The government has notified changes to the goods and services tax (GST) rules, lowering the input tax credit to 10% from 20% of eligible credit, if invoices or debit notes are not reflected in filings. It has also permitted officers at the level of commissioners to bar debit of input tax credit for one year in case of credit being availed fraudulently. The GST Council had approved a proposal in this regard at its meeting on December 18 to check tax evasion and menace of fake invoicing. The new rules will come into effect from January 1, 2020. “The commissioner having reasons to believe that credit of input tax has been fraudulently availed may not allow debit for discharge of any liability or for claim of any refund of any unutilised amount,” the notification said. The Centre further notified that e-way bill of taxpayers who have not filed their Form GSTR-1 for two months or two quarters shall be blocked. The government has also allowed waiver of late fee for entities furnishing outward supply details in Form GSTR-1 between December 19, 2019 and January 10, 2020, for the period between July 2017 and November 2019.
Source: Economic Times
As many as 12 delegates, representing the textile industry from different parts of the country, had a meeting with Prime Minister Narendra Modi in New Delhi recently. “This is a sector that creates jobs. He (Prime Minister) wanted to understand why the industry’s growth is affected. He was receptive to our suggestions,” said one of the delegates. Raja Shanmugham, president of Tiruppur Exporters’ Association, who was also part of the team, said the meeting is an indication of the Prime Minister’s eagerness to help the industry. He wanted to elicit information from the industry at the field level. “It is a morale booster,” Mr. Shanmugham said. While some of the delegates were from the industrial associations, others were heads of some of the leading textile producing companies in the country. “I think this is the first of its kind where the Prime Minister listened in detail to the industry for nearly two hours.” Mr. Shanmugham said that as a representative of the garment cluster in Tiruppur, he urged the Prime Minister to take steps and address the financial crunch that the exporters are facing and sought handholding for the Micro, Small and Medium-scale Enterprises (MSMEs). Another delegate from Coimbatore said the industry would soon submit a memorandum prepared jointly by the sector to the Prime Minister, as a follow-up to the meeting. The industry expects measures that would revive its growth as the Prime Minister had listened to all the issues that the industry faced, the delegate said.
Source: The Hindu
FIEO has estimated that about 5,000 relatively small exporters have been red-flagged so far which account for about 7% of MSMEs. Amid the country’s dismal exports performance — merchandise exports shrank 0.34% year-on-year in November, the fifth contraction in the past eight months — as many as 245 Star Export Houses and over 5,000 other exporters remain deprived of their goods and services tax (GST) refunds due to alleged overreach by the taxman. A new system designed to identify ‘risky exporters’ — those who are suspected to be claiming excessive input tax credits — involves a long verification process by the tax officers, and this has resulted in substantial amounts of legitimate refunds being withheld. Though the size of the withheld funds is not immediately clear, according to several sources in the exporters’ community, the fact that established trading houses with Star Exporter tag are also among those identified for verification of refund claims shows the system is deeply flawed. In a letter to senior indirect tax officials, the director general of analytics and risk management (DGARM) noted that verification reports for 94 Star Export Houses out of 245 identified had been received while 161 reports were still pending. “Out of the 161 pending verifications, in 103 cases scroll are suspended. Therefore, there is an urgent need to expedite the verification in respect of the 103 Star Export House,” DGARM wrote. “The tax department seems to have overreached in its bid to curb frauds. These (Star Export House) exporters are not among the typical fly-by-night operators and they should not have been targeted by the GST system,” a government source said. He added that the policy tools aimed at curbing malpractices among exporters have either been blunt or draconian. Star Export House exporters are certified by the government on the basis of export performance (Rs 15 crore to Rs 5,000 crore FOB in the current and three preceding years). They are extended certain benefits including customs clearance on self-certification basis and exemption from furnishing bank guarantee under certain schemes. The system typically red-flags exporters who are discharge a high share of their tax liability through the input tax credit accumulated in their accounts. Some of them have also been profiled as ‘risky’ if their suppliers fail to upload invoices in their returns. However, merchant exporters for instance are at the receiving end of such parameters as their exports usually consist of low value addition and hence they utilise large portion of ITC to pay taxes. Similarly, exporters argue that failure of their suppliers to upload invoices shouldn’t reflect on their credibility as genuine taxpayers. Exporters can either pay IGST at the time of exports and claim refund for the same. The other option is to export goods without payment of tax by furnishing a bond or letter of undertaking. In this case, the accumulated input tax credit is available for refund. “It is vital that exporters who have been classified as ‘risky’ and have had their refund blocked are told in clear terms the reasons for the same. They must also be made aware of the procedure to extricate themselves from this list. However, currently the department has no answer for these exporters,” Ajai Sahai, director general and ceo of Federation of Indian Exports Organisation (FIEO) said. FIEO has estimated that about 5,000 relatively small exporters have been red-flagged so far which account for about 7% of MSMEs. The exports are considered as zero-rated supplies under GST, for which the exporters claim a refund on integrated GST paid on the exported goods. Sahai said even after department conducts a thorough examination of the ‘risky’ exporters and finds them to be genuine, the system isn’t being updated in a timely manner to allow such taxpayers to continue their business without hassles. Additionally, a profiled exporter is also subjected to a complete cargo check at ports which is creating huge bottlenecks for businesses as the department doesn’t have enough manpower to carry out such checks. “Procedure for claiming IGST refunds is automated, however, tax authorities have also identified risky exporters at the national level in case of which 100% examination is being made mandatory before sanction of any GST refund. This process of identification and deferral of tax refunds for so-called “risky exporters” are leading to blockage for funds for genuine exporters who have fallen prey to the discriminatory profiling mechanism of the system,” Rajat Mohan, senior partner at AMRG & Associates, said.
Source: Financial Express
Cotton mills may not spin a robust performance in fiscal year 2020. Despite higher crop output in the current cotton season, prices have not eased much. Meanwhile, yarn exports are far from encouraging. As a result, profits of spinning mills will be squeezed between weak revenue and high input costs. In fact, Icra Ltd estimates the average operating margin of 79 spinning mills to shrink by 200-400 basis points (bps) year-on-year (y-o-y) in FY20. This is higher than the 100-150bps margin contraction forecast in May. Typically, domestic cotton prices toe the international trend, which has seen a moderation in the last few months. However, this time around, the government’s move to increase the minimum support price for the benefit of farmers has supported Indian prices. So, while international prices have fallen by 15% after a bumper crop in the US and Brazil, domestic cotton prices dipped by about 10%.Be that as it may, the bigger problem is that demand for textiles and yarn has been weak. The US-China trade war led to a demand slump for yarn in international markets. Apart from China, demand from Vietnam, Bangladesh and other neighbouring nations have not been upbeat. Not surprisingly, cotton yarn exports in the first seven months of FY20 were down by about 40% and prices have been weak. Cut to the home turf, festive sales (September-October) for textiles inched up slightly, but dropped again, keeping with the consumption slowdown in other sectors. Analysts said the cotton price spread, which is the difference between the price of yarn and raw cotton, has fallen from ₹80-85 per kg in April to ₹75 in October. This signals weaker profit margins in the coming quarters. After all, raw cotton accounts for 65% of the total operating cost of spinning mills. That said, the drop in cotton prices in November has raised hopes for yarn mills. Profitability of mills may get a leg up in the second half of FY20. “However, this may not be sufficient to offset the steep negative impact on profitability seen in the first half," said Sushant Sarode, associate director, Crisil. The scenario is tougher for smaller mills. Their working capital costs are higher than large and integrated mills, on account of higher interest cost and inventory. Larger mills also have superior customer profiles, diverse product mix and the ability to manufacture a wide range of yarn counts. Listed firms, such as Vardhman Textiles Ltd, KPR Mill Ltd and Ambika Cotton Mills Ltd, have therefore maintained profitability in the last few quarters, despite the odds. Yet, the stock prices have fallen 10-30% in the past one year due to the overhang of weak demand for yarn. The gloom among spinning mills is likely to continue unless exports and domestic consumption rev up to improve profitability.
Source: Live Mint
The DPIIT is working actively on the e-commerce as well as new industrial policies, and both are expected to be released by the end of this fiscal, a top official has said. "I personally feel that both these policies will be ready by this financial year end," Department for Promotion of Industry and Internal Trade Trade (DPIIT) Secretary Guruprasad Mohapatra told PTI. He said that the department has done several round of stakeholders' meetings on both the policies. The government in February released a draft national e-commerce policy, proposing setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad. Several foreign e-commerce firms have raised concerns over some points in the draft pertaining to data. The department has received huge response on the draft and it is examining all the views and comments. "We are working actively on both the policies," Mohapatra said. As the draft policy includes several provisions related to data, the department is also looking at the Personal Data Protection Bill approved by the Cabinet earlier this month. The proposed new industrial policy is aimed at promoting emerging sectors, reducing regulatory hurdles and making India a manufacturing hub. This will be the third industrial policy after the first in 1956 and the second in 1991. It will replace the industrial policy of 1991 which was prepared in the backdrop of the balance of payment crisis. The DPIIT had initiated the process of formulation of a new industrial policy in May 2017. The new policy will subsume the National Manufacturing Policy (NMP). It had also floated a discussion paper on the policy with an aim to create jobs in next two decades, promote foreign technology transfer and attract USD 100 billion foreign direct investment (FDI) annually.
Source: Economic Times
The continuous contraction in India's exports is likely to stop next year but the rate of growth will be subdued on account of the uncertain global trade situation due to rising protectionism. Commerce Secretary Anup Wadhawan said the current slowdown in exports is mainly due to a decline in petroleum products, which constitute 13.42 per cent of overall outward shipments. This decline, he said, is mainly on account of fall in petroleum prices which has driven the export value downwards. However, "the positive growth in the exports of non-conventional commodity groups like electronic goods, drugs, and pharmaceuticals, organic and inorganic chemicals, augurs well for future growth," he told PTI. India's export growth is in the negative zone since August 2019 due to a steep fall in shipments of key sectors like petroleum, engineering and gems and jewellery. Labour-intensive sectors such as carpets, ready-made garments, handloom and leather too are recording decline in export growth. As per the World Trade Organization (WTO), global merchandise trade volumes are expected to rise by only 1.2 per cent in 2019, substantially slower than the 2.6 per cent growth forecast in April 2019. However in 2020, the growth in trade volume is projected to accelerate to 2.7 per cent. Apex exporters body Federation of Indian Export Organisations (FIEO) said the global situation is becoming extremely challenging as rising protectionism is leading to uncertainty. FIEO Director General Ajay Sahai said the global situation is likely to improve in the first half of 2020, which would have a positive impact on India's exports. "If the global situation improves, which is likely in the first half of 2020, we may look for 15 per cent growth in exports in the next financial year (2020-21). Exports will come out of negative zone next year but the rate of growth will not be in double digits," he said. He added that the order book position of Indian exporters is encouraging and less volatility in the domestic currency has also been a positive factor for traders. Sahai also said that Indian exports have to be aligned with changing import patterns of the global economy as 50 per cent of the world imports today is accounted by electrical and electronics products, automobiles, machinery, petroleum products and plastic items. "While employment-intensive sectors should be pushed in exports, the new strategy should focus on technology-driven sectors," he said. Sharing similar views, Professor Rakesh Mohan Joshi from the Indian Institute of Foreign Trade (IIFT) said the steps taken by the government would help exports record growth in 2020. "There is a need to take structural reforms to increase the competitiveness of Indian products in the global markets," Joshi said. The commerce ministry is considering several steps such as the announcement of the new WTO-compliant export incentive scheme and the new foreign trade policy for the next five years in 2020 to push the country's exports. The ministry has conducted a series of meetings with concerned stakeholders to finalise the foreign trade policy. On the trade front, India has been negotiating the mega free trade agreement RCEP (Regional Comprehensive Economic Partnership) since 2013. But in November, Prime Minister Narendra Modi said India will not join the RCEP deal as negotiations failed to satisfactorily address New Delhi's "outstanding issues and concerns". Since January this year, exports have recorded a low rate of growth and slipped into the negative zone in August. During AprilNovember 2019-20, the country's exports contracted by 2 per cent to USD 212 billion. Going by the current trend, FIEO has estimated that the exports may stand at USD 330-340 billion in the current fiscal. In 2018-19, the exports grew by 9 per cent to USD 331 billion from USD 303.5 billion in 2017-18. Since 2011-12, India's exports have been hovering at around USD 300 billion. Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.
Source: Economic Times
India is expected to overtake Germany to become fourth-largest economy in 2026 and Japan to become third largest in 2034, according to a recent report by the UKbased Centre for Economics and Business Research (CEBR). It further said India is also set to reach a gross domestic product (GDP) of USD 5 trillion by 2026, 2 years later than the government's target. "India has decisively overtaken both France and the UK to become the world's fifth-largest economy in 2019. It is expected to overtake Germany to become fourth largest in 2026 and Japan to become the third largest in 2034," the report, titled 'World Economic League Table 2020', said. Japan, Germany and India will battle for third position over the next 15 years, according to the CEBR. Referring to Prime Minister Narendra Modi-led government's target of taking the economy to 5 USD trillion by 2024, it said, "India is also set to reach a GDP of USD 5 trillion by 2026 - 2 years later than the current government target." But, dark clouds gathering all over the economy are leading many to question the maintainability of the target. Recently, former Reserve Bank governor C Rangarajan, said that at the current growth rate, reaching the USD 5-trillion GDP target by 2024-25 is "simply out of question".Noting that Indian data revisions mean that 2019 was the year when the country's economy finally overtook the UK and France, the report said, "But, slow growth during the year has increased pressure for more radical economic reforms." Despite the rapid ascent of countries such as India and Indonesia, it is striking how little an impact this will have on the US and China's dominant roles in the global economy, said Pablo Shah, senior economist at Cebr. India, which till recently was hailed as the world's fastest-growing major economy, has seen growth rate decline to a six-year low of 4.5 per cent in the September quarter of 2019-20. This has largely been attributed to the slowdown in investment that has now broadened into consumption, driven by financial stress among rural households and weak job creation. The World Economic League Table is an annual calculation by Cebr jointly published by Cebr and Global Construction Perspectives. The base data for 2019 is taken from the IMF World Economic Outlook.
Source: Economic Times
GST reforms if revenues rise, I-T cut unlikely. Finance minister Nirmala Sitharaman surprised everyone with her big-ticket corporate tax rate cut on September 20. Will she do the same for personal income-tax (I-T) in the upcoming budget, shifting to a flat rate tax with no exemption? Will she rewrite the Goods and Services Tax (GST) script to unleash GST 2.0, migrating to a two-rate structure? Bibek Debroy, chairman, Prime Minister’s Economic Advisory Council, suggested offering a lower rate with zero exemptions for incomes up to a certain level. The Direct Taxes Task Force, set up by the finance ministry, in its report also suggested a rejig in personal I-T. What stands in the way of these logical changes is possibly the slowing economy and the attendant muted rise in tax revenues. A cut in personal I-T will put more money in the hands of people, lift overall sentiment, and perk up demand. However, while this story may play out with some time lag, tax loss would be immediate, adding to the Rs 1.45 lakh crore giveaway on account of corporate tax. The revenue gap would, if taxes are cut, expand fiscal deficit, derailing the macro stability that has kept inflation low and pushed interest rates down. In short, potential benefit of an I-T cut may be erased by the consequences of higher fiscal deficit. Likewise, there is a case for a dual rate GST as opposed to a five-rate one? But revenue consideration trumps this reform, and some states have also opposed any change for the same reason. However, if the economy does pick up, and revenues rise, one can bet on GST reform being first off the blocks, may be even in 2020.
Source: Economic Times
An umbrella information portal collating official data on employment, industry, health, GST and trade is in the works, as the government plans to put out timely, credible and userfriendly official data through a single window. The Ministry of Statistics and Programme Implementation (MoSPI) is developing a digital repository of all official statistics in the country, called the National Integrated Information Portal (NIIP), officials aware of the development said. This is expected to improve transparency and make access to such data easier. The move comes after questions were raised about the credibility of official data. The NIIP will make information flow quicker to generate key macroeconomic indicators and feed into sustainable development goals. Data from ANMOL (National Health Mission), the HRD ministry’s Unified District Information System for Education (UDISE), corporate affairs ministry’s Corporate Data Management, labour and employment ministry’s Unified Shram Suvidha Portal and National Career Service, ICEGATE and Government e-Marketplace is likely to be part of the portal. At present, this data is available on the websites of respective ministries that are not always updated on time. The portal will provide a highend platform for data analytics and to interpret socio-economic data to the Centre, states and general public, the officials said. “It will have a dashboard for socio-economic indicators to monitor the health and progress of the economy on a real-time basis and suggest leads for sector-specific interventions,” an official aware of the details said. The development of NIIP will have three phases, starting with integrating all statistical activities of MoSPI followed by including key data sets available with other departments. In the third phase, data available in states will be on-boarded on the NIIP. The ministry has floated a tender to hire an agency to develop the portal and to implement it in a phased manner for integrating statistical data from key ministries into the NIIP. The data will be made public in a standard, unified and harmonized format.
Source: Economic Times
The labour ministry has chalked out a plan to launch a new portal 'Santusht' next month for speedy redressal of worker as well as employer grievances and ensuring effective implementation of labour laws at the grassroot level, a source said. Initially, Santusht (Hindi for satisfied) would monitor all services provided by retirement fund body EPFO and health insurance and services provider ESIC to formal sector workers. Later, the portal would cover other wings of the ministry as well. It would also have data on real time basis to assess the performance of each and every official. Workers and employers can lodge their complaints on the portal, which would be managed by an internal monitoring cell comprising five to six officers, the source said. Presently, the ministry is in the process of categorising 44 central labour laws into four broad codes on wages, industrial relations, social security and occupational safety, health and working conditions (OSH). The ministry top brass is hopeful of getting all the four codes operational by 2020. "The ministry wants to ensure effective implementation of four labour codes which are likely to be a reality in 2020," the source said. "It is not enough to have legislations for safeguarding workers' rights and providing various facilities to employers for creating conducive environment for job creation and robust economic growth. The effective implementation of all codes is required. That would be ensured by Santusht," the source added. The portal would have all data related to business transacted by the EPFO and ESIC. There have been grievances of the subscribers of the two bodies as well as other workers regarding poor implementation of labour laws in the country. Workers have faced issues like delay in settling claims by Employees' Provident Fund Organisation (EPFO) and Employees' State Insurance Corporation (ESIC). Some workers do not get minimum wages, while other issues related to labour law implementation at the grassroot level affects both employees and employers. The portal would help the labour ministry to assess the performance of officials, which would be given due weighage at the time of their appraisals, transfers and postings, the source added. Santusht is envisaged to ensure transparency, accountability and effective implementation of labour laws.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1004.73 |
USD/Ton |
0% |
12/29/2019 |
|
VSF |
1343.45 |
USD/Ton |
-0.21% |
12/29/2019 |
|
ASF |
2000.88 |
USD/Ton |
0% |
12/29/2019 |
|
Polyester POY |
1017.59 |
USD/Ton |
0% |
12/29/2019 |
|
Nylon FDY |
2158.09 |
USD/Ton |
0.67% |
12/29/2019 |
|
40D Spandex |
4101.80 |
USD/Ton |
0% |
12/29/2019 |
|
Nylon POY |
5359.50 |
USD/Ton |
0% |
12/29/2019 |
|
Acrylic Top 3D |
1264.84 |
USD/Ton |
0% |
12/29/2019 |
|
Polyester FDY |
1993.73 |
USD/Ton |
0% |
12/29/2019 |
|
Nylon DTY |
2186.68 |
USD/Ton |
0% |
12/29/2019 |
|
Viscose Long Filament |
1157.65 |
USD/Ton |
0% |
12/29/2019 |
|
Polyester DTY |
2372.47 |
USD/Ton |
0% |
12/29/2019 |
|
30S Spun Rayon Yarn |
1993.73 |
USD/Ton |
0% |
12/29/2019 |
|
32S Polyester Yarn |
1615.00 |
USD/Ton |
0% |
12/29/2019 |
|
45S T/C Yarn |
2401.06 |
USD/Ton |
0% |
12/29/2019 |
|
40S Rayon Yarn |
1757.92 |
USD/Ton |
0% |
12/29/2019 |
|
T/R Yarn 65/35 32S |
2186.68 |
USD/Ton |
0% |
12/29/2019 |
|
45S Polyester Yarn |
2172.38 |
USD/Ton |
0% |
12/29/2019 |
|
T/C Yarn 65/35 32S |
1915.13 |
USD/Ton |
0.75% |
12/29/2019 |
|
10S Denim Fabric |
1.26 |
USD/Meter |
0% |
12/29/2019 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
12/29/2019 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
12/29/2019 |
|
30S Rayon Fabric |
0.53 |
USD/Meter |
0% |
12/29/2019 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
12/29/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14292 USD dtd. 29/12/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Top advisors to the prime minister of Pakistan have continuously asserted that Pakistan’s economy is improving, but not in a way that has created jobs. The implication of this is that sectors typically linked to job creation–such as the agriculture and industry sectors–will be neglected. This is a potentially alarming situation. If this is the case, Pakistan’s economic improvements will be one-legged and shaky. Therefore, the government must pay attention to the labour-intensive agricultural and industrial sectors. These sectors have long production chains; meaning that they have excellent job-creating potential. Unfortunately, these sectors have struggled over the last decade and have lost their market share to regional competitors. For example, textile and clothing exports dropped from USD 13.8 billion to USD 13.5 billion from 2011 to 2018. During the same period, Pakistan’s Asian competitors significantly gained a market share in textiles in clothing exports. Vietnam’s exports increased from USD 15.2 billion to USD 33.5 billion (a 120 per cent increase) during the same period. Similarly, India, Bangladesh and Sri Lanka raised their textile and clothing exports by 36 per cent, 72 per cent, and 24 per cent, respectively, during this period. Pakistan’s negative growth in this industry makes it a clear outlier, despite having an exceptional textile industry infrastructure. A comparison between Vietnam and Pakistan highlights some significant changes that Pakistan can make to regain its competitive edge in the textile industry. The economies of Pakistan and Vietnam were very different in the early 1980s. During this period, the economy of Vietnam faced multifaceted problems against the backdrop of the Vietnam-US war. The country heavily relied on its agriculture and primary goods production sectors. Almost all Vietnamese state-owned enterprises were inefficient, and no foreign direct investment was available. Thus, the country depended on donors and foreign loans. Meanwhile, the opposite situation occurred in Pakistan. In 1980, Pakistan was 40 to 60 per cent richer in terms of income per capita than its three neighbours (India, China and Bangladesh). So, how did Vietnam acquire the status of “new manufacturing powerhouse” over the last three decades? The country took several holistic steps on several fronts, the most important of which was the “rethinking” of policy. The Doi Moi economic reforms of 1986 shifted the paradigm in Vietnam from “political relations” to “political-economic relations.” This changed the mindset of Vietnamese policymakers. As a result, Vietnam made new friends. For example, it withdrew all troops from Cambodia and actively participated in resolving Cambodia’s problems. Then, it normalised relations with China and became the Association of Southeast Asian Nations (ASEAN) observer. Most importantly, it improved relations with the US. Consequently, the US lifted the economic sanctions it had imposed on Vietnam. Afterwards, a bilateral trade agreement was forged between the US and Vietnam; further strengthening the relations between the two countries. During this time, Vietnam also improved its political-economic relations with China. Vietnam’s normalised relations with various countries sent a strong positive message to international investors. As a result, their confidence boosted, and many foreign investments were made in Vietnam. Moreover, Vietnam changed the structure of its economy to improve the absorptive capacity of the economy to handle increased domestic and foreign investments. These included improvements to the energy supply, the development of infrastructure, the establishment of Special Economic Zones (SEZs), improvements in human capital, the liberalisation of trade, the rationalising of the exchange rate regimes, improvements to the overall business environment and stabilisation at the macro-economic level. Notable improvements were made in terms of the electricity production of the country, which increased from 4825-gigawatt-hours in 1990 to 16,319-gigawatt-hours in 2017. Furthermore, the implementation of renewable energy sources in Vietnam in 2015 exceeded that of all other ASEAN countries. This was instrumental to Vietnam’s ability to overcome its energy shortage problem. In terms of Vietnam’s infrastructure, a vast network of roads, high-speed railways, ports and waterways were developed with the help of several foreign countries. Several SEZs (industrial zones, hi-tech zones, export zones and processing zones) were established to make use of these new roads, railway stations, and ports. As a part of this effort, special facilities were offered to foreign enterprises and attracted a massive amount of investment. The resultant industrial growth created a demand for a skilled labour force. Therefore, Vietnam invested heavily in its educational sector. Trade liberalisation then became the primary driving force behind Vietnam’s structural transformation. Vietnam signed trade agreements with South Korea, the ASEAN, and the European Union, and it joined the Asia-Pacific Economic Cooperation, the Eurasian Economic Union, and the World Trade Organization. Simultaneously, Vietnam adopted a supportive exchange rate regime. The Vietnamese Dong depreciated considerably, which made Vietnam competitive in the international market. Importantly, all these efforts were backed by favourable macroeconomic stability and a business-conducive environment. The case of Vietnam proves that a holistic development approach that is accompanied by dedicated resources can change the fate of the country. As such, this case provides important takeaways for Pakistan’s struggling textile sector. The textile industry of Pakistan is one of the country’s essential industries – textiles comprise 64 per cent of Pakistan’s exports and directly employs 1.4 million people. Moreover, the textile sector comprises around 8.5 per cent of Pakistan’s GDP and 16 per cent of the nation’s taxes. Pakistan’s textile sector has an undeniably strong base, and its output could be doubled through a holistic development approach similar to that utilised in Vietnam. Moving forward, the government needs to take several necessary steps so that Pakistan’s textile industry can outperform those of its regional competitors. The most crucial step towards achieving this goal is to ensure that all economic policies in Pakistan are backed by strong political will and are consistent. Of course, policymakers must also address the efficiency of the public sector, and efforts must be made to attract investments in export-oriented sectors. Last, but not least, Pakistan’s institutional strength – and the value of its available skilled personnel – cannot be neglected. The writer is a professor of Economics at the Pakistan Institute of Development Economics (PIDE), Islamabad
Source: Daily Times
U.N. Security Council members are due to meet informally on Monday for a second round of negotiations on a Russian and Chinese proposal to lift a raft of sanctions on North Korea, a move that some diplomats say has little support. China and Russia are convening negotiations a day before North Korean leader Kim Jong Un’s deadline for the United States to show flexibility in stalled talks aimed at getting Pyongyang to give up its nuclear weapons program. North Korea has warned the United States could receive an unwanted “Christmas gift” if it fails. A top White House official said on Sunday that the United States would be very disappointed if North Korea tested a long-range or nuclear missile and would take appropriate action as a leading military and economic power. Pyongyang has been under U.N. sanctions since 2006 over its missile and nuclear programs, which the Security Council has unanimously strengthened over the years. Though some diplomats, speaking on condition of anonymity, have warned that unity would be broken if Russia and China put their new plan to a vote. Russia and China proposed a draft U.N. Security Council resolution earlier this month that would lift sanctions on industries that earned North Korea hundreds of millions of dollars. Those sanctions were imposed in 2016 and 2017 to cut off funding for Pyongyang’s nuclear and missile programs. In an attempt to preserve council unity on North Korea, diplomats said the United States put forward a draft press statement on the issue, but that move was dismissed by Russia and China. The pair have instead scheduled on Monday a second round of talks on their draft resolution, diplomats said. One Security Council diplomat, speaking on condition of anonymity, accused Russia and China on Sunday of coordinating with North Korea on the draft resolution, including letting Pyongyang make its own additions to the text, before they engaged with the 15-member Security Council. “China and Russia are pushing a sanctions-gutting resolution knowing full well from the beginning that they do not have the votes for the resolution to pass,” said the council diplomat. “The U.N. Security Council cannot support a resolution that subsidizes DPRK’s ongoing development of weapons of mass destruction with sanctions relief, which is what the Chinese and Russian resolution would do,” the diplomat said, referring to North Korea’s official name - the Democratic People’s Republic of Korea. Russia and China have said they hope lifting some sanctions could help break the deadlock and encourage talks between Washington and Pyongyang. But the United States, France and Britain said now is not the time to consider lifting sanctions. A Security Council resolution needs nine votes in favor and no vetoes by the United States, China, Russia, France and Britain. The Chinese and Russian proposal would lift a ban on North Korea exporting statues, seafood and textiles, and ease restrictions on infrastructure projects and North Koreans working overseas, according to the draft seen by Reuters.
Source: Reuters
Bangladesh is lagging behind its global peers due to lack of investment and adequate government support to set up mills to produce manmade fibres (MMFs), which are gaining popularity worldwide as biodegradable raw material for apparel manufacturing. The share of MMF-based apparel is around 45 percent in the global trade, which is growing at 5 percent, as such garments are more environment friendly, according to a study of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). On the other hand, the share of global trade of cotton-based apparel is around 35 percent now, which shrunk at a compound annual growth rate (CAGR) of 0.5 percent between 2007 and 2017, the study found. “It is very expensive to set up an MMF based mill,” said A Matin Chowdhury, managing director of Malek Spinning Mills, a leading spinner. Chowdhury said he tried to set up an MMF-based mill 10 years ago, when the project cost was estimated at $100 million. “Now it takes between $400 million and $500 million.” In 2017, the global trade of MMF-based apparel was $150 billion, where Bangladesh’s share was 5 percent compared to Vietnam’s 10 percent share. Bangladesh has 430 spinning mills, of them 124 are based on polyester and viscose staple fibre, the two forms of MMF. Moreover, around 93.57 percent of the 20.52 lakh tonnes of fibre imported in 2018 was cotton, according to the study. Bangladesh should go for establishing mills only to produce manmade fibres, as the demand for MMF-based garment items is increasing worldwide, Chowdhury said. “Otherwise, the country’s $8 billion worth primary textile sector would be in a big trouble soon.” But setting up such an expensive textile project is not easy for investors without government’s supports in the form of low-cost loan and easy access to gas, according to the entrepreneur. Bangladesh has business potential in MMF like viscose, acrylic and polyester, he said. Consumers are more informed and concerned about the environment, people and sustainability, because of which they now look for products, which are easy to care and environment friendly, according to the study. The rise of Fast Fashion, a term used to describe clothing designs that move quickly from the catwalk to stores to meet new trends, is reducing the lead time of order delivery. The Fast Fashion category has grown at 20 percent CAGR between 2015 and 2018 whereas global apparel retail grew 4 percent to 5 percent during the same time, the BGMEA study also said. The fact that fashion consumers on average buy 60 percent more pieces of clothing than 15 years ago, generating up to 92 million tonnes of trash, equivalent to 4 percent of the world’s waste each year, add more havoc to these impacts, according to a recent report of The Jakarta Post, an English daily based in Indonesia. Viscose, the third-most commonly used fibre in the world, has been hailed as a sustainable alternative to oil-based synthetic textiles such as polyester, acrylic, nylon and spandex. Introduced in the late 1800s as an alternative to silk, the plant-based viscose, also known as rayon, is inexpensive to make and applicable in many ways, including for casual wear items, denim, socks, bed linen, towels, face masks and wet wipes, The Jakarta Post article said. However, it is tough to trace how the items to produce viscose were sourced and whether the labour rights were ensured. And Bangladesh should concentrate more on investing in primary textiles, especially in woven and non-cotton sectors, to comply with the standards set by the European Union to avail trade benefits, the BGMEA study said. A decade ago, Bangladesh had eight MMF-based textile companies, which has risen to nearly 60 now to meet the rising demand, said Monsoor Ahmed, secretary to the Bangladesh Textile Mills Association. Some proposals for setting up new factories are pending with the association, he said. Of the garment items exported from Bangladesh last fiscal year, 74.14 percent was made from cotton fibre, whereas it was 68.67 percent in 2008-09, the BGMEA study showed.
Source: The Daily Star
Profits at China's industrial firms grew at the fastest pace in eight months in November, but broad weakness in domestic demand remains a risk for company earnings next year. Industrial profits in November rose 5.4% from a year earlier to 593.9 billion yuan, snapping three months of decline, as production and sales quickened, data from the National Bureau of Statistics (NBS) showed. That compared with a 9.9% drop in October. For January-November, industrial firms notched profits of 5.61 trillion yuan, down 2.1% from a year earlier, but slightly better than a 2.9% fall in the first 10 months. The expansion was mostly due to quickening production and sales, while factory-gate prices contracted at a slower pace, said Zhu Hong, an official with the statistics bureau in a statement released alongside the data. But he cautioned that the rebound may not be an indication of a sustained recovery. "Although the profit growth turned to positive in November, we have to see that the current downward pressure on the economy is still big, and the volatility and uncertainty of profit growth still exist due to multiple factors such as market demand and industrial prices."
Source: Tele Trade
Disposable fashion will become a thing of the past under measures to ban clothes and textiles from household bins, landfill and incineration. Bulky items such as furniture, toys and mattresses are also likely to be banned in an effort to force greater reuse of unwanted goods or recycling of their components. 'Fast fashion' has expanded the size of our wardrobes in recent years, but when clothes are thrown away they contribute to the country's enormous waste problem. There are now 75 measures Climate Action and Environment Minister Richard Bruton believes can be implemented quickly to radically change how we manage waste. Clearer recycling labels on packaging, extending the range of recyclables collected in household bins and a ban on non-recyclable packaging are planned. A VAT reduction on reuse and repair enterprises may also be brought in to curb the country's throw-away habits and addiction to so-called 'fast fashion'. Other measures to be introduced include requiring waste companies to hit recycling targets as a condition of their permits and forcing tobacco companies to cover the cost of collecting cigarette butts and making safe their plastic and chemical-filled filters. Mr Bruton has also directed a study on what he said was the "significant criminal element involved in illegal waste activities". A network of multi-agency forums would be established to clamp down on dumping, fly-by-night operators and illegal waste enterprises. The minister said the waste industry would be required to contribute to the costs of enforcing the waste regulations. "I am determined to address how we manage our waste as part of the Climate Action Plan," Mr Bruton said. "We must radically change our wasteful use of precious resources which damages our climate and our environment and compromises our future." Ireland produces 15 million tonnes of waste a year - 3.2 for every person in the country - and we generate far more packaging and plastic waste than the EU average. The amount of household waste going to landfill and incineration would instantly fall by a third if it was properly segregated and the situation is worse in relation to commercial waste, 70pc of which is rendered impossible to recycle because of poor segregation. Textiles, including unwanted clothes and household furnishings and linen, accounted for 80,000 tonnes of waste last year, making up 10pc of the contents of general household waste bins, 9pc of organic bin contents and 3pc of recycling bin contents. A dedicated textile bin collection may form part of the solution. On-street recycling bins and more recycling facilities for bulky items are also likely options. Food waste - estimated to cost the average household €700 a year - is also targeted for reduction, as is construction waste, which is currently being generated at a rate of 11 tonnes for every house built. The Government has already committed to a range of measures to minimise the production of single-use plastics. These new measures, which are open to public consultation until February 21, are driven mainly by EU directives which must now be translated into Irish law.
Source: The Independent
