Technical textiles are the fastest growing and the most promising areas that fall under the larger textile industry. Dating back to the nineteenth century, the Indian textile sector is one of the oldest in the Indian economy. The sector is highly diversified, catering to a wide range of segments ranging from traditional handloom products to cotton, wool and silk products and has products that vary across natural & man-made fiber, yarn and apparel. Technical textiles to0 are set to play a crucial role in transforming the sector, given their wide applications across multiple end-use industries such as automobile, construction, infrastructure, healthcare, aviation, defence, etc. Additionally, the textile industry is closely linked and dependent on the agriculture industry in order to source raw materials such as cotton. This is a sustainable bet wherein the entire industry is based on the byproduct of agriculture which helps the ecosystem as a whole, the producer and the end-consumer. Hence, the growth and all-round development of the textile industry is one of the crucial parameters that contribute to the growth of India’s economy. As per a recent report by India Brand Equity Foundation, India’s overall textile exports during FY 2017-18 stood at USD 39.2 billion and is expected to increase to USD 82.00 billion by 2021 (up to Jan 19). Apparel manufacturers are now diversifying exports into countries like Japan, Israel, South Africa, and Hong Kong. Textile exports have witnessed a bearish trend for two years in a row and factors that led the growth curve downward include time taken to align to the new goods and services tax (GST) regime, the downward revision of export incentives, and the credit squeeze particularly faced by small and medium enterprises. Having said that, India is set to touch the USD 185 billion figure by the year 2024-2025 as per the Vision Strategy Action Plan for Indian Textile Sector. Below mentioned are three important factors that will help keep the sector in an upward trajectory.
Positive outlook for the sector at hand
Balancing compliance
This is a critical time for the textile value chain in India. Customers are feeling the impact of shifting fiber trends, changing consumer preferences, higher operating costs and the requirement of meeting different environmental standards. Also, the companies in India are now turning towards innovative dyeing methods and processes that facilitate greater water saving, as the government aims to cut industrial water use by 50% in the next five years. Harshad Naik is Managing Director, India Subcontinent at Huntsman International India Pvt Ltd.
Source: Financial Express
But weak market conditions keep firms spooked and business optimism low. A sudden boost in new orders helped the beleaguered manufacturing sector surge ahead in December even as business optimism fell to a three-year low, with firms remaining spooked by weak market conditions, said a monthly global survey released on Thursday. The widely tracked Nikkei India manufacturing Purchase Managers’ Index (PMI) rose to 52.7, a seven-month high, from November’s 51.2. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. The rebound in growth comes after October’s two-year low PMI performance at 50.6. However, official data shows that contraction remained entrenched in the manufacturing sector till November. India’s overall industrial production fell 3.8 per cent in October, after contracting 4.3 per cent in September, lowest in eight years. On the other hand, the output of eight core sectors of the economy fell for a third straight month in November, contracting by 1.5 per cent. Output had crashed by a record 5.8 per cent and 5.2 per cent over the preceding two months as a broad-based decline gripped most sectors. But for December, PMI painted a favorable picture with factories pumping up production to a 10-month high. This was attributed to new orders rising at their fastest pace since July, companies ramping up production and resumed hiring efforts. At the sub-sector level, growth was led by consumer goods, though intermediate goods also made a stronger contribution to the headline figure. But, the crucial capital goods segment remained in contraction, the survey pointed out. Companies that signalled growth commented on the securing of new work, the successful launch of new products and improved technology. New work increased solidly, with the pace of expansion picking up to the fastest since July. Where growth was noted, firms reported marketing successes, new product drives and better demand conditions. However, new export orders contributed a small part of rising sales. In 2019, manufacturers had fallen back to demand from overseas to rescue them at times of lax domestic demand. Foreign orders expanded for the twenty-sixth month in a row, albeit modestly, the survey said. As a result of rising fortunes, more firms reported they have stepped up hiring efforts at the strongest pace since February. Despite this, outstanding business rose further. In November, the survey had noted massive layoffs by firms. Firms also increased input buying at the year-end, following contractions in each of the prior four months. The rise was only marginal, however, and failed to have an impact on vendor performance. Although stocks of purchases continued to decline, the contraction lost strength. In fact, the pace of depletion was only fractional. On the other hand, holdings of finished products decreased sharply in December. Amid reports of higher prices paid for chemicals, food, metals, paper, plastics and textiles, average cost burdens increased further. Moreover, the overall rate of inflation reached a 13-month high. In order to protect margins, goods producers lifted their fee again in December. The rate of charge inflation was solid and the quickest in close to three years. Business sentiment had strengthened in November, with panel members expecting advertising efforts and product diversification to support output growth in the year ahead. That said, the Future Output Index was well below its average, as a number of firms were concerned about the state of the economy. Despite the improvement in operating conditions during December, companies were cautious regarding the year-ahead outlook. “However, a note of caution is evident from the survey’s measure of business confidence. The degree of optimism signalled at the end of 2019 was the weakest in just under three years, reflecting concerns over market conditions, which could restrict job creation and investment in the early part of 2020,” said Pollyanna de Lima, principal economist at IHS Markit. But on an average, the survey pointed out, production is expected to expand in the coming 12 months.
Source: Business Standard
Even as the GST collection crossed Rs 1-trn mark for the 2nd month in a row in December, the receipts were nowhere near Rs 1.10 trn required every month from Dec onwards to meet the target for 2019-20. Against the backdrop of a steep goods and services tax (GST) collection target for 2019-20, Revenue Secretary Ajay Bhushan Pandey will hold a day-long meeting with tax commissioners on January 14 to discuss ways for streamlining the GST system and plug leaks because of fraud. Sources said the meeting with state tax commissioners and chief central tax commissioners will deliberate on enhancing GST compliance by plugging loopholes and discouraging tax evaders and those gaming or misusing the system. The meeting assumes significance as the GST Council in its last meeting held on December 18, ...
Source: Business Standard
India can explore an annual USD 82-billion export potential in twenty products, including electrical equipment and ferro alloys, in the world's second largest economy China, according to a report. Indian exporters have a competitive advantage as far as these twenty goods are concerned. Currently, India meets only 3.3 per cent or USD 2.7 billion of the total annual import demands of USD 82 billion for these 20 products in China. India's exports of these 20 products are worth around USD 15 billion to the world, which is 4.5 per cent of the country's annual outward shipments. These goods constituted about 17 per cent of India's exports to China in 2018, according to the report by MVIRDC World Trade Centre Mumbai. India can substantially reduce its trade deficit with China, which stood at USD 53.56 billion in 2018-19, by enhancing its market share for these products in that country, the report added. Electrical equipment, tobacco, iron and steel, ferro alloys, parts of aircraft, engines and other auto-components, benzene, frozen boneless bovine meat are some of the product segment out of the 20 in the list. "In order to realise this untapped export potential, India and China must exchange trade delegation with members from these identified sectors. We must also create awareness on this opportunity among India's micro, small and medium enterprises producing these identified products," MVIRDC World Trade Centre Mumbai Senior Director Rupa Naik said. Increasing India's market share for these products in China will add further momentum to the growing exports of India in this country, she added. India's overall exports to China grew 5.39 per cent to USD 11.57 billion in April-November 2019, even as our total exports to the world declined 2 per cent during this period. The country's overall trade deficit with China declined 5 per cent to USD 35.3 billion in the first eight months of the current financial year, compared to USD 37.3 billion in the year-ago period, the report added.
Source: Economic Times
Among EU nations, the Netherlands has historically been the fourth biggest source of foreign direct investments (FDI) for India, pegged at $29 billion since 2000. Despite India’s willingness to slash tariffs on wines and automobiles from the European Union (EU), the bloc remains firm that its concerns on investment protection will need to be addressed in any future bilateral deal. After deciding not to join the proposed Regional Comprehensive Economic Partnership (RCEP), New Delhi has reached out to the EU to restart stalled talks on the Broad-based Trade and Investment Agreement (BTIA). But EU trade policymakers are in no mood to discuss the pact until India starts discussion on investment protection, a key concern for European firms in India, ...
Source: Business Standard
The government plans to increase the use of artificial intelligence and data analytics to track down tax evaders, and improve compliance with the Goods and Service Tax in order to augment revenue. Top tax officials are scheduled to participate in a brainstorming session to be chaired by revenue secretary Ajay Bhushan Pandey next week to firm up this plan. “The revenue secretary will hold a day-long meeting on January 7 with tax commissioners to discuss ways to streamline the GST system and plug leakages due to fraud,” said a person aware of the development. The discussions will include assessing the wider use of data analytics and AI in the process of enforcement and red-flagging tax evaders and fake refund claimants without overreach or harassment to genuine taxpayers. The meeting comes on the heels of the government notifying changes to GST rules to prevent frauds and fake invoicing, besides setting up grievance cells to ensure that genuine taxpayers are not harassed and the overall tax base increases. The government last week reduced input tax credit to 10% from 20% of eligible credit if invoices or debit notes were not reflected in filings. Last month, the Central Board of Indirect Taxes and Customs instructed field officers to expeditiously create GST grievance redressal committees at zonal and state levels. Tax officials have been directed to identify cases of suppression of personal income, wilful tax evasion, fake invoicing or inflated or fake e-way bills, and take stern action. Those attending the session will include state tax commissioners and chief tax commissioners from the Centre, senior officials of various tax bodies along with officers of the enforcement wings. Their goal is to develop a targeted approach to stop tax and duty evasion while making sure that no taxpayer is troubled. There’s growing concern over revenue shortfall, with slowing consumption demand adversely impacting GST collections. The corporate tax cut amounting to a loss of revenue of Rs 1.45 lakh crore, along with recent GST compensation of over Rs 35,000 crore to states, have increased the stress on the Centre’s fiscal position.
Source: Economic Times
UK retailer MotherCare files for bankruptcy--the latest international company to hurt Tirupur's fortunes. Tirupur, the garment hub that makes exports worth Rs 26,000 crore annually, had a forgettable year in 2019. At least four world famous brands that sourced their products from the Tamil Nadu city either filed for bankruptcy in the US and Europe as demand slowed down due to competition from online channels and costs going up. MotherCare, the baby and maternity clothes retailer that annually sourced garments worth Rs 100 crore from a single exporter in Tirupur, filed for bankruptcy in the UK and will close all its 79 shops in that country. It was the latest world-famous brand to pull down Tirupur’s fortunes. Media reports quoting Coresight Research said that as of November 1, nearly 9,000 textile retail stores were closed in major markets across the US and Europe. The closures were 55 per cent higher than last year's. As many as 10 major brands, including Forever 21, Payless and Barney's, filed for bankruptcy between January and October, estimated CB Insights, which tracks private company financing and angel investments. Textile Magazine, in its latest issue, counted JCPenney, GAP, Sears and Victoria's Secret among major companies that have downsized. It said Zalando, the European e-commerce brand, is winding up sourcing from India after closing its private-label segment zLabels. The company once sourced garments worth nearly Euro 20 million annually from India—mainly from Bengaluru and Tirupur—but has decided to end that. Mothercare had slumped to £36.9m loss in the financial year ending March 2019, struggling amid a period of turmoil for high street retailers. It followed the likes of Bonmarche, Jack Wills and Karen Millen, which have gone bust in recent months, according to UK’s Daily Mail tabloid. One of the key reasons for these brands to shutdown is changing consumer trends and competition from e-commerce players. R Raj Kumar, managing director of BEST Corporation Ltd that supplies garments to various brands, said his company used to get around Rs 100 crore worth of business from MotherCare alone but orders reduced by 50 per cent after UK brands scaled down. Kumar, who believes that that the brand will come to its glory dates after the current consolidation phase will get over. Till the time, he decided to look for new customers and new geography. To be cost competitive, his company already set up a facility at Ethiopia, which enjoys duty free status from major markets, and exploring other countries. Another exporter recalled his association with an American brand, which filed for Chapter 11 bankruptcy protection in the US recently. He said some big retailers have opted for Chapter 11 because they wanted to get out of leasing contracts. Most of these retailers have set up shops in locations which are taken for lease for long years. In the current market conditions they can't afford to pay such a hefty rent and can't cancel the lease, which will call for heavy compensation. Chapter 11 gives cushion for retailers to come out from this problem for the retailers."What we are seeing is a temporary phase, most of these brands will come back in a franchisee model or through a different route. We are confident of getting back the orders. Our only challenge is to be cost competitive, for which we need Government's support," said the exporter on condition of anonymity.
Source: Business Standard
According to sources, UPPCL decided to pass on the increase in the power purchase cost due to hike in coal prices to the consumers. The Uttar Pradesh Power Corporation (UPPCL) on Thursday increased the electricity tariff to 66 paise per unit with effect from January 1. The sudden change is being attributed to the increase in the price of coal. According to sources, UPPCL decided to pass on the increase in the power purchase cost due to hike in coal prices to the consumers. It therefore hiked the energy cost from 04/paise to 66 paise per unit across various categories. This was done by invoking the fuel and power purchase cost adjustment (FPPCA) clause under the National Tariff Act. However, following a petition filed by UP power consumers forum, the state’s Electricity Regulatory Commission (ERC) took cognisance of the matter and found that the calculation for the hike was incorrect. It has thus sent back the matter to UPPCL for correction. Speaking to FE, an official of UPERC said that the matter is under consideration and would be taken up after the computation is corrected and placed before it for approval. Giving details of the matter, an official of UPPCL, requesting anonymity, said that as per the National Tariff Act, licencees have the right to increase the tariff by 10% in case of an increase in fuel cost price on a quarterly basis by invoking the FPPCA till March 31, 2020. “It was under this regulation that UPPCL has sought to adjust the variance in the power procurement cost and power sold cost,” he said. UPERC had in September last year approved 8-15% tariff hike for different categories of rural and urban consumers. While a hike of 8-12% in power tariff had been approved by the UPERC for domestic consumers, electricity prices in industrial areas had increased by 10%.
Source: Financial Express
A researcher at the Indian Institute of Technology (IIT) here has developed a "fabric feel tester" at a cost nearly 100 times cheaper than the ones presently available in market. According to officials, a patent has also been filed for the instrument which has been developed by professor Apurba Das and his team with support from the government's department of science and technology. The instrument measures the subjective fabric feel perception and expresses it by an objective numerical value. Fabric feel is a generic term for textile sensations associated with fabrics. "The existing Kawabata Evaluation System of Fabrics (KESF) system used in the clothing industry is very complex and requires four different modules. The new instrument will not only measure fabric softness and feel directly but also help in selecting the optimum fabric finish treatment by comparing the feel," a senior IIT-Delhi official said. "The instrument will help check change in fabric feel after chemical or mechanical treatment and thus help in developing newer fabrics and finishings with better feel. The cost of the new fabric feel tester is around Rs 1.75 lakhs as compared to the cost of complete KESF equipment which is more than Rs 1.5 crore," the official added. According to the official, the device finds its usage broadly in dyeing and finishing in textile and apparel industries, weaving industries, garment manufacturing units and testing laboratories. It will be helpful for industries who are dealing with the production, evaluation and application of textile fabrics for process, quality and quick decision making," the official said.
Source: Times of India
Make in India’s outstanding success can be gauged from the fact that after the launch, India received investment commitments worth Rs. 16.40 lakh crore and investment inquiries worth Rs. 1.5 lakh crore between September 2014 to February 2016. Make in India has been a major national programme of the Narendra Modi led government, designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure and industrial corridors in the country. The primary objective of this initiative is to attract investments from across the globe. The focus of Make in India programme has been on 25 sectors. These include automobiles, aviation, chemicals, IT & BPM, pharmaceuticals, construction, defence manufacturing, electrical machinery, food processing, textiles and garments, ports, leather, media and entertainment, wellness, mining, tourism and hospitality, railways, automobile components, renewable energy, biotechnology, space, thermal power, roads and highways, and electronics systems. Make in India’s outstanding success can be gauged from the fact that after the launch, India received investment commitments worth Rs. 16.40 lakh crore and investment inquiries worth Rs. 1.5 lakh crore between September 2014 to February 2016. As a result, India emerged as the top destination globally in 2015-16, for Foreign Direct Investment (FDI), surpassing the USA and China, with a record of $60.1 billion in FDI. Another $60 billion in 2016-17, and $61.96 billion in 2017-18, meant that FDI, as a percentage of GDP under the 4.5 odd years of the Modi dispensation always averaged at a very healthy 1.6-2 percent of GDP approximately. Netting in FDI of $250 billion in 5.5 years of its tenure, the Modi government has clearly been a favourite with long term offshore investors and entities and that was never a small ask to start with, in the first place, given the poor legacy of policy paralysis, that the Modi government inherited from its predecessor, an incompetent and corrupt, the Congress-led UPA coalition. Coming back to Make in India again, according to the data published by the Department of Industrial Policy & Promotion (DIPP), in December 2016, industrial activity rose by 29 per cent, primarily in states like Madhya Pradesh and Maharashtra, as part of the Make In India initiative. International brands like Huawei, Tristone Flowtech, LeEco, Zopo Mobile, Panasonic, and Havells, among others, have invested in India between 2015 and 2017. Other global electronics companies like the UK-based Dyson Ltd., and the Japanese Akai, either entered or plan to enter the Indian market, including Italian bike-maker Binelli. Samsung, Xiaomi, Foxconn, Monsanto, Microsoft, Qualcomm, Oracle, Gionee, Sony Ericcson, LG, and HTC, have all increased their commitments to India after the Modi dispensation came to power in May 2014. Again, in May 2018, retail giant Walmart acquired a 77 percent stake in e-commerce major Flipkart, for a good $16 billion, with Amazon outlining plans to invest $5 billion in India in the next few years. Online food delivery company Swiggy raised $1 billion in its latest funding round led by the South African internet group, Naspers, while hotel aggregator OYO Rooms raised $1 billion from the likes of Softbank of Japan and America’s Sequoia Capital, among others, in the last one year. Vedanta’s over Rs. 5000 crore investment in the stressed asset, Electrosteel Ltd. and $67 billion global steel behemoth, Arcelor Mittal’s decision to pump in a massive Rs. 42,000 crore to acquire Essar Steel, among others, are just a few examples of how Make in India has been giving decisive contours to the entire manufacturing process through a mix of greenfield investments, brownfield expansions, M&A deals, start-up ventures and Digital India led e-commerce businesses. More importantly, Make in India has also embraced the agri-economy wonderfully well. ITC’s 83,338 odd E-Choupals, covering about 5000 villages and 10 lakh farmers, are making rapid strides in improving agricultural productivity and quality of farm produce, besides risk mitigation and cost minimisation. It is important to note here, that the most dominant contribution by any government anywhere in the world, to help industry, is to weed out policy paralysis, which the erstwhile Congress-led UPA regime was infamous for. In contrast, the very essence of Modinomics has been “Minimum Government, Maximum Governance”. For instance, environmental clearances which used to take upwards of 600 days before the Modi government took charge, saw a turnaround time of fewer than 180 days in most cases, post-May 2014. It is for good reason, therefore, that the “Lion” on the move, is the logo of the Make in India campaign. If there is one home-grown success story of Make in India under the Modi government that needs to be commended, it is the KHADI revolution. Sales of Khadi, including solar and poly vastra, grew 24.71 percent to Rs. 2503 crore during 2017-18 as against Rs. 2007 crore in the previous fiscal, as per data by Khadi and Village Industries Commission (KVIC). Incredibly, the total average Khadi sale, which was Rs. 914.07 crore during the years 2004 to 2014, jumped to Rs. 1828.3 crore in merely three years after that, i.e. from 2015 to 2018, there was a phenomenal over-hundred percent increase. Moreover, with the average Khadi sale of Rs. 120.09 crore by Departmental Sales Outlets (DSOs) in the 2015-18 period, a growth of 168.24 percent has been recorded, as compared to Rs. 44.77 crore in the 2004-14 decade. As many as 375 new Khadi institutions were established after 2015 in some two-odd years, whereas the number of new Khadi institutions established in the 10 years between 2004 and 2014 was only 110, as per the KVIC, reflecting, once again, how erstwhile Congress-led regimes never capitalised on India’s core, home-grown strengths. Unarguably, the Make in India programme is very important for the economic growth of India as it aims at utilising the existing Indian talent base, creating additional employment opportunities and empowering the secondary and tertiary sectors, by raising the share of manufacturing from 16.8 percent in 2016-17, to 25 percent of GDP by 2025. The programme that aimed at improving India’s rank on the Ease of Doing Business index by eliminating unnecessary laws and regulations, making bureaucratic processes easier, making the government more transparent, responsive and accountable, saw India’s ranking jump by a massive 65 places from 142 in 2014, to 63 in 2019, indicating how an enabling business climate under the Modi dispensation has worked wonders. The World Bank’s electricity accessibility ranking for India, too, improved, going from the 99th position in 2014, to the 26th position, underlining the huge strides made on this front. Lame-duck critics who allege that the World Bank’s EODB ranking only takes into account surveys done in Mumbai and Delhi are clearly off the mark because Mumbai alone accounts for a little over 6 percent of the country’s GDP, over 10 percent of factory employment, well over 30 percent of the entire direct tax collection in India, 40 percent of foreign trade, at least 70 percent of India’s maritime trade and capital market transactions, and before GST came into effect, it accounted for over 20 percent and 60 percent of all excise and customs collections, respectively. Hence, Mumbai is a microcosm of the Make in India story in more ways than one. Beyond Mumbai, the Modi government’s decision to transform India into an electronics manufacturing hub was sealed with the shortlisting of Ghaziabad in Uttar Pradesh, Vadodara, and Gandhinagar in Gujarat, and four cities in Maharashtra, namely, Nagpur, Nasik, Aurangabad, and Thane. Greenfield electronics clusters would be set up at Bhopal, Bhubaneswar, Hyderabad, Maheshwaram, Bhiwandi, Jabalpur, Hosur and Kakinada. Gautam Buddh Nagar in Noida in Uttar Pradesh is well-positioned too, to become the electronic hub of India, a reflection of how Make in India has become the progressive development mantra of even pockets that were either lesser known or deliberately ignored by the likes of “Behenji”, “Netaji” and Netaji’s inept son, who ruled the state for years together. That Uttar Pradesh, for the last few decades, under the thoroughly incompetent, erstwhile Samajwadi Party (SP) and, Bahujan Samajwadi Party (BSP) regimes, was a horribly neglected region due to lack of political will and rampant corruption and lawlessness, is well-documented. However, after the mercurial and dynamic Yogi Adityanath stormed to power in UP in 2017, the state has undergone a make-over, with some 150 plots allotted via a public lottery after which some big companies, including TCS, PayTM, and Kent, got land in Noida. The government has got a Memorandum of Understanding (MoU), signed with Haier for Rs. 3000 crore, while VIVO has also been allotted land too. Within just 5 months of being in power, the reformist Yogi government had ground-breaking ceremonies worth Rs. 60,000 crore for a plethora of projects as part of the overall Make in India campaign, with another Rs. 4.28 lakh crore of MOUs being inked in February 2018, at the global investor summit held in the state. What a pity that a deplorably left-leaning media in India has never been able to go beyond the charismatic Yogi’s saffron robes. Talking of electronics, FDI in electronics manufacturing in 2016 was an all-time high of $18.36 billion. The Indian IT-electronics sector has witnessed consistent growth in terms of market-size post-2014 but challenges like high costs of power and finance, high transaction costs, a lopsided tax structure and lack of development of a healthy supply chain, under a clueless Manmohan Singh-led Congress establishment, kept India behind in electronics hardware manufacturing capabilities. Bucking that trend, the Modi government gave excise and customs duty benefits to local producers and many Information Technology Agreement (ITA) goods. Customer Premise Equipment (CPE) goods to be included under the differential duty scheme for locally made devices, and a proposal for a ‘Component Trading Hub’ to bring down logistics costs by creating a robust infrastructure for connectivity, are being worked upon. According to a report by Consumer Electronics and Appliances Manufacturers Association (CEAMA) and Frost and Sullivan, the Consumer Electronics Industry in India is projected to grow at a Compound Annual Growth Rate (CAGR) of 9.5 percent from 2018 till 2021. While talking about Consumer Electronics, India’s smartphone adoption is growing at a CAGR of above 23 percent and the country overtook the US in 2016 to become the world’s second-largest smartphone market by users. Components worth over $80 billion would be required for smartphones and feature phones sold in India over the next five years. Removing duties on well over 35 capital goods components, besides tax holidays, providing benefits under differential duty scheme and a facilitative, business-friendly environment for manufacturing mobile handsets, which made India the 2nd biggest mobile handset maker in the world, is a ringing endorsement of how Modi’s Make in India has truly made India a force to reckon with in the global manufacturing sweepstakes. The IT and electronics ministry reworked the Modified Special Incentive Package Scheme (M-SIPS) for mobile manufacturing units. To attract investments in electronics manufacturing, the M-SIPS was notified in 2012 for both new and expansion projects. The Union government approved 75 proposals worth $885 million in the first phase under M-SIPS for manufacturing in 2016. Under the CFC Scheme, the government provides 75 percent grant for the project for a minimum of seven companies. The Southern India Electronic Industries Chamber (SIEIC), together with 15 ESDM companies, which planned to establish an Electronic Common Facility Centre (CFC) in the Electronic Manufacturing Cluster of Vellore district in Tamil Nadu, through the Union Ministry of Electronics, to focus on electronics hardware manufacturing skill development, research, and development to promote electronic hardware manufacturing and an innovation centre for engineering and design, are steps in the right direction. In the later phase, the focus would be on establishing advanced electroplating for electronic industries. The Indian electronics industry is certainly on the right track to becoming a preferred manufacturing destination, thanks to the tremendously collaborative effort of the Make in India initiative. “I want to tell the people of the whole world: Come, Make in India. Come and manufacture in India. Go and sell in any country of the world, but manufacture here. We have the skill, talent, discipline and the desire to do something. We want to give the world an opportunity that comes, Make in India”, Prime Minister of India, Mr. Narendra Modi said while introducing the programme in his maiden Independence Day speech from the ramparts of the Red Fort on 15th August, 2014. The initiative was formally introduced on September 25, 2014, by Mr. Modi at Vigyan Bhawan, New Delhi, in the presence of business giants from India. Five years hence, Make in India has a lot to look back at and feel proud about, and a lot more to look forward to, as India, thanks to its most powerful and popular mass leader, Prime Minister Narendra Modi, who epitomizes Modinomics, is on the cusp of an industrial revolution. Ms Sanju Verma is an Economist, Chief Spokesperson for BJP Mumbai and Author of Best Selling Book, "Truth&Dare--The Modi Dynamic".
Source: Daily News & Analysis
From cheaper online fund transfers to GST getting a makeover, there are several changes that will come into effect in 2020. Here's a look at some of the things that you should know. Cheaper online fund transfers Effective January 1, as a savings bank account holder, you can undertake fund transfers through NEFT without facing any charges from your bank. Make sure you initiate the transaction online via internet banking or the bank’s mobile apps. Buying a ride may get costlier Top carmakers including Kia, Maruti Suzuki, Hyundai, Nissan and Mercedes have said their cars will cost more. New year cheer for customers of State Bank of India For customers of SBI, home loans are set to get cheaper by 25 basis points. Withdrawing cash gets more secure as the bankintroduces OTP for ATM transactions above Rs 10,000 withdrawn between 8 PM and 8 AM.
Bad news for users of Windows
If you use WhatsApp on Windows Phone, the app won’t work from January 1, as WhatsApp drops support and won’t provide updates to the OS. Green new year Kerala to bid goodbye to single-use plastic as it welcomes the new year.
GST gets a makeover
Businesses with an annual turnover of above Rs 500 crore to implement e-invoicing on a voluntary basis. Companies need to stringently monitor whether suppliers are uploading returns on a regular basis as input tax credit will now be restricted to 10% (from 20%) if invoices aren’t reflected in filings. All new dealers enrolling for GST scheme will have to have Aadhaar authentication.
Kickstarting a digital payments culture
Businesses with annual turnover of Rs 50 crore or more in the preceding year cannot insist on cash payments, and will have to compulsorily provide customers options to pay via digital options such as debit cards powered by RuPay, Unified Payments Interface (UPI), BHIM-UPI, UPI Quick Response Code (UPI QR Code), and others. Passing the buck: Businesses accepting digital payments through RuPay cards and UPI payments need not pay Merchant Discount Rate (MDR) charges — the fee paid by the merchant to a bank for routing money through their network. Connectivity boon for startups :Reliance Jio will start providing free cloud and connectivity services to the country’s startups including Azure cloud services that Jio is bringing as part of its alliance with Microsoft. Incentive hit for exporters :As the new export scheme Remission of Duties or Taxes on Export Products replaces the existing Merchandise Export from India Scheme, an incentive cut from 4% to 2% will hit electronics and textiles among other sectors.
Source: Times of India
The Rupee lost 16 paise to close at 71.38 against the U.S. Dollar on Thursday as steady rise in crude oil prices and stronger dollar against key global currencies weighed on sentiment. At the interbank foreign exchange market, the domestic currency opened weak at 71.27 a dollar. It touched the day’s high of 71.26, before finally settling at 71.38, a drop of 16 paise over its previous close. The Indian currency is trading in a narrow range amid lack of directional cues from the global market, experts said. Rise in crude oil prices weighed on the domestic unit, but robust domestic equities supported the Rupee and restricted the fall, they said. Brent futures, the global oil benchmark, rose 0.50% to $66.33 per barrel. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.24% to 96.67. On the domestic equity market front, the 30-share BSE Sensex ended 320.62 points, or 0.78%, higher at 41,626.64. Similarly, the NSE Nifty closed 99.70 points, or 0.82 %, up at 12,282.20 — its new closing record. “Rupee extended losses to 71.36 on back of crude prices holding at higher levels which is making importers buy the dollar to hedge the net outflows for crude buying,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities. Foreign institutional investors (FIIs) bought equities worth ₹688.76 crore on a net basis on Thursday, according to provisional exchange data. “This month (January), economic calendar on domestic front remains little muted and focus will be primarily on the inflation number that has seen an uptick in last few months following rise in food prices. But on other hand, clarity on trade talk between the U.S. and China could increase the volatility for the currency. We expect USD/INR (Spot) to quote in range of 70.50-72.50,” according to Motilal Oswal Financial Services’ Commodity and Currency Canvas report. The 10-year government bond yield was at 6.50%.
Source: The Hindu
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1005.29 |
USD/Ton |
0% |
1/3/2020 |
|
VSF |
1356.17 |
USD/Ton |
0.53% |
1/3/2020 |
|
ASF |
2009.14 |
USD/Ton |
0% |
1/3/2020 |
|
Polyester POY |
1018.92 |
USD/Ton |
0% |
1/3/2020 |
|
Nylon FDY |
2167.00 |
USD/Ton |
0% |
1/3/2020 |
|
40D Spandex |
4118.74 |
USD/Ton |
0% |
1/3/2020 |
|
Nylon POY |
2195.70 |
USD/Ton |
0% |
1/3/2020 |
|
Acrylic Top 3D |
1162.43 |
USD/Ton |
0% |
1/3/2020 |
|
Polyester FDY |
2382.27 |
USD/Ton |
0% |
1/3/2020 |
|
Nylon DTY |
5381.63 |
USD/Ton |
0% |
1/3/2020 |
|
Viscose Long Filament |
1270.06 |
USD/Ton |
0% |
1/3/2020 |
|
Polyester DTY |
2001.96 |
USD/Ton |
0% |
1/3/2020 |
|
30S Spun Rayon Yarn |
2001.96 |
USD/Ton |
0% |
1/3/2020 |
|
32S Polyester Yarn |
1621.66 |
USD/Ton |
0% |
1/3/2020 |
|
45S T/C Yarn |
2410.97 |
USD/Ton |
0% |
1/3/2020 |
|
40S Rayon Yarn |
2167.00 |
USD/Ton |
0% |
1/3/2020 |
|
T/R Yarn 65/35 32S |
1923.03 |
USD/Ton |
0% |
1/3/2020 |
|
45S Polyester Yarn |
1765.17 |
USD/Ton |
0% |
1/3/2020 |
|
T/C Yarn 65/35 32S |
2195.70 |
USD/Ton |
0% |
1/3/2020 |
|
10S Denim Fabric |
1.27 |
USD/Meter |
0% |
1/3/2020 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
1/3/2020 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
1/3/2020 |
|
30S Rayon Fabric |
0.53 |
USD/Meter |
0% |
1/3/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
1/3/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14351USD dtd. 03/01/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
European Commission President Ursula von der Leyen is concerned over the ability to roll out Brexit in the timeline sought by Prime Minister Boris Johnson. Stating that it is not only a question of negotiating an agreement, she was apprehensive whether all negotiations are possible in such a short time. “I am very worried about the short time available,” she said. She raised her concerns over the length of the timeline in an interview to French newspaper Les Echos. Following a landslide general election victory by Johnson’s Conservative party on December 12, the United Kingdom is due to leave the European Union (EU) on January 31. After its exit from the EU, a transitional period will exist until the end of 2020 to allow time for negotiation on future trade links. Negotiations are due to begin in February. Voicing her concerns, she also raised the possibility of a mid-year review of the transition period with the potential for an extension if one were required, according to British media reports. Under the EU-UK withdrawal agreement, there is room for the United Kingdom to seek an extension on the transition period of up to two years. Prime Minister Boris Johnson, however, is adamant that there will be no extension. The Withdrawal Bill is currently working its way through a number of stages in the UK parliament.
Source: Fibre2Fashion
Pakistani exporters are hoping to gain a major share in the world’s textile market, amid an ongoing trade war between the US and China, as they gear up for the Heimtextil 2020. The world’s largest trade exhibition of home and contract textile Heimtextil 2020 will be held from January 7-10 in Frankfurt. It is the first trade fair of the year for the textile sector and is perceived as a trend barometer. This year, 231 companies of Pakistan will showcase their products in the exhibition. The Trade Development Authority of Pakistan (TDAP) has set up a traditional Pakistani pavilion for small and medium-sized export companies, where 56 Pakistani firms will display their products. Exporters are in high spirits and are hoping to receive new orders as they are targeting the market space created by the trade conflict between the US and China. On the other hand, most companies are hoping to take advantage of the so far untapped tariff concessions under the GSP Plus programme for the EU market. Messe Frankfurt Country Head for Pakistan, Bangladesh and Sri Lanka Umer Salahuddin said, “Pakistan is the fourth largest international exhibitor at Heimtextil. The number of Pakistani exhibitors has grown over the past few years, which has resulted in growth of Pakistan’s home textile exports.” He added that most of the Pakistani companies were participating in this year’s exhibition with new products. “Pakistani companies have made great strides in keeping with the theme of the exhibition and emerging trends in their respective markets,” Umer remarked. A Pakistani export firm, which regularly attends the exhibition, is hopeful that it will be able to attract new buyers to its hospitality and health care-related textile products. According to Nadeem Kayani, Director of the JK Group of Companies, which has participated in the exhibition for 19 years, US buyers are looking for alternatives to Chinese products in the wake of the ongoing trade spat. “US buyers have already begun to expand their links with Pakistan for its home textile products,” Kayani said, adding that the US, the UK, Spain, Italy and Portugal were the major markets for its products. “We have high hopes that we can woo new US buyers in Heimtextil as there is a strong possibility of increased participation by American purchasers.” Commenting on the hurdles, Kayani said the decline in the value of the rupee had led to an increase in the input cost of businesses. On the other hand, the rise in gas tariffs is also pushing up the cost of production. “Export industries are also facing shortage of capital due to the withdrawal of zero-rated facility for the five major export-oriented industries.” Meanwhile, opportunities are growing for Pakistan due to the changing global trade environment and benefits can be reaped by resolving the problems facing the industries. Another Pakistani exhibitor, Lakhany Silk Mills CEO Hanif Lakhani, said, “European buyers prefer quality products at good prices. European buyers will, therefore, be the focus of our attention.” He said “Pakistan has not yet made full use of the GSP Plus facility; many home textile tariff lines have not been used yet. Our company is participating with new products, especially kitchen wares, that can attract European buyers due to their better quality and we can also get benefit from the tariff concessions. “We have been participating in the Heimtextil exhibition since 2001. This exhibition is a good platform to meet existing buyers and chase new customers.” Lakhani said, “The depreciation of the rupee is beneficial for Pakistani exporters. Although input costs have increased, wages are at the same level, this is not the case with competing countries of Pakistan. “Pakistan’s export firms can benefit from the depreciation of the rupee. The government has made it easy for the exporters to get sales tax refunds, which is a helpful step in increasing exports.” Heimtextil plays an important role in promoting exports of home textile products from Pakistan. This year marks the 50th edition of Heimtextil, which is the largest gathering of exporters, buyers, technology companies, researchers and designers from all over the world. Pakistan first participated in the trade fair in 1975.
Source: The Tribune
Stakeholders in the Sri Lankan apparel industry are making a concerted effort to create a sustainable domestic fabric supply base. Despite the goods exported to the European Union (EU) being eligible for the generalised system of preferences (GSP+) benefit, the island nation is unable to meet the country of origin rule. The available domestic fabric is only knitted fabric. The fabric capacity available is fully absorbed by the industry and as a result, a part of the knitted and woven fabric requirement is being imported, Joint Apparel Association Forum (JAAF) general secretary Tuli Cooray said. The total annual import of fabric goes well beyond $2 billion. Whether GSP+ exists or not, having its own fabric base will ensure a sustainable apparel industry, Cooray was quoted as saying by a Sri Lankan newspaper. The proposal to set up a textile development park in Eravur has been recognised in the government manifesto. A minimum of three plants will be promoted by JAAF. China is looking for attractive sites for such investments, Cooray said. If the textile plants are given access to domestic markets, the domestic apparel manufacturers can improve their delivery at a lesser cost, he added.
Source: Fibre2Fashion
Special Assistant to the Prime Minister (SAPM) on Information and Broadcasting, Dr Firdous Ashiq Awan on Thursday said that the appreciation by All Pakistan Textiles Mills Association (APTMA) of the initiatives taken by Prime Minister Imran Khan and his economic team for promotion of textile exports was a good omen and manifestation of their trust in the government. In a tweet, she said that the steps were a proof of the government's sincere efforts for promotion of exports. She said that the policy would be soon announced for establishment of new industries and steps would be taken for revival of sick industrial units so that the poor segments of the society get a chance to earn their livelihood.
She said that cotton crop was vital for promotion of textile industry.
Dr Firdous said that agriculture sector had been made part of China Pakistan Economic Corridor, and with China's help, use of technology would be increased for cotton crop. These steps, being taken under the vision of Prime Minister Imran Khan, would eventually strengthen agriculture sector and promote exports, she remarked. She said that the PM had also issued directives for strict punitive measuresagainst the elements indulged in adulteration of seeds and pesticides.
Source: Urdu Point News
In late November 2019, Indonesia introduced its long-awaited law on e-commerce through Government Regulation 80 of 2019 (GR 80, 2019). GR 80, 2019 was issued to improve the governance of internet-based and electronic trading activities in addition to ensuring tax compliance among e-commerce businesses. The regulation, which will apply to domestic and international internet companies, defines the type of entities that can engage in e-commerce. Additionally, the regulation addresses the specific set up requirements businesses will need to comply with, as well as the framework for online contracts and transactions, and the provisions for consumer right protection. Businesses will have until November 2021 to adhere to the new provisions.
What are the entities allowed to engage in e-commerce?
GR 80, 2019 addresses the types of entities that are permitted to engage in e-commerce activities. These are:
o Online retail websites;
o Online classified ads;
o Price comparison websites; and
o Daily deal websites.
Another key provision of the set up requirement is to prioritize the trade of domestic goods or services, improve their competitiveness, and facilitate a special section or area to promote such goods or services on online marketplaces. Online marketplaces must also store their data (subscribers, payments, complaints, contracts, shipments etc) in local data centers in addition to having domain names that ‘reflect’ Indonesia (i.e. dot id). Online marketplaces are asked to retain financial data for up to 10 years and non-financial data for five years.
Foreign e-commerce entities
Foreign e-commerce businesses or internet companies that have a significant economic presence in Indonesia will be classified as having a permanent establishment in the country, and as such, deemed as an Indonesian tax residence. These entities would need to satisfy the following criteria:
Businesses that do fulfill the categories must also appoint a local representative in Indonesia and adhere to all applicable tax regulations.
Tax compliance
Online sellers must now adhere to prevalent regulations regarding income tax. This is governed by Law 30 of 2008 and would mean that online businesses classified as small or medium enterprises (SMEs) must pay 0.5 percent in income tax while large companies pay the 25 percent corporate tax rate. Additionally, individual taxpayers who are earning at least 4.8 billion Rupiah (US$342,000) from their online business must charge their customers value-added tax (VAT).
Consumer protection
GR 80, 2019 states that e-commerce businesses must respect consumer protection and rights as stated in Law 8 of 1999. Furthermore, the regulation addresses more specific protection framework regarding personal data protection, consumer complaints, and dispute resolutions.
Personal data protection
Online marketplaces and e-commerce businesses who collect personal data must follow the data protection standards set out in GR 80, 2019. These include:
Consumer complaint services
GR 80, 2019also states that e-commerce businesses must provide a complaint service for consumers. This must include at least:
Electronic contracts
GR 80, 2019, recognizes two types of electronic contracts: purchase agreements and license agreements. For the agreement to be deemed valid and binding, they must abide by the following requirements:
Payments
Online marketplaces are permitted to cooperate with online payment service systems that are authorized by Bank Indonesia (the central bank). Payment service operators are required to maintain the highest standards of security for electronic systems, which is regulated by the Financial Services Authority, the State Cyber and Cryptography Agency, and the central bank.
Import tax
From January 2020, the government will lower the import tax threshold value on consumer goods sold via e-commerce platforms. Goods now worth at least US$3 will be liable for import tax; the threshold was previously at US$75. This new rule is aimed at controlling the number of cheap foreign products entering the country in addition to protecting domestic firms. Additionally, there will be different tariff rates for imported textiles, shoes, and bags. Textiles will be subject to 15-20 percent in import duties, as are bags, while shoes will be subject to a 25-30 percent rate. This is also before applying the 10 percent VAT and 7.5 percent in income tax.
Optimizing Indonesia’s digital economy
GR 80, 2019 comes as Indonesia’s internet economy experiences rapid growth with over 10 percent of Indonesia’s 270 million population indulging in online shopping – making the country’s e-commerce industry one of the most dynamic and largest in Southeast Asia. By issuing GR 80, 2019, the government aims to address underlying issues that have plagued Indonesia’s e-commerce industry, in particular, regarding the legal and tax obligations of online storefronts, and consumer protection guidelines. The regulation has faced rejection from e-commerce platforms and online vendors who claim that it would discourage small and medium enterprises from expanding online and stifle the growth of the industry; resulting in smaller sellers to shift to social media sites.However, the legal framework laid out in GR 80, 2019will be encouraging for foreign investors, who are eager to capitalize on an industry that is predicted to have a gross market value of US$53 billion by 2025.
Source: ASEAN Briefing
