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Union Minister Smriti Irani is scheduled to lay the foundation of a textile tourism park on Monday at Meghalaya's Ri-Bhoi district, an official said here.
The textile minister will also review the construction work of National Institute of Fashion Technology centre in East Khasi Hills district during the visit, he said.
The foundation stone for the fashion centre was laid by former textile minister Kavuru Sambasiva Rao in 2013.
Chief Minister Conrad K Sangma will receive her at the Shillong airport in the morning, the oicial said, adding that Irani is also expected to visit an Anganwadi centre at Umsning.
Source: Deccan Herald
The DRI has asked the customs wing to look carefully at the origin certificates issued for such consignments by Bangladesh trade bodies.
The Directorate of Revenue Intelligence has sounded an alarm over garments being imported through Bangladesh from other countries to take advantage of duty concessions offered under a free-trade pact.
The DRI has asked the customs wing to look carefully at the origin certificates issued for such consignments by Bangladesh trade bodies. “There is concern over growing cheap imports from third countries via Bangladesh,” a government official said, adding that the agency wants to ensure that only Bangladeshi origin imports are brought in.
The move comes after the DRI issued a show-cause notice in early August to Future Enterprises on 83 garment consignments, allegedly imported from third countries and routed via Bangladesh to take advantage of zero import duty. The agency fears that the route could be abused by other importers and wants the customs to remain alert. Customs will now keep a close watch on garment imports under the South Asian Free Trade Area agreement entering the country via Bangladesh, another government official said. The South Asian Free Trade Agreement mandates 30% local value addition in least developed countries for import by other nations. Local value addition norms are incorporated in the
trade pacts to not just protect the importing partner but also to ensure contribution to the exporting partner’s economy and local job creation through stringent value addition criterion.
“Such imports using the FTA route without any value addition don’t just defeat the whole objective of the agreement but also hurt the ‘Make in India’ initiative,” the person said. The agency has written to the finance ministry to take up the matter of origin certificates issued in Bangladesh without adherence to local value addition norms. This is not the first time that violation of value-addition norms and rules of origin has come to fore. A similar issue had cropped up under the India-Thailand FTA with regard to gold jewellery imports and the India-Asean accord with regard to consumer durables imports.
Source: Economic Times
Top fashion and retail brands like Future Group, Shoppers Stop, Aditya Birla Retail, Arvind Brands, Lifestyle, Max, Raymond, House of Anita Dongre, Westside, Spykar, Levis, Bestsellers and Trends are signatories to the project.
Union Minister for Textiles Smriti Zubin Irani has launched a project which aims to move towards sustainable fashion that contributes to a clean environment. Project SU.RE (sustainable resolution), which involves 16 leading retail fashion brands, reflects the thought of Mahatma Gandhi and is a step towards responsible and smart business, she said here on Thursday night.
"Never before have 16 of the biggest brands of India come together to save the earth. The combined industry value of the the 16 signatories to the resolution is around Rs 30,000 crore. "Everything we consume, we have to consume responsibly. The step taken today makes for not only responsible business but also smart business, Irani said at the Lakme Fashion Winter/Festive 2019 after launching SU.RE. The SU.RE project by Indias apparel industry aims for a sustainable pathway for the fashion industry. The project was launched by the minister along with the Clothing Manufacturers Association of India (CMAI), United Nations in India and IMG Reliance, the organisers of Lakme Fashion Week.
"As a proud Indian, I stand here today to witness history. I would like to tell the United Nations that this has become possible due to the initiative of the industry, IMG Reliance and Lakme Fashion Week," the minister said. "We are celebrating the 150th birth anniversary year of Mahatma Gandhi, who asked us to be the change you wish to see in the world. The sustainability resolution adopted today is reflective of that very thought of the Mahatma," she said. Rahul Mehta, President, CMAI, said, "In the past, several products and processes of our industry were not environment-friendly. It is a responsible and timely step taken by the apparel industry of India, especially the signatories, to commit to move towards sustainable fashion." Top fashion and retail brands like Future Group, Shoppers Stop NSE 1.91 % , Aditya Birla NSE -2.02 % Retail, Arvind Brands, Lifestyle, Max, Raymond NSE 2.12 % , House of Anita Dongre, Westside, Spykar, Levis, Bestsellers and Trends are signatories to the project. The signatories have pledged to source or utilise a substantial portion of their total consumption using sustainable raw materials and processes by 2025. "The future of design is foremost about design with a future and without sustainable supply chains, the fashion industry will become less and less viable, said Renata Lok- Dessallien, Resident Coordinator, United Nations in India said.
Source: Economic Times
Consumers have cut spending in India as they turn more pessimistic about jobs amid a slowdown in growth to a five-year low.
India’s steps to boost financial market sentiment and support businesses could fall short of shoring up growth in Asia’s third-largest economy.
Finance Minister Nirmala Sitharaman announced a number of measures on Friday to help re-ignite an economy that’s slowed sharply on the back of weak consumption and a deteriorating global environment. However, she didn’t outline any major fiscal support -- as businesses had been calling for -- focusing instead on steps to spur foreign funds and lending.
Economists, finance leaders, industry executives and local media raised questions about the effectiveness of the measures, which included scrapping a tax on foreign funds, allowing concessions on vehicle purchases and hastening infusion of an already announced 700 billion rupees ($9.8 billion) of capital in state-run banks.
“These are short-term palliatives,” said Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics in Singapore. “What India needs is structural reforms to take growth to above 7%.”
Consumers have cut spending in India as they turn more pessimistic about jobs amid a slowdown in growth to a five-year low. Data due this week is likely to show the economy expanded 5.7% in the quarter ended June, below the 5.8% pace seen in the previous three months.
The withdrawal of the additional tax on foreign portfolio investors may help to spur sentiment in the equity markets. Overseas investors pulled out more than $3 billion from the nation’s stock and bond markets since July.
But businesses had been hoping for more.
The “crisis is not because of decline in ease of doing business or sops for automakers,” Thomas Isaac, the finance minister of the southern Indian state of Kerala, said via Twitter. “Bank recapitalization had already been announced. What is required is a large fiscal spending package.”
Sitharaman, who last month narrowed the budget deficit target for the current fiscal year to 3.3% of GDP from 3.4%, ignored the auto industry’s demand for a reduction of a goods-and-services tax on vehicles to halt the worst slump in car sales in almost two decades.
“Moderation of GST base rate from 28% to 18% for all categories as being requested by the auto industry for sometime now would have been the real demand stimulant,” said Rohit Suri, president and managing director of Jaguar Land Rover India Ltd.
The lack of a fiscal response puts the burden on the Reserve Bank of India to continue with its stimulus. Governor Shaktikanta Das has already cut interest rates to the lowest in nine years.
Top Finance Ministry officials have shown reluctance for stronger measures. Krishnamurthy Subramanian, the ministry’s chief economic adviser, said government intervention for the private sector presents a “moral hazard.”
The Times of India newspaper said in an editorial that while Sitharaman’s plan was a start, the government needs to do more work to address larger problems of structural deficiencies, which have lowered the nation’s growth potential. The finance minister said Friday that more measures are in the offing to support the economy and an announcement may be made again this week.
“Announcements from the finance minister have potential to boost short-term sentiment,” said Prayesh Jain, executive vice president at YES Securities India Ltd. in Mumbai. “But ground realities of weak economic environment needs to change for a tectonic shift in demand.”
Source: The Economic Times
CII said the macro impact of the economic package announced can be expected to be significant.
To bolster consumption, the government also said that banks have decided to cut interest rates, a move that would lead to lower equated-monthly instalments for home, automobile and other loans.
Industry body CII on Sunday said the multi-sectoral and multi-dimensional policy stimulus announced last week will have significant impact, imparting stability and underpinning a new growth impetus for India.
CII said the measures announced come at a time when the world economy is buffeted by global headwinds and trade slowdown.
"Coming in the wake of several retaliatory and counter-retaliatory trade measures between the two largest global trading nations, the economic package announced by Nirmala Sitharaman, Minister of Finance and Corporate Affairs, on Friday imparts stability and underpins a new growth impetus for India," it added.
CII President Vikram Kirloskar said the macro impact of the economic package announced can be expected to be significant.
"It is indeed commendable that all these multi-sectoral steps were carried out without pressure on the fiscal deficit. With her six-dimensional announcement, FM has indeed hit a sixer out of the grounds," he added.
The industry body said it expects that the economy will climb up in the coming months.
CII's Business Outlook Survey for April-June 2019 stood at 59.6, lower than 65.2 in the previous quarter. It showed that as of June, two-thirds of survey respondents expected growth of over 6.5 per cent for 2019-20.
"The comprehensive measures removing enhanced surcharge on FPIs (foreign portfolio investors) and DIs (domestic investors), securing transmission of lower repo rates, addressing delayed payments and ensuring that bank officials are confident about lending are strategically targeted towards raising investments," CII President-Designate Uday Kotak said.
Creation of a shelf of infrastructure projects and announcement of a long-term financial institution have wide positive ramifications for the economy, he said adding that the industry is looking forward to more such announcements from the finance minister as mentioned by her in speech on Friday.
On Friday, the government announced a raft of measures, including rollback of enhanced super-rich tax on foreign and domestic equity investors, exemption of start-ups from 'angel tax', a package to address distress in the automobile sector and upfront infusion of Rs 70,000 crore to public sector banks, in efforts to boost economic growth from a five-year low.
To bolster consumption, the government also said that banks have decided to cut interest rates, a move that would lead to lower equated-monthly instalments for home, automobile and other loans.
Sitharaman, who had been flooded with demands from different sectors after her maiden Budget this year, did little to address their distress, promised to continue the reforms and announce more measures next week.
"With the global environment in high flux, India remains well-poised for staying at the top of the growth ladder... The growth momentum across sectors such as infrastructure, automotives, consumer durables, and others will see huge impetus. Kudos for this well-thought economic stimulus," CII Director-General Chandrajit Banerjee said.
Source: The Economic Times
Gross domestic product may have grown at 5.2-6% in April-June, says an ET Survey.
NEW DELHI: India’s economy may have expanded by not more than 6% in the first quarter of this financial year – slower than China’s 6.2% in the same period – an ET survey showed.
Gross domestic product may have grown at 5.2-6% in April-June against 5.8% in the preceding quarter due to weak industrial growth and muted investment and government spending before the elections along with an unfavourable base effect, according to the survey of 11 independent economists. India’s GDP had expanded 8% in the first quarter of 2018-19.
“We estimate a sequentially lower GDP primarily on account of further deceleration across the board. While a slowing consumption is getting reflected in highfrequency indicators, investments may have paused before the elections — in a wait and watch mode,” said Shubhada Rao, chief economist at Yes Bank.
The moderation in GDP expansion is in line with industrial production growing at 3.6% in the first quarter compared with 5.1% a year earlier. High-frequency indicators such as automobile sales, rail freight, domestic air traffic and imports (nonoil, non-gold, non-silver and nonprecious and semi-precious stones) indicate a slowdown in consumption, especially private consumption, even with low inflation.
India’s passenger vehicle industry suffered its worst performance in 19 years in July with a 31% drop in sales and the ninth consecutive month of declining sales, underscoring a sharp decline in demand.
HDFC Bank expects growth at 5.2% in the first quarter and at 6.7% for the full year. India’s Economic Survey estimated GDP growth of 7 percent in FY20, higher than FY19’s five-year low of 6.8%. India slipped one notch to become the seventh-largest economy in 2018.
“The reason for the continuing slowdown is a pronounced weakness in the manufacturing segment, with spillover effects in construction. In addition, government spending in the early months of Q1was quite low,” said Saugata Bhattacharya, chief economist at Axis Bank.
Although the RBI has cut the key lending rate four times in succession by a total of 110 basis points, economists are apprehensive of this translating into growth soon. One basis point is one-hundredth of a percentage point.
As per the minutes of the RBI’s Monetary Policy Committee meeting, there is “clear evidence of domestic demand slowing down further... investment activity has been losing traction and the weakening of the global economy in the face of intensifying trade and geo-political tensions has severely impacted India’s exports, which may further impact investment activity.”
The RBI has said that the importance of surplus liquidity has increased “in view of the shadow banking stress.”
“The momentum which was weakening in the fourth quarter has spilled over to the first quarter and the unfavourable base is playing out here. The boost that we expected from government-related expenditure is not there… consumption demand is under pressure and the festive season will be lacklustre,” said Sunil Kumar Sinha, principal economist at India Ratings and Research.
The slowdown in private consumption has marred sentiment. It grew 7.2% in the March quarter, lower than 8.2% in the quarter ended December. The Central Statistics Office will release the official growth estimates for the June quarter on August 30.
“While the concurrent state of the economy remains quite concerning, nascent signs of green shoots and positive performance of leading indicators provide some signs that a recovery may be slowly materialising,” Nomura said in a report.
As per Sakshi Gupta, senior economist at HDFC Bank, India’s annual growth could slow to 6.7% but activity in the second half of the year is likely to pick up after a weak-to-moderate first half.
“The slowing economy is getting reflected in consumption demand. Investment, imports and production of capital goods are weak. Sentiment is also not encouraging. This quarter, at best, will be at par with the previous quarter but we expect a better second half,” said DK Joshi, chief economist at Crisil.
Bhattacharya of Axis Bank expects stronger growth in the financial services segment.
Source: The Economic Times
On-going negotiating round in Jakarta to focus on resolving ISDS, rules of origin
To protect domestic industry against surge in imports once tariffs are brought down under the proposed Regional Comprehensive Economic Partnership (RCEP) pact, India
has suggested an auto trigger method that would automatically increase import levies once shipments cross a given threshold limit.
“New Delhi will push for the acceptance of its proposal on auto trigger as a provisional safeguard measure against import surges at the crucial negotiating round of the 16 RCEP countries, that has started in Jakarta,” an official familiar with the matter told BusinessLine.
The country’s negotiating team will also fight against the proposed inclusion of the controversial investor-state dispute settlement (ISDS) in the pact by members like Japan and Singapore, argue for a strict rules of origin (ROO) clause to stop third country imports, demand better offers in services and try and extend protection to a number of sensitive dairy and farm items and industrial goods, the official added.
Most RCEP members, which includes the 10-country ASEAN, China, Japan, South Korea, India, Australia and New Zealand, are looking at concluding the negotiations for RCEP in November this year.
The on-going negotiating round in Jakarta is important as it would give inputs for the meeting of RCEP Trade Minister in September where the final shape for the ambitious pact is to be given.
“India is doing its bit in convincing members that despite their ambitions to eliminate duties in almost all items being traded within the proposed zone (over 90 per cent of items), the country has to protect the interests of its sensitive sectors as it could affect livelihoods of millions of people in the country. It is not possible for India to match the market access ambitions of many others, including China,” the official said.
India’s proposal for auto trigger of safeguard duties on imports is one of the ways the country thinks it can accord some protection to its local industry in case there is a flood of imports once duties or eliminated or reduced for RCEP members.
“It takes a long time to impose regular safeguard duties when there is a surge in imports as procedures have to be followed. By the time the duties are in place it can cause a lot of damage in the local market. The auto trigger could provisionally raise duties automatically the moment imports increase beyond a given level,” the official explained.
New Delhi also does not want an ISDS mechanism in RCEP as it does not want its domestic laws to be challenged in offshore arbitral tribunals. “As a middle path some countries have proposed that ISDS be put off for a while and implemented some years after the RCEP is implemented. India, however, is opposed to that as well,” the official said.
Mega trade deal
To protect domestic industry, the ‘auto trigger’ mechanism will ensure that import levies are raised if there is a flood of imports
India is opposed to the proposed dispute settlement body as it does not want its domestic laws to challenged outside India
India is pushing for stringent norms for ‘Rules of origin’ to prevent goods being routed through nations with lower duties
Rules of Origin (ROO) is yet another area where India is fighting members such as China and many ASEAN members who want relaxed rules. India wants stringent rules for ROO as it is apprehensive that in case it gives greater concession to some members in terms of market access in goods, items from other countries such as China could come into India routed through those countries at reduced duties.
“The issues that still remain unresolved are most crucial and the RCEP pact can’t be finalised without a resolution of these. India will stay firm on its stand that it will not be hurried into an agreement despite fixed deadlines,” the official said.
The RCEP could be the largest free trade zone in the world once signed as member countries account for 25 per cent of global GDP, 30 per cent of global trade, 26 per cent of global foreign direct investment flows and 45 per cent of the total population.
Source: The Hindu Business Line
A door to transfer of tech know-how
Bangladesh textile and apparel industries received $408 million in foreign direct investment (FDI) in 2018, down by $13 million from the previous year.
While total FDI in the country saw a 68% rise to $3.61 billion in the same year, the plunge in overseas investment in textile and apparel sector raised question about its reasons and effectiveness. Is there a need for FDI in the sector? If needed, which segment or sub-sector of the industry needs it?
For the last couple of years, FDI in the apparel and textile has been hovering around $400 million.
Do textile and RMG sectors need FDI
When Bangladesh badly needs to produce high -end products and increase production capacity in the apparel industry, FDI in the area can play an important role in technology transfer from the skilled foreign professionals, economists and trade analysts believe.
“In increasing the export earnings and sustaining the current growth of exports, Bangladesh needs to increase production capacity and move for high value goods to get better deals from foreign brands for its apparel items. To this end, the sector needs a huge amount of capital and skilled workforce where FDI can play an important role,” Centre for Policy Dialogue (CPD) research director Khondaker Golam Moazzem has told Dhaka Tribune.
He thinks such FDI should come in backward linkage textile and high-end products of the readymade garment as it will help transfer foreign and latest technologies to embolden local industry.
FDI in these segments can be a boon for Bangladesh economy in moving towards the value added products, the economist adds.
Where FDI is needed
Bangladesh is doing well in basic and medium-end products in RMG, where primary textile is supplying fabrics and yarn. But there is a huge scope of investment in the primary textile, especially in high-end fabric textiles.
“Since there is a gap between demand and supply of raw materials for the apparel, we need foreign investment in the primary textile, which needs huge investment,” Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Kokhon says.
But the FDI will not be attracted unless the government policy becomes favorable and production cost is reduced offering utility services including gas and electricity at affordable prices, Kokhon points out.
According to BTMA, currently primary textile sector can meet around 90% yarn demand for knit RMG and 40% yarn demand for woven RMG.
On the other hand, denim fabrics in the country can meet around 50% demand, where higher-end fabric is mostly dependent on import.
“Usually, apparel makers discourage FDI in basic product manufacturing as we have enough capacity in basic and medium segments,” Mohammad Hatem, former vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), says.
But there is a scope of investment in dyeing, chemical, high-end products such as suit, lingerie, outwear jacket and fancy items, Hatem adds.
Can anyone invest in apparel sector?
Under the Bangladesh Export Processing Zones Authority (BEPZA) and Bangladesh Economic Zones Authority (BEZA), 100% FDI is allowed in the textile and apparel sector but it discourages such investment for basic items.
“In EPZs, 100% foreign investment in apparel and textile sector is allowed but we discourage this in the case of regular items as there is no scope of technology transfer and knowledge and experience sharing out of such traditional investment ,” Nazma Binte Alamgir, General Manager of BEPZA, clarifies.
"We encourage oversees investment in high valued items such as jackets, suite, army dress, fashion jackets, outwear and protective jacket," she adds.
Besides, a foreign investor can invest outside EPZs or SEZs and s/he has to take permission from the Bangladesh Investment Development Authority (BIDA) and then become a member of BGMEA or BKMEA for exporting clothing items.
FDI status in the sector
As per Bangladesh Bank (BB) data, last year the FDI in the sector declined by 3.24% to $408 million, from $421.68 million in 2017.
Hong Kong was the largest investor with an investment of $83 million in the country’s textile and garment industry, followed by United Kingdom’s $43 million, China with $40 million, South Korea $35 million, British Virginia Islands $33 million and Bermuda with $31 million, according to FDI data.Why investment is slow
Business people blame the rise in the production cost and cumbersome process of getting factory permission along with scarcity of land.
“In making investment in any country, investors seek security and return of their investment. Since the production cost is higher here due to rise in gas and electricity prices coupled with land scarcity, FDI is low,” says Mohammad Ali Kokhon.
In order to further increase the FDI in the sector, the government has to promote investment opportunities by creating enabling business climate and offering incentive to keep production cost a reasonable level, Khokon states.
However, the business leader hopes the FDI in the sector will rise as the government is providing investment facility in Special Economic Zones.
Trade war opens new horizon
Economists believe that ongoing US-China trade war has opened up new opportunity for Bangladesh as investors are relocating their ventures from China to elsewhere.
“In the face of intensifying trade friction between the US and China, investors are fleeing China. They are investing in many Asian countries,” Policy Research Institute (PRI) executive director Ahsan H Mansur says.
“Bangladesh should attract the Chinese investment here,” he adds.
He strongly believes Bangladesh has enough opportunity to grab work orders and investment from foreign nations.
Bangladesh has to liberalize its trade and investment policy to incentivize FDI which would ultimately give a boost in investment as well as capacity, he adds.
Source: The daily Star
With several free trade agreements having been signed recently, Vietnam has been strongly attracting foreign enterprises, especially in the sector of garment and textile accessories.
Once these projects are put into operations, they will help to partly solve a shortage in garment and textile accessories supply as well as meet rules of new-generation free trade agreements. Unlike the past when foreign investors in garment and textile sectors came to Vietnam for processing only, now, besides diversifying investment from direct and indirect investment via acquisitions and purchases of shares of domestic enterprises, most projects are focusing on investing in yarn, garment and accessories. Investment projects were spread at several provinces as infrastructure has been getting better and become more convenient with the scale of each project from tens of millions dollars to hundreds of millions dollars.
Recently, Binh Duong Province granted permission for Korean company, Kyung Bang Vietnam, to expand its investment by an additional US$40 million with goal to raise its annual cotton yarn production capacity to 9,000 tons and blended yarn production capacity to 11,000 tons. The project aims to produce woven fabric, knitted fabric and crocheted fabric and complete woven products. With this amount of additional capital, the project of Kyung Bang Vietnam now has total investment of up to more than $219 million. At the same time, the Taiwanese Far Eastern Group also spent hundreds of millions dollars for the project of fabric and chemical yarn in Bau Bang Industrial Park in Binh Duong Province, and continued to hire more land here to expand investment. In the north, Singaporean company, Herberton Limited Company, started construction of the Nam Dinh Ramatex Textile and Garment Factory project with total investment of around $80 million. The factory - once becomes operational - has a capacity of 25,000 tons of fabric of various kinds and 15 million clothing items annually and creates jobs for around 3,000 workers.
Although the EU-Vietnam Free Trade Agreement was signed at the end of June this year, the number of investors in garment and textile sector has increased significantly.
‘Earlier, foreign investment attraction in garment and textile sector was poor but in the past three years, large enterprises from the US and Europe have flocked to Vietnam. Noticeably, recently a German group invested in a sheep wool yarn spinning plant project in Da lat. Groups from Israel and the US invested in textile in Binh Dinh Province and dyeing in Nam Dinh Province. This shows that there is a wave of foreign direct investment in garment and textile accessories sector,’ said Mr. Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association.
Although foreign investment attraction has been happening smoothly, it depends on investment environment and policies to keep foreign investors to stay here for a long time. According to experts, earlier, Vietnam’s garment and textile industry developed horizontally, relying on low labor cost. But this is an industry with extremely cutthroat competition on global scale. If an investor invests in Vietnam and faces increasing costs, without stable supply chain, they might move to other countries. Therefore, Vietnam must build a stable and long-lasting supply chain to prevent investors from moving their facilities to other countries. This also helps to bring higher value added to Vietnamese garment and textile products.
At the conference on “Vietnamese garment and textile industry amid challenges and opportunities from European market” held recently, Mr. Giang said that there is an extremely fierce competition in garment and textile industry, relating to product prices. Vietnam currently ranked third after China and India but it was being closely tailed by some countries. So, if Vietnam does not have a good strategy, it will find it difficult to approach the European market. In order to take advantage of opportunities created by free trade agreements, the Government should make development strategy for industrial parks so as to make up for a shortage in supply of some garment and textile accessories. Especially, as for new free trade agreements, Vietnamese garment products have to meet rules of origin for fabric.
Sharing the same point of view, Ms. Nguyen Thi Thu Trang, director of WTO Center and Integration, said that if the rules of origin are not ensured, Vietnamese products will not receive preferential import tariffs. In fact, despite much efforts, around 90 percent of materials and accessories for domestic production were imported from countries which are not members of the agreements and are not received accumulated preferential treatment in accordance with the agreements. High requirements in the rules of origin of new-generation free trade agreements will motivate attraction of foreign and domestic investment in garment and textile accessories sector in Vietnam.
Source: SGGP News
President Trump, championing his 'America First' policy has been a vocal critic of India for levying "tremendously high" duties on US products, has described the country as a "tariff king".
WASHINGTON: India is "the worst" in terms of high tariffs on American products, a top American Senator claimed on Sunday, ahead of US President Donald Trump's crucial meeting with Prime Minister Narendra Modi on the sidelines of the G-7 Summit in France which is likely to be dominated by trade frictions between the two countries.
President Trump, championing his 'America First' policy has been a vocal critic of India for levying "tremendously high" duties on US products, has described the country as a "tariff king".
"When you look at the world tariff regime; 67 per cent of all the tariffs in the world disadvantage America. There's a higher tariff on American products in the country in which we do business with. India is the worst," Senator Lindsey Graham told CBS.
Graham, over the past several months has emerged as a close confidant of Trump on issues related to South Asia.
He was present when Trump held meeting with the visiting Pakistani Prime Minister Imran Khan at the White House last month.
Responding to a question, the Senator from South Carolina said he had introduced a bill in the Senate that allows the American President to charge a country the same as it does with the US while doing business.
"So, like in India... they have a 100 per cent tariff on a lot of our products. Either we increase tariffs on Indian products, or we all go to zero. The goal is to go to zero," Graham said.
The Trump-Modi meeting assumes significance in the wake of the strain that has popped up in the bilateral relationship on a host of trade and economic issues.
Ahead of the meeting in France on the sidelines of the G-7 summit, the White House said that trade and tariffs would be important topics of discussion between the two leaders.
"They will look for solutions on the trade front. The US is looking to India to reduce tariffs and open its markets," a senior administration official said, ahead of the meeting early this week.
Early this week, India's Ambassador to the US Harsh Vardhan Shringla had met Graham at the US Capitol.
According to the Indian Embassy, they "discussed the immense potential for closer strategic and economic ties between the world's oldest and largest democracies."
India has raised tariffs on 28 items, including almond, pulses and walnut, exported from the US in retaliation to America's withdrawal of preferential access for Indian products.
The Trump administration wants Prime Minister Modi to lower the trade barriers and embrace "fair and reciprocal" trade.
Trump has also criticised India's high import tariff on the iconic Harley Davidson motorcycles as "unacceptable" though acknowledging that his "good friend" Prime Minister Modi has reduced it from 100 per cent to 50 per cent.
Last February, India slashed the customs duty on imported motorcycles like Harley-Davidson to 50 per cent after Trump called it "unfair" and threatened to increase the tariff on import of Indian bikes to the US.
The government on June 21 last year decided to impose these duties in retaliation to the US decision of significantly hiking customs duties on certain steel and aluminium products.
America, in March last year, imposed 25 per cent tariff on steel and a 10 per cent import duty on aluminium products.
As India is one of the major exporters of these items to the US, the move has revenue implication of about USD 240 million on domestic steel and aluminium products.
India has also dragged the US to the World Trade Organisation's (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.
India exports steel and aluminium products worth about USD 1.5 billion to the US every year. 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.
The US and China have been locked in a bruising trade war since Trump imposed heavy tariffs on imported steel and aluminium items from China in March last year, a move that sparked fears of a global trade war.
In response, China imposed tit-for-tat tariffs on billions of dollars worth of American imports.
Source: The Economic Times
China is willing to resolve its trade dispute with the United States through "calm" negotiations and resolutely opposes the escalation of the conflict, Vice Premier Liu He, who has been leading the talks with Washington, said on Monday.
However, Trump appeared on Sunday to back off on his threat to order U.S. companies out of China. Liu, speaking at a tech conference in southwest China’s Chongqing, said nobody benefited from a trade war. “We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war,” Liu, who is President Xi Jinping’s top economic adviser, said, according to a government transcript. “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world,” he added.
U.S. companies are especially welcome in China, and will be treated well, Liu said. “We welcome enterprises from all over the world, including the United States, to invest and operate in China,” he added. “We will continue to create a good investment environment, protect intellectual property rights, promote the development of smart intelligent industries with our market open, resolutely oppose technological blockades and protectionism, and strive to protect the completeness of the supply chain.” It was not clear exactly how Trump could get U.S. companies to leave China.
U.S. Treasury Secretary Steven Mnuchin said Trump could order companies out of China under the International Emergency Economic Powers Act if he declared a national emergency. The trade war has damaged global growth, upset allies, and raised market fears that the world economy will tip into a recession. Global stock markets reeled on Monday after the latest measures, while China’s yuan currency fell to a fresh 11-year low. Investors streamed into the safe harbours of sovereign bonds and gold. Chinese state media on Monday blasted the United States.
The official China Daily said in an editorial that Washington would “never be allowed to control China’s fate”. “It has become unquestionably clear that his administration’s tariff war against China is politically motivated. What Washington wants from its largest trade partner is for it to be content to play second fiddle and meekly do as it demands,” the English-language paper wrote in an editorial.
“Washington has again taken the initiative to escalate the fight in the hope that Beijing will throw in the sponge as early as possible. But Beijing regards the trade war as an unavoidable trial by fire, from which the country will emerge stronger.” The Global Times, a widely-read tabloid published by the ruling Communist Party’s official People’s Daily, said leaving the Chinese market would be “suicide” for U.S. companies, especially for auto firms.
“U.S. companies are welcome to invest and operate in the Chinese market, but if some U.S. companies want to obey Trump’s order and join Washington’s trade war, the result is bleak. A decision to give up the Chinese market is just suicide,” the paper said in its editorial.
Source: The Financial Express
Turkish firms can raise their exports by 30% through taking proper steps for digitalization, according to a digital communications expert.
"Digitalization is a must in an era when technology is coming in everywhere," Nabat Garakhanova told Anadolu Agency.
Some 90% of all Turkish companies are micro, small- and medium-sized enterprises (SMEs), which face some problems with digitalization, stressed Garakhanova, also the head of MEZO Digital, a consultancy firm.
She underlined that European countries such as Germany, the U.K., Spain, and Italy -- which make extensive use of digital technology -- are some of the main destinations of Turkish exporters.
Turkish firms should adapt to this situation to boost their exports to these countries, she added.
"Firms should have websites, do search engine optimization, be on social media, and register on e-commerce platforms," she urged.
She added that even companies on a tight budget can take such steps thanks to new digital advertising methods and free platforms.
"Firms should also have multilingual websites and accounts and optimize them with their target countries," Garakhanova stressed.
She said Turkish firms are prominent in several sectors such as furniture, textiles, heavy industry, and supplies, and that they can contribute more to the country's economy if they are digitalized.
Turkish ministries and chambers of commerce support companies, but NGOs should focus on this issue to encourage local companies, she said.
Source: Daily Times
