MARKET WATCH 10 DEC 2019


National

Additional 2% export benefits to end Dec 31; Government yet to give roadmap for garments, madeups

45% of textile units hit by working capital crunch

Value addition, brand creation ‘vital’ for textile industry growth

Piyush Goyal demands reciprocal access for Indian companies abroad

While trade war between US & China escalated, couldn't have waited to slash corporate tax: Nirmala Sitharaman

Japanese Trade Minister to discuss RCEP pact with Goyal

WTO panel report: India needs a fresh debate on trade policy framework

Central GST falls short of budget estimate by 40pc in April- November

Slowdown only cyclical, India's growth potential not lost: Chief Economic Advisor

Rupee settles 16 paise vs $

 

International

Bangladesh: Textile millers seek PM’s help to check bond facility misuse

Pakistan: Separate textile ministry urged

Italy interested in importing Uzbek agricultural, textile products (Exclusive)

Global trade of MMF floor coverings growing since 2015

Bangladesh: Trades with Nepal, Bhutan allowed thru 3 more LCSs

 

National

 

Additional 2% export benefits to end Dec 31; Government yet to give roadmap for garments, madeups

A two percentage point cut in duty incentives under an existing export scheme effective January 1 has panicked electronics manufacturers, who say the reduction has the potential to derail the $3 billion mobile handset export segment, halting capacity expansion and leading to job losses.  Ahead of a new export incentive scheme--Remission of Duties or Taxes on Export Products (RoDTEP)--to be rolled out from next year, the Director General of Foreign Trade (DGFT) Saturday issued a notice that the additional 2% benefits given under the existing Merchandise Export from India Scheme (MEIS) for all sectors, except garments and made ups, and including electronics manufacturing, would end on December 31. With the additional benefits gone, the original incentive of 2%, 3% and 5% would remain until RoDTEP is put in place. The RoDTEP scheme, which is scheduled to replace MEIS from January 1, is yet to get cabinet approval. “The lead time given to exporters is less. A minimum of three months should have been given,” said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO). The electronics manufacturing industry, for which the export incentive will dropped to 2% from 4% now, was sharper in its criticism of the government move. “This news is nothing less than a painful shock. At one end, the government is talking about attracting investments to make India an electronics export hub, and at the other end, this export incentive is being withdrawn,” said Sanjeev Agarwal, head of manufacturing and design at Lava. “We have already started to export, lined up investments and taken orders basis this 4% export incentive. We will have to cancel orders and fire people if the government doesn’t reverse this.” Lava recently won orders from US companies such as GE and AT&T to manufacture white-label devices. Meanwhile, other handset manufacturers and component suppliers such as Apple, ViVo, Oppo, Foxconn and Flextronics, through their industry association, have reached out to finance minister Niramala Sitharaman, communications and IT minister Ravi Shankar Prasad and commerce minister Piyush Goyal, saying the move would severely impact current as well as future investments in electronics manufacturing.  “It will also lead to an immediate halt in all future hiring and capacity expansion,” the India Cellular and Electronics Association (ICEA) said in its December 9 letter.  The national electronics policy 2019 has targeted $110 billion of mobile handset exports by 2025.  “The disabilities in electronic manufacturing vis-a vis China and Vietnam had only been partially met through the 4% MEIS scheme and the discussions in the government were around how to scale this incentive up,” said ICEA chairman Pankaj Mohindroo. “In fact, the committee set up by the PMO headed by Niti Aayog CEO and with members from finance, commerce and MeitY among others was on how to come up with a WTO-compliant scheme to address the disabilities. But this is in fact going the other way.”  In October, the World Trade Organisation (WTO) ruled that India’s export incentive schemes, including MEIS, were inconsistent with provisions of the trade body’s agreement on Subsidies and Countervailing Measures. India was given 90 to 180 days to withdraw these schemes. However, India has contested the ruling, which, the industry said, essentially implies that there is no obligation to meet the timelines, thus confusing the industry as to why there seems to be hurry in reducing the incentives under the MEIS scheme before the government has unveiled a replacement.  The finance minister, in her budget speech, had even announced an allocation of Rs 50,000 crore to replace the MEIS scheme. Further, the development comes at a time when the IT ministry is also in discussions with the finance ministry to find WTO-compliant ways to provide increased incentives to the electronic manufacturing industry. Thus, Saturday’s notification before the announcement of details for a new scheme has really thrown the industry into a tizzy. Nitin Kunkolienker, president of Manufacturers Association of IT (MAIT), said the government’s move was not aligned with the vision of an export-led electronics manufacturing out of India. “MAIT has been proposing 8-10% support to offset India disability to attract global manufacturing into the country. This reduction will not only bring exports to a standstill of electronics from India but will also impact the existing investments as well as planned investments for the future period – much of which was linked to export orders,” Kunkolienker said.

Source: The Economic Times

Back to top

 

45% of textile units hit by working capital crunch

A study conducted by textile industrial association Indian Texpreneurs Federation (ITF) on the current state of the sector has shown that about 45% of the firms across the state are facing a ‘severe or very severe’ crunch in their working capital requirements, which is affecting their performance.

Convener of ITF Prabhu Dhamodharan said they had conducted a survey among textile entrepreneurs in spinning and readymade garment sectors in September and November, in which more than 300 entrepreneurs participated. “We conducted the study in three levels. First was a survey among the participant units, where participants mentioned that a lack of sufficient working capital was the single largest reason for their poor performance. Following this, we compared the result with credit rating agencies’ profiles of the units, where the results were in agreement. In the third level, we collected three years’ balance sheets of the participants and analysed financial results. All the three results showed that 45% units face working capital issues. Small and medium industries face this more. Working capital issues affect performance. The difference between a strong player and these units is lack of money. This leads to increase in manufacturing cost,” he said. Volatility in cotton prices, Eurozone crisis and extended credit due to liquidity crisis in the system were some of the reasons for the shortage of working capital, Dhamodharan said. “ITF submitted the results to the Centre. We met the textile minister and the textile secretary 10 days ago and explained the findings with data. They said our study was Tamil Nadu specific and asked for a pan-Indian study to ascertain whether this was an area-specific issue or an overall issue.” Following this, ITF appointed research firm Crisil Limited to conduct a pan-India study. “They will submit a report covering 1,800 units across India in 30-40 days.” Of these, 1,146 would be spinning units and 690 would be readymade garment units in Tamil Nadu, Karnataka, Gujarat, Maharashtra, Punjab and NCR region. “The firm will analyse financial performance of spinning and readymade garment units from 2016 to 2019. It will arrive at pan-India rating distribution of rating profiles of various textile clusters to understand clusterwise performance of units. It will also compare the performance trends of listed companies with smaller, unlisted entities to draw inferences on the financial health of the sector. ITF will submit the result to the ministry of textiles and ministry of finance,” Dhamodharan added.

Source: The Times of India

Back to top

 

Value addition, brand creation ‘vital’ for textile industry growth

With cotton yarn exports dominating readymade garment exports from Punjab, textile players in the region have stressed on value addition, brand creation and large-scale production facility to boost textile sector in the state. According to textile players, manufacturers can get higher returns and increase their share in exports only through value addition. Punjab is among the largest producers of cotton, blended yarn and mill- made fabrics in India, but still it is much behind value addition as compared to Tiruppur in Tamil Nadu. “The textile industry from Punjab is exporting raw materials such as yarn, denim and non-denim fabric to South India and other countries. If the industry wants to take over Tirrupur cluster, it will have to focus on value addition like garmenting with a better strategy and efficiency,” said Kamal Oswal, vice-chairman and managing director, Nahar Industrial Enterprises, during the recently concluded Progressive Punjab Investors Summit. In 2018, out of total exports of cotton yarn and readymade garments from Punjab, the share of cotton yarn was 64%. The total exports of cotton yarn and readymade garments were Rs 6,489 crore. Further, the size of Punjab’s textile industry is around Rs 30,000 crore which includes spinning, yarn production, fabric manufacturing and garmenting. Out of the total industry size, the share of garmenting is around 8%. Tiruppur cluster in Tamil Nadu is a leader in garment exports from the country. The Tiruppur Exporters’ Association (TEA), India’s leading readymade/knitwear cluster, has reported exports of Rs 26,000 crore in fiscal 2019 and Rs 24,000 crore in the previous fiscal. Experts said the Ludhiana-based manufacturers should focus on creating their own brand. “Currently, many of the units work as vendors for other manufacturers. If the industry really wants to grow, they should focus on creating their own brand because when a unit works for a brand its growth depends on the original manufacturer but when an industry creates its own brand, it can group by leaps and bounds,” Oswal added. Textile players were also of view that the textile sector in Punjab is dominated by the MSMEs. However, the need of the hour is to have large production facilities, preferably 10,000 pieces per day. To boost the textile sector, Apparel Export Promotion Council chairman HKL Maggu stressed on technology upgrade and skilling workers. He said the council was planning to have a centre of excellence to boost exports from the state. Experts said the dissemination of knowledge by textile giants, exchange of ideas and best practices could do wonders for Punjab to enable it to develop on the lines of Tiruppur.

Source:The Tribune

Back to top

 

Piyush Goyal demands reciprocal access for Indian companies abroad

Commerce and industry minister Piyush Goyal said the government will stop other countries from participating in local contracts unless Indian firms are given a similar opportunity. “Unless we get reciprocal access to those markets, the government has decided that we will stop giving them an opportunity to participate in contracts in India. That is a part of the policy of the Narendra Modi government,” Goyal said at an event organised by Exim Bank on Monday. “Today, it is in our policy that if our companies are not allowed to do business or opportunities emerging in any country, I can assure you that we will not allow them to participate here.” This policy had been introduced two years ago and is “fair by all global standards”, he said. Goyal said this had been a “major stumbling block” in the RCEP negotiations. “I had not heard that China ever opens up any of their government contracts… They are never opened up for international competition in the garb of being public procurement,” Goyal said. India opted out of the RCEP last month after negotiating the pact with 15 other Asia-Pacific countries for seven years. China is part of the grouping. “Many other Asean countries, even Japan and Korea, the kind of conditionalities that are put, don’t allow too many of our Indian companies to participate in tenders in those countries,” he said. The minister asked Exim Bank to study such conditions and give feedback so that the government can “stand up for your right to do business in those countries”. If an Indian oil, coal or power company floats a contract, more often than not, the government allows international bidders to come in. He also said that India and its citizens want the rules of the game to change and corrupt practices to be eliminated. “We would like to be recognised the world over as a country which focuses on ethical business practices and a country where every process is based on fair play,” he said.

Source: The Economic Times

Back to top

 

While trade war between US & China escalated, couldn't have waited to slash corporate tax: Nirmala Sitharaman

The ongoing trade war between the US and China was an impetus for India to slash corporate tax rates through an ordinance, and waiting for the FY21 budget was a delay which the government wanted to avoid, Finance Minister Nirmala Sitharaman said on Thursday.  Sitharaman had in September announced corporate tax rate cut from an effective 35% (including surcharges and cesses) to an effective 25.17% while the rate for new manufacturing companies reduced to 15% from 25%.  The Rajya Sabha on Thursday gave its assent to the Taxation Laws (Amendment) Bill, 2019, replacing an ordinance that was used to slash corporate tax rates to stimulate growth.  The Rajya Sabha cleared the legislation with a voice vote without any changes. The Lok Sabhahas already passed the bill.  As per rules, the Rajya Sabha cannot amend a money bill but can recommend amendments. “Considering the trade war between the US and China, which was looming large, everybody was speculating, there were several companies which were likely to come out of China even if they kept their operations there, they wanted to shift,” Sitharaman said. The minister said while Southeast Asian countries like Thailand and Vietnam were rolling out tax concessions as the global trade war escalated, India had to respond well in time to attract investments at the earliest. “Should India be waiting for a golden moment to come up with this kind of a concession, instead of getting it sooner rather than later, and drawing these companies to come to India and invest,” Sitharaman said. Clarifying further on the bill, she gave a negative list of activities that did not classify as manufacturing. “Certain activities are not in the nature of manufacturing, such as development of computer software, printing of books, mining, etc shall not be allowed as manufacturing for the purpose of allowing lower taxation regime available to new manufacturing companies,” Sitharaman said.  “Cutting down the corporate tax rate, is not just good for headline, it is not just good PR, it is not just good atmospherics, it is good reform,” she added. The minister said the government had taken a “conscious call” on the new tax regime applying to fresh investments.  “The idea of giving a lower tax rate for new manufacturing companies is because we want fresh investment to come in,” Sitharaman said. “It should not become that the whole lot of existing production capacities and investment just transfer to the new one with no additional investments coming in.”  Sitharaman said she had been constantly in touch with trade bodies, industry leaders, to address issues they were facing and responding almost fortnightly with recuperative measures since August this year. Countering the criticism on declining consumption, she said private consumption in the first half of 2019-20 was still 2% higher than that during the UPA-II regime. “Private consumption during UPA-II was 56.2% of GDP. This increased to 59.0% during NDA-1. Even in the first half of 19-20, private consumption is 58.5% of the GDP, still about 2.2% higher than that during UPA-II,” Sitharaman said.

Source: The Economic Times

Back to top

 

Japanese Trade Minister to discuss RCEP pact with Goyal

Talks may discuss New Delhi’s concerns, suggest ways to make Indian industry more competitive. Japanese Trade Minister Hiroshi Kajiyama will meet his Indian counterpart Piyush Goyal on Tuesday to discuss the conditions under which New Delhi could get back into the trade negotiations for the proposed Regional Cooperation for Economic Partnership (RCEP) pact between 16 countries. “The two Trade Ministers are likely to discuss in details the problems India had with the current framework of the RCEP pact. The way ahead may also be discussed,” an official told.  New Delhi had decided to exit the RCEP being negotiated by the 10-member ASEAN, China, India, South Korea, Japan, New Zealand and Australia at the Leaders Summit last month. It’s main concerns, mostly related to opening up markets for its key competitor China, remained unaddressed. India’s decision to quit the group was not taken well by members such as New Zealand and Japan which officially said they wanted to sign an RCEP pact of which all 16 countries, including India, were members. The RCEP countries (with the exception of India) decided to finalise the pact by February 2020. Kajiyama is expected to propose measures that will increase the competitiveness of Indian industries with the help of information technology, the official said. It could give subsidies to Japanese IT firms to carry out research if they entered into joint ventures with Indian companies. The country could also offer help in making the farming and fishing sectors more efficient. India’s biggest concern with the RCEP is related to the ‘rules of origin’ (ROO) agreed to by the other members. New Delhi believes that the ROO are very relaxed and would allow Chinese goods, which may be behind higher tariff walls for a longer period compared to goods from ASEAN, to circumvent the duties and flow into India from the shores of the ASEAN nations. This could spell doom as India was being asked to consider bringing about 90 per cent of goods traded with the ASEAN to zero per cent. India has also demanded that the base rate of duty (for calculating tariff cuts) should be 2019 instead of 2014, as agreed earlier, as those rates were not relevant any more. An adequate Auto Trigger Safeguard Mechanism to save the economy against dumping of cheap imports and import surges was another of the country’s demands.

Source: The Hindu Business Line

Back to top

 

WTO panel report: India needs a fresh debate on trade policy framework

Greater collaboration between the government and the private sector, for developing trade-smart schemes and incentives that have long-term sustainability and contribution to the growth of Indian industry, is the only sensible way forward. Recent global events have significant implications for reshaping India’s trade policy framework. The first important trigger for change occurred in 2013-14 when India’s per capita GNI (Gross National Income, earlier referred to as GNP or Gross National Product), assessed by the World Bank, breached the threshold of $1,000. This development had a ripple effect in India’s status as a ‘developing country’ under the WTO’s Agreement on Subsidies and Countervailing Measures (ASCM), which regulates, among other aspects, export subsidies. In 2017, after three consecutive years of India’s per capita GNI exceeding $1,000, India graduated out of the list of ‘developing countries’ under Annex VII of the ASCM, which basically meant losing the space for foreign trade policy manoeuvrability that India had enjoyed till then as a developing country. This was the genesis of the second trigger—a dispute challenging India’s export subsidy schemes that was initiated by the US at the WTO in March 2018. The initial consultative phase did not lead to any resolution, and therefore the US sought the establishment of a panel for dispute settlement at the WTO in May 2018. At the core of the dispute was the contention that ‘export incentives’ granted by India under the DFIS, EOU, EPCG, MEIS and SEZ schemes are ‘export subsidies’ that are prohibited under the ASCM. The WTO panel report, published on October 31, 2019, held these schemes to be prohibited ‘export subsidies’. The panel recommended that India should withdraw these schemes in a time-bound manner. The WTO dispute mechanism allows for countries the right to appeal panel reports with the WTO’s Appellate Body and India has exercised this right. But while an appeal can provide some tactical advantage in the short run, domestic reform is inevitable. In anticipation of the inevitable, the government has been undertaking suitable steps, such as emphasising that Indian industry should reduce its reliance on export incentives and has to reinvent itself by increasing its competitiveness in the global market based on increased productivity of resources, improved quality, better efficiency and increasing reliance on data-driven business strategies. The government has also announced December 31, 2019, as the sunset date for the MEIS (Merchandise Exports from India Scheme). There is also anticipation of the launch of a new scheme, the RoDTEP (Remission of Duties or Taxes on Export Products). Another significant initiative by the Indian government was the setting up of a group consisting of SEZ stakeholders under the chairmanship of Baba Kalyani, which has made significant recommendations for SEZ reforms that the government is considering. These developments need to be seen in the context of India’s positioning in the global trade scenario. This includes recent events such as: (a) India taking a strong stand regarding its crucial and sensitive demands at the RCEP negotiations, while keeping its options open regarding its continued engagement with the RCEP as well as other free trade agreements (FTAs) with strategic trading partners; (b) India’s embracing of the tenets of the WTO’s Trade Facilitation Agreement, which, apart from ensuring compliance with our WTO obligations, has contributed to improving India’s ranking in the World Bank’s Ease of Doing Business report; and (c) India’s adoption of disruptive technologies for trade automation and reduction of transaction costs, which has a role to play for making it an attractive destination for trade and investment. Seen against this overall backdrop, the tactical and strategic response in appealing the WTO panel report on export subsidies is only a short-term solution. In the long-term, as a member of the WTO, and as party to various FTAs, course correction with regard to formulating WTO- and FTA-compliant incentives and subsidies is inevitable. Firstly, India’s trade policy of the future ought to consider distinct approaches for trade in goods and trade in services. This aspect has also been highlighted among the recommendations of the Baba Kalyani report on SEZ reform. The distinction between goods and services will also enable designing separate incentives and subsidies for services exports, which neither the WTO nor India’s FTAs currently regulate. With services commanding increasing relevance for India’s growth story, and with the increasing ‘servicification’ of manufacturing, carefully-designed and WTO-compatible services subsidies are an important way forward. Equally, carefully-designed incentive schemes and subsidies for goods, which are compatible with our international obligations, are also essential. There exists sufficient space under both the WTO agreements and FTAs for this. Secondly, a meaningful trade policy framework needs to be rooted in an evidence-based approach, and rely on microeconomic data from the industry to enable targeted decision-making based on trade data analytics. Early indicators that the government has also recognised and is acting on this imperative is evidenced in the request from the government for microeconomic data from export promotion councils, for quantifying the rate of RoDTEP. In order to be able to respond to such a request and benefit from the scheme that is eventually put in place, Indian industry will also need to be proactive and establish appropriate mechanisms to capture data at the granular level, through innovative changes in accounting systems, IT systems and MIS, as well as ensure auditable record-keeping of the information required to benefit from the scheme. With increasing growth of the digital economy and blurring of lines between the physical and digital economies, the centrality of data-driven insights in informing policymaking is that much more crucial. This necessarily has to be an evolving approach, with the industry informing the design and outcome of the government policy by sharing qualitative data over a period of time. And finally, the trade policy of the future will have to forego its three-decade old preoccupation with export obligations and foreign exchange earnings. The shift from export growth to broad-based employment and economic growth was highlighted in the Baba Kalyani report as well. This will also enable the new policy to shed the legacy of India’s 1991 balance of payment crisis and look at the world with a new and aspirational approach and a perspective of global leadership. The ability of the government’s policy to have real benefits will also depend on the extent to which Indian businesses can provide crucial strategic inputs to the government, a theme which was discussed at a recently held CII conference in Mumbai, on the Global Trade Scenario, aptly titled ‘Navigating the New Normal’. Large industry houses, especially, will need to be better equipped with research and appropriate skill-sets, and apportion resources to be able to compliment and supplement government efforts. The government reaching out to industry for collating microeconomic data for informing and refining the RoDTEP scheme is an important starting point. Greater collaboration between the government and the private sector, for developing trade-smart schemes and incentives that have long-term sustainability and contribution to the growth of Indian industry, is the only sensible way forward.

Source: The Financial Express

Back to top

 

Central GST falls short of budget estimate by 40pc in April- November

The Central GST collection fell short of the budgeted estimate by nearly 40 per cent during the April-November period of 2019-20, according to the data presented in Parliament on Monday. The actual CGST collection during April-November stood at Rs 3,28,365 crore while the budgeted estimate is of Rs 5,26,000 crore for these months, Minister of State for Finance Anurag Singh Thakur said in a written reply in Lok Sabha. The minister added that the data was, however, provisional. In 2018-19, the actual CGST collection stood at Rs 4,57,534 crore as against the provisional estimate of Rs 6,03,900 crore for the year, he said. In 2017-18, the CGST collection was Rs 2,03,261 crore. The minister said that as many as 999 cases were registered till October in the current fiscal for GST evasion and Rs 8,134.39 crore has been recovered. During 2018-19, a total of Rs 19,395.26 crore were recovered (1473 cases) and in 2017-18 the recovery was of Rs 757.81 crore (148 cases). For strengthening monitoring tools to prevent GST evasion, emphasis has been laid on system based analytical tools and system generated intelligence, Thakur said. "In this connection, the Directorate General of Analytics and Risk Management(DGARM) has been set up by the CBIC. Further, E- way bill squads have been activated for the purposes of random verification of the goods in transit," he said. The minister also informed the house that it has inserted a new CGST rule which puts restriction that the input tax credit (ITC) availed by a taxpayer shall not exceed 20 per cent of the eligible credit available in respect of invoices or debit notes. The capping of ITC would lead to reduction in cases of fraudulent ITC availment as well as increase in payment of tax through cash thereby boosting GST collection, Thakur said further.

Source: The Economic Times

Back to top

 

Slowdown only cyclical, India's growth potential not lost: Chief Economic Advisor

The economic slowdown which India is facing at present is only cyclical in nature, and the country has not lost its growth potential, which signifies that the economy will bounce back, Chief Economic Advisor K Subramanian said. Subramanian said that there was, needless to say, a slowdown in the economy but it needs to be assessed whether it was structural or cyclical in nature. India’s GDP growth in Q1 of the current financial year, fell to a 6-year low of 5%, while Q2 slowed down further to 4.5%. The Reserve Bank of India has also lowered its GDP forecast for 2019-20 from 6.1% to 5%. “My take is that this is a lot more on the cyclical side, because there has been no change in the demographics, there has been no change in the demand in the medium term and the ability of companies to supply,” he said at the FICCI young leaders summit here on Monday. “and if anything, we are now doing a lot of reforms, and reforms enhance the productivity of the economy,” he added. He said that the potential growth rate of the country was unaltered, the reason why the economy will come back on track, he said, without indicating a time period, however. “As we showed clearly in the economic survey that for an economy like India, it is actually investment, especially private investment that is the key driver of economic growth,” he said. He said that there was a well thought-out agenda behind implementation of the reforms that the government was introducing. “So the steps we are taking, be it the corporate tax rate cut, the code on wages and industrial relations, is trying to create a more favourable environment for investment, which is what we require for sustained growth,” he said. “The laws of economics are quite strong and what basically takes us down, also brings us up,” he added. Finance minister Nirmala Sitharaman, in November this year said that while the growth rate had come down, there was no fear of recession. Sitharaman had in September announced corporate tax rate cut from an effective 35% (including surcharges and cesses) to an effective 25.17% while the rate for new manufacturing companies reduced to 15% from 25%. The CEA also said that the government was not complacent of what was needed to be done, continuous stakeholder discussions are being held to see what recuperative measures could be further taken.

Source: The Economic Times

Back to top

 

Rupee settles 16 paise vs $

The rupee pared initial losses and settled 16 paise up at 71.04 against the US dollar on Monday amid softening crude oil prices and weakening of the greenback against other currencies overseas. Forex traders said the rupee gained amid lower crude oil prices and weaker dollar index. Moreover, positive developments on the US-China trade front also supported the local unit. At the interbank foreign exchange market, the rupee opened at 71.24 against the US dollar. During the day, the domestic unit fluctuated between a high of 71.02 and a low of 71.27, and finally ended the day at 71.04 against the US dollar. On Friday, the rupee had settled at 71.20.

Source: The Hindu Business Line

Back to top

 

International

 

Bangladesh: Textile millers seek PM’s help to check bond facility misuse

Textile millers have sought the prime minister’s intervention to save the country’s primary textile sector by preventing misuse of bonded warehouse facility and import of yarns and fabrics through missdeclaration by a section of businesses. The Bangladesh Textile Mills Association in separate letters to prime minister Sheikh Hasina and textiles and jute minister Golam Dastagir Gazi made the demand. The BTMA said that the local textile mills were in dire straits for last few years due to price hike of gas, import of fabrics through missdeclaration and misuse of bonded warehouse facility. In the letters, BTMA president Mohammad Ali Khokon, however, thanked the National Board of Revenue and law enforcement agencies as they started drives to stop misuse of bonded warehouse facility by businesses. The association thanked the prime minister for providing various policy supports to the textile sector and demanded constant drives against the people who are selling yarn and fabrics in the local market by misusing bonded warehouse facility. The trade body requested the textiles minister to issue a demi official letter to the finance minister so that the drives against misuse of bonded warehouse facility continue. According to the letter, the BTMA member mills invested more than $7 billion in the textile sector but a good number of mills might turn into sick units due to misuse of bonded warehouse facility and import of yarns and fabrics through missdeclaration by a section of businesses. The local market should be freed from smuggled yarns and fabrics for the survival of the country’s textile industry, otherwise the country’s economic growth would be hampered as the primary textile mills contribute significantly to the rise in the export of readymade garment products and meet the essential needs of common people, it said. Citing the NBR data, the BTMA said that customs bond commissionerate conducted a total of 223 drives in January-October this year and seized 85 trucks and covered vans laden with fabrics and yarns for misusing bonded warehouse facility. In the period, the NBR identified revenue evasion worth Tk 256 crore by misusing of bonded warehouse facility and cancelled 326 bond licences, BTMA officials said. Earlier, textile manufacturers told the media that they were losing business worth more than $6 billion annually in the domestic market due to smuggling of yarn and fabrics into the country and misuse of bonded warehouse facility, industry people said. They said that the size of the domestic market of fabrics was 7 to 8 billion metres worth $11-$12 billion. Of which, the local producers meet demand for only 3 to 4 billion metres of fabrics worth nearly $6 billion and the rest of the demand was met by smuggled fabrics and fabrics imported under the bonded warehouse facility.

Source: New Age Business

Back to top

 

Pakistan: Separate textile ministry urged

Calling the merger of commerce and textile divisions as counterproductive, value-added textiles on Monday demanded a dedicated, independent, and authorised textile ministry so that this subsector could contribute to the revival of economy by tipping the trade balance in Pakistan’s favour. “It is an irony the government, without consulting the genuine stakeholders - the value added textile sector, merged the two divisions…,” said industry officials in a joint statement. The federal cabinet lately gave a go-ahead to this merger in view of the recommendations made by Dr Ishrat Hussain, Prime Minister's Advisor on Restructuring and Austerity. The move did not go down well with textile sector that had been demanding for a separate ministry for a long time.

Source: The News

Back to top

 

Italy interested in importing Uzbek agricultural, textile products (Exclusive)

Italy-Uzbekistan Chamber of Commerce is the only Italian business organization dedicated exclusively to Uzbekistan, President of the Chamber of Commerce Luigi Iperti toldTrendin an interview. It works in close collaboration with the Italian Embassy in Tashkent, Italian ICE Trade Agency and the Embassy of Uzbekistan in Rome for the promotion of Italian companies in Uzbekistan, Iperti added. Italy's exports reach 500 billion euros a year, while imports amount to over 450 million euros; therefore, there are great possibilities for Uzbekistan to export its products to Italy, Iperti said. "For this purpose, we have agreed to host a trading house in Italy with Uzbek products. The products of the Uzbek textile and fashion industries and the agricultural products sector are very interesting," the president of the Italy-Uzbekistan chamber of Commerce (CIUZ) noted. Iperti stated that Uzbek products are of good quality and at competitive prices. Italy is interested in the Uzbek industry developing and growing via export, while import of Italian port of technologies, machinery and even fashion products to Uzbekistan can also grow. The CIUZ president added that Italian business circles are most interested in creating JVs with Uzbek companies operating oil and gas sector as well as with enterprises involved in mechanical engineering and manufacturing. "Some Italian companies already present in Uzbekistan. I believe that others will follow. Uzbekistan is rich in skilled labor, raw materials and energy at very competitive prices. Italian companies are interested to produce in Uzbekistan and sell in the country, while they also want to export to neighboring countries and to Russia via Uzbekistan," Iperti said.

Source:Menafn

Back to top

 

Global trade of MMF floor coverings growing since 2015

The global trade of carpets and other textile floor coverings of man-made textile material has been growing with a high CAGR (compound annual growth rate), after witnessing a fall in 2015, according to data from TexPro. The trade has increased from $11,678.36 million in 2016 to $13,701.50 million in 2018 with a growth rate of 17.32 per cent. The total trade gained 8.16 per cent in 2018 over the previous year. It is anticipated to reach $17,412.40 million in 2021 growing at a CAGR of 8.32 per cent from 2018, according to Fibre2Fashion's market analysis tool TexPro. The global exports of carpets and other textile floor coverings of man-made textile material was $7,183.64 million in 2016 which reached $8,453.43 million in 2018 with a growth rate of 17.68 per cent. Overall increase of exports of carpets and other textile floor coverings of man-made textile material moved up by 8.66 per cent in 2018 over the previous year, and is anticipated to reach $10,791.10 million in 2021 with a CAGR of 8.48 per cent from 2018. In terms of volume, the global exports of carpets and other textile floor coverings of man-made textile material was 1,062.38 thousand tonnes in 2016, which jumped 22.48 per cent to 1,301.15 thousand tonnes in 2018. Overall export of carpets and other textile floor coverings of man-made textile material rose by 7.95 per cent in 2018 over the previous year. It is expected to reach 1,763.61 thousand tonnes in 2021 growing at a CAGR of 10.67 per cent from 2018. In value terms, China ($3,071.15 million), Turkey ($2,066.03 million), Belgium ($982.95 million), Netherlands ($437.85 million) and Iran ($374.41 million) were the key exporters of carpets and other textile floor coverings of man-made textile material across the globe in 2018, together comprising 82.01 per cent of total export. These were followed by India ($292.39 million), US ($240.45 million), Germany ($142.48 million) and Canada ($97.75 million). From 2013 to 2018, the most notable rate of growth in terms of export, amongst the main exporting countries, was attained by China (158.25 per cent), Iran (40.73 per cent) and Turkey (15.96 per cent).

Source: Fibre2Fashion

Back to top

 

Bangladesh: Trades with Nepal, Bhutan allowed thru 3 more LCSs

The National Board of Revenue has allowed import and export business with Nepal and Bhutan through three more land customs stations to facilitate Bangladesh’s trades with the two South Asian countries. Customs wing of the revenue board on December 1 widened the scope for international trades with the countries through Tamabil in Sylhet, Chilmari in Kurigram and Nakugaon in Sherpur land customs stations, amending the previous statutory regulatory order on import and export through the LC stations using Indian territories. These LC stations were previously used for trade with India only. The revenue board has also included the number of products eligible for import from neighbouring India through different LC stations, including Akhaura in Brahmanbaria, Darshana (rail route) in Chuadanga and Bibirbazar in Cumilla. Previously, export and import of goods between Bangladesh and Nepal and between Bangladesh and Bhutan were allowed only through Burimari in Lalmonirhat and Banglabandha in Panchagarh LC stations. These LC stations, except Chilmari, are also operated as land ports under the Bangladesh Land Port Authority. In both cases, importers and exporters have to use Indian lands to complete the trade activities as Bangladesh has no border with Nepal and Bhutan. According to the SRO, businesses will now be able to import all goods, except potatoes and yarn produced and processed in Nepal and Bhutan, through the LC stations from the two countries. Export of all products is permitted through the LC stations. NBR officials said that they permitted import and export business with Nepal and Bhutan through the LC stations to boost bilateral trades with the regional countries. There were also demands for the scope from the neighbouring countries as well as traders from Bangladesh, they said. Nakugaon LC station will now be vibrant due to allowing import from the two countries. Trade particularly from Bhutan will increase through the port, they added. Traders, however, will have to fulfil conditions related to rules of origin under the notification of the revenue board issued on April 24, 1977. According to the SRO, businesses will now also be able to import paper, sugar, cashew nut, generator, broken glass, chocolate, baby wiper, confectionary goods and bitumen through Akhaura and Bibirbazar land ports. India is demanding withdrawal of port restrictions on export of 19 goods through Akharua and some other goods through other major LC stations. The NBR also allowed import of dry fish, raw hide, spices and Arjun flower (broom) through Bibirbazar, and pulse, raw cotton and cotton bale through Darshana (rail route) from India. Earlier on July 2018, the revenue board widened the lists of eligible goods for import to and export from neighbouring countries, particularly from India. Bangladesh has 184 land customs stations at borders with neighbouring countries — India and Myanmar.

Most of the land customs stations are located at the border with India.

Source: New Age Business

 Back to top

 

 

 

 

Subscribe to SRTEPC mailing list

Exchange Rates