NATIONAL

• Govt reveals slew of measures to increase export credit to 30% in FY20
• India in dialogue with US to resolve trade issues: Goyal
• Govt appoints OSD to Smriti Irani, Pvt Secy to Javadekar
• Big export boost requires a bigger change in strategy
• Wholesale inflation remains unchanged in August, but it's just notional relief
• India’s readymade garment exports see negative growth

INTERNATIONAL

• Global Textile Raw Material Price 16-09-2019
• Egypt's exports rise to 29.2 bln USD in 2018
• Turkey, India intensify efforts to expand economic, commercial relations
• Việt Nam’s textile export value up almost 7% in eight months

Govt reveals slew of measures to increase export credit to 30% in FY20

The commerce department clarified that the ECGC would cover not only outstanding principal of loans but also unpaid interest. The government is banking on greater loan coverage, easier inspection norms, and streamlining of profiles of exporters to raise annual credit disbursal by 30 per cent in the current fiscal year (2019-20 or FY20), said Commerce and Industry Minister Piyush Goyal on Monday. After exports declined 6 per cent in August, the government had on Saturday announced a slew of measures to boost outflow of Indian goods. On Monday, Goyal elaborated on what measures the government was taking and what effect it would have. One focus is increasing export credit insurance, a crucial industry demand. Goyal said premium paid by small businesses would fall. For accounts with limits of Rs 80 crore, the annual premium rate would be bought to 0.6 per cent; for those above Rs 80 crore, it would be 0.72 per cent. Rates for foreign and rupee export credit interest will be below 4 per cent and 8 per cent, respectively, Goyal said. Export credit disbursal by public sector banks fell by 45 per cent in FY19 to Rs 15,600 crore, according to the Reserve Bank of India (RBI) data. In the previous year, it was Rs 28,300 crore. The government wants to now bring down the cost of credit to lower provisioning requirement and quicker settlement of claims. Finance Minister Nirmala Sitharaman had on Saturday said insurance cover for working capital loans released by banks will rise to 90 per cent, from the current 60 per cent. For this, the government will boost the Export Credit Guarantee Corporation of India (ECGC)’s coffers by Rs 1,700 crore annually. The commerce department clarified that the ECGC would cover not only outstanding principal of loans but also unpaid interest. Interest will be covered for a maximum of two quarters or till the loan is declared a non-performing asset — which happens when interest remains unpaid for 90 days — whichever is earlier. The ECGC will cover about Rs 3 trillion of export credit, which remains uncovered till the end of the financial year. Under the updated Export Credit Insurance Scheme (ECIS), ECGC officials will not inspect bank documents and records until losses on a loan reach Rs 10 crore. Earlier, the threshold was Rs 1 crore. Goyal said State Bank of India would provide foreign exchange funds to banks at the London Interbank Offered Rate (Libor) plus 50 basis points for export credit. The Libor is a benchmark interest rate at which global banks give each other short-term loans. The ECIS is also targeting quick settlement of claims through provisional payment of up to 50 per cent in 30 days. “Exporters will benefit as they will get a better rating since the ECIS can be considered as an export-incentive scheme,” said Goyal. He added good exporters will get an “AA” rating very easily, and as a result, banks will be more eager to provide loans to them. The government also announced on Saturday an additional Rs 36,000-68,000 crore will be made available to banks for lending to the export sector as part of a planned update to the priority sector lending norms. The RBI will soon bring out enabling guidelines for this. Data on export finance will now be regularly monitored by an inter-ministerial working group under the commerce department. It will track the disbursal of export credit through a public dashboard, reviewed with the help of trade institutions, with key figures being made available to the public periodically. With traders now being able to take export credit directly in foreign currencies, the ministry now aims to raise the share of foreign currency in total export credit much beyond the present level of 50 per cent, said a senior official. The ministry has also discussed in detail the possibility of easing norms for banks, when it comes to lending export credit. The cap on export credit for banks — at 2 per cent of the total loans disbursed — may also be relaxed to boost export credit flows, the official added.Pushing credit

• 45% Fall in export credit disbursal by public sector banks in FY19 to Rs 156 billion
• Rs 10 cr The level at which ECGC officials will start checking bank documents
• 2% Current share of export credit in total loans disbursed by banks
• 50% Share of foreign currency in total export credit

Source: Business Standard

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India in dialogue with US to resolve trade issues: Goyal

Union Commerce Minister Piyush Goyal on Monday said that Indian government is in continuous dialogue with the US to resolve trade differences. However, he stopped short of revealing whether the two countries have reached a deal or not. Union Commerce Minister Piyush Goyal on Monday said that Indian government is in continuous dialogue with the US to resolve trade differences. However, he stopped short of revealing whether the two countries have reached a deal or not. Goyal made the remarks while addressing a press briefing regarding a slew of recently-announced measures to prop-up country`s exports. Asked whether the two countries have reached a trade deal which might be announced during Prime Minister Narendra Modi's upcoming US trip, he replied that India was in continuous dialogue with the US and is working towards resolving all issues. Hinting that some of the trade issues may find an early resolution, he, however, refrained from getting into details. The Minister further said that any announcement over trade deal entirely depends on Prime Minister Modi and US President Donald Trump`s decision. The development comes after speculations have built up regarding a trade deal which might be announced during Prime Minister Modi`s visit. Besides, the minister said that Uttar Pradesh government has proposed to host one of the four mega shopping festivals which will be held in 2020. The state government is interested in hosting such an event to promote handicrafts, he said. The ministry has so far asked state governments to send in their proposals regarding the mega events. On last Saturday, Finance Minister Nirmala Sitharaman had said that as part of the steps taken to boost exports, India will organise annual mega shopping festivals, similar to the ones held in Dubai, to facilitate exchange between global producers and consumers. She had said that these "mega shopping festivals" will be held at four destinations across the country and their themes will vary from gems and jewellery, textiles and leather to yoga, among others. During Monday`s press briefing, Goyal said that patent filing fees for MSMEs will be reduced to enhance IPR ecosystem. AT the briefing, Goyal along with Minister of State for Commerce & Industry Hardeep Singh Puri, also launched `Common Digital Platform for Issuance of electronic Certificates of Origin` (CoO).

Source: Zeebiz

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Govt appoints OSD to Smriti Irani, Pvt Secy to Javadekar

The government on Monday appointed an officer on special duty and a private secretary respectively for Union ministers Smriti Irani and Prakash Javadekar. The two appointments were cleared by Appointments Committee of the Cabinet in its meeting chaired by Prime Minister Narendra Modi. K M Mahesh, a 2003-batch IRS officer has been appointed as private secretary to Minister for Environment, Forest and Climate Change and Information and Broadcasting Prakash Javadekar, the Department of Personnel and Training said in an official order. Mahesh will be functioning as the minister''s PS in the Ministry of Environment, Forest and Climate Change for a period up to October 19, 2020, the order said, adding the IRS officer was given the new assignment after curtailment of his tenure as a director in the Ministry of Petroleum and Natural Gas under the Central Staffing Scheme. In a separate order, the ACC appointed Shah Devanshi Viren as officer on special duty to Textile Minister Smriti Zubin Irani in the Ministry of Textiles for a period of five years. Viren''s tenure will be counted from the date of assumption of the charge and will be co-terminus with the minister''s tenure, the order said.

Source: Outlook India

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Big export boost requires a bigger change in strategy

The measures, announced last week, include replacing a WTO-non-compliant duty refund scheme with a compliant one and, with a Rs 10,000 crore higher outlay, there are measures to ensure a higher amount of export credit—around Rs 36,000 crore—is available at lower interest rates. The government has done well to come out with a series of initiatives to boost India’s flagging exports; between FY14 and FY19, India’s exports grew at less than 1% per annum. The measures, announced last week, include replacing a WTO-non-compliant duty refund scheme with a compliant one and, with a Rs 10,000 crore higher outlay, there are measures to ensure a higher amount of export credit—around Rs 36,000 crore—is available at lower interest rates. Other measures include ways to reduce the processing time at airports and ports, etc. While a weakening rupee should help India’s $330-bn exports grow, it is not clear how much these moves will help boost growth to reasonable levels in even the medium term, much less be able to reach commerce minister Piyush Goyal’s $1-trn-stretch target. Though Goyal was pilloried for his recent slip about Einstein having discovered gravity, he was right when he said that looking at the past didn’t necessarily help predict how the future would unfold. Between 1990 and 2018, while India’s exports grew just 18 times, for instance, Vietnam’s rose 102 times, as a result of which, its exports are 75% those of India today; these were a mere 6% in 1960. In other words, it is not how fast global trade is growing that is critical, what matters is seizing the opportunities that global trade throws up; Vietnam didn’t just catch the textiles boom, it also rode the electronics boom, and the possibilities that got thrown up with rising US-China tensions. Seizing the opportunities, however, requires an almost complete retooling of India’s manufacturing/regulations since no country can become an export powerhouse unless its local production is globally competitive; cheaper export credit, for instance, is a good thing, but it cannot make an uncompetitive product into a world-beating one. In which case, India needs to fix its infrastructure deficit, high corporate tax rates, high-cost labour and land, and reduce costs associated with bureaucratic red tape, convoluted decision-making, etc. It is also critical that various sectoral distortions be corrected; so, for instance, India’s tax policies in textiles are biased against man-made fibres whereas global demand is for such materials, and not for cotton, which is the mainstay of India’s industry. Other sectoral policies also need to be fixed. While India’s policies on mobile phones have so far attracted mostly small players, the bulk of the $300bn global export market for smart-phones—60% of this takes place from out of China—is serviced by four of five large companies, like Apple and Samsung; it is difficult to see how India’s exports of smart-phones can take off unless India is part of the global value chains of these firms. There is, so far, little serious attempt to ensure that firms like Samsung and Apple shift their production bases to India; the boom in India’s automobile exports after Suzuki’s entry ensured its entire vendor-base moved to India, though, should have made clear just how important being part of global value chains is. Around 70-75% of global trade, in any case, takes place through value chains run by MNCs across the world. Agriculture is another big area of export potential, but harnessing this requires moving away from today’s stop-go policies towards agriculture exports—normally based on how local prices are faring—as well as those like MSPs that distort markets. In the case of minerals, where there is big exports potential, similarly, India needs to both get its royalty-cum-tax regime right as well ensure all permissions—including licensing fresh mines and all environmental clearances—are given at the earliest. Only a policy that aims at making a country more competitive can deliver top-class exports growth; an exports-policy makes little sense on its own.

Source: Financial Express

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Wholesale inflation remains unchanged in August, but it's just notional relief

Wholesale inflation remained unchanged during the month of August at 1.08%, similar to July. But this brings only a notional relief to the govt battling an economic slowdown. The "unchanged wholesale inflation" template hides worrisome details. It shows that items of daily mass consumption witnessed a rise in inflation while the manufacturing sector showed zero inflation or even deflation. Wholesale inflation is the rate of increase in wholesale prices, determined by the Wholesale Price Index (WPI). Wholesale inflation had come in at a 25-month low of 1.08%.The data released for August showed that Wholesale Price Food index rose to 5.75% in August from 4.54% in July. The index for 'Manufacture of Food Products' group rose by 1.1% to 132.4 (provisional) from 130.9 (provisional) for July 2019. Food inflation shot up to 7.67% in August from 6.15% a month ago. This was because of a rise in prices of oil and spices (including mixed spices) maida, rapeseed oil, butter, sooji, sugar, sunflower oil, groundnut oil, salt, cottonseed oil, ice cream, wheat flour (atta), powder milk, palm oil, instant coffee, rice, non-basmati, ghee, castor oil, cocoa, chocolate, molasses, manufacture of health supplements, rice bran, sugar confectionery, rice products and soyabean oil. This means that the wholesale inflation rose in case of items which are consumed commonly and generally lead to higher spend by a household on daily need items. Even the index for what the government unofficially terms the 'sin goods' category rose. 'Manufacture of Beverages' group rose by 0.6% to 124.0 (provisional) from 123.2 (provisional) for July due to higher price of spirits, country liquor, rectified spirit, aerated drinks/soft drinks. The lone decline was in the case of the price of beer (1%)The price of other meats, preserved/processed, buffalo meat, fresh/frozen, processed tea and chicken/duck, dressed - fresh/frozen declined. The price of basmati rice, manufacture of processed ready to eat food, gram powder (besan) and manufacture of macaroni, noodles, couscous and similar farinaceous products declined up to 1%. These are commodities which have lower consumption in rural tracts of the country.

MANUFACTURING SECTOR WOES

On the other hand inflation for manufactured items fell to 0%, signalling lack of pricing power of producers. Deflation in manufacturing products was at 0.3% in July 2019. The manufacturing products category has a crucial weightage of 64.23% on the WPI, which means its ups and downs have a huge impact on wholesale inflation. A fall shows its declining day. In this segment deflation (negative inflation) was at 0.3 per cent. In fuel & power, wholesale inflation stood at 0.1% in July. Many manufactured items saw negative inflation or deflation. These include vegetable and animal oils, leather apparel products, paper, rubber, chemicals, steel, basic metals among others. Fuel inflation fell into negative territory. This relief is temporary because the disruption in crude oil supply from Saudi Arabia may lead to rise in fuel prices and a corresponding rise in prices of essentials fuel to the transportation cost element. The auto sector had been worst hit by the slowdown and the index for manufacturing in the segment reflected negative sentiment. The index for 'Manufacture of Motor Vehicles, Trailers and Semi-Trailers' group declined by 0.4% to 113.5 (provisional) from 114.0 (provisional) for July. The index for 'Manufacture of Textiles' group declined by 0.8% to 118.3 (provisional) from 119.3 (provisional) for July due to lower price of texturised and twisted yarn, weaving & finishing of textiles, cotton yarn, manufacture of other textiles and synthetic yarn. The index for 'Manufacture of Wearing Apparel' group declined by 0.6% to 136.3 (provisional) from 137.1 (provisional) for the previous month due to lower price of manufacture of wearing apparel (woven), except fur apparel.

Source: Business Today

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India’s readymade garment exports see negative growth

Tirupur: Readymade garments exports in the country have taken a hit, with June witnessing a 9.18% fall in exports, and August recording 2.44% negative growth. This was the lowest growth for both months in the past six years. Tirupur Exporters’ Association president R M Shanmugham said readymade garments worth $1.260 billion were exported in August from across the country; it was $1.292 billion in August. In June, it recorded $1.357 billion. The Tirupur apparel cluster accounts for about for 55% of the trade. “Only now the industry is witnessing the full adverse effect of demonetisation and GST. Around 50% of work has come down in the apparel units in recent months, as many were having layoffs,” said S P Muthurathinam, president, Tirupur Exporters and Manufacturers Association. Shanmugham said, “We need worry about the figures only if September shows negative growth.” “The central government says it is taking steps like the restoration of Merchandise Exports for India Scheme and other incentives to put the industry on the growth track. But, the government should mainly focus on establishing Free Trade Agreements (FTA) with countries like the US and the European Union, without which Indian units cannot compete with companies in underdeveloped countries including Bangladesh, Vietnam and Cambodia. Those countries were having FTA and other special agreements,” said N Jeyasekaran, a knitwear exporter. “The government says that it is trying to bring FTA, but main hurdle is that the countries like the US wants India to allow duty-free import of automobile and winery products,” said Shanmugham. “It is unfair that the central government is ‘putting down’ welfare of the textile units by weighing more on automobile imports,” Jeyasekaran said. The industrialists said the government should also focus on creating infrastructure like housing for labourers and upskilling existing labourers.

Source: Times of India

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Global Textile Raw Material Price 16-09-2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14123 USD dtd. 16/09/2019). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Egypt's exports rise to 29.2 bln USD in 2018

CAIRO- The Egyptian government announced on Monday that the country's exports during 2018 rose to 29.2 billion U.S. dollars. The Council of Ministers said in a statement that Egyptian exports hit 29.2 billion U.S. dollars in 2018, compared with 26.3 billion U.S. dollars in 2017, 22.5 billion U.S. dollars in 2016 and 22 billion U.S. dollars in 2015. The value of Egyptian exports during the first half of this year increased by 2 percent to reach 15.3 billion U.S. dollars, compared with 15 billion U.S. dollars during the same period last year, according to the statement. The most important commodities exported by Egypt in 2018 were fuel, mineral oils, plastics, electrical appliances, precious metals and fruits. According to the statement, Egypt ranked first globally in 2018 for exports of aluminum foil, second for exports of carpets of textile materials, and fourth for exports of alloy and steel bars, textiles, and phosphate fertilizers. Egypt's economy has been battered by years of turmoil following the 2011 popular uprising that toppled former President Hosni Mubarak. However, the country has recently been showing signs of economic improvement amid strict economic reforms including tax hikes and energy subsidy cuts recommended by the International Monetary Fund that supports Egypt's economic reform plan with a 12-billion-dollar loan. Enditem

Source: Xinhuanet

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Turkey, India intensify efforts to expand economic, commercial relations

Turkey is preparing to host a delegation of businesspeople from India, which is one of the 17 target countries in the Ministry of Trade's Export Master Plan. The delegation, consisting of entrepreneurs from various sectors, including information technologies, pharmaceutical industry, textiles and food, will discuss cooperation opportunities in Istanbul from Sept. 18-20. According to Anadolu Agency (AA), a delegation of about 20 people will hold talks in Istanbul as part of the three-day business visit. The delegation will meet with the representatives of various institutions and business people, especially the Turkish Exporters' Assembly (TİM). Within the scope of the visit, the delegation is expected to evaluate opportunities for cooperation with companies operating in information technologies, the pharmaceutical industry and textile and food sectors. India was listed among the 17 target countries in the Export Master Plan announced by Trade Minister Ruhsar Pekcan. In this context, the contact between the two countries is expected to intensify in the political, diplomatic and economic fields, while mutual visits between the business worlds have accelerated. Most recently, China attended the 88th İzmir International Fair as a "partner country" and India as the "focus country." Businesspeople and investors from both countries exhibited their products and held talks for new cooperation during the fair. Last year, India's economy grew by 7.3% to $2.6 trillion. The country had $523 billion in imports and $338 billion in exports, while its trade volume with Turkey stood at $8.7 billion. India's main import items include mineral fuels, precious and semi-precious stones, pearls, electrical and electronic equipment, machinery, nuclear reactors and organic chemicals. There has been a remarkable increase in the number of tourists coming from this country to Turkey since 2017. The number of Indian tourists in Turkey soared to 129,000 in the January-July period this year from 43,000 last year.

Indian market offers great opportunities

Canan Çelebioğlu, Head of the Turkish-Indian Business Council of the Foreign Economic Relations Board (DEİK), said that the Indian market offers great opportunities for Turkey in exports and imports, with its growing middle class and increasing domestic market demand. Çelebioğlu stated that India, with its ever-liberalizing economic structure, will form one of the most attractive markets in the coming years as it is today, and therefore it is among the 17 most important target countries. According to Çelebioğlu, foreign capital investments in India, which increased by 6% to $42 billion in 2018, mainly targeted services, IT, manufacturing and telecommunications sectors; while other important industries include chemistry, pharmaceuticals, automotive and infrastructure. Expressing that India's IT sector grows 4-5 times faster than the global IT market, Çelebioğlu added: "Almost all global electronic giants, including HP, IBM, Samsung and LG, have investments in India. Domestic IT demand is expected to reach $400 billion in 2020. It is estimated that there will be 1.1 billion telecom users and 500 million broadband users. These magnitudes explain why global companies want to be involved in this market." Underlining that the construction sector is one of the primary sectors seeking to do business in India, Çelebioğlu said that the country needs serious infrastructure projects in all areas. Also, an investment of $600 billion is required in the country only for urbanization infrastructure in the next 20 years. The need for housing is also very high due to the rapidly growing population. The country's transportation infrastructure needs serious investments, especially in roads, railways and ports. Meanwhile, 100 smart cities are planned to be built by 2020. Stressing that it is necessary to create success stories to increase the trade volume in favor of Turkey, Çelebioğlu noted that it is of great importance to boost the motivation and efficiency of Turkish companies in line with Turkey's strategic objectives and priorities. Highlighting that they will continue to seek solutions to the problems and contribute to the relations of the two countries by strengthening their communication with their Indian counterpart organization, Çelebioglu said that India offers opportunities in all sectors that cannot be ignored.

Source: Daily sabah

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Việt Nam’s textile export value up almost 7% in eight months

HÀ NỘI – Việt Nam Textile and Apparel Association (Vitas) said the total export value of textiles, fiber, and cloth reached US$25.7 billion in the first 8 months of the year, up 8.6 per cent year on year, including 60.6 per cent from foreign direct investment (FDI) enterprises. The textile and garment industry spent $14.9 billion to import textile and garment materials for production, up 2.3 per cent year on year, including 62 per cent from FDI enterprises. The industry’s trade surplus in the first eight months reached $10.8 billion. According to the Ministry of Industry and Trade, domestic textile enterprises face many challenges in production and business activities. The US-China trade war has affected exchange rates, leading to higher prices of processed goods in Việt Nam compared to regional competitors such as South Korea and China. That has also affected the number of export orders for local enterprises. In the first eight months of this year, textile production and exports have grown over the same period last year, but due to changing orders, local businesses need to have solutions for production and business. Industry experts said export orders have fallen. Some businesses have only received 70 per cent of new orders against the same period in 2018. Consumption of fibres and raw materials has struggled as Việt Nam's major export market –China (accounting for 60 per cent) – has cut import volume. Garment enterprises also saw a drop in orders. In 2018, many large enterprises in the industry had export orders throughout the year, while this year, they could only sign monthly export contracts with small volume. Buyers are concerned the US-China trade war will escalate, so orders are broken up instead of in bulk. Phí Việt Trịnh, General Director of Hồ Gươm Garment Group said the firm's orders have fallen against the same period last year. But there are still enough jobs for workers. It expects by year-end, orders will increase because demand is higher in the last months of the year.

No benefit

As the third quarter comes to an end, it is unlikely that Vietnamese textile enterprises will increase exports due to the on-going US-China trade war as some previously predicted. In the textile and garment industry, enterprises from South Korea and Taiwan in Việt Nam have gained advantages from the trade war because they own production factories under the value chain. “Korean textile and apparel companies in Việt Nam are the biggest beneficiaries of the trade war. This country’s 143 enterprises account for about 50 per cent of Việt Nam's textile and apparel export value to the US,” FiinGroup, a financial and business information provider in Việt Nam, was quoted by the Đầu Tư (Investment) newspaper as saying. Việt Nam has not seen investment flows to the textile and garment industry due to the US-China trade war, according to the Việt Nam Textile and Garment Group (Vinatex). There have not been significant shift in production from China to Việt Nam. The investment from a country to another depends on many factors, said a Vinatex leader. Nguyễn Thị Thu Trang, Director of the WTO Centre under the Việt Nam Chamber of Commerce and Industry – VCCI, said Việt Nam has not benefited from the trade war as many forecasted, including the moving investment from China to Việt Nam. Another problem is that although the export turnover is large, the domestic textile and garment industry still lacks input materials. It has to import all cotton and 80 per cent of fabric and other material from China and India so the product costs of domestic firms are much higher than FDI companies, she said. Therefore, if local firms have increased garment exports, textile companies of China and India would benefit, because the local firms have to increase their imports of raw materials. – VNS

Source: Vietnam News

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