CBIC's latest GST circular clears air over several key issues such as how to calculate 20% amount over and above the eligible amount of ITC, cut-off dates and where the new rule will not be applicable. In a big relief for GST taxpayers, the Union government on Monday clarified the new rules related to availing input tax credit under the GST. It said that a certain category of Input Tax Credit claims such as ITC in respect of the IGST paid on imports and GST paid under the reverse charge mechanism have been kept out of the scope of the new rules introduced last month. The new rules implemented by the CBIC limited input tax credit claims to 20% of the eligible amount where invoice matching has been done. However, the notification issued by the CBIC on October 9 caused a lot of confusion over the method of calculating this 20% amount, the cut-off date and also whether it was to be calculated supplier-wise or on a consolidated basis. These concerns prompted the CBIC’s GST policy wing to issue a new circular today clarifying all these aspects. “This circular clarifies a few points and will be of help to GST payers,” said Pritam Mahure, a Pune based chartered accountant. The circular issued by the Central Board of Indirect Taxes (CBIC) also clarified that this 20% cap on the eligible Input Tax Credit will not be calculated supplier-wise and GST payers can avail the input tax credit on a consolidated basis. The Modi government had received complaints that some businesses were availing input tax credit by using fake GST invoices. In order to check the problem of misuse of input tax credit system, the CBEC, the nodal body to implement indirect taxes in the country, had last month made it compulsory to match the invoices uploaded by the suppliers in their GSTR1 forms before buyers can avail Input Tax Credit in their GSTR-3 returns. However, it also allowed the buyers to claim 20% more input tax credit over and above the eligible amount where invoice matching was done but the lack of clarity over the method of calculation created confusion among GST payers. The CBIC’s latest circular is intended at clarifying all these aspects. For example, if a buyer is entitled to avail input tax credit of Rs 10 lakh on inward supplies (purchases) in a month but if his suppliers have only uploaded the correct invoices in respect of supplies of Rs 6 lakh only in the GSTR1 forms uploaded by them, then the buyer can avail ITC of Rs 6 lakh plus 20% of the eligible amount that is Rs 1.2 lakh. Therefore the buyer could claim a total ITC of Rs 7.2 lakh in the month. It also clarified that the total amount of ITC, even after the addition of 20% input tax credit over and above the eligible amount where invoice matching has been done, cannot exceed the total amount of input tax credit that can be claimed. For example, if a buyer is entitled to ITC of Rs 10 lakh on inward supplies and invoice matching is done in case of Rs 9 lakh then as per the 20% cap rule, he is also entitled to avail 20% over and above the eligible amount of Rs 9 lakh, which is 1.8 lakh in this case. However, this can take the total amount of ITC to be availed by him in the month to Rs 10.8 lakh, Rs 80,000 more than the total ITC amount that can be claimed. The new circular has clarified that in any case ITC claims will be restricted to the total amount due. For example, if a buyer is entitled to ITC of Rs 10 lakh on inward supplies and invoice matching is done in case of Rs 9 lakh then as per the 20% cap rule, he is also entitled to avail 20% over and above the eligible amount of Rs 9 lakh, which is 1.8 lakh in this case. However, this can take the total amount of ITC to be availed by him in the month to Rs 10.8 lakh, Rs 80,000 more than the total ITC amount that can be claimed. The new circular has clarified that in any case ITC claims will be restricted to the total amount due. The latest GST circular also clarified three distinct cases where the newly introduced rule to cap ITC to 20% over and above the eligible amount will not be applicable.
Where new GST Input Tax Credit rule will not be applicable
The cap of 20% on availing input tax credit under the GST rule 36, sub-rule (4) introduced on October 9 will not be applicable on three cases:
1. ITC in respect of the IGST paid on imports and these importers can directly avail the input tax credit;
2. The cap of 20% will also not apply to those cases where GST has been paid under the Reverse Charge Mechanism (RCM) and;
3. The ceiling of 20% on availing ITC will also not apply on Input Service Distributors (ISD), these are those businesses that receive invoices on behalf of the services used by their branches and subordinate offices.
Source: Financial Express
Even as the government works on longer-term measures to revive the economy, it must find a way for businesses and individuals to be able to access loans and, at the same time, speed up payments so cash flows back into the economy. Given the festive season was around the corner, one would have expected companies to have ramped up production somewhat in September. Under the circumstances, the sharp contraction in the IIP, to an eight-year low of a negative 4.3% year-on-year (y-o-y), comes as a bit of a shock. To be sure, auto manufacturers have been producing less in order to reduce inventories that piled up after the weak 2018 festive season. But, demand is clearly weaker than perceived and consumer confidence severely dented; else, how does one explain a near 10% y-o-y contraction in consumer durables? The infrastructure and construction sectors have been sluggish for a long time now, and it is possible the the late rains in many parts of the country exacerbated the situation. So, the poor data from this segment isn’t a big surprise. Neither is the steep 21% y-o-y fall in the capital goods segment because very few companies are adding capacity as the investment data has shown us. But, the discourse should now move on to how soon the economy can come out of the trough it has fallen into. Right now, it would appear that, among other factors, tight credit conditions are making it hard for all, except for top-rated borrowers, to access loans at affordable rates, and this is hurting demand and business. After the NBFC crisis which started in August 2018, companies and individuals have been finding it harder to get affordable loans; disbursements by NBFCs and HFCs fell 32% y-o-y in Q2FY20—led by a 36% y-o-y drop at NBFCs—while bank credit growth slowed to 8% y-o-y. Overall loan growth seems to have slumped to 6%, as analysts at Credit Suisse have pointed out, these are levels seen during demonetisation. Even as the government works on longer-term measures to revive the economy, it must find a way for businesses and individuals to be able to access loans and, at the same time, speed up payments so cash flows back into the economy. One can’t blame lenders for being risk-averse since it is a fact that credit profiles of most companies are far from robust and, in many cases, are deteriorating. The onus is now on the government to spend more; schemes such as the Rs. 25,000 crore fund for the real estate sector will go some way in reviving demand. However, over the longer term, the government must ensure that regulation is unbiased, else, we will see wealth destruction of a colossal magnitude as we have seen in telecom. Moreover, investments by global corporations, as indeed local players, will slow down. It is no surprise that key sectors such as defence have attracted such little FDI. Without an investment revival, there is little hope of the economy clocking more than 6%.
Source: Financial Express
Launching the Rise of Finance: Causes, Consequences and Cure, she said the book would help "understand the current economic situation facing both the world and Indian economy". Finance Minister Nirmala Sitharaman on Sunday said the economy was currently facing challenges, even as she unveiled a book on global finance. Launching the Rise of Finance: Causes, Consequences and Cure, she said the book would help “understand the current economic situation facing both the world and Indian economy”. “This will be a book that is very relevant to those of us, sitting on the policy making table. Secondly, its relevance and the timing of the launch of the book in India. We are currently facing a challenging time,” the minister said. The book is co-authored by V Anantha Nageswaran and Gulzar Natarajan. Nageswaran is dean of IFMR Graduate School of Business at Krea University. Natarajan is senior managing director at Global Innovation Fund. India’s economic growth slumped to an over six-year low of 5 per cent in the June quarter because of slower consumer demand and private investment amid a deteriorating global environment. This has prompted many global agencies to cut India’s GDP growth by various degrees for 2019-20. The RBI, in its October monetary policy review, had cut sharply its economic growth projection for the country for this fiscal to 6.1 per cent, from 6.9 per cent earlier.
Source: Business Standard
Industrial output contracted by 4.3 per cent for the second-straight month in September, nosediving to an 8-year low. Spurred by a major loss in manufacturing output and a deepening slowdown in capital goods production, the latest contraction was much higher than the 1.4 per cent fall in August. The Index of Industrial Production (IIP) fell by the highest margin since October 2011, data released on Monday showed. Economists said the latest data is worse than what was anticipated. “Cumulative growth in 2019-20 so far at 1.3 per cent as against 5.2 per cent in 2018-19 is very low and indicates stagnation,” Madan Sabnavis, chief economist at CARE Ratings, said. Industrial output had turned negative in August, crashing to an 81-month low, with across-the-board contractions reducing output by 1.4 per cent. However, economists had warned of a major fall earlier as well. After a 4.6 per cent industrial growth in July, they had cautioned against interpreting the data as a revival of industrial production. Mining activities and electricity generation also contracted in September.
Manufacturing turns sick
September saw the slowdown in the manufacturing sector — which accounts for 78 per cent of the index — deepen at a fast pace. September output contracted by 3.9 per cent — much higher than the 1.6 per cent contraction in August. Of the 23 sub-sectors within manufacturing, 17 recorded year-on-year contractions, up from 15 in the previous month. The IIP database showed contraction spread across all segments of the automobile sector, with motor vehicle production dipping by 25 per cent in September. Auto components, commercial vehicles and two-wheelers were flagged by the government as sectors pulling the overall IIP growth down. Machinery production reduced by 18.2 per cent and the production of electronic goods remained contractionary, going down by 10.6 per cent in September. This came after the government pushed manufacturing in the sector in a sustained manner over the past one year through a series of benefits and a phased manufacturing programme aimed at reducing imports of electronics goods. The capital goods segment, that signifies investment, contracted 20 per cent in September after a 21 per cent fall in August. Production in the category remained in the red for the eighth-straight month despite government efforts to open up even more sectors to easier foreign direct investment (FDI) flows earlier this year.
Consumer demand fizzles
September's industrial production also showed that consumer demand continues to remain in the doldrums. September, the month before the festive season kicked in, saw production of consumer durables contract for the fourth-straight month. Production contracted by 10 per cent, up from 9 per cent in the previous month. The negative growth baffled economists who said e-commerce sales in October was very high and should have been on the back of positive growth in this segment. Crucially, the consumer non-durables category slipped into contraction for the first time in FY20, with production thinning by 0.4 per cent. "The sequential worsening in the performance of consumer durables and non-durables in September belies any hopes of a pre-festive restocking of inventories," Aditi Nayar, principal economist at ICRA, said. The late withdrawal of the monsoon also dampened construction activity, contributing to the contraction in the output of infrastructure goods in September 2019, she said. "The economy is presently facing a structural growth slowdown originating from declining household savings rate, and low agricultural growth. Low agricultural growth is feeding into low agricultural and non-agricultural wage growth in rural areas, which is impacting rural demand adversely," Devendra Kumar Pant, chief economist at India Ratings & Research, said. With the output of the core sectors falling by a record 5.2 per cent in September to a 14-year low, and production by seven of the eight industries declining, slow economic growth is expected by economists in the second quarter of this fiscal year. Experts predicted that GDP growth is likely to slip in the second quarter of FY20 from the already multi-year low in the first quarter. As a result, the likelihood of another rate cut in December has intensified, despite elevated CPI inflation, they said.
Source: Business Standard
Move follows govt. decision to pull out of RCEP; Europe sceptical about timeline. India and the European Union committed once again to restarting talks on a free trade agreement, but did not spell out a roadmap on how to break the six-year old logjam in talks. European officials also remained sceptical about how quickly the talks could be restarted, given a number of issues, including India’s decision to cancel Bilateral Investment Treaties with 58 countries, including 22 EU countries in 2016, and the Brexit process. “[India and the EU] underlined the necessity of having a Bilateral Trade and Investment Agreement (BTIA) and agreed to continue working towards it,” said a statement released on Saturday after a meeting of the India-EU Strategic Partnership Review, led by MEA secretary Vijay Thakur Singh and European External Action Service Deputy Secretary General EU Christian Leffler. The renewed push for the BTIA, which includes both trade and investment, follows the government’s decision to pull out of the ASEAN-led Regional Comprehensive Economic Partnership last week.
‘Prefers FTA with West’
Commerce Minister Piyush Goyal, as well as Ministry of External Affairs (MEA) officials have said that rather than the 15-nation grouping which includes China, India would like to explore FTAs with the West, including EU and the United States. Prime Minister Narendra Modi and German Chancellor Angela Merkel also pushed for the BTIA during their bilateral meeting on November 1. Speaking to The Hindu, Pekka Haavisto, Foreign Minister of Finland, who is the EU Council President this year, however, said that the deal could take a “long, long time”. In 2013, India and the EU suspended talks after reaching a dead end on issues such as tariff on European cars and wine, on data security, and India’s desire to include services and more visas for Indian professionals in the agreement. Since then, despite meeting several times, negotiators have not been able to even agree on the terms for restarting the talks, despite a firm announcement by Mr. Modi and the EU President at a summit in 2017. “Unfortunately the EU-India summit keeps getting postponed, so [one] step is to have regular summits.” Mr. Haavisto said. He also cited the ongoing Brexit process for delaying the EU’s other trade deals, but said that the EU had managed to close FTAs with China, Japan and the MERCOSUR Latin American countries. Another major problem, he explained, was that the NDA government’s decision to cancel investment treaties had slowed interest from European companies who did not want to “risk” investing until another investment protection agreement was put in place, which could be discussed at the next EU-India summit in March 2020.
Source: The Hindu
The narrative that RCEP-Asean-type of deals are hurting is incorrect & the talk of a US/EU FTA is just wishful thinking.There are essentially two strands to the arguments made after India walked out of RCEP. First, that the lack of safeguards in RCEP that India wanted against a surge in Chinese imports will hurt India, so the country is better off without being a part of RCEP; the Asean FTA is held up as an example of how FTAs are hurting. Second, rather than getting bogged down in an FTA driven by Chinese interests, India’s interests are better served by concluding an FTA with the US or the EU; and since both are higher-cost economies than India, India’s exports will also grow faster than, say, in an RCEP FTA. Apart from the fact that it makes little sense to give up on trade with the world’s fastest-growing region, the assertion that the Asean FTA has hurt India is incorrect; nor is it a given that India’s exports will rise in a US/EU FTA. After all, if countries in the RCEP—and China is just one of them—are more competitive than India, they will continue to export more to the US/EU, even when India has an FTA; you just have to look at the growth in India’s exports and those of various RCEP countries to know this. More on the proposed US/EU FTAs in a bit. Indeed, even when you look at India’s exports growth to Asean, this lack of competitiveness is a factor that can’t be ignored; just because India and Vietnam, say, have the same access to the Chinese market and the same duties levied on them, it doesn’t mean India’s exports will do better even if they are less competitive. Vietnam’s better performance relative to India can’t possibly be laid at Asean’s doors. The fact that, between 1990 and 2018, Vietnam’s overall exports grew 102 times versus just 18 for India—as a result, Vietnam’s exports are now 75% those of India’s—makes it clear that the Asean FTA is hardly the issue. If India is not part of RCEP, and doesn’t get the benefits RCEP members do, its exports to these countries are unlikely to grow as fast as those of others. And, as India fails to join other such FTAs, whom will it trade with? As India gets more inward-focussed—it has been raising import duties—it will get less competitive. This will push up its trade deficit; as its import duties go up, so will smuggling levels. India’s imports from Asean growing faster than its exports—exports grew 2.07 times in FY10-FY19 while imports grew 2.3 times—also has to do with India’s poor domestic policies, which resulted in imports of items like coal or mobile phones/components shooting up. After all this, between FY10 and FY19, India’s global exports rose 1.9 times while those to Asean rose 2.1 times; India’s imports from the world rose 1.8 times while those from Asean rose 2.3 times. Yet, in relative terms, India’s trade deficit hasn’t risen discernibly. India’s Asean trade deficit was around 8.3% of its total deficit with the world in the 2000s, and fell to 7.7% in the 2010s (see graphic); the deficit was as low as 4.2% in FY11, and as high as 12.5% in FY16. Those denouncing the Asean and other such FTAs would do well to look at the data. Pravin Krishna of Johns Hopkins University points out in a recent paper that between 2007 and 2017, India’s trade deficit with Asean (as a percentage of India’s total trade deficit with all countries) fell from 9.9% to 6.6%. For all bilateral agreements that India has, such as with Japan, Korea, etc, this fell from 12.6% to 7.5%. The numbers will vary depending on the year—the number for 2018 could be different than that for 2017—but, there is no evidence of a catastrophic impact of FTAs, either bilateral or plurilateral. Indeed, the sharpest deterioration in India’s deficit is with China, a country it has no FTA with; once again, FTAs are not the problem. The reason for that is simple. For one, according to Krishna, there is a long gestation before any FTA gets actualised; this applies to RCEP as well. The India-Japan trade agreement began in the year 2011, but implementation is complete for only about 23% of the tariff lines so far; India will liberalise imports for 63% of goods only in 2021, and another 14% of goods are not even part of the FTA. Similarly, under the India-Korea agreement, signed in 2010, only about 8% of tariff lines had been fully eliminated prior to 2017; 20% are totally out of the FTA’s purview. Nor is it true, Krishna points out, that all trade in an FTA takes advantage of the preferential duties since there are complex rules of origin etc; despite the recent explosion in FTAs, Krishna says, only about 16% of world trade takes place on a preferential basis (the figure rises to 30% when intra-EU trade is included in the calculations). It is not clear how soon India can sign an FTA with US/EU, but suffice it to say that India has not even been able to resolve its dispute with the US on simple issues like duties on Harley Davidson motorbikes. An FTA with India, along the lines of the TPP that the US was working on, will presumably be as stringent—TPP had rules on labour laws, intellectual property protection (India will have to grant patents to a lot more US drugs as US rules are more liberal than India’s), reducing sops to PSUs, and the need for unfettered market access to US firms. If lobby groups like Amul could stop an RCEP, surely they will try and do the same when the US/EU want even more market access and have even larger subsidy levels? Since most Indian markets will have to be opened, other lobbies will also get active. India’s trade negotiators need to get real.
Source: Financial Express
Under the prevailing conditions, it would be hard to have our way in most trade agreements as every country would be pushing to leverage the deal which increases their exports and limits imports. India has once again displayed its macho image by walking out of the RCEP, keeping domestic interests in mind. Earlier, a similar position was taken at the WTO, and, more recently, with the US. This is a change of image from the past, and shows that the country has the strength to take a firm position on trade issues. More importantly, as India is a strong economic power, a powerful message has been conveyed to the rest of the world. The Ricardian theory of comparative advantage states that countries should specialise in production of commodities where they have a comparative advantage in terms of cost, and import those where they don’t. This leads to an optimal solution. But the world is not that simple; generally, countries produce everything depending on their social structure, economic distribution and political motivations. In case of commodities like oil or gold, there are few producers and many consumers, thus, there are only a few options. Rarely does a large oil producer also import oil. Besides the prices have been more or less fixed via economic structures, which are formal. But for several other commodities there are both exports and imports. Besides, the overarching motivation for governments is to protect domestic industry. There is a lot of talk of pushing forth India’s exports; the problem, however, is that they tend to be concentrated in less price-elastic goods, which are driven more by global growth prospects. While some suggest weakening the rupee to boost exports, anecdotal evidence shows that this hasn’t worked. If we are serious about pushing our exports, India needs to adopt an open door policy. It should also try removing bottlenecks. More important, countries should also let our exports come in. Curiously, we face tough competition from countries like China, Sri Lanka, Bangladesh and Vietnam in areas where we have a comparative advantage. Against this background, free trade agreements (FTAs) make sense. The WTO is supposed to be the biggest FTA involving over 160 countries; all members agree on certain norms on movement of goods, services and investment. The idea is that elimination of quotas and reduction in tariff barriers would lead to materialisation of an optimal solution. This has seldom worked smoothly. WTO has been one-sided when it comes to services as the Western world is against immigration. Ironically, the developed world does not mind flooding emerging countries with their investment and goods. Therefore, the WTO solution has always been a mirage. Now, let us look at RCEP. When 16 countries covering a large geography in terms of population and size have to negotiate, there would always be varying interests. It can never be a zero-sum game for everyone, even though on an average all countries would be better off. India is right to play tough while negotiating on imports in the farm area or textiles, as agreements like this are prone to encourage dumping. But, to get the benefits of freer entry into other countries, India has to be open to more imports in goods which may be lead to a direct competition with probably the most underprivileged class, i.e., farmers. Also, the choice of year for benchmarking will always be a bone of contention. Each country would like to bat for the year that is most convenient. The fact is that all countries subsidise various sections of the economy based on social and political requirements, this trend is more prevelant in agriculture. Therefore, costs and prices tend to be skewed. Also, every country wants to protect their farmers as they constitute a big constituency. Dairy products or other agro products entering through the FTA window can create problems of survival of local communities. Thus, it is natural to have resistance to these bilateral and multilateral agreements. India puts export restrictions on farm product, which is not the case for other countries like New Zealand. Hence, there will always be such instances of competitive pressures. So, is India right in walking out of the RCEP? Sovereign countries have a right to move on if they do not acquiesce to the terms, though ideally one would not go to sign the agreement and then withdraw. The spade work should have been done well in advance. Besides, walking out may not be the best way; negotiating agreements, which are serious in nature, requires a lot of diplomatic maneuvers. In political parleys discussions go on and diplomatic ties are maintained till the end, the same holds true for economic agreements. Walking out of the deal signals a message of intransigence, while keeping talks alive adds a strong diplomatic touch to a firm position being taken. An argument that is often given is that the 16 nation group includes Asean, which is anyway not very significant in our trade basket. If this was indeed the case, there was little need to prolong the conversation. India needs to strike such agreements with various countries in different geographies to leverage mutual advantage to grow exports. While there are talks for looking more towards the US and Europe to sign such agreements, getting these countries and blocs on board won’t be easy either. Europe has been going through tough times and the US has been targeting India on certain trade issues. More importantly, the world economy has been through a rather long phase of slowdown with few signs of an imminent turnaround. The pace of global trade has gotten truncated. Trade growth has been around 3.2% per annum, post the financial crisis. Several nations which are dependent on exports have gone into a tailspin. Any idea of trade talks with groups would invariably be directed at enhancing their own markets while keeping others out—typical of such phases. RCEP composition shows that the ASEAN nations are export-oriented economies and countries like Japan and China, owing to limited domestic demand, have become more dependent on foreign trade. India has had an advantage of being fairly insulated as growth has been driven primarily by the domestic forces. Therefore, under the prevailing conditions, it would be hard to have our way in most trade agreements as every country would be pushing to leverage the deal which increases their exports and limits imports. The path along will surely be uneven.
Source: Financial Express
Many factors have contributed to the doubts about our ability to reap the benefits under RCEP Our government’s decision to stay out of the Regional Comprehensive Economic Partnership (RCEP) has drawn near-unanimous support from political parties and organisations representing farmers, traders and industries. It is clear recognition that Indian producers will find it difficult to cope with increased import, especially of dairy products from Australia and New Zealand and manufactured goods from China. In the early ‘90s, the minority government of Narasimha Rao decided to join the World Trade Organization (WTO). This was despite strong opposition from other political ...
Source: Business Standard
Students should make the best use of the knowledge they acquire to improve the country’s economy, said Smriti Zubin Irani, Union Minister of Textiles and for Women and Child Development, during her convocation address at the Vellore Institute of Technology’s Chennai campus on Tuesday. Ms. Irani, cited research studies by the students of the institute and said, “Artificial intelligence in healthcare is slated to grow by 40% and value of of AI in healthcare will reach US$6.6 billion in India in 2021.” “The market for AI in agriculture will grow to $2.6 billion in the next two years. In education technology, it is set to grow to $252 billion,” she said. Earlier, she opened an auditorium on the premises. Padmaja Chunduru, Managing Director, Indian Bank, said students had many options unlike in the past. She urged graduates to take a decision after weighing the pros and cons of their decision. The bank has been the pioneer in the self-help group movement with around six lakh SHGs comprising 42 lakh women, mostly in Tamil Nadu and the southern States, Ms. Chunduru said. VIT chancellor G. Viswanathan said if the government wants to increase the gross enrolment ratio of higher education then it should invest at least 6% of the GDP in the sector.
Women empowerment
The concentration of women in the workforce has fallen. Representation of women in the country’s administrative sectors (currently 15%) and judiciary (11%), policy making (Assembly 9% and Parliament 11%) must be increased to enable women participate in economic development. For this to happen, the government should offer free higher education to women, as it was being done in over 30 countries, he said. As many as 1,701 graduands received their degrees, including 64 Ph.D students.
Source: The Hindu
The Home Textile Exporters' Welfare Association (HEWA) has sought Prime Minister Narendra Modi's intervention for release of pending dues under the RoSCTL, a taxes and levies rebate scheme. In March, the government had announced the Rebate of State and Central Taxes and Levies on Export of Garments and Made-ups (RoSCTL) scheme which provides rebate on all embedded taxes on exports, but HEWA claims exporters are yet to receive the refunds from this scheme which are pending since last eight months. "As the matter is still under consideration of the PM Office and we are hopeful that we will get a positive response at the earliest," HEWA Director Anant Srivastava told PTI. He said if the pending RoSCTL amount is released at the earliest it will be feasible for Indian Exporters to ship their consignments on time. According to Srivastava, a delegation from HEWA met Union Textiles Minister Smriti Irani in September and had detailed discussion on pending RoSCTL dues. Under the scheme, maximum rate of rebate for apparel is 6.05 per cent while for made-ups, this goes up to 8.2 per cent. The made-ups segment comprises of home textiles products such as bed linen, pillows and carpets.
Source: Business Standard
Haryana government led by Chief Minister Manohar Lal Khattar has constituted an Economic Advisory Council (EAC) to promote industries in the state and address issues related to various issues and policies of economic development. A notification to this effect has been issued by the Industries and Commerce Department, said a government spokesman, adding the EAC will comprise membership-based advisory panel and will be headed by the Chief Minister, while various representatives of the government, industry and academia sector have also been included in the panel. The Finance Minister, Industries Minister and Chief Secretary will be the members of the EAC. Apart from this, Additional Chief Secretary/ Principal Secretaries of Finance, Town and Country Planning, Power, Revenue, Excise and Taxation, Labour, Environment and Industries, MD, HSIIDC and Director, Director General, Industries and Commerce, Haryana, have been included in the panel. The spokesman said that members of the private sector including real estate leaders, chairman and managing directors of the headquarters of major banks in Haryana, management partners of leading consulting firms, country heads of major IT firms, head of apex industry association and vice-chancellors of educational institutions, Chairman and Managing Director of Food Processing units, top textiles, logistics, aerospace in Haryana have also been included in the panel. The spokesman said that this council would be constituted for 5 years, in which the government members would remain as permanent members of the council, while the members of the private sector would serve a term of 2 years. He informed that a report related to the achievements and contributions of the EAC will be placed before the Haryana Enterprise Promotion Board (HEPB) once a year. He said that the purpose of setting up this EAC will be to act as the sounding board of the State Government on various economic issues and development strategies, advocacy on policy matters and other issues of economic development targeted at prosperity and job creation. The EAC will guide the development in the State based on the changing economic environment and market trends. He said that this council will also give Haryana a platform to showcase its flagship projects targeting industrial and urban development, to a top-class professional network and further spread awareness about the investment available for private players in these projects. While sharing the key functions of the EAC, the spokesman said that the Council will analyse and review the status of economic development and growth in the state. Apart from this, the EAC will also discuss the macroeconomic developments and issues with implications for economic policy. The EAC will also address issues of macroeconomic importance and present views thereon to the Government either through a suo-moto on a reference from the Chief Minister or anyone else.
Source: Business Standard
Nomura chief economist Sonal Varma has put the Q2 growth at 4.2 per cent, similar to what SBI has estimated. A severe contraction in factory output has prompted observers of the Indian economy to downsize their estimate of the pace with which it could have grown in the July-September quarter (Q2 FY20). So much, that most of them have put the headline number at 4.2-4.7 per cent. But this time around, services sector activity, too, has pulled down growth in Q2, they said. Looking forward, though they expect the Reserve Bank of India (RBI) to cut rates up to 50 basis points in the two remaining policy meetings of the fiscal year, they said the effectiveness of rate cuts has diminished now. Saying that the domestic slowdown is syncronised with the global slump, the State Bank of India has lowered its estimate for growth in gross domestic product (GDP) at 4.2 per cent. For the full fiscal year, it has given the lowest estimate so far, at 5 per cent. It attributed a part of this to the slowing down of the money multiplier – rate at which money supply changes with respect to reserve money – due to de-risking of the financial system, including banks, and the rise in digital payments. “Under the current macro environment, monetary policy seems to be less effective than the fiscal policy as low interest rate does not guarantee rise in investment demand,” said the report. In what is suggestive of an entrenched slowdown, economists said that growth has not bottomed out yet. “We think the economy grew at 4.5 per cent in the September quarter, and anything below 5 per cent indicates growth has not bottomed out yet,” said Madan Sabnavis, chief economist at CARE ratings. He added that services output, too, looks bleak this time, barring the financial sector and public administration. “While credit and deposits growths are in double digits, trade, freight and air traffic would pull services down.” Aditi Nayar, principal economist at ICRA, said the enhanced spending by the government after the Union Budget on July 5 would add up to the Q2 growth. “Slowdown would also be associated with a few positive factors, such as lower raw material costs, a sharp pick-up in spending by the government in Q2 and improved profitability revealed by some banks,” she said. She, too, said that trade and freight have done poorly in that period, and would pull Q2 headline numbers down. Nomura chief economist Sonal Varma has put the Q2 growth at 4.2 per cent, similar to what SBI has estimated. Suvodeep Rakshit, chief economist at Kotak Securities, has said the Q2 growth number would be 4.7 per cent, revising downward from his earlier estimate of 5.2 per cent. He said that it is too early to say that the economy is showing green shoots. “While October shows some uptick in segments of auto sales, it is most probably a blip that can be attached to festive season sales. Moreover, some increase in steel and cement prices cannot be said to be indicators of demand picking up,” he told Business Standard.
Source: Business Standard
Indian textile industry contributes 2% to India's GDP, 10% of manufacturing production and 14%. The textile industry is currently estimated as $ 120 billion, is expected to reach $230 billion by 2020. In an exclusive conversation Vinod Kumar Gupta, Managing Director, Dollar Industries Ltd talks about growth in this segment. Highlight the journey of Dollar Industries in the Indian market so far. What are key learnings gained out of the market? In 1973-74, when Indian Textile Industry experienced different export performance for the period of Pre Economic Reforms, Shri Dindayal Gupta, Chairman, Dollar Industries Limited started his proprietary firm, Bhawani Textiles on the same year. In the year 2000, Bhawani Textiles established Dollar Foundation to carry CSR (Corporate Social Responsibility) activities. After walking a long and decisive path of notable revises in hosiery orb, Bhawani Textiles turned in to Bhawani Textiles Ltd. in 2005 and in 2008 Bhawani Textiles Ltd. became Dollar Industries Ltd. The Company’s sensible investments in manufacturing assets distinguish its products from its peers. Dollar’s young asset quality has helped it to reap multiple benefits. The focus is to be the best integrated hosiery textiles company with the ‘smallest Balance Sheet’. Investment in proprietary manufacturing facilities helped Dollar add value to their bottom-line. Approximately 30% of our sales were derived from captive consumption. Also, introducing manufacturing units include services like Spinning, Knitting, Bleaching, Dyeing, Garmenting and Branding has boost the production. Dollar’s always had a brand driven approach, from Endorsing Akshay Kumar as the brand ambassador for almost nine years to steady premiumisation of products. The company always introduced aspirational products at pocket-friendly prices. We diversify into multiple categories, as the main focus is on Customer choices and preferences. Offering more choices in terms of products, sizes, styles and colours, categories like Men’s innerwear to children and women’s wear. What is your assessment about Hosiery sector in India. According to you, what are the factors propelling growth in this segment? With a strong multi fibre base and abundant supply of raw materials like cotton,wool,silk,jute and manmade fibres, India enjoys a distinct advantage of backward integration which many country do not possess. Indian textile industry contributes 2% to India’s GDP, 10% of manufacturing production and 14% to overall IIP(Index of Industrial production). The industry is labour intensive and employ approximately 45 million people directly and approximately 20 million people indirectly. The textile industry is currently estimated as $ 120 billion, is expected to reach $230 billion by 2020.
Indian Inner Segment Overview
Kindly shed light on the current distribution of Dollar Industries. How do you plan to grow your network in the time to come?
Our dealership network is our strength. We have more than 900 dealers over 1 lakh MBOs across India. We constantly push our products to the remotest markets in India. We are planning to expand globally and domestically by the next fiscal year.
Kindly shed light on your Omnichannel strategy?
Yes, we are into omni-channel retailing since long. We have pushed our product from various social media pages as well as display networks, taking the consumers directly to various e-selling platforms. Thus, enabling them to access our products as per their convenience. Our growing business in e-commerce for the past 4 years is an evident point towards the success of our omni channels.
Kindly shed light on key innovations that the company has adopted in the recent past in the area of product and customer experience?
When it comes to products, we have a wide range of products such as Bigboss, Missy, Force NXT, Thermals; etc. This has enabled us to cater to more masses. Moreover, the availability of Dollar products at all e-commerce platforms as well as our very own website has enabled us to enhance sales as well as customer experience. Dollar has always been one step ahead when it comes to design and comfort. We have wide range of new designs, style and cut which consists of narrow cut, cut & sew, printed and embroidery.
Athleisure is the latest trend in the Indian market. How company is capitalizing on same.
The Athleisure collection is made with a combination of high grade combed cotton and elastane with various colour options to choose from. We have introduced pastel colours such as brown, olive, mélange and some darker shades like black, blue, etc. which makes this collection more trendy than any other in its class.
Kindly highlight your global expansion plans.
Dollar products are available across India catering to masses. Dollar Industries has the widest range of offerings, which is popular not just in India but also in Middle East and Gulf countries, Nepal and is spreading its wings to Africa. The company plans to become one of the most popular brands in knitwear segment in Asia. We are one of the few organizations in hosiery to have end to end manufacturing units. We keep on increasing our strength from time to time by including international mechanism and state of the art units
Source: Dollar’s Annual
Senior officials said the lack of data had also hampered the government's push to administer the 12 Champion Services Sectors initiative. The lack of data has made difficult the commerce and industry ministry’s plans to expand the Services Exports from India Scheme (SEIS) and provide a crucial leg-up to new sectors. Introduced in the Foreign Trade Policy (FTP) 2015-2020, the SEIS has been successful with incentives worth Rs 4,262 crore disbursed to services exporters in 2018-19 fiscal year. “The government wants to widen the SEIS and boost support to services exporters by not only increasing reward in certain cases but also coverage of the scheme. But, getting requisite data to do so have been difficult,” ...
Source: Business Standard
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
971.01 |
USD/Ton |
0% |
11/12/2019 |
|
VSF |
1509.66 |
USD/Ton |
0% |
11/12/2019 |
|
ASF |
2189.58 |
USD/Ton |
0% |
11/12/2019 |
|
Polyester POY |
966.01 |
USD/Ton |
-0.59% |
11/12/2019 |
|
Nylon FDY |
2233.10 |
USD/Ton |
0% |
11/12/2019 |
|
40D Spandex |
4109.47 |
USD/Ton |
0% |
11/12/2019 |
|
Nylon POY |
1077.31 |
USD/Ton |
-1.31% |
11/12/2019 |
|
Acrylic Top 3D |
2475.67 |
USD/Ton |
-0.57% |
11/12/2019 |
|
Polyester FDY |
5393.68 |
USD/Ton |
0% |
11/12/2019 |
|
Nylon DTY |
1220.00 |
USD/Ton |
-0.58% |
11/12/2019 |
|
Viscose Long Filament |
2104.68 |
USD/Ton |
0% |
11/12/2019 |
|
Polyester DTY |
2325.85 |
USD/Ton |
0% |
11/12/2019 |
|
30S Spun Rayon Yarn |
2097.54 |
USD/Ton |
-0.68% |
11/12/2019 |
|
32S Polyester Yarn |
1605.26 |
USD/Ton |
-0.44% |
11/12/2019 |
|
45S T/C Yarn |
2425.73 |
USD/Ton |
0% |
11/12/2019 |
|
40S Rayon Yarn |
1783.63 |
USD/Ton |
0% |
11/12/2019 |
|
T/R Yarn 65/35 32S |
2297.31 |
USD/Ton |
0% |
11/12/2019 |
|
45S Polyester Yarn |
2397.19 |
USD/Ton |
0% |
11/12/2019 |
|
T/C Yarn 65/35 32S |
1954.85 |
USD/Ton |
-0.36% |
11/12/2019 |
|
10S Denim Fabric |
1.26 |
USD/Meter |
0% |
11/12/2019 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
11/12/2019 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
11/12/2019 |
|
30S Rayon Fabric |
0.56 |
USD/Meter |
-0.51% |
11/12/2019 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
11/12/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14269 USD dtd. 12/11/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Senate on Tuesday appealed to the Federal Government to ban importation of textiles for a period of five years to allow for the production of local textiles. This followed the debate on a motion sponsored by Senator Kabir Barkiya (APC-Katsina Central) during plenary session on “Urgent need to revamp the nation’s comatose textile industry”. The upper chamber also appealed to the Federal Government to provide the necessary infrastructural facilities especially power supply to local textile manufacturing companies to revamp the industry. It also called on the government to encourage local textile manufacturing companies by providing them with soft loans and easy access to credit facilities through the Bank of Industry. Barkiya noted that the textile industry played a significant role in the manufacturing sector of the Nigerian economy with a record of over 140 companies in the 1960s and 1970s. “The textile industry recorded an annual growth of 67 per cent and as of 1991, employed above 25 per cent of the workers in the manufacturing sector. The textile industry was then the highest employer of labour apart from the civil service.” He noted that the industry had witnessed massive decline in the last two decades with many textile companies such as Kaduna Textile, Kano Textile and Aba Textile closing shop and throwing their workers into the job market. Contributing, Senator Robert Boroffice (APC-Ondo North) said that the importation of textile materials was as a result of the comatose textile industry. “The closure of our borders is an eye opener. China closed its borders for 40 years for its industrialisation and development. I believe that the closure of our borders should be extended to allow us to put our house in order.” The President of the Senate, Ahmad Lawan, said as Nigeria had signed the Africa Continental Free Trade Agreement, “We have to be prepared for the repercussions. “We cannot stop trading easily with other people. We have to up our game; we need to be competitive,” Lawan said.
Source: The Punch
On 8 November 2019, the European Commission announced that EU Member States endorsed the trade agreement between the EU and Singapore allowing the EU’s first agreement with a Southeast Asian country to enter into force as soon as 21 November. According to the announcement: Singapore is by far the EU’s largest trading partner in the Southeast Asian region, with total bilateral trade in goods of over €53 billion and another €51 billion of trade in services. Over 10,000 EU companies are established in Singapore and use it as a hub for the whole Pacific region. Singapore is also the number one location for European investment in Asia, with investment between the EU and Singapore growing rapidly in recent years: combined bilateral investment stocks reached €344 billion in 2017. Under thetrade agreement, Singapore will remove all remaining tariffs on EU products. The agreement also provides new opportunities for EU services’ providers, among others in sectors such as telecommunications, environmental services, engineering, computing and maritime transport. It will also make the business environment more predictable. The agreement will also enable legal protection for 190 iconic European food and drink products, known as Geographical Indications. Singapore is already the third-largest destination for such European speciality products. Singapore also agreed to remove obstacles to trade besides tariffs in key sectors, for instance by recognising the EU’s safety tests for cars and many electronic appliances or by accepting labels that EU companies use for textiles. The EU and Singapore have also concluded an investment protection agreement, which can enter into force after it has been ratified by all EU Member States according to their own national procedures.
Source: Lexology
In a bid to make Pakistan the world leader in the textile sector, Faisalabad Chamber of Commerce and Industry (FCCI) Senior Vice President Zafar Iqbal Sarwar has proposed the announcement of a new textile policy for 2019-24 by mainly focusing on value-added goods export. Unfolding objectives of the textile policy, he said that special emphasis should be given to improving Pakistan’s global ranking in the ease of doing business and reducing the cost of doing business. He proposed one-window operation for the purposes of registration, incorporation, EOBI, social security, taxation, fee collection, etc. He demanded levy of uniform energy charges across the country in addition to the settlement of Gas Infrastructure Development Cess (GIDC) issue and payables. Sarwar said that in order to stop the misuse of subsidised energy and the Duty and Tax Remission for Export (DTRE) scheme, the government must take appropriate steps in consultation with the real stakeholders. He said that efforts must be expedited to increase cotton production through improving the product mix by concentrating on research and development activity. He urged the government to provide a subsidised credit facility, enhance audit limits, give mark-up support and incentives so that textile exporters could invest in value addition of their innovative products. The official said that steps should also be taken to facilitate additional capital investment and reduce the cost of doing business. In this connection, he proposed the constitution of dispute resolution committees consisting of representatives of the Federal Board of Revenue (FBR), trade bodies and the Institute of Chartered Accountants of Pakistan (ICAP). Underlining the importance of small and medium enterprises (SMEs), he said, “The government should also focus on strengthening this important sector, which is full of potential.” Expressing satisfaction over the GSP Plus status, he said intensive efforts should be made to launch a diplomatic campaign to reap full benefits of the facility. In that connection, green finance facilities and compliance with different conventions should also be ensured through policy interventions. Sarwar proposed the setting up of a textile research forum to enhance cotton yield by encouraging cultivation of genetically modified seeds, production of organic cotton and establishing a production centre in Pakistan. He said that Pakistan-based testing facilities must be put in place in addition to encouraging internationally accredited labs with special focus on installing testing equipment for the identification of harmful substances. He added that the government should encourage joint ventures and investment for the manufacturing of textile machinery and production of various inputs used by allied industries in Pakistan subject to the economic viability. He stressed the need for introducing Pakistan brand and establishing a business facilitation centre for textile exporters so that they could explore new markets and introduce their own brands in international markets. The FCCI senior vice president demanded that existing industrial zones should be improved by extending the facility of “plug and play”, especially to the SME sector, which was starved of finances. Similarly, vocational training should be improved and women entrepreneurs must be encouraged so that they could play their role through coordinated efforts with the relevant ministers and trade authorities, he added.
Source: The Express Tribune
The first Vietnamese market in Malaysia is scheduled to be inaugurated in March 2020 with a scale of 20 pavilions, the Investment & Trade Promotion Centre of Ho Chi Minh City (ITPC) announced at a ceremony held in the city on November 9. Tansri Matshah Safuan, Chairman of Safuan Group (Malaysia), said that Vietnam Market in Kuala Lumpur is the first large-scale trading center for Vietnam-Malaysia cooperation, which has been formed on the basis of real needs for Vietnamese goods and services in Malaysia. He hailed the market as an important bridge to boost the exports of Vietnamese commodities to Singapore, Thailand and other ASEAN markets. The Vietnam Market will feature six floors in the Safuan Plaza building, located in the most dynamic area of Kuala Lumpur, next to major shopping centres, commercial streets and famous tourist sites. The venue will be open to Vietnamese exporters of agricultural products, seafood, handicraft and fine art products, garment & textiles, mechanics, machinery, cosmetics, proprietary technologies and service industries. It is also an ideal place for Vietnamese businesses to conduct investment and expand their operations in Malaysia. According to Nguyen Tuan, Deputy Director of ITPC, Malaysia is currently the sixth largest trading partner of Vietnam, behind China, the Republic of Korea, the United States, Japan and Thailand, and the second largest trading partner of Vietnam among ASEAN countries. Vice versa, Vietnam is the 12th largest trading partner of Malaysia, the fourth largest of the country in the ASEAN bloc, and one of the largest rice suppliers to Malaysia. In 2018, Vietnam exported US$8.47 billion worth of products to Malaysia and imported US$4.77 billion worth of commodities from the country. The major exports to Malaysia included computers, electronic products and components, phones and accessories, iron and steel, glass and glass products, and rice. In the first six months of 2019, Vietnam’s export revenue in the Malaysian market reached US$3.52 billion, with strong growth seen in machinery and equipment (up 66.3%), means of transport (up 21.6%), aquatic products and seafood (up 13.2%), footwear (up 17.3%), and garment & textiles (up 11.2%).The Vietnam Market project is expected to contribute to further accelerating Vietnam-Malaysia trade exchange and boost the exports of Vietnam’s strength goods to Malaysia, thereby approaching other markets. It also creates favourable conditions for Malaysians to directly select and purchase quality products of Vietnam.
Source: Nhan Dhan Online
Indonesia is betting on bilateral and multilateral trade agreements to revive the country’s sluggish non-oil exports within the next five years. Trade Minister Agus Suparmanto said trade agreements would allow Indonesia to increase its exports, as the country would generally receive easier access and lower import tariffs as part of the trade concessions. At present, Indonesia is concluding at least 11 trade agreements and plans to ratify 13 others in the next five years. With the signing of these free trade agreements, the Trade Ministry is optimistic non-oil and gas exports will grow between 6.88 and 12.23 percent by 2024. “I think the target is realistic amid the global economic slowdown,” Agus said at a press conference at his office in Jakarta on Nov. 8. An expert staff member for international trade at the ministry, Arlinda, said that food and beverages, textiles and textile products, electronics, automotive parts and wood and wooden products were among the products included on the export priority list. “The government will still focus on coal and crude palm oil [CPO] exports, as both are still top export products this year,” she said. According to Statistics Indonesia (BPS), the country’s non-oil and gas exports from January to September fell 6.22 percent to US$114.8 billion from $122.4 billion over the same period last year. Indonesia suffered a $1.95 billion trade deficit during the first nine months of 2019, a slight decline from the $8.7 billion deficit in 2018. “We will also keep our trade balance in check, and constantly expand Indonesia’s market by finishing international trade agreements,” Agus told the press. He added that among the 13 trade agreements to be ratified was the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), would be discussed by the House of Representatives on Nov. 18 for approval. According to data from Australia's Department of Foreign Affairs and Trade (DFAT), Indonesia is Australia's 14th-largest trading partner with A$17.58 billion (US$11.78 billion) booked last year, following Singapore (A$32.24 billion), Thailand (A$25.73 billion) and Malaysia (A$24.18 billion). Australia’s Trade, Tourism and Investment Minister Simon John Birmingham said during a recent meeting with the Indonesian trade minister that the Australian parliament would ratify the IA-CEPA by the end of this month or in early December, as both countries had reached a unanimous agreement on the trade deal. Easier access to the Australian market is expected to spur Indonesia’s automotive and textile industry growth as well as increase exports of timber, electronics and pharmaceuticals. Meanwhile, Indonesia will import cattle and sheep. Other than ratifications, Agus added that the ministry would also finalize several trade agreements that will be overseen by his deputy minister. Deputy Trade Minister Jerry Sambuaga said he would prioritize the Indonesia-European Union CEPA (IEU-CEPA), which is expected to be completed by mid next year after negotiations began in 2016. Indonesia’s non-oil and gas exports to EU member states totaled $10.69 billion from January to September 2019, a 17.5 percent slump from the same period last year, according to the BPS. “Our other priorities are the Morocco preferential trade agreement [PTA], Tunisia-PTA, Bangladesh-PTA as well as the Turkey-CEPA,” Jerry said, stating that all parties were strategic partners to Indonesia. During the conference, the trade minister also stated that he planned to increase exports of goods and services by around 4.5 to 8.63 percent, ensure food price inflation remained at less than 3 percent and implement import controls that only prioritized materials for export and investment purposes.
Source: The Jakarta Post
Mr. David Savman, head of production at H&M, said the company would do less business in Cambodia if the current EU trade benefits ended and named China and Indonesia as alternative sourcing countries. Mr. Savman was attending the Textile and Apparel SEA Summit in Phnom Penh last week when quoted by Reuters for saying that H&M, which has about 50 factories in Cambodia, had an exit strategy in place and that the firm had no further obligation to the Cambodian workers. Cambodia benefits from the EU’s “Everything But Arms” (EBA) trade programme, which allows Cambodia to export most goods to the EU, duty-free. The agreement is in jeopardy because the EU is accusing the Cambodian government of violating human rights. The EU bloc is Cambodia’s largest trading partner, accounting for 45 percent of its exports in 2018. Clothing factories in the country employ 700,000 workers, and garments make up a large share of exports to the EU, worth about $5.5 billion. Yet the value of exports to Europe fell by about $600 million in the first half of 2019 compared with the same period last year, according to Ken Loo, secretary general at the Garment Manufacturers Association of Cambodia (GMAC). “You can already see the impact, just on the threat of withdrawal,” he said, predicting mass job losses from the second quarter of 2020 should the trade preferences be revoked. The garment industry is Cambodia’s largest employer and generates $7 billion annually, but it faces uncertainty after the European Union (EU) began a process this year that could see tariffs reintroduced next August. The European Chamber of Commerce estimates that 90,000 jobs would be at risk if the EU suspended special trade preferences over Cambodia’s record on democracy and human rights. Cambodia’s garment factories are estimated to employ one in every 25 people, most of them young women who provide for their extended families. Accusations of human rights abuse by the Cambodian government may lead to the end of a preferential trade agreement.
Source: Scand Asia
The Ghana Federation of Labour (GFL) has said that the 2020 budget should tackle the dire situation of the Ghanaian textile manufacturing industry are facing. Mr Abraham Koomson, GFL Secretary General told the Ghana News Agency in an interview at Tema on expectations of the 2020 budget that government must implement practical measures in the sector, to reduce the escalation of imported local branded textiles and the flooding of the markets with smuggled products. Mr Ken Ofori-Atta, Minister of Finance is expected to present the 2020 Budget Statement and Economic Policy to Parliament on Thursday November 14, 2019. Mr Koomson noted that the excitement of leadership and members of the GFL was short-lived as a policy announcement by President Nana Addo Danquah Akufo-Addo in the 2019 state of the nation’s address to tackle such issues did not materialize as expected. He said “the VAT free period applied for almost one year without the complimentary measures to holistically address the challenges facing the industry” and stressed that “stakeholders of the textile sector want to see workable measures to address the issue”. He called for the reactivation of Anti-piracy Taskforce to check smuggling at the point to address smuggling of textiles into the country, a situation he said had worsened due to the withdrawal of the taskforce from the markets. The GFL also recommended to government to implement a single-entry corridor policy as well as resourcing of security agencies for effective enforcement of such policies. Mr Koomson also called for the extension of the zero VAT regime beyond three years due to the prevalence of smuggling adding that the implementation of the Textile Import Management System must also reflect to that effect. “We also recognize that the effectiveness of the Textile Import Management System is heavily dependent on the effectiveness of the single entry corridor policy”, he added. Giving evidence of the effects of smuggling and unfair practices in the industry on local textile manufacturing companies, he said currently, about 2,000 people were working in the sector compared to the over 25,000 employees in the 1975, which was equivalent to 27 per cent of the total manufacturing employment in Ghana. He said, the surviving textile companies, which he described as distressed were Akosombo Textiles GTP, Printex Ghana Limited and Volta Star (Juapong Textiles Limited).
Source: Ghana News Association
