India’s exports, which is not decoupled from growth of world trade,” it said. However, the increase in exports cannot be taken for granted, as the government’s efforts to revive manufacturing and exports over the last five years have not yielded tangible results, according to Biswajit Dhar, Professor, Jawaharlal Nehru University.
Need to change dynamics
“The pertinent question here is the different business model that the government will bring in to change the entire dynamics. We need to have a focussed industrial policy. Our IPR policy also needs to be robust and innovation-driven, as we cannot depend upon the developed countries to give us technology,” Dhar said. The growth rate of merchandise exports and imports fell in 2018-19 compared to the previous year, attributable to the slower growth of world output and trade and the lower domestic GDP growth in 2018-19 among other factors, the Survey stated. India’s balance of payment situation deteriorated in the first half of 2018-19 due to the sharp rise in crude oil prices, leading to a higher trade deficit and widening of the CAD. The CAD moderated to an extent in the third quarter, as international crude oil prices eased sequentially in November and December 2018.
Investment uncertainty
On a positive note, the Survey noted that the government is expected to lift restrictions on FDI inflows further, which will continue to increase the stability of sources funding the CAD. It, however, highlighted the negative correlation between foreign investments and economic uncertainty. . Not just short-term inflows, but also long-term capital inflows are affected by higher uncertainty in economic policy.Changes made to the FDI policy relating to e-commerce recently have drawn lot of criticism from foreign investors and countries, including the US, for creating uncertainty.
Source: Business Line
India's first Design Development Center 'Fashionova' was launched in the Textile city Surat recently to promote the city in the field of the fashion design sector. The main objective of this studio is to provide a strong platform to all those who have a flair of the apparel business. It fulfills, on a large scale, all business needs from co-working space, technicians, expert advises to cognitive workshops and exposure to the industry. Surat is renowned for its textile and the city had to be dependent on Mumbai or Delhi for unique and latest design trends. This design development center will bridge this gap. "There are many fashion institutes in the country, but our objective is not just to teach fashion design. We are focused on promoting creativity and want to provide them market assistance also where they can sell their creative design and earn money", said Anupam Goyal, Founder, Fashionova Design Development. Fashionava Design Development Centre has been started at Udhana area of the city with all state-of-the-art machinery and other facilities. It was inaugurated in the presence Paris-based-designer Neona Skane, Bollywood celebrity designer Salim Asgarally, CHASA IDT Director Chandrakala Sanap and Surat industrialists. "This is the first of its kind of design development center in India and it will achieve new heights in the near future", he added. It is to mention that Fashionova has been named in the Start-up scheme of the Government. The new center will fulfill the needs of new designs of the city and all types of brands will be able to connect with emerging designers of the country.
Source: Business Standard
The onus of rescuing economic growth has been placed squarely on exports, since the share of consumption in gross domestic product (GDP) remains constrained. Any investment-driven growth model must have an aggressive export strategy, the government said in its Economic Survey of 2018-2019. The onus of rescuing economic growth has been placed squarely on exports, since the share of consumption in gross domestic product (GDP) remains constrained by a high level of savings, the Survey said. Goods exports rose 8.8 per cent in 2018-19, after a 10 per cent rise in the previous year. However, it mentioned weak exports growth in 2019-20 as a key downside risk to the economy, taking note of continuing heightened US-China trade tensions. The Survey sounded a stark warning that prospects of export growth remain weak for 2019-20 if status quo is maintained. The World Economic Outlook in its April 2019 issue had projected growth in world output at 3.3 per cent in 2019, down from 3.6 per cent in 2018.
Rupee devaluation
The Survey pointed out that the desired export growth required to deliver the 8 per cent real GDP growth rate may require a depreciation in the real effective exchange rate. "But we emphasise export growth stemming from increases in productivity rather than currency depreciation," the Survey countered. However, the government stressed that a higher growth rate for exports has been seen in Rupee terms due to the depreciation of the currency, while that of imports declined in 2018-19. In view of the demand by industry to re-assess India's existing free trade agreements (FTA), the Survey noted that India's imports from FTA nations have been on the rise, accounting for 52.0 per cent of India’s total imports. On the other hand, exports continue to trail. Outbound trade with trade partners accounted for 36.9 per cent of total exports. The high-level advisory group, formed to boost exports and headed by ex-member of the prime minister's economic advisory council Surjit Bhalla, had suggested making impact assessment studies for industry a pre-requisite for all trade negotiations. India has signed 28 bilateral and multilateral trade agreements with various countries and nation groupings.
East Asia model
The Survey also continued to focus on manufacturing-led growth in east-Asian economies such as Japan, South Korea and most importantly China. Chief Economic Advisor Krishnamurthy Subramanian borrowed from his predecessor Arvind Subramanian’s idea of pushing labour-intensive manufacturing investment to simultaneously boost productivity, job creation and exports. In two such key sectors — textiles and leather — the government has indicated further structural reforms. The latest survey again called for drastically raising India’s share in global exports through a targeted plan of pushing up market share in major markets. In the latest ‘virtuous cycle’ of economic growth, the government has stressed the need for India's exports to GDP ratio to rise fast.
Source: Business Standard
Our textile industry stands next to agriculture, providing employment to 110 million people directly and indirectly. Tamil Nadu’s textile hub, Tirupur, has been slowly bleeding from the blow inflicted by China’s tilt to Bangladesh, Vietnam and Ethiopia. The wound hurts more because of India’s excessive dependence on China for the past three years and its dwindling presence in Europe. The Tirupur Exporters’ Association, India’s leading knitwear/readymade garment export cluster, has been clamouring for an agreement that is compatible with the WTO in place of incentives like the Merchandise Exports from India Scheme (MEIS) given to exporters. Its recent appeal to the Centre to diversify global reach must be taken seriously to stitch the sector back together. For readymade garments, the industry has been urging the Centre to work towards inking Free Trade Agreements with the EU, the UK and the Eurasian Economic Union, and trade deals with Canada and Australia. The sector feels the pinch as India is competing with Bangladesh, Vietnam, Cambodia, Ethiopia, Myanmar and Sri Lanka, apart from China, currently the world’s largest garment exporter. Many of them export duty-free to the EU because they are either in the least developed country bracket, are a signatory of Free Trade Agreements or come under the US Generalised System of Preferences (GSP) list. While Bangladesh enjoys duty-free status while exporting to Europe, India and Vietnam pay 13-15% in import duties. Yet, Vietnam has the advantage of better efficiency (90%) than India (50%). Labour is cheaper in Bangladesh and Vietnam. So, India has slipped to the fourth choice for any importer, after China, Bangladesh and Vietnam. Our textile industry stands next to agriculture, providing employment to 110 million people directly and indirectly. The total textile exports amount to $38 billion, with a 4.3% share in the GDP. India’s share in global garment exports is 5.2%. It is high time the Centre delves into the possibility of inking trade deals that would save the sector from being ripped apart, and exporters hope that Friday’s Budget would provide them some relief.
Source: The New Indian Express
The Indian rupee on July 4 furthered its gains by another 39 paise to 68.50 a U.S. dollar, tracking firmer emerging market currencies, lower crude oil prices, even as participants keenly awaited the Union Budget to be unveiled on July 5. At the interbank foreign exchange market, the rupee opened at 68.86 per dollar and advanced to a high of 68.49 during the day. It finally settled at 68.50, up 39 paise against its previous close of 68.89. Meanwhile, the Economic Survey 2019 stressed the need to give a huge boost to spending and reforms to accelerate higher rate of expansion to double the economy’s size to $5 trillion by 2024-25. Forex traders said the budget will give further cues going ahead in the currency market. “Rupee gain was followed by stronger emerging market currencies. Lower crude oil prices and stronger domestic equity markets supported rupee in Thursday’s trade,” said V.K. Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Meanwhile, the 10-year government bond yield was at 6.75% on July 4. “India’s 10-year sovereign bonds are trading higher as a key government report said the federal and state administrations are generally on the path of fiscal consolidation,” Mr. Sharma said. Brent crude futures, the global oil benchmark, slipped 0.13% to $63.74 per barrel. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out ₹28.95 crore on Thursday, as per provisional data. The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.03% to 96.73. In the stock market, the 30-share BSE Sensex settled 68.81 points, or 0.17%, higher at 39,908.06; while the broader NSE Nifty climbed 30 points, or 0.25%, to 11,946.75. The Financial Benchmark India Private Ltd. (FBIL) set the reference rate for the rupee/dollar at 68.8776 and for rupee/euro at 77.7256. The reference rate for rupee/British pound was fixed at 86.6076 and for rupee/100 Japanese yen at 64.00.
Source: The Hindu
As many as 700 brands and manufacturers from 32 countries are exhibiting at the ongoing HGH India in the Bombay Exhibition Centre, Goregaon. The 8th edition of India's largest trade show for home textiles and home décor is setting new benchmarks in the industry, bringing new brands, manufacturers, innovation, design and products under one roof. The three day exposition was inaugurated by Shantamanu, development commissioner, handicrafts along with Arun Roongta, managing director of HGH India and other dignitaries from the industry. HGH India is a trade show which is helping the home industry integrates products across segments. "In the last eight years of operation, HGH India has displayed clear, increasing progress. Their focus, much like ours has always been on the artisans, craftsmen, carpet weavers and handicraft workers. Trade shows like this help in providing exposure to them and watching the biggest names of the industry together on one unified platform, helps them understand the kind of opportunities available. While HGH stands for Home Décor, Gifts and Houseware, for me it stands for Higher, Go Higher,” Shantamanu said. Among the many highlights of the exhibition, is the presence of international brands from Turkey, Europe, US, UAE, the UK and over 75 exhibitors from China brought through the Zhejiang Broad International Convention & Exhibition Co. Ltd. among others. There is also a strong presence of well-known Indian brands showcasing a wide range of innovative products in the home textiles, home décor, houseware, and gift space "We at HGH India are overwhelmed with the response in spite of the delayed start. I would like to thank all the exhibitors and retailers for their unanimous support in helping us keep the show alive for the benefit of the entire industry. HGH India’s 8th edition is a testimony to the entire home product industry’s trust in the trade show and we are confident that it will be another successful year for all our patrons, accelerating the growth of the home textile, home décor, houseware and gift industries," said Roongta.
Source: Fibre2Fashion
FBR will deliver a comprehensive presentation with regard to the procedures of tax returns and its flaws in next meeting of NA body. The National Assembly Standing Committee on Finance on Thursday formed a sub-committee to identify the problems being confronted by the local textile sector due to zero rating on export and other taxation charges regarding exports, imports and local industries. The meeting of the Standing Committee on Finance, Revenue and Economic Affairs of the National Assembly was held under the chairmanship of Asad Umar, MNA. While talking about the refund problems being faced by the exporters, the Committee recommended the FBR to arrange a detailed briefing about the criteria of refunds and role of newly created refund’s company in FBR. The Committee decided to appoint a four members sub-committee under the convenership of Faiz Ullah, MNA. Sub-Committee comprises of the following: Raza Nasrullah, MNA Member, Aisha Ghaus Pasha, MNA Member, Ms. Nafisa Shah, MNA, Member. The Sub-Committee will submit its recommendations to main Committee within thirty days. The Committee recommended that Federal of Board of Revenue (FBR) will deliver a comprehensive presentation with regard to the procedures of tax returns and its flaws in its next meeting. The Committee noted the problems being faced by the real estate sector due to uncertainty about the implementation of property value with regard to DC rates, increase in FBR value and recommended the Advisor on Finance & Revenue to coordinate with provincial governments in order to address the anomalies in that regard. The Committee also directed the FBR to issue a clarification about increase in FBR’s property rates at the earliest. The Committee was of the view that single assessment mechanism should be introduced to define the property rates in the country. The Committee deferred the agenda regarding work plan assigned by the Special Committee on Agricultural Products to Uplift the Agriculture Development in the country and directed that Fakhar Imam or any other member of the said Committee may be invited in the next meeting of the Committee. The Committee expressed its grave concern over the unsatisfactory and incomplete presentation of FBR on the Automatic Exchange of information, data received from Organization for Economic Co-operation and Development (OECD). The Committee directed that Chairman FBR should brief the Committee in that regard in its next meeting. The Committee unanimously recommended that Competition Commission of Pakistan (CCP) will be invited shortly to explain the reasons of sharp price increase in cement, flour, sugar, domestic airfare and automotive industry in the county. The meeting was attended by MNAs Raza Nasrullah, Faiz Ullah, Makhdoom Syed Sami-ul-Hassan Gillani, Sardar Nasrullah Khan Dreshak, Jamil Ahmed Khan, Faheem Khan, Dr. Ramesh Kumar Vanwani, Chaudhry Khalid Javed, Ali Pervaiz, Dr. Aisha Ghaus Pasha, Ms. Nafisa Shah and Ms. Hina Rabbani Khar besides the senior officers of Ministry of Finance, EAD, FBR, SBP, SECP, ZTBL, Ministry of Law, Ministry of National Food Security & Research.
Source: The Nation
Vietnam spent over 6.7 billion U.S. dollars importing cloth in the first half of this year, posting a year-on-year increase of 7.6 percent. Its largest import market of cloth was China, tailed by South Korea and Japan, according to the Vietnamese Ministry of Industry and Trade on Thursday. Between January and June, Vietnam imported 826,000 tons of cotton worth over 1.5 billion U.S. dollars, down 1.3 percent in volume and 2 percent in value. The country also poured more than 1.2 billion U.S. dollars into importing 535,000 tons of yarn in the same period, up 6.6 percent and 8.6 percent, respectively. In 2018, Vietnam spent 12.9 billion U.S. dollars on importing cloth, up 13.5 percent; over 3 billion U.S. dollars on cotton, up 28.5 percent; and 2.4 billion U.S. dollars on yarn, up 32.7 percent. Vietnam reaped 30.4 billion U.S. dollars from exporting garments and textiles last year, up 16.6 percent against 2017, mainly to the United States, Japan and China, according to the country's General Statistics Office.
Source: Xinhua
The leaders of the two countries agreed last weekend to relaunch trade talks that had stalled in May after US officials accused China of pulling back from commitments. Existing US tariffs will have to be removed if there is to be a trade deal between Beijing and Washington, China's commerce ministry said on Thursday. The leaders of the two countries agreed last weekend to relaunch trade talks that had stalled in May after US officials accused China of pulling back from commitments made in the text of a pact negotiators had said was nearly finished. Trade teams from both countries are in contact, commerce ministry spokesman Gao Feng told a regular media briefing. To get talks restarted, US President Donald Trump had agreed not to put tariffs on about $300 billion in additional Chinese imports and ease curbs on Chinese tech giant Huawei. The United States now has tariffs of 25 per cent on $250 billion of Chinese goods, ranging from furniture to semiconductors. China welcomes the US decision not to slap new tariffs on its goods, Gao said, when asked how long the trade truce can last.
Source: Business Standard
China and Bangladesh on Thursday agreed to advance their cooperation under the multi-billion dollar Belt and Road Initiative (BRI) as Prime Minister Sheikh Hasina held wide ranging talks with her Chinese counterpart Li Keqiang to further consolidate the bilateral ties and signed several agreements. On her first visit to China after her re-election, Hasina, who was accorded a red carpet welcome, held talks with Chinese Premier Li during which a consensus was reached to step-up cooperation under the BRI, official Chinese media reported. After the talks, Li and Hasina witnessed the signing of bilateral cooperation agreements in different sectors ranging from aid for the Rohingyas, economic and technical cooperation, investment, power, culture, tourism and water conservancy. China agreed to provide 2,500 tonnes of rice to the forcibly displaced Rohingyas from Myanmar, Foreign Secretary Md Shahidul Haque told Bangladesh's state-run BSS news agency. In his talks with Hasina, Li stressed that China stood ready to better synergize the BRI with Bangladesh's development strategy and speed up mutually beneficial cooperation in various fields. He called on the two sides to work together to build the Bangladesh-China-India-Myanmar (BCIM) economic corridor in a bid to connect the market covering nearly three billion people. The reference to the BRI and the BCIM by Li is regarded significant from India's point of view. Under the BRI, China has been routing most of its investments through its multi-billion-dollar global project aimed at financing and building infrastructure projects, especially in developing countries to enhance its influence across the world. The BRI investments were criticised by the US as debt trap especially after Sri Lanka handed over its Hambantota port as debt swap to China in 2017. The controversial USD 60 billion China-Pakistan Economic Corridor (CPEC) and BCIM are the components of the BRI, which was mooted by Chinese President Xi Jinping in 2013. While the CPEC regarded as the flagship project of the BRI took off, the BCIM failed to make headway. India has protested to China over the CPEC as it is being laid through Pakistan-occupied Kashmir. China lately is making efforts to revive the BCIM. After a long gap, Xi raised the BCIM project during his meeting with Prime Minister Narendra Modi at Bishkek on the sidelines of the Shanghai Cooperation Organisation summit early this month. The 2800-km BCIM corridor proposes to link Kunming in China's Yunnan province with Kolkata, passing though nodes such as Mandalay in Myanmar and Dhaka in Bangladesh before heading to Kolkata. With an estimated USD 31 billion investments, China has emerged as a major investor in Bangladesh - mainly in the infrastructure and energy sectors - raising concerns in India over growing Chinese influence in the region. The rapid expansion of Chinese investments in Bangladesh were regarded as the second highest by Beijing after the USD 60 billion CPEC. During his talks with Hasina, Li also expressed expectation to discuss feasibility of joint study on the free trade agreement, increase import of Bangladeshi high-quality products meeting the needs of the Chinese market, promote balanced development of trade, and facilitate bilateral investment and personnel exchanges. China will continue to provide assistance within its capacity for Bangladesh's development, Li added. Hasina said both sides are committed to peace, stability, mutual benefits, and settlement of disputes by peaceful means. She said Bangladesh was advancing the goal of "Sonar Bangla" at present, reiterating that her country was willing to actively participate in the joint construction of BRI, accelerate the building of the BCIM, press ahead regional connectivity, beef up cooperation on trade, investment, service and infrastructure, so as to jointly embrace an even better future, Xinhua news agency reported. Hasina began her visit on July 3 by taking part in Summer Davos meeting held at the Chinese city of Dalian. She is also scheduled to meet Xi before winding up her visit on Friday. China in recent years has ramped up its investments in Bangladesh especially after the visit of Xi in 2016. China's investments in Bangladesh included the construction of 6-km long bridge across the Padma river, as the Ganga is known in the country, costing about USD 3.7 billion and the USD 2.5 billion power plant at Payra near Dhaka.
Source: Business Standard
The programme will require "decisive fiscal consolidation" and a multi-year plan to strengthen Pakistan's notoriously weak tax system as well as large scale reforms that are likely to pile pressure on the government of PM Imran Khan. The International Monetary Fund Executive board approved a three-year, $6 billion loan package for Pakistan on Wednesday to rein in mounting debts and stave off a looming balance of payments crisis, in exchange for tough austerity measures. Board approval will allow immediate disbursement of around $1 billion, with the remainder to be phased in over the period of the programme, subject to quarterly review, the IMF said, highlighting the need for Pakistan to agree to tough conditions for the coming three years. Just as important as the package itself, approval will also unlock an additional $38 billion from Pakistan's international partners over the programme period. "Pakistan is facing significant economic challenges on the back of large fiscal and financial needs and weak and unbalanced growth," IMF First Deputy Managing Director David Lipton said in a statement. The programme will require "decisive fiscal consolidation" and a multi-year plan to strengthen Pakistan's notoriously weak tax system as well as large scale reforms that are likely to pile pressure on the government of Prime Minister Imran Khan. Khan came to power last August, inheriting an economy plagued with problems. But he was initially deeply reluctant to turn to the IMF, which has provided more than 20 bailout packages to Pakistan over the decades. However, despite securing billions of dollars in loans from friendly countries including China, Saudi Arabia and the United Arab Emirates, mounting economic headwinds forced his government to turn to the fund. With foreign exchange reserves shrinking to only $7.3 billion, less than the equivalent of two months' worth of imports, and the budget deficit set to top 7% of gross domestic product this year, Pakistan faces tough economic medicine to tackle problems that have been years in the making. Dominated by agriculture and textiles and with a large informal sector that pays no tax, the economy has struggled to develop export industries and successive governments have spent heavily to defend an overvalued exchange rate. The $60 billion China Pakistan Economic Corridor, launched in 2015, had promised a new beginning. Its infrastructure projects were intended to become a new foundation for growth, but they also required heavy imports of capital equipment, widening the trade deficit. According to IMF forecasts, real GDP growth is expected to slow to 2.4% in the current fiscal year to June 2020, down from 3.3% in the year just ended. The IMF's terms call for a "flexible market-determined exchange rate" to help correct an unsustainable current account deficit and make industries more competitive, while trying to expand the tax base in a country where only 1% of the 208 million population file returns. The central bank, which controls the currency, has hiked interest rates to 12.25% and slashed the rupee to historic lows against the dollar, but this has piled more pressure on households facing inflation running at almost 9%.In addition, in a bid to cut public debt, the government has set ambitious tax and revenue plans, despite failing to meet the previous year's targets and hiked prices in the creaking energy sector, where mounting debt backlogs have acted as a growing drain on government resources. The programme also calls for expanded social spending to protect the most vulnerable. However, the combined package of belt-tightening measures has prompted anger from opposition parties, which say the government hesitated too long before turning to the fund. They have pledged a campaign of protests this month.
Source: Business Today
