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MARKET WATCH 7 SEP 2019

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National

Surat’s textile units ready to control pollution through ETS

At least 150 textile dyeing and printing mills in the city will go hi-tech by September 15. For the first time in the country, emission trading scheme (ETS) will be launched in Surat where a daily measure of suspended particulate matter (SPM) being emitted through chimneys of these units will be measured in real time. Initiated by ministry of environment and forest and climate change (MoEF&CC), Government of India and started by Government of Gujarat, the ETS project workshop will be held at Kevadia Colony on September 11. Regular real-time monitoring of particulate matter (PM10) per milligram per normal metre cube (mg/NM3) will take place under this project. Industrial units polluting the air must not violate the prescribed norm of 150 mg/NM3 at any time under ETS. To measure this, a specialized device will be placed on the chimneys of the textile units. This device will be connected directly with boiler section of the mills to give real-time emission data to the servers of Gujarat Pollution Control Board (GPCB) and individual users. The GPCB is the nodal agency for the project under which the units have been divided into small, medium and large categories. A small unit has been made to pay deposit of Rs2 lakh, medium unit Rs3 lakh and large unit Rs10 lakh for joining ETS. Any unit violating the emission norm of 150mg/NM3 will have to buy extra amount permit from those units that have not transgressed. It is like an old carbon footprint method wherein units will be able to trade their permits which each other. Parag Dave, regional officer, GPCB, said, “This is first-of-its-kind pilot project in India. Depending on its success, this project will be replicated in other parts of the state and country. When MoEF&CC launched this scheme, only three states showed willingness to run the pilot project, but Gujarat is the only one to implement it.” Pandesara Industrial Association president Kamal Tulsiyan said, “This is the right way to control air pollution in textile mills. If emission norm is followed, the issue of  overshooting of PM10 will not arise. Units that regularly overshoot their permissible limits create a lot of air pollution in lower and middle strata of atmosphere.”

Source: The Times of India

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Fortum, Haryana University to make textile fibre from paddy straw

Some farmers burn crop residues and destroy them, causing environmental pollution. Finnish firm Fortum India signed an agreement with Chaudhary Charan Singh Haryana Agricultural University, Hisar to make textile fibre from paddy straw that is otherwise burnt by the farmers causing pollution in northern states. The memorandum of understanding aims to protect the environment and to provide simple and economical options for the farmers to manage paddy straw, an official statement said. Chaudhary Charan Singh Haryana Agricultural University has been working towards the management of paddy straw and, Fortum’s partnership with HAU will include to deepen understanding of the theoretical and practical knowledge and expertise in the areas of studying the properties of rice straw and other agri-biomass, its availability, socio economic impact, probable supply chain and other possible area of support, in the State of Haryana, an official statement said. Prof K.P. Singh, Vice Chancellor, HAU, while expressing his thoughts over the MoU, said, “This will give more thrust to the university's crop residue management program. The university is striving not only for the proper management of crop residues but also for the fair value of everything coming out of the farm.” The statement said it is noteworthy that there is a serious problem of managing paddy straw in the states of Haryana, Punjab and Uttar Pradesh. Some farmers burn crop residues and destroy them, causing environmental pollution. Sanjay Aggarwal, Managing Director of Fortum India Private Limited said, “ Burning of crop residues on a large scale in the fields emits greenhouse gas which has huge side effects on the environment. In three states in the Delhi region, 50 million tonnes of agrobiomass is burned every year. We intend to convert this agricultural waste into valuable products, provide solutions to reduce pollution, which will help local communities to become selfsufficient and raise their standard of living. “We will work with the university to make textile fiber from paddy straw, as well as other valuable chemicals which are used in many industries, to make bioplastics and to establish bio refinery in the future.”, he further added.

Source: Economic Times

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Will respond to challenges faced by all sectors: FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Friday said the government will respond to the challenges faced by all the sectors. Every possible help will be extended to them, she told a press conference here. “We are looking at the challenges which the sectors are facing. We will respond to the challenges and extend every possible help,” Sitharaman said to a query on the ongoing slowdown of the economy. She said the Centre is “continuously engaging with the sectors facing challenges and interacting with them”. About revenue collection during the current financial year, the minister said targets have been given to the CBDT and CBIC. “These targets have been given after due considerations and consultations”, Sitharaman said adding that if the collections are low, the central government will look into it. “But spending on social sector will not be affected,” she said. On transfer of RBI surplus to the government, she said the Centre had not taken any call as of now on how to use it. The Reserve Bank of India has recently decided to transfer Rs 1.76 lakh crore in dividend and surplus reserve to the government. The finance minister, who also held a meeting with the tax administrators here, said the revenue department will bring in faceless assessment and randomise the scrutiny process from the Vijaya Dashami day. “We are doing this to reduce the probability of harrassment,” she added. Another change will also be brought in, Sitharaman said adding that every notice with claims issued to the taxpayers will be accompanied by a document identification number (DIN). “If a notice of a tax claim is not accompanied by a DIN, it can be treated as not issued”, she said. This will not only make the assessment process more transparent but also do away with discretion, she said. On the meeting with the tax administrators, Sitharaman said a message has been given to them that “it is necessary to perform our duty and not to overreach. Entrepreneurs should not be troubled”.

Source: The Financial Express

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Government likely to announce measures to boost exports soon

The Central Government is expected to soon announce measures for certain sectors, including gems and jewellery, to boost the country’s subdued exports, an official said. Finance and commerce ministries have held several round of talks on these measures, the official said. As part of a proposal that is under consideration, the government may extend the deadline for removal of tax benefits to units in the special economic zones (SEZs). In the Union Budget 2016-17, it was announced that income tax benefits to new SEZ units would be available to only those entities that commence activity before March 31, 2020. For the labour-intensive gems and jewellery sector, the government is looking at cutting import duty on coloured gem stones and polished diamonds from the current 7.5 per cent. There is also a consideration to increase the insurance coverage by the Export Credit Guarantee Corporation of India for export credit from the current 60 per cent to 90 per cent. This would enable banks to provide more export credit at competitive rates. There is a plan for strict implementation of rules of origin criteria to check diversion of imports via free-trade agreement countries. This is aimed at promoting domestic manufacturing and to reduce imports. A standard operating procedure could be implemented for faster clearance of import and export consignments. Exporters are demanding several other measures such as enhancing benefits of the Merchandise Exports from India Scheme (MEIS) for sectors like non-basmati rice and textiles, besides interest subvention for large pharmaceutical companies. “Because exports are passing through tough times amidst global contraction in demand due to economic uncertainties, support measures for exporters would help in imparting further competitiveness to it,” Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said. S C Ralhan, president of the Ludhiana-based Hand Tools Association, said refund of indirect taxes such as on oil and power, and state levies such as mandi tax would help in dealing with liquidity issue. India’s exports have recorded 2.25 per cent growth in July. Cumulatively during April-July this fiscal, the exports dipped by 0.37 per cent to $107.41 billion.

Source: The Hindu Business Line

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Rupee up 12 paise at 71.72 vs dollar

The rupee continued its winning momentum for a third session in a row on Friday, rising 12 paise to settle at 71.72 against the US dollar, as signs of easing trade tensions between the US and China enthused investors.  At the interbank foreign exchange market, the local unit opened on a strong note at 71.87 and finally closed at 71.72, higher by 12 paise over its previous close.

Source: The Hindu Business Line

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India should hurry RCEP trade pact to attract Chinese investment

India faces fierce and opposing pressures when it comes to negotiations on the Regional Comprehensive Economic Partnership -- a 16-member free trade pact comprising ASEAN, China, Japan and others. On the one hand, other countries see it as the major obstacle because it is not letting the negotiations on RCEP conclude and are demanding it now do so. On the other, Indian industry, struggling to compete with Chinese merchandise, is strongly opposed to freer trade with China. To make matters worse, New Delhi is clueless about how to deal with its $59 billion trade deficit with China, an economy five times as big as it by gross domestic product. There is a way through: Narendra Modi must engage with Beijing to get a mutually beneficial trade deal. China is likely to be more accommodating to India's market access concerns given its defensiveness on Huawei, its foreign direct investment and its Belt and Road Initiative, which New Delhi can leverage to its advantage. India has recently been taking desperate actions: the government has been raising tariff barriers and relying on safeguards and anti-dumping investigations to rein in imports of cheaper Chinese merchandise, supporting indigenous manufacturers. China's reluctance to genuinely open up its market for Indian exports, relying on non-tariff barriers such as cumbersome regulatory approvals for Indian exports such as pharmaceuticals, does not help either. India's commerce minister Piyush Goyal skipped a recent ministerial meeting about RCEP in Beijing at the start of August. That showed India was not in hurry to let the trade negotiations conclude any sooner, despite international pressure. With India's increasing focus on electrical vehicles and solar energy, India will be importing more solar panels and batteries, the latter to be used in electrical vehicles. Consequently, the prospects for cutting its trade deficit with China remain bleak. Thus it is not difficult to understand why India has been dragging its feet on the free trade pact. Quitting the talks should not be an option. India needs to engage with China -- and other RCEP partners -- to protect its commercial interests, and it can use the U.S.'s hostility to Huawei supplying its fifth-generation telecom technology globally to its advantage. Beijing wants New Delhi to ignore U.S. pressure and allow Huawei gears in its 5G rollout, which gives Modi leverage in talks. Xi's pet project, the Belt and Road Initiative, offers another opportunity. BRI is facing headwinds from countries that have borrowed Chinese money to finance their extravagant infrastructure projects, meaning China can no longer depend on BRI to deploy its surplus capital and expertise in infrastructure building. Instead, it could deploy its surplus in India, still one of the fastest growing large economies. Getting India to somehow join BRI would be a big diplomatic coup for Beijing. For India, Chinese capital will help in bridging its saving-investment gap just as its domestic savings are declining and populist, unproductive spending is on the rise. As domestic savings are declining, the only way to boost overall investment is through tapping foreign savings and here China could be a large source. India must somehow attract this investment, to help upgrade its roads, rail networks and ports, without officially joining BRI, which it opposes for Pakistan's role in it. Increased Chinese investment would increase Beijing's stake in India's well-being, and discourage it from encouraging Pakistan's adventurism. RCEP countries account for a quarter of global GDP, a quarter of foreign direct investment and almost a third of world trade, according to think tank the National Institution for Transforming India. It makes sense for India to belong as trade and investment become more regional. Supply chains are now sourcing more locally and regionally than before. Rising wages and the growing American and European boycott of Chinese investment, especially in their tech industries, will induce China to look for regional opportunities. India, given its stable government, large market size and cheaper labor, can be an attractive investment destination for Chinese outward FDI. Moreover, India cannot ignore the potential benefit of a deeper engagement with China, which imported $2.1 trillion of goods in 2018. This is especially true when the U.S. is turning protectionist; the EU is struggling to deal with the Brexit mess; and the Middle East is troubled by its overreliance on oil. The recent removal of India from the U.S. list of countries some of whose imports are allowed duty-free and the tightening of immigration rules will further hurt India's exports. Thus, India has little choice but to look for alternative markets such as China. China remains the most price-competitive supplier of key industrial inputs and equipment including pharmaceutical ingredients, electronics and telecom gears. For all of these India does not have adequate domestic capacity or alternative suppliers who can match China in price or scale. To safeguard indigenous business from the influx of Chinese imports, India needs to effectively address the internal impediments to manufacturing such as basicinfrastructure, quality of regulations and red tape. Given RCEP's market size, it can be a vehicle to double India's global export share from below 2% to 4%, needed to make India a $5 trillion economy by 2022, as Modi has declared his intention. That calls for a pragmatic approach on RCEP on the part of New Delhi.

Source: Asian Nikkei Review

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International

China 'eating the tariffs,' Trump says ahead of talks

US President Donald Trump on Friday said the costs of his protracted trade war were falling squarely on China. Top-level negotiators are due to gather in Washington early next month while lower-level staff will meet in late September, according to officials on both sides. "China is eating the tariffs," Trump said on Twitter, repeating his claim that higher duty rates meant Washington collected billions of dollars from the Asian economy, and not US importers. "China having worst year in decades. Talks happening, good for all!" Corporate earnings reports indicate American companies have been hit by rising tariffs and trade uncertainty. A report released this week said more than 10,000 job cuts announced last month stemmed from "trade difficulties." Trade relations between the two economic powers deteriorated suddenly last month and US duties on hundreds of billions of dollars in Chinese goods are due to rise in October and December. Trump in recent weeks has insisted that China's slowing economy will pressure Beijing into cutting a deal favorable to the US. There are mounting signs the trade war has also begun to weigh on the US economy, however. Larry Kudlow, a top Trump economic adviser, told CNBC on Friday the face-to-face talks will resume in a calmer atmosphere despite steadily escalating tariffs. "I don't want to predict anything. I'm just saying it is good thing that they're coming here, and tempers are calmer," Kudlow said. "We would love to go back to where we were in May, where we were getting kind of close to an agreement, maybe 90 percent of the way," he added. "It's very positive that we negotiate and it may well be that something positive comes out of that." After months of positive signals from both sides, talks abruptly broke up in May as US officials accused their Chinese counterparts of retracting core commitments made up to that point.

Source: The Economic Times

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China cuts banks’ reserve ratios, frees up $126 billion for loans as economy slows

Analysts had expected China to announce more policy easing measures soon as the world's second-largest economy comes under growing pressure from escalating U.S. tariffs and sluggish domestic demand. China’s central bank said on Friday it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing 900 billion yuan ($126.35 billion) in liquidity to shore up the flagging economy. Analysts had expected China to announce more policy easing measures soon as the world’s second-largest economy comes under growing pressure from escalating U.S. tariffs and sluggish domestic demand. The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) by 50 basis points (bps) for all banks, with an additional 100 bps cut for qualified city commercial banks. The RRR for large banks will be lowered to 13.0%. The PBOC has now slashed the ratio seven times since early 2018. The size of the latest move was at the upper end of market expectations, and the amount of funds released will be the largest so far in the current easing cycle. The broad-based cut, which will release 800 billion yuan in liquidity, is effective Sept. 16. The additional targeted cut will release 100 billion yuan, in two phases effective Oct. 15 and Nov. 15. “The move shows policymakers are increasingly worried but it’s far from enough to stabilise the economy,” said Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong. “The key constraint is that everything is slowing down – corporates are not willing to invest because of the trade war, a global slowdown, and weak infrastructure and property sector growth.”The latest move to spur bank lending followed a cabinet meeting on Sept. 4 that pledged to implement both broad and targeted cuts in the RRR “in a timely manner”. The PBOC said it will maintain a prudent monetary policy and avoid flood-like stimulus, while increasing counter-cyclical adjustments and maintaining reasonable and abundant liquidity. Analysts say China’s economic growth has likely cooled further this quarter from a near 30-year low of 6.2% in April-June. Morgan Stanley says it is now tracking the lower end of the government’s full-year target range of around 6-6.5%. With Washington imposing new tariffs from Sept. 1, and threatening more measures from Oct. 1 and Dec. 15, some economists have recently cut their China growth estimates for next year to below 6%, which would breach Beijing’s longer-term development goal. The central bank is also widely expected to cut one or more of its key policy interest rates in mid-September — for the first time in four years — as it works to reduce corporate funding costs. “I think it’s very likely they will cut the LPR (loan prime rate) by about 5-10 bps later this month. I also expect another RRR cut of 50 bps by the end of this year,” Macquarie’s Hu said. Despite a slew of support measures and policy easing since last year, China’s economy is still struggling to get back on firm footing. July’s data showed growth stumbled more sharply than expected as the intensifying trade war with the United States took a heavier toll, and August factory surveys pointed to continued weakness. Prior to the latest RRR cut, the central bank had pumped out 3.63 trillion yuan in net liquidity through reserve cuts since early 2018, according to Reuters calculations based on PBOC data and analyst estimates. The PBOC’s hefty injections have helped bring down companies’ borrowing costs, which had jumped early last year as regulators clamped down on riskier types of financing and debt. But analysts have cautioned that some companies may be merely refinancing existing debt at better rates, rather than borrowing to fund fresh investments. Analysts say the problem is not a lack of credit — the PBOC has injected generous amounts of liquidity — but weakening business and consumer confidence as the trade war drags on. That has weighed on activity from manufacturing and investment to retail sales. In the latest escalation in the protracted trade dispute, the United States began imposing 15% tariffs on a variety of Chinese goods on Sept. 1 – including footwear, smart watches and flat-panel televisions – and China began imposing new duties on U.S. crude.The next high-level trade talks are slated for early October, but a lasting peace seems more elusive than ever. The government has repeatedly said it will not resort to “flood-like” stimulus as it did in past economic downturns, which left a mountain of debt and sparked fears of property market bubbles. Instead, Beijing has relied more on fiscal stimulus such as increased infrastructure spending and tax cuts, though the boost has been milder than expected so far.The cabinet said on Wednesday China will allow local governments to issue special purpose bonds earlier than normal next year to help steady growth, and specified for the first time that about 20% of all special purpose bonds issued by every province could be used as project capital. Many local governments are facing increasing fiscal strains as tax cuts and the broader economic slowdown reduce revenues, hampering their ability to implement infrastructure projects.

Source: The Reuters

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Ghana Export Promotion Authority to support textile exports-CEO

The Ghana Export Promotion Authority, will strengthen efforts towards ensuring that, the garment and textile industry attains its full potential in exports. This is because the sector has enough potential to rank amongst the highest within the exports sector. Madam Afua Asabea Asare, Chief Executive Officer, Ghana Export Promotion Authority (GEPA), said this in Accra on Wednesday, at a News conference to promote the ITME Africa 2020 event, scheduled to take place in February, at Addis Ababa, Ethiopia. The ITME Africa 2020 event is organised by the India based ITME Society. Madam Asare said the textile and garment industry, employed a large section of the working populace, which made it a vibrant field worth paying attention to. She said the ITME Africa 2020 event, presented an opportunity for Ghanaians in the garment and textile industry to learn and improve on their craft and trade, and advised that those who attend the event, make the most of it by learning as much as possible. Mr. Hari Shankar, Chairman, India ITME Society said ITME Africa 2020 would develop trade and investment opportunities in the garment and textile sector, and also provide a global platform for exhibitors to showcase their products, and disseminate information on innovative technology in the textile industry.He said the exhibition would strengthen the textile manufacturing industry in Africa, by facilitating exchange of Knowledge among countries and people. Mr Shankar said India supported Ghanaian private businesses, which had contributed to the development of the private sector, and also fostered healthy bilateral relations between the two countries. He urged Ghanaian companies to endeavour to attend the event, and explore the various opportunities the event would bring. The ITME Africa 2020, is scheduled to take place from February 14 to 16, 2020, at the Millennium Hall, Addis Ababa, Ethiopia, and would basically seek to educate participants on the textile industry.

Source: Business Ghana

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Pakistan: Govt to take all possible measures for promotion of textile, garment sector: PM

Prime Minister Imran Khan on Friday assured to the delegation of textile and garment sector that the government would take all possible measures for promotion of this sector.The prime minister was talking to a delegation of leading businessmen of textile and garments sector which called on him at the PM Office. He said promotion of garments and textile sector would not only provide huge employment opportunities but as a whole it would help curtail difference between imports and exports.The prime minister was given a detailed briefing about local capacity of textile and garments sector, hurdles in its progress and promotion and future policy in that regard.The prime minister was told that textile sector contribute 3.3 percent to the Gross Domestic Product (GDP) of Pakistan and there were numerous opportunities to increase its growth.

Source: Associated Press of Pakistan

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