The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 DEC, 2019

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INTERNATIONAL

 

Commerce Ministry wants stricter rules on trade remedies to be implemented soon

Will ask Department of Revenue to notify change in ‘lesser duty rule’ to impose higher duties on cheaper imports. Seeking early action on its proposal to remove the ‘lesser duty rule’ that would allow harsher duties against dumped and subsidised imports, the Commerce Ministry has decided to pursue the matter with the Department of Revenue. “Early action needs to be taken on doing away with the lesser duty rule so that higher anti-dumping and countervailing duties can be imposed on cheap imports hurting domestic producers. The Commerce Ministry is taking up the matter with the Revenue Department so that the final notification is expedited,” a government official told BusinessLine. The lesser duty rule states that in case of imports, once dumping or subsidies are established, the penal duty imposed on the item may be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry. “Because of the lesser duty rule at times India ends up imposing lower penal duties on dumped or subsidised imports than what the margin of dumping and the subsidies call for. This leads to our domestic industry getting lower protection than what it is acceptable globally. The amendment proposed by the Commerce Ministry is aimed to change this,” the official said. In September, the Commerce Ministry approved amendments in the rules of trade remedies such as anti-dumping, countervailing or anti-subsidy and safeguard to do away with the lesser duty rule. There is no problem with the proposed move at the multilateral level as the lesser duty rule is not mandatory under the World Trade Organization provisions. A large number of WTO members, including the EU, do not use the lesser duty rule and impose anti-dumping and countervailing duty to the full extent of dumping and subsidy margins.

 Domestic producers

“The Commerce Ministry wants to convince the Revenue Department that there is a need for early notification of the amended rules as India’s domestic producers are taking a hit due to cheap imports in a large number of sectors ranging from steel and chemicals to solar cells and panels,” the official said.

Anti-dumping duties

India has imposed anti-dumping duties on about 100 items imported from China as the neighbouring country, which runs a trade surplus of over $60 billion annually with India, is the largest source of cheap imports. Anti-dumping and countervailing duties are also a source of revenue for the government. The Centre raised ₹765.37 crore through anti-dumping duties in the first eight months of the fiscal year, as per government figures. In 2018-19, it raised ₹1,307.35 crore through such duties.

Source: The Hindu Business Line

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Govt to defer new exports scheme

The decision to defer the RoDTEP roll-out comes at a time when the WTO’s appellate body remains paralysed. The government has decided to defer the introduction of a Rs 50,000-crore exports programme — which was supposed to replace its flagship, but WTO-incompatible, Merchandise Exports From India Scheme (MEIS) — to the next fiscal from the proposed date of January 1, 2020, official and trade sources told FE. Commerce minister Piyush Goyal is learnt to have acceded to exporters’ request to grant them more time to prepare for a transition from the MEIS to the new scheme called Remission of Duties and Taxes on Export Product (RoDTEP), given the operational challenges. Also, the next foreign trade policy, which will contain broad contours of the RoDTEP, will only be rolled out from April 2020, as the current one is in effect up to March. The new scheme is supposed to reimburse all taxes and duties paid on inputs consumed in exports in sync with the WTO norms. Since potential revenue forgone in the current MEIS is around Rs 40,000 crore a year, RoDTEP is expected to cost the government an additional Rs 10,000 crore annually. The decision to defer the RoDTEP roll-out comes at a time when the WTO’s appellate body remains paralysed. So India is spared the trouble of having to fast restructure some of its contentious trade schemes, as its November 19 appeal against a ruling of the WTO’s Disputes Settlement Body (DSB) in favour of the US against New Delhi’s export “subsidies” is still pending. The fate of all such appeals remains uncertain, as the US has refused to relent on its move to block the appointment of appellate members. According to the WTO rules, unless appeals are heard and settled, the findings of the DSB won’t be binding on the losing party. Welcoming the latest plan to defer the roll-out of RoDTEP, Engineering Export Promotion Council vice-chairman Arun Garodia said the MEIS would remain in force till March 31, 2020, due to “operational difficulties being faced by exporters for the switchover”. The roll-out of RoDTEP from January 2020 was one of a raft of measures — including easier priority-sector lending norms for exports, greater insurance cover under ECGC and lower premium for MSMEs to avail of such cover — announced by the government in September to help reverse a slide in exports.

Though the goods and services tax (GST) regime has subsumed a plethora of levies, some still exist (petroleum and electricity are still outside the GST ambit, while other levies like mandi tax, stamp duty, embedded central GST and compensation cess etc remain unrebated). The MEIS, exporters have persistently complained, doesn’t offset all the taxes, so the new scheme will be beneficial to them when it’s implemented. The proposed transition to the new scheme came after the US dragged India to the WTO, claiming that New Delhi had offered illegal export subsidies and “thousands of Indian companies are receiving benefits totalling over $7 billion annually from these programmes”. However, Indian officials have rejected such claims and repeatedly stated that the entire allocation or potential revenue forgone on account of various such schemes (including MEIS) doesn’t qualify as export subsidies, as in most cases, they are meant to only soften the blow of imposts that exporters have been forced to bear due to a complicated tax structure. Exports are supposed to be zero-rated, in sync with the best global practices, they have argued.

Source:  Financial Express

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Piyush Goyal meets EPC, FIEO members; Talks exports & foreign trade policy

Union Minister for Commerce & Industry & Railways, Piyush Goyal, met with all Export Promotion Councils (EPCs), Federation of Indian Export Organisation (FIEO) and Commodity Boards under the Department of Commerce, Ministry of Commerce and Industry. In a marathon five-hour meeting held on 19 December in New Delhi, Piyush Goyal reviewed and sought inputs from EPCs for the Foreign Trade Policy and got their views on steps that may be taken to boost India’s exports. Pre-budget inputs from EPCs was also taken so that they may be sent to the Finance Ministry. Thirty-seven EPCs, FIEO and three Commodity Boards of the Department of Commerce attended the meeting and took this opportunity to discuss with the Commerce & Industry Minister every issue that the Councils face while exporting merchandise and services, and also to give their feedback on the various initiatives that are being taken by the Ministry to ease lending and credit availability to exporters. The EPCs also gave their views on India’s FTAs/PTAs with other countries, especially ASEAN. The problem of exporters identified as “risky exporters” by CBIC was taken up and Piyush Goyal directed that a nodal officer be appointed in the office of Directorate General of Foreign Trade (DGFT), and urged the Councils to send a list of those identified as risky exporters to the nodal officer in DGFT so that this issue may be taken up with the Finance Ministry. Councils were directed to send this list by 31 December 2019 to Additional DGFT, Vijay Kumar. Goyal further suggested that rationalization of EPCs must be taken up in order to avoid duplication of work and suggested that the big exporters may continue to be part of FIEO and smaller Councils may merge with bigger EPCs that deal with products of similar nature. The Commerce & Industry Minister urged EPCs to study the non-tariff barriers (NTB) being faced by them while exporting to other countries so that a study may be done to look at these NTBs and take up this issue bilaterally with countries, especially with whom India has FTAs/PTAs. Goyal urged exporters to make use of the NIRVIK (Niryat Rin Vikas Yojana) Scheme that will soon be approved by Cabinet so that exporters are able to access easy lending and enhanced loan availability that will cover 90% of the principle interest and will also include both pre and post shipment credit. Director General and CEO of FIEO, Dr Ajay Sahai, suggested that the New Foreign Trade Policy should study profiles of exports as well as global import trends as India largely exports textiles, leather, handicraft, carpets, marine and agro products. While these are important for employment their share in global exports is in decline, Sahai observed. The top 5 products in global exports, accounting for over 50%, are electrical & electronic products, petroleum goods, machinery, automobile and plastic goods. However, their share in India’s exports is less than 33%. India’s global share in these 5 products, put together, is about 1%. Therefore, the New FTP should facilitate the export of these products, suggested Sahai. The issue of India’s low share in high technology exports was also discussed by FIEO. High technology accounts for 6.3% of exports, whereas the same is 29% for China, 32% for South Korea, 34% for Vietnam, 39% for Singapore. Specific issues and problems being faced by certain EPCs like Telecom, Forest Produce and Shellac Export Promotion Council, Sports Goods EPC and CAPEXIL will be taken up with other line Ministries, Goyal assured, so that these issues and problems may be sorted out as soon as possible. At the end of the meeting, it was decided by the Minister, in concurrence with all EPCs and Boards, that another meeting will be held after the Budget in February 2020 to review the tasks achieved and those still pending, that were discussed in the meeting. Commerce Secretary and other senior officers of both Department of Commerce and Department for Promotion of Industry and Internal Trade were present at the meeting.

Source: Indus Dictum

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In a big relief to exporters, SBI withdraws e-BRC charges

In what can be termed as a major relief to exporters, the State Bank of India (SBI) has decided to withdraw charges levied on the issuance of Bank Realisation Certificate (e-BRC) for the export of shipments. Banks charge Rs 1000 as e-BRC fee for every shipment exported from the country. SBI decision to withdraw e-BRC charges came after the intervention of Commerce and Industry Minister Piyush Goyal. A source from Commerce and Industry Ministry told ANI that," SBI has informed that e-BRC charge has been reduced to nil for all Export Credit Customer. SBI has further agreed to reverse the charges if wrongly levied by its field formation." The issue of high banking charges for the issuance of e-BRC was raised by exporters in the meeting chaired by the Commerce and Industry Minister Piyush Goyal on December 19. The exporters said that SBI has raised the charge for issuance of the same to Rs 1000. Thereafter, Commerce and Industry Minister instantly took up the matter with SBI asking them to review the charge as such charges raise the transaction cost of exports making them less competitive. Talking to ANI Dr Ajay Sahai, DG and CEO Federation of Indian Exports Organisation (FIEO) termed it a big relief for exporters. "SBI has already done it. Taking lead from SBI now we will request other banks to follow it. There are around 1.5 lakh total active exporters and 25 per cent exporters are a client of SBI, so 40,000 exporters will directly benefit by the decision of SBI," said Sahai. "This decision has set a trend and we will request other banks to withdraw this charge and reverse the fees paid so far by exporters. e BRC fee was charged by the banks since July 2019. Commerce and Industry Minister has played a very big role for withdrawal of this charge," he added. Around 40 representatives from the Federation of Indian Export Organization (FIEO) and Export Promotion Councils met with Commerce and Industry Minister on December 19 and raised their voice against e-BRC charged by Bank. Following which, Minister Piyush Goyal spoke to SBI Chairman Rajnish Kumar and on the very next day, SBI decided to withdraw and reverse the charges collected so far. e-BRC was charged on every shipment of exporters. On an average if a exporter is exporting 50 shipment in a year then he has to pay Rs 50,000 for his shipments. FIEO DG Sahai also said that such a timely intervention by Minister will not only exude confidence among exporters that we can approach the Government for immediate redressal but will also motivate the community to focus on long term target of contributing towards US$ 5 trillion economy.

Sources: Times of India

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US-China trade deal: Deal offers nothing but superficial symbolism

It is unrealistic to assume the Phase-1 deal would end the US-China trade war, the underlying causes of which are systemic and linked to geopolitical rivalry. Phase 1 of the US-China trade deal marks cessation of retaliatory trade actions that the two countries have been engaging in for nearly two years now. But, it doesn’t mean that trade friction between the two countries has come to an end. The fact that both countries continue to view each other suspiciously is evident from the fact that the tariffs they imposed on each other’s products over the last twenty months remain in place. The deal has not, at least till now, ensured that both countries remove the tariffs on a large number of bilaterally traded items that were set in motion after the Section 232 tariff impositions by USA on steel and aluminum imports. While these tariffs affected steel and aluminum exports to the US by various countries, including India, the later tariffs imposed by the US, specifically on Chinese products, were justified under Section 301. Section 232 tariffs are brought in on national security grounds. Section 301 tariffs, on the other hand, are driven by unfair trade practices by US trade partners—in this instance, specifically by China. None of these tariffs, imposed at various points in time by the US, are going to go. The ones imposed by China, in retaliation, are also going to stay. What does the deal achieve then? Much of the outcome is symbolic. The symbolism is of far greater significance for the US. Unilateral tariff actions were begun by the US. It is far more important for the US, therefore, to demonstrate that it was able to fork out a deal that made the trade war worthwhile. But, does the deal justify the trade war? The core elements of the deal are intellectual property, technology transfer, agriculture, financial services, currency, foreign exchange, and dispute resolution. It is important to note that the core US angst against China was the ‘unfair’ practices maintained by the latter on various aspects of managing IP, and technology transfer. From the fact sheet released by the USTR on the subject, it is not clear exactly what the specific commitments made by China for safeguarding IP content, primarily by acting on piracy and counterfeiting, are about. On technology transfer, the fact sheet claims that for the first time in any trade agreement, China has agreed not to pressurise ‘…foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government’. What exactly the commitment by China in this regard might be is unclear and won’t be known till the text of the deal sees the light of day. But, if Chinese authorities wish to block market access for foreign companies as a negotiating chip to obtain knowledge of technology, they might well be able to do so through various other means. The mere ‘agreement’ provided in consultations and negotiations is insufficient for what the US was looking to achieve. Perhaps, the US trade negotiators also know this only too well. It remains to be seen how China fares following the deal, in future Section 301 investigations, and the US IP watch. There is not much to suggest that the outcomes of these investigations would change dramatically. On symbolism, a point the US trade authorities would wish to sell firmly to domestic constituencies is the commitment by China to remove a large number of non-trade barriers on US agricultural exports. Equally high on the symbolism quotient would be the Chinese commitment to buy more of various US goods and services. Both assume importance at a time when the US is heading into its next Presidential elections with the knowledge that trade war and tariff actions have not really delivered American producers the goods they promised to do. Less politically symbolic, but nevertheless strategically important, would be emphasis on commitments by China to refrain from unfair exchange rate practices and currency manipulations. Principally, the deal, the way it has come out from US official agencies, underpins a situation where a naughty, ill-behaved kid (China) has promised to behave in the future, following stern action (tariffs) by a strict guardian (the US). The US is keen to build the deal as evidence of the success of its efforts to put China ‘in line’. Whether that actually is the case will only be known in future. China’s ability to restrict market access through creative protectionism, notwithstanding official grant of concessions in several respects, is well known, and visible from the trade policy actions following its accession to WTO. Over the years, China has taken to blocking market through a variety of complex, internal ‘beyond the border’ domestic regulations rather than ‘on border’ restrictions, like tariffs. It might continue to do so, notwithstanding US pressure. It would be unrealistic to assume that the Phase 1 deal would bring to an end the US-China trade war. The underlying causes behind the US-China friction are systemic, and linked to their overall efforts to gain a geopolitical edge over each other through technology-driven economic supremacy missions. More is expected to happen in the foreseeable future. The onus of such developments, till now, has been with the US. It remains to be seen whether China begins a new fold of response to the hostilities. Critical issues like data governance, and surveillance concerns arising out of suspicions over Huawei remain untouched in the deal. Symbolic commitments might not be enough to keep both countries away from locking horns on the ‘alive’ issues soon again. (Senior research fellow & research lead (trade and economic policy), NUS).

Source:  Financial Express

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'New registrations by taxpayers being verified by GST council'

The GST Council is verifying the 66.79 lakh new registrations by taxpayers, which could be fake or pertain to shell companies, Bihar Deputy Chief Minister Sushil Kumar Modi, who is also the convenor of Group of Ministers (GoM) on integrated GST, said on Monday. "The new taxpayers, who are 66.7 lakh in number, hardly pay 15% of tax. So, whatever taxes we are getting from them is only 15% of taxes, which is about Rs 10,000 crore. Hence, we are strictly monintoring the new taxpayers to ensure they are not fake," he told reporters after the his meeting with the GoM. Modi said the number of active taxpayers has gone up to 1.21 crore since the launch of the goods and services tax (GST), of which 66.79 lakh are new registrations. According to him, many states have started physically verifying these companies by visiting the premises, geo- tagging the location and uploading the photographs on the system from mobile phones. The GST Council has also introduced 3B, a simple return, which has to be filed every month, said the Bihar deputy chief minister. "We have decided in one of our GST council meetings that if the firms don't file 3B returns for two consecutive months, their e-way bill will be blocked," said Modi. He said that till date, about 3.47 lakh dealers' e- way bill has been blocked by the system and as soon as the 3B return is filed, the system would automatically open and the e-bill is generated. Another decision taken in the meeting was the late fee of Rs 100 per day under the GSTR-1 or the outward supply has been waived, he said. "It is a one-time opportunity for those have not filed their GST return-1. We have waived the late fee of Rs 100 per day. Those who don't file the GSTR-1 for two consecutive terms, their e-way bill will also be blocked," he said. Conceding that there was huge backlog of refund of GST pending with the authorities, Modi said Rs 25,170 crore worth online refund was pending pertaining to 77,038 applications. Of these, Rs 2,503 crore pertaining 5,912 applications were disbursed, and online refund has picked up speed, he said. Explaining the reason behind poor disbursement of refund, Modi said many states were not acknowledging the online applications. "States are delaying in acknowledging those online applications. And if sometimes they acknowledge, they have to issue deficiency memo which are not being issued. We have gone into the details, and asked the states to expedite all these refunds. Now, the system has become very simple," he said. The Bihar deputy chief minister said a new return system would be launched from Apri 1, 2020, which would have a few fields. "The new return system is very simple with very few fields. It will be user-friendly," Modi said. To a question on GST collection plummeting, Modi said there was a cyclic slowdown in the economy, which would soon be back on track. He rejected the charge that states were not paid their share of GST saying that all the dues are getting cleared.

Source: Economic Times

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Mirroring slowdown: Electricity use down by 20% in Gujarat and Maharashtra

Sharper fall in power demand in industrialised states tallies with IIP, belies govt claim that prolonged monsoon caused it. While the usually rising power demand has fallen since August 2019, the decline has been sharper in the industrialised states of Maharashtra and Gujarat. This controverts the government’s attribution of the historic fall in electricity consumption in the country during recent months to ‘extended monsoon’ and the consequent “reduction in demand in agriculture sector and the reduction in cooling requirement in the domestic and commercial sectors”. In the festive month of October, power consumption in the country dropped 12.5% on year; the fall was a steeper 18.8% in Prime Minister Narendra Modi’s home state Gujarat and an even more pronounced 21.2% in Maharashtra. Given that industrial and commercial consumers have a much higher share in total power consumption in both these states (54% in Gujarat and 46% in Maharashtra) compared with pan-India average of nearly 40%, it is clear muted activity in factories has been one of the principal reasons for the fall in demand for electricity. India’s industrial production shrank 3.8% in October, recording its third straight monthly contraction. Electricity generation crashed by 12.2% in the month, recording its worst monthly fall in the current index of industrial production (IIP) series. While the rate of growth of power consumption had been falling since early this financial year, a phase of contraction began in August. Electricity consumed in August-November 2019 was 12.5% lower than in the year-ago period in Gujarat, while the fall was 13.2% in Maharashtra and 4.7% on pan-India basis. Of course, an unfavourable base also contributed to the trend of dipping electricity use, but not to the extent the impact from industrial slowdown could be negated. Electricity consumed in the country in October 2018 was up 11.8% y-o-y, in the run-up to the Lok Sabha elections. The consumption grew at a stratospheric 26.2% in Maharashtra in October 2018, but rose slightly below the pan-India rate in Gujarat (11.4%). So the industrial activity appears to have been hit the hardest in Gujarat. The decline in power consumption is also being reflected in low utilisation levels, measured by plant load factor (PLF), at thermal power plants. PLF of coal-based power plants — many of which are anyway stressed due to lack of adequate demand and coal supply issues — touched an all-time low of 48.9% in October (the PLF was 61% in FY19 and 64.3% in FY15). In terms of peak demand — which reflects the highest power requirement level reached at a particular moment — most states including Gujarat, Maharashtra and Tamil Nadu have recorded positive growth in the ongoing fiscal year as well. However, experts point out that peak demand is largely a function of unplanned surge in residential and domestic power usage, usually seen during festive seasons. “The reduction in consumption with an increasing peak demand can be linked to the economic slowdown and reduction in number of shifts of production,” said Sambitosh Mohapatra, partner, power and utilities at PwC India. “The potential for time-of-day tariff to incentivise the flattening of the peak load and load balancing for agriculture remains,” Mohapatra added. However, power demand seems to have started improving, of late. Electricity requirement since December 16 has been more than the corresponding days in FY19. Amongst all kinds of consumers including households and industrial and commercial units, India consumed 8.76 lakh million units (MU) of electricity in April-November this year, compared with 8.64 lakh MU in the year-ago period. In FY19, the country had consumed 12.68 lakh MUs of electricity.

Source:  Financial Express

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WTO Appellate body going into slumber is a serious setback

The WTO Appellate Body going into slumber is a serious setback for the rules-based multilateral trading order. On December 11, the World Trade Organisation’s Appellate Body (AB)—which is part of the WTO’s dispute settlement mechanism—went into hibernation. This mechanism, which was created to settle trade-related legal spats amongst the 164 WTO member countries, is made of two levels. The first level constitutes of WTO panels—these are ad hoc bodies in charge of adjudicating disputes between WTO members in the first instance. The second level constitutes of an appellate mechanism or the AB, which is a permanent body, comprising of seven individuals appointed for four-year terms. The AB hears appeals from reports issued by WTO panels. Three out of seven AB members serve on any one case. AB rulings are binding on the countries that are parties to the dispute. If a country fails to comply with an AB ruling, the winning country can take countermeasures against the disobedient country as per WTO rules. Therefore, the WTO’s dispute settlement mechanism brings certainty and predictability to the rules-based multilateral trading order by holding countries accountable for not keeping their end of reciprocal bargains, and by sanctioning and capping countermeasures in case of non-compliance.

US’s obduracy

The AB has gone into hibernation because the numbers of AB members kept dwindling, coming down to just one on December 11, due to the US blocking fresh appointments. The US believes that the AB has gone beyond its mandate. Its major complaint with the AB is that the latter, in a series of rulings, has overturned the US practice of ‘zeroing’—a controversial methodology for calculating anti-dumping duties on foreign products. The US has also expressed other concerns such as the AB’s treatment of Chinese state-owned companies, violations of statutory timelines as the AB often takes more time than stipulated to decide on a case, and AB rulings having precedential value. In the late 1990s and the early 2000s, the critics of economic globalisation used to single out the US for creating international economic institutions like the WTO, which were, at the time, seen as part of the global imperialist state pushing neoliberal capitalism to the detriment of the Third World. In fact, the WTO’s dispute settlement system was specifically criticised for creating coercive enforcement machinery pressurising the Third World countries to liberalise their markets. Interestingly, today, the US has turned out to be the biggest critic of the AB, while the Third World states like India are campaigning for its protection. The AB has actually become a victim of its own success. In less than 25 years of existence, it has produced close to 156 rulings involving myriad of issues like taxes on alcoholic beverages, subsidies given for civilian aircraft production, importation of solar cells, anti-dumping duties on shrimps, packaging regulations for cigarettes, regulation of gambling services, measures affecting imports of beef, etc. The AB, upholding international rule of law, on several occasions, has passed judgments against powerful developed countries like the US. Both in terms of sheer volume of cases and the wealth of jurisprudence produced, the AB has outperformed most international courts and international tribunals.

Adverse implications

The AB going into slumber is a serious setback for the rules-based multilateral trading order. The most immediate implication would be that if any WTO panel report were appealed, it would go into a ‘void’, as the AB doesn’t have the minimum number of members required to hear the case. This would allow a country to block the adoption of the report if it loses a trade dispute, and thus not comply with the WTO panel decision. India, recently, has appealed against a WTO panel ruling, which pronounced India’s certain provisions of the domestic export incentive initiatives as WTO-inconsistent. Therefore, India can continue with these measures despite their inconsistency with WTO rules. Likewise, the US has appealed against a WTO panel ruling in favour of India in the renewable energy sector, thus allowing it to continue with the WTO-inconsistent measures. The role of the WTO’s dispute settlement mechanism including the AB is premised on the assumption that a country unilaterally determining treaty violation by another country may be wrong. Any such unilateral determination may lead to countries overreacting in suspending reciprocal concessions that form part of WTO agreements. This, in turn, will trigger greater retaliation from the other side, leading to trade wars and ushering in instability in the global economy. As the noted international lawyer Joost Pauwelyn believes, given the eventual uselessness of purely unilateral enforcement, hopefully the US will also accept third-party adjudication in some form. However, it is important for WTO member countries to carry out required reforms ensuring that the AB follows the strict timelines given in WTO rules to decide on appeals. Finally, all nations, especially the US, should remember that the liberal rules-based global economic order built so arduously post the Second World War should not be sacrificed at the altar of domestic and competitive populism. The author is senior assistant professor, Faculty of Law, South Asian University, Delhi.

Source:, Financial Express

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Tackling India’s economic slowdown

A weaker rupee rather than high import duties will provide protection to domestic manufacturers and improve India’s export competitiveness. Liquidity situation in the shadow banking space must also improve. A key supply-side measure that can help in the short-term is a genuine attempt to reduce the compliance burden for SMEs. India’s GDP growth has decelerated to 4.5% in the second quarter. Neither consumption nor export and private investment are supportive. In fact, India’s economic growth is being driven by government expenditure. Excluding the government part that comprises not more than 13%, the Indian economy grew just 3.05% in the July-September quarter. Therefore, things are much worse than what headline growth number suggests. Slowing GDP growth will lower tax collections, and even cap the government’s ability to spend and support growth. The government has been hinting that the global headwinds are behind sluggish exports, and this is not without reason. US President Donald Trump has removed India from the US GSP (Generalized System of Preferences) beneficiary list, with adverse implications for export items such as chemicals, pharmaceuticals and engineering goods. The American tightening of immigration rules dampens Indian information technology (IT) export prospects. The European Union (EU) is struggling with Brexit, and slowing growth in its larger economies such as Germany. The Middle East—another major export market for Indian merchandise—is troubled by its over-reliance on oil and the regional political turmoil. Supply chains are now sourcing more locally than before. All of these developments are bound to affect India’s exports.

However, what the government is not telling—and which it rather should—is that India’s merchandise exports have been hovering around $300 billion for a very long time. The figure stood at $305 billion in FY12, and it will be no different in FY20. Obviously, the problem is internal mismanagement. Countries such as Bangladesh and Vietnam are fast replacing India in the products the latter has traditionally dominated; for example, apparels. India’s textile majors such as Arvind and Raymond are silently shifting their production base to Ethiopia to take advantage of cheaper labour and electricity, and duty-free market access in top consuming markets. Vietnam, in fact, is far ahead of India in attracting top electronics manufactures and, in turn, it is now pushing electronics exports as well.  Similarly, a number of factors are responsible for the slowdown in consumption, which has fallen to 5.1% year-on-year in Q2FY20 compared to 9.8% in Q2FY19. Continuing rural distress, which was accentuated first by the note ban and then by domestic and global supply gluts, is now capping rural demand. The wholesale prices of most agricultural crops are 15-20% lower than their MSP (minimum support price), while the prices of major farm inputs and equipment have gone up by 10% or so. This is squeezing margins and, in turn, farmers’ incomes and their demand for goods and services. High taxation and regulatory rent-seeking in sectors such as automobiles and real estate are aiding the demand slowdown. For instance, effective taxation is up to 50% for automobiles. Similarly, high GST (goods and services tax) on key inputs such as cement, protectionism-induced high-priced steel along with prohibitive stamp duty and registration charges are keeping home prices inflated and the demand for them capped. This hampers the prospects of dependent industries. Rising household debts and credit crunch in the shadow banking space are further contributing to the demand slowdown. No wonder, investment, as measured by the gross fixed capital formation (GFCF), grew by a meagre 1% in Q2FY20, even as its share in GDP continued to decline. The decline in capacity is reflected by 3.8% contraction in factory output in October—the third month in a row. Government investments, which usually bridge the gap during a slowdown, started losing steam as state governments’ capex—which makes up the major share of public investments—has shrunk in the last two quarters. Nevertheless, a 15.6% increase in government expenditure in the second quarter, compared to 10.9% in the same quarter last fiscal, has contributed one-third of the 4.5% GDP growth rate. However, government demand is primarily dependent upon its tax collection as it can’t really borrow much without forcing interest rates to rise. That crowds out private investment. The direct tax including corporate and personal income tax grew 5% in the period April-September 15, compared to the same period last year. Therefore, to achieve the budgeted target of 17.3% in FY20, it must grow by a whopping 27%—which is highly unlikely. GST collection remains muted due to slowing growth and low base—only 1.2 million out of the 62 million companies are GST-registered. Given this backdrop, badly-timed corporate tax cut will further limit the government’s ability to spend and support growth. And if that was not enough, recent disruptions related to amendments in the citizenship Act and national registry will hurt economic activities and hamper growth. Going forward, the government can do the following to revive consumer demand. The GST Council should increase GST on low GST items with inelastic demand, and reduce GST rates for high GST items with elastic demand. That will reduce rate differentials and discourage GST evasion and corruption. That will also boost the overall consumer demand. As reviving demand remains the key to reviving private investment, reducing income tax rates for lower-income people, if not for all, can be a big sentiment booster. Keeping import duties high, especially on key industrial raw material such as steel or polyester and synthetic fibres, hurts downstream industries and induces import of high- value finished goods—this adds to the import bill. Similarly, a stronger rupee encourages imports and hurts exports. Therefore, a weaker rupee rather than high import duties will provide protection to domestic manufacturers and yet improve India’s export competitiveness. In addition, liquidity situation in the shadow banking space must improve. One key supply-side measure that can help even in the short term could be a genuine attempt to reduce the compliance burden for SMEs.

Source:  Financial Express

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Centre-state mechanism to facilitate investments: Guruprasad Mohapatra

The government has drawn up a roadmap to encourage investments into the country including a mechanism to have authorities from the Centre and states at one place to facilitate investors, along with roadshows next year to attract funds from abroad. “We are looking at how to further expedite the various approval processes, and also put in place a mechanism to have the authorities of various departments of central and state governments at one place to facilitate the domestic and foreign investors,” Guruprasad Mohapatra, secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), told ET. He said several foreign investors have reached out to the government evincing interest in the country and Invest India—the national investment promotion and facilitation agency— is hand-holding 609 companies, which are at different stages of their India investment plans. India simplified the foreign direct investment (FDI) norms for contract manufacturing, single brand retail trade, coal mining and digital news media in August and the secretary said his department has identified more sectors where the norms can be liberalised. INDUSTRIAL POLICY, MAKE IN INDIA The DPIIT is working on a draft Industrial Policy to create a globally competitive, modern and inclusive industry. “The major objective of the policy is to attain $1 trillion gross value added or more from the manufacturing sector by 2024-25 by raising the share of manufacturing from the current 16.4% to over 20% in GVA,” Mohapatra said. The department has set up a working group comprising government and industry representatives to suggest broad contours of the policy. He said the situation in manufacturing GVA is “worrisome” with growth contracting by 1% in the July-September quarter of 2019- 20 from 6.9% expansion a year ago. The Indian economy is currently going through a slowdown, he said. India, as per the secretary, has offered a predictable and clear policy roadmap for foreign investors in the smartphone sector to plan their investments in India. “We are now striving to increase value addition in the smartphone value chain,” he said, giving the example of printed circuit boards, which were earlier imported fully assembled mostly from China and put together with the rest of the components. “Now, phone makers say they expect to localise 70-75% of the handset value in India in coming few years,” he said but cautioned that ‘Make in India' cannot be successful without design and innovation Mohapatra said India is on the path of becoming the hub for hi-tech manufacturing as global giants such as Apple, GE, Siemens, HTC, Toshiba and Boeing have either set up or are in process of setting up manufacturing plants in India.

ECOMMERCE POLICY

The secretary said his department is studying the linkages between the Draft Data Protection Bill and e-commerce policy especially the data-related provisions. Considering the impact e-commerce is expected to have on the Indian economy, it is important that e-commerce policy is finalised after careful consideration of every viewpoint,” Mohapatra said. However, he said the need of an e-commerce regulator depends on what are the final contours of the e-commerce policy. The government has also put in place a committee to look at the issues related to FDI in e-commerce. The committee will examine any grievances or representations received in this regard. On the issue of FDI violation by global ecommerce companies, he said, “We have received complaints that some e-commerce companies are giving deep discount and thus violating the FDI policy. DPIIT is examining the issue”.

REFORMS PUSH

Citing low consumption and investment demand along with slow growth in exports as the main reasons for the slowdown, Mohapatra said there is a need to revive the demand in economy through various measures. “Personal income tax rates may be reduced at least for the lower strata. Interest rates (can) be reduced to trigger pick up in consumption and investment demand,” he suggested. Besides, government and CPSEs should clear their pending dues and manufacturing exports should be incentivised to boost external demand and exports. He also observed that anomalies in tax structures, which make many sectors uncompetitive in the external market, will be addressed through the proposed Remission of Duties or Taxes on Export Products (RoDTEP) scheme. While there is growing protectionist tendency among major economies of the world, a surge of cheap imports has been observed in several product lines. “Special boost be given to distressed sectors like automobiles, textiles, electronics, capital goods through Public Procurement Scheme of the government,” he said. He added that a detailed action plan for implementation of required reforms has been drawn and shared with the relevant ministries and states to ensure that India keep moving up the ladder in Doing Business Rankings. India’s rank jumped 14 notches to 63, among 190 countries, in World Bank’s Ease of Doing Business index this year.

Source:  Economic Times

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Why India needs to get over growth numbers, and look beyond

There is a growing concern over India’s GDP growth figures. While it is true that there has been a decline in the growth rate, reading GDP numbers in isolation doesn’t give us a holistic picture of the economy. The Indian economy is in a transitional phase, given the many structural reforms GoI has introduced. It should emerge stronger once the positives of these reforms have percolated the market. The good news is that the percolation process is already underway. These reforms were imperative to lay the foundation of sustainable growth and equity. When private participants were allowed in sectors such as power, coal and telecom — which were earlier in the public domain — new regulatory mechanisms followed. However, the power of the regulators, the writ of the concerned government department and the judiciary were limited, and evolving. They had to learn how to ensure transparency, prevent monopolistic practices and protect the interest of consumers. The process has proven to be a path of learning both for policymakers and the judiciary, and is still in the works. The changes were largely structural in nature, and were essential for the public sector-dominated economy to move towards a competitive market economy. The economy is still grappling with the upshots of that transition. The second important structural change has been in the direction of reducing social and economic inequality. High levels of inequality cannot support social stability or economic growth. The march to a market economy in the 1990s meant that while some people could climb the economic ladder quickly, millions were left behind. The first few years of the first term of the Modi administration were spent in leveraging the power of JAM (Jan Dhan, Aadhaar and Mobile) to lay the foundation for programmes aimed at boosting direct transfer of benefits. An example of this is the emphasis laid on mobilising Unified Payments Interface (UPI). Through various schemes for housing, cooking gas, toilets, health, education, electricity and employment, GoI tried to counterbalance poverty, exclusion and inequality to ensure that the poorest had access to basic facilities. This was done in a manner that would minimise leakages to reach the maximum number of people, and improve the delivery of public programmes. This took up a significant share of the government’s money and focus. Three, any market economy needs mechanisms for entry and exit of firms to remain dynamic, and not get flooded with zombie firms. This required GoI to work on two fronts. One, improve the ease of doing business to allow easier entry; and two, put in place a bankruptcy process that allows resolution for failing firms. GoI did both. Currently, there may be some hiccups in these processes, but the bottlenecks are being removed. Once all the minor problems are weeded out, the economy should be much more robust. Four, the introduction of the goods and services tax (GST) was a long overdue reform. Reaching consensus with all states was difficult. Today, the media focus on shortages in GST collections. However, excise collections by states were not making headlines earlier as they were hidden in state budgets. Today, since the system is centralised, all its difficulties are transparent. Second, GoI has been very responsive, and is resolving the various problems as and when they are reported. Some people criticise the GST Council for being too responsive. But until the GST implementation and rates stabilise, there may be uncertainty and disruption, and the council will have to work to allay concerns effectively. Finally, GoI is committed to an environmentfriendly sustainable growth. The PM has made commitments to reduce carbon emissions, to increase the share of renewable energy, and to move towards electric vehicles. This means businesses such as the automobile industry need to move to new standards. These, too, are structural reforms that disrupt investment plans and drag growth figures down. GoI initiated bold and long due reformsthat were necessary to lay the understructure of sustainable growth in the country. These reforms are currently showing that growth is in slow track, but will eventually ensure that the economy will emerge more resilient. The size of the Indian market, its large middle class, the varied demographic profile, a democratic political system and amarket-based economy are key features of the economy. These, along with the important structural reforms already undertaken, and more that are on the agenda, will ensure that the Indian growth story will emerge stronger. The writer is national general secretary, BJP

Source:  Economic Times

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Who will approve and release official surveys? Draft NSC Bill stays silent

However, while the Rangarajan commission had recommended making the NSC a 'nodal and empowered body for all core statistical activities of the country', The proposed law on the National Statistical Commission (NSC) omits a critical element necessary for the autonomy of official statistics: Giving powers to the body to approve and release official survey reports.

The draft NSC Bill, which was made public last week for inviting comments, proposes to give the NSC an “advisory role” in terms of periodic reviews of official statistical systems at various levels. While releasing the draft, the government said it had borrowed ideas from a report by a commission led by former Reserve Bank of India governor C ...

Source:  Business Standard

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Pakistan plans tax breaks for some sectors in new export policy

Growing exports from current $20b a year is plan to increase foreign exchange earnings

Pakistan is considering offering tax breaks to various industries with export potential as it looks beyond textiles to boost outbound trade, an adviser to Prime Minister Imran Khan said. Engineering, chemicals, technology and footwear are among 20 sectors identified for incentives, Abdul Razak Dawood, the commerce and investment adviser to the prime minister, said in an interview in Islamabad. An export policy will be announced next month, he said. Growing exports from the current over $20 billion a year is Pakistan’s plan to increase foreign exchange earnings and end a chronic boom-and-bust cycle. The South Asian nation was this year forced to turn to the International Monetary Fund for a bailout — its 13th since the late 1980s — to avoid a balance of payments crisis. “I am in favour of limited time-bound incentives,” Dawood said, indicating a three- to four-year period for tax breaks. He opposed concessions for the textile industry, saying “they have gone to the point that it is a drug.” Textiles currently account for about 60% of Pakistan’s total exports. The new plan complements the central bank’s aim to offer cheap credit to export-oriented industries to diversify that basket. “If we want to go to $100 billion or $200 billion exports like Malaysia or Thailand, you ain’t gonna do it on textile,” said Dawood, who was previously chairman of Lahore-based Descon Engineering Ltd. The nation’s exporters also stand to gain from the central bank’s move to devalue the currency by almost half, besides the government’s move to remove duty on some raw materials used for exports and lower utility prices. Pakistan’s exports, particularly textiles, became competitive after the rupee’s devaluation and duty cuts, Dawood said, citing a 36% jump in quantity of garments shipments. “It means that we are getting market share, we are taking somebody’s market share.” Pakistan’s trade deficit narrowed 33% to $9.7 billion in the five months to November, as imports dropped by 18% and exports rose 5% in the same period. Dawood said he sees outbound shipments growing to $24.5-$25 billion this fiscal year ending June from $23 billion last year.

China Market

Pakistan is pinning hopes on a new free-trade agreement with China to grow overseas shipments by at least $500 million annually. The agreement, which takes effect next month, will help Islamabad reduce its trade gap with Beijing from the current $12 billion, according to data compiled by Bloomberg News. Dawood said he is seeing interest from Chinese companies that want to set up factories in Pakistan and use them as a hub for exports. The two bordering nations have gotten close in recent years with Pakistan being a flagship market for China’s Belt and Road Initiative. China planned to finance projects valued at $60 billion since 2015 and has helped end the nation’s chronic energy blackouts. For low value added engineering products “we are much cheaper than China now,” Dawood said, adding that the plan for the next China international import exhibition is to have only an engineering pavilion. “We got to get out of the textiles syndrome.”

Source: Gulfnew

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Boosting exports: Govt may give tax break to 20 industrial sectors

ISLAMABAD: Pakistan is considering offering tax breaks to various industries with export potential as it looks beyond textiles to boost outbound trade, Bloomberg reported an adviser to Prime Minister Imran Khan as saying on Monday. Engineering, chemicals, technology and footwear are among 20 sectors identified for incentives, Abdul Razak Dawood, the commerce and investment adviser to the prime minister, said in an interview in Islamabad. An export policy will be announced next month, he said. “I am in favor of limited time-bound incentives,” Dawood said, indicating a three- to four-year period for tax breaks. He opposed concessions for the textile industry, saying “they have gone to the point that it is a drug.” “If we want to go to $100 billion or $200 billion exports like Malaysia or Thailand, you ain’t gonna do it on textile,” said Dawood.

Source: The PK News

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USA: 40 companies achieved GOTS certification in 2019

Forty companies, including 21 retailers and 14 manufacturers, received Global Organic Textile Standard (GOTS) certification in 2019, bringing the U.S. total to 113. GOTS covers the processing, manufacturing, packaging, labeling, trading and distribution of all textiles made from at least 70% certified organic natural fibers. The companies certified are:

  • Knitter: Roshan Trading Inc. dba Laguna Fabrics/Enviro Fabrics.
  • Cotton gins: King-Mesa Gin; Mesa Farmers Cooperative Inc.; West Gin LLC, Woolam Gin.
  • Manufacturers: Avocado Green Brands LLC; BAC Distributing Inc. dba Naturepedic; Brentwood Home LLC; Chevaldi; Diamond Wipes International Inc.; Fibertex Nonwovens Inc.; Fischer Manufacturing LLC; New Fashion Products Inc; Panditos LLC dba White Lotus Home; Quality Sleep Shop Inc. dba My Green Mattress; Sleep Technologies Inc. dba The Natural Latex; The Procter and Gamble Co.; Tour Image dba Ustrive Manufacturing; WPT Corporation.
  • Traders or retailers: A1 Home Collections LLC; Cole and Cleo LLC; Conscious Step; Everlane; Fair Seas Supply Company LLC; Green Cotton Group USA Ltd; Helix Sleep Inc. dba Birch Living; Hope & Henry, LLC; Louis Dreyfus Company Cotton LLC dba Allenberg Cotton Co.; Noleo Care Company LLC; Modn Made LLC dba MakeMake Organics; Organics and More LLC; Pem-America Inc.; Sweet Dreams Inc. dba Gotcha Covered; Standard Fiber LLC; Revman International Inc.; Sally Fox dba Vreseis Limited; Simple Ecology Inc; The Home Depot Inc. dba The Company Store; The William Carter Co; Warwick Fulfillment Solutions.

Products many only be sold with a GOTS label if the entire supply chain is certified and the necessary scope and transaction certificates have been obtained to prove certification. To guarantee consistent product assurance of GOTS certified textiles, an independent on-site inspection is carried out annually buy GOTS-approved certifiers. GOTS, which is a nonprofit organization, was developed by Organic Trade Association (United States), Japan Organic Cotton Association, International Association Natural Textile Industry (Germany) and Soil Association (United Kingdom) to define globally recognized requirements that ensure the organic status of textiles, from field to finished product.

Source: Home Textiiles Today

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Turkish garment makers set eye on US market

Already one of the most prominent textile and clothing producers, Turkey is now raising its sight for a higher rise in exports, setting their eye on the U.S. market. Speaking to state-run Anadolu Agency, Hadi Karasu, the head of Turkish Clothing Manufacturers’ Association (TGSD), said that clients from the United States have again started to show interest in Turkey’s clothing industry. “Some of our members have 20 years of experience with the U.S. We see that American brands’ expectations of Turkey, which have a totally different way of working than Europe, has increased in the last 20 years,” Karasu said. “We need to recall our past know-hows, to return to domestic production and actualize a change that can fulfill the increasing demands in order to raise our share in the U.S. market,” Karasu stated, adding that the U.S. is the world’s largest clothing importer with a turnover of $103 billion. Despite the economic troubles many industries went through in 2019, the “ready-to-wear” industry resumed production with all capacity, according to the association head. “Additionally, it has also provided support on economic sustainability during a time our country needed it the most, with its near $18 billion export [volume],” he said. 50,000 employment in one-year Karasu also conveyed that the clothing industry has generated an employment of nearly 50,000 people in just one year. According to the figures Karasu provided, the sector had an employment of 510,000 people in September 2018, and this figure had increased to over 560,000 people in September 2019. “The data show that we have provided employment for 50,000 people and in other terms, that we increased our employment by 9.7 percent,” he said. The ready-made clothing companies have acquired some 297 incentive certifications from the industry and technology ministry, amounting to 1.5 billion Turkish Liras of investment, Karasu conveyed. The majority of production is taking place in Turkey’s northwestern Marmara region, especially Istanbul, the association head said. He added that there are discussions about modernizing the manufacturing facilities with new technologies, and excess machinery will be transferred to Turkey’s eastern and southeastern regions.

Source: Hurriet Daily News

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British MPs back PM's Brexit plan to leave EU on Jan 31

Prime Minister Boris Johnson’s Brexit bill was given preliminary approval last week by British lawmakers, paving the way for the United Kingdom to leave the European Union (EU) in January. The House of Commons voted 358-234 for the Withdrawal Agreement Bill. It needs approval by parliament’s upper chamber, and is likely to see more scrutiny and amendment. The divorce deal also needs to be ratified by the European parliament. Passing the bill would end the ‘acrimony and anguish’ that has gripped the nation since it voted in 2016 to leave the EU, British media reports quoted Johnson as saying. The bill commits the United Kingdom to leaving the EU on January 31 and to concluding trade talks with the bloc by the end of 2020. The December 20 vote was described by Johnson as a closure, saying, “Brexit will be done, it will be over." “The sorry story of the last three-and-a-half years will be at an end and we will be able to move forward together," he said. Trade experts and EU officials feel striking a free trade deal within 11 months will be a struggle, but Johnson insists he won’t agree to any more delays. That has set off alarm bells among business es, who fear that means the country will face a “no-deal" Brexit at the start of 2021. Economists say that would disrupt trade with the EU — Britain's biggest trading partner — and plunge the U.K. into recession. Johnson said Friday he was confident of striking a “deep, special and democratically accountable partnership with those nations we are proud to call our closest friends" by the Brexit deadline. Johnson, who has a 80-seat majority in the 650-seat House of Commons, Johnson did away with parts of the Brexit bill that gave lawmakers a role in negotiating a future trade deal with the EU and required ministers to provide regular updates to Parliament. The clauses were added earlier to win opposition lawmakers’ support for the Brexit bill and Johnson no longer needs that. The bill is expected to complete its passage through parliament in January even without opposition votes. Very little will change immediately after Brexit. Britain will remain an EU member in all but name during the 11-month transition period that ends in December 2020.

Source: Fibre2Fashion

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Indonesia to Lower Threshold for Import Taxes on e-Commerce Goods

Indonesia will lower the threshold at which it begins to impose import taxes on consumer goods sold via e-commerce to just $3, from $75, to control purchases of cheap foreign products and protect small domestic firms, officials said on Monday. Overseas shipments from e-commerce purchases jumped to nearly 50 million packages so far in 2019, compared with 19.6 million packages last year and 6.1 million the year before, with most of the goods coming from China, customs data showed. "This is to protect firms who've been producing goods that are often traded in e-commerce, such as sandals, crafts, and handbags," said customs director general Heru Pambudi. Under the new regulations, which will come into effect at the end of January 2020, foreign-produced textiles, clothes, bags, and shoes that cost a minimum of $3 will be subject to a range of taxes with a total rate of 32.5% to 50% of their value, the official said. For other products, the import taxes will be lowered from 27.5%-37.5% of their value to 17.5%, as applicable to any goods worth $3. Goods worth below $3 will still be subject to some taxes, such as value-added tax, though the range would be lower, something that was not required before. Pambudi told reporters this was in response to the demands of the general public and businesses, and will allow domestic goods to go "head to head" with foreign ones.

Source: New York Times

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ESMA kicks-off digital printing course for textile

European Securities and Markets Authority (ESMA), an independent EU Authority that safeguards stability of EU's financial system, has announced the first ESMA Academy course about digital printing for textile applications in cooperation with German Institutes of Textiles and Fiber Research. The programme will take place from April 21-24, 2020 at DITF Denkendorf. Participants at the programme, will receive insights in the procedure of inkjet printing on textile materials and accompanying topics such as textile chemistry and pre-treatment, ink formulation, curing techniques, colour management and characterisation of textile materials and printing quality. In addition, the workflow in digital printing will be shown in a Textile Microfactory environment. The practical training will be offered in small teams by ESMA and will highlight some of the topics that are discussed in the theoretical part. Participants will learn and exercise the workflow, and each required single step in digital printing on textiles. Each of the practical sessions will end with a question or task that is to be tackled by the teams in order to stimulate the assimilation of the subject matters. “This is the first of many new activities that we plan under the new textile division within ESMA. In a longer term our goal is to create a united community focused on improving and guiding changes in the textile printing industry. The focus lies on areas such as sustainability, standardisation, colour management and regulations,” said ESMA in a press release.

Source: Fibre2fashion

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Turkmenistan to present textile products at exhibition in Germany

Turkmenistan prepares to participate in the Heimtextil international textile exhibition, which will be held in Frankfurt am Main city of Germany from January 7 to January 10, 2020, Trend reports referring to the Turkmen government. The textile manufacturers from more than 130 countries will attend the event. Turkmenistan will present its achievements in the textile industry and carpet-making. Over one million tons of cotton, which serves as a raw material base for the textile industry development in Turkmenistan, are grown annually in the country. A significant part of Turkmenistan’s exported products are home textiles, sports and jeans wear, produced under the world-famous brands Puma, Wal-Mart, Bershka, Pool & Bear, River Island and Cosco. It is planned to allocate more than $300 million by 2025 for the implementation of more than 30 projects in the textile industry of Turkmenistan. As was reported in September, 18 out of 29 textile enterprises planned for transfer to private ownership, have already been privatized in Turkmenistan. The assortment of textile products in the near future will be expanded due to the establishment of the production of corduroy fabric and various types of non-woven materials like spunbond, spunleis, hollow fiber, curtains, as well as sintepon and carpet.

Source:  Azer News

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