The Central Board of Indirect Taxes and Customs (CBIC) has asked Director General of Foreign Trade (DGFT) to beef up its system used for accrediting exporters after investigations brought to the fore integrated goods and services tax (IGST) fraud by some ‘star’ status holding exporters. Star exporters, which are given more leeway than others including reduced customs inspections, may now be asked to produce statutory records of compliance, including certifications declaring no non-performing assets (NPA) from the banks as CBIC cracks down on fake invoicing and fraudulent tax crediting, being encashed through IGST and input tax credit refunds. Investigations found nine star exporters in sectors such as agro processing, garments and electronics were not traceable at the addresses on record, while in two cases, the premises were found sealed and seized by banks as the exporters had been declared as NPAs, even as they availed IGST refunds. Further, 40 of 241 star exporters surveyed had declared their turnover between nil and Rs 1 crore in 2017-18 and 2018-19, when it should have been at least Rs 21.5 crore for three consecutive years. “These instances emphasize the need to make the system of accrediting exporters more robust,” the CBIC said in an office memo to the DGFT, seen by ET.
Source: Economic Times
Through the move, the commerce department plans to restrict imports costing an estimated Rs 4 trillion, primarily from China. Mandatory licensing norms may be put in place for vast segments of India’s imports that have not yet been properly categorised and remain immune to policy measures, according to sources. Through the move, the commerce department plans to restrict imports costing an estimated Rs 4 trillion, primarily from China. Currently, thousands of import categories are labeled “others” in the official trade classification handbook. Many of these bring in goods worth Rs 100 crore or more. But, little data is available on what these are. Apart from controlling runaway trade ...
Source: Business Standard
The government has chalked out a detailed action plan as it seeks to put India into the top 50 of the World Bank's ease of doing business index. The plan includes strengthening six focus areas—enforcing contracts, resolving insolvency, starting a business, registering property, paying taxes and trading across borders—before the bank releases this year’s rankings. The Department for Promotion of Industry and Internal Trade (DPIIT) also plans to share reforms related to a new indicator contracting with the government for the first time with the World Bank for the upcoming ‘doing business report’. “The idea is to engage expert agencies to receive regular industry feedback on reforms and identify corrective measures based on feedback received,” said an official aware of the details. India jumped 14 places to rank 63rd, among 190 countries, in the bank’s ease of doing business index in 2019. While doing business covers 12 areas of business regulation, it includes only 10 broad indicators in the ease of doing business score and ease of doing business ranking. Regulations on employing workers and contracting with the government are not included in the ease of doing business score and ranking. Bengaluru and Kolkata will be included in the upcoming report along with New Delhi and Mumbai. “We plan to gauge user perception and frequently consult stakeholders to understand the gaps in reform implementation,” the official added. Twitter polls and live Twitter chat sessions are planned to gauge user perception.
SECTOR-SPECIFIC, NEW CITY REFORMS
To improve contract enforcement, the government has proposed commercial courts with e-court management, reduced time taken in disposal of cases and fast tracking of large and important cases through daily hearings. To make it easier to register property, DPIIT and the department of land resources will discuss complete cadastral mapping of all plots, timely disposal of property disputes and making statistics of land disputes public. An integrated portal for verification of title and encumbrances, and a simultaneous action plan to enact land titling bills for all the four cities are also being considered. For ease of paying taxes, the government is mulling introducing cash refund of input tax earned on capital goods besides reducing the time taken in Employee State Insurance Corporation and Employee Provident Fund Organisation compliance. Amendments to the Insolvency & Bankruptcy Code to include operational creditors in committee of creditors and disposal of old cases on a priority basis are the reforms proposed to better India’s rank on the resolving insolvency index. To improve trading across borders, it has been proposed to remove infrastructure bottlenecks at ports and inland container depots. For Kolkata and Bengaluru specifically, the government wants to make it easier to start a business and plans to do away with the requirements of bank account details in profession tax registration, and inspection for registration of shops and establishments and trade license. It also plans to provide real time registration for shops and establishments. Integration of online system with all external and internal agencies involved in providing no objection certificates for obtaining construction permits and joint inspections by all agencies is also being thought of.
Source: Economic Times
Home minister Amit Shah will head a group of ministers to discuss the proposed National Tariff Policy that is being awaited as a major reform by the stressed power sector but being opposed by state governments and discoms due to clauses like penalties for load shedding. The inter-ministerial group will have 10 ministers, including eight in cabinet rank and two with independent charge, people familiar with the development said. Defence minister Rajnath Singh, finance minister Nirmala Sitharaman, road and transport minister Nitin Gadkari, coal and mines minister Pralhad Joshi, women and child development minister Smriti Irani, agriculture minister Narendra Singh Tomar, and Jal Shakti minister Gajendra Singh Shekhawat are part of the GoM, sources said. The ministers of state with independent charge in the group include R K Singh of power and renewable energy and Mansukh L Mandaviya of shipping, they said. The central government in the proposed draft amendments to the National Tariff Policy of 2016 has included provisions for imposition of penalties by appropriate commission on the distribution companies for power cuts other than force majeure conditions or technical faults. The draft policy was sent for approval to cabinet secretariat, and later it was referred to the GoM headed by Shah. The draft policy has proposed that any subsidy would have to be given through direct benefit transfer, i.e. directly in the bank account of consumers. Also, cross subsidies on industries would not exceed 20%.It has proposed that state electricity regulators shall not allow discoms to pass through transmission and commercial losses beyond 15% in consumer tariffs. It has also called for simplification of tariff categories and rationalisation of retail electricity tariffs.
Source: Economic Times
Over 250 exporters in Tiruppur have been categorised as “Risky” by the Customs Department. Industry sources told BusinessLine that the exporters were in the dark about “Risky Exporter Status” categorisation for a long time. “The Risk Management Centre for Customs in Mumbai had identified some exporters as “Risky”, as they claim IGST refund (on FOB value) and the department had felt that the IGST claims were wrongly made. The issue came to the fore in June, and has remained unresolved for the last six months.
Working capital lost
“This has only resulted in complete erosion of working capital as IGST claims of over ₹500 crore have been locked up. The exporters are in dire straits,” an industry insider said, highlighting his plight. Yet another exporter, preferring anonymity said that there were varied interpretations about this categorisation of “risky exporter”. Small exporters have been trapped, he added. Exporters say that they are not against verification of the claims, but the delay has impacted their business operations badly.
Liquidity crunch
“We have been facing huge financial crunch since the roll out of GST. Withholding of IGST claims has further aggravated the issue. Non-release of IGST claims is the issue at this juncture,” the source said. However, industry sources hope that some relief will come their way soon, particularly after their interaction with the Prime Minister last week. The Apparel Export Promotion Council has, in the meanwhile, organised a meeting with the Commissioner of Customs, Tiruchi and Tuticorin at Tirupur on Thursday, specifically to discuss the issue of Risky Exporter status.
Source: The Hindu Business Line
India and the US are close to concluding a trade package that would provide enhanced market access to both countries, India's outgoing Ambassador to the US Harsh Vardhan Shringla has said. Shringla made the comments while addressing a group of Indian-American entrepreneurs during a farewell lunch on Friday organised for him by TiE DC, a regional chapter of the global non-profit membership and mentoring organization for entrepreneurs “We are close to concluding a trade package that would provide enhanced market access to both countries," Shringla said during the event. The outgoing Ambassador, who would take up his new assignment as India's next foreign secretary later this month, however, did not give an exact date for the inking of the much-anticipated trade deal. The trade deal was first announced by US President Donald Trump when he met Prime Minister Narendra Modi in New York in September on the sidelines of the UN General Assembly. Trump on September 24 said his country will soon have a trade deal with India to boost economic ties between the two nations. Shringla said the signing of the trade package would pave the way for a much bigger bilateral trade deal between the two largest democracies of the world, which will only benefit the companies of the two countries. "We see a lot of openings," he said. Shringla, who is scheduled to leave for India later this month, said that the India- US bilateral trade has increased significantly in the last one decade and it is expected to be over USD160 billion by 2019. Noting that there are a lot of complementarities between the Indian and the US economy, the Ambassador said that Indian-American entrepreneurs and in particular organizations like TiE DC play an important part in strengthening these bilateral ties, not only people to people but also economic and strategic relationship. Ravi Puli, an entrepreneur from TiE DC, said that in just about an year, Shringla has made a great impact on India-US relationship. "As an ambassador, he has taken the US- India relations to a level that all of us are feeling very proud and we are looking forward to take it even further with his leadership as a foreign secretary of India," he said. The event was attended by eminent Indian-American entrepreneurs from in and around Washington DC and leaders of other chapters from various parts of the country.
Source: Economic Times
India is close to finalising a proposed India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with Mauritius, with seven rounds of negotiations to improve market access between the two sides having been completed, the Indian ministry of commerce and industry said recently. CECPA seeks to mutually benefit both countries. The negotiations have focussed on various aspects including trade in goods, trade in services, rules of origin, technical barriers to trade and sanitary and phyto-sanitary (SPS) measures, trade remedies and dispute settlement, the ministry said. “India- Mauritius CECPA negotiations for trade in goods and trade in services, have been completed. The agreement is near finalisation,” Indian media reports quoted the ministry as saying. India had a trade surplus of around $1.09 billion with Mauritius in 2018-19. Mauritius was the second top source of foreign direct investment into India in 2018-19. India received $8 billion in inflows from the country. India exports petroleum products, pharmaceuticals, cereals, cotton and electrical machinery, apparel and clothing accessories to Mauritius. The island nation’s exports to New Delhi include iron and steel, pearls, precious/semi-precious stones and optical, photographic and precision instruments.
Source: Fibre2Fashion
The total number of TBT measures put in place by all RCEP members, including India, stood at 5,909. Countries like China, South Korea and Japan may boast of low tariffs but they have erected huge non-tariff barriers (NTBs), most of which are tailored to mask the ferocity of trade protectionism, in a bid to control the imports they deem undesirable. An internal analysis of the Indian commerce ministry ahead of the country’s pull-out of the RCEP deal in November shows China has put in place 1,516 notifications that are nothing but technical barriers to trade (TBT), followed by South Korea (1,036), Japan (917) and Thailand (809), while India has initiated only 172 such steps (See the chart). The total number of TBT measures put in place by all RCEP members, including India, stood at 5,909. India’s average applied tariff, however, stood at 17.1%, the highest among RCEP members, while China’s was 9.8%, South Korea’s 13.7% and Japan’s 4.4%.Similarly, China has notified 1,332 sanitary and phytosanitary (SPS) measures, while South Korea and Japan have imposed 777 and 754 SPS barriers, respectively. In contrast, India has imposed only 261 SPS measures, according the analysis reviewed by FE. These two types of steps are the major sources of non-tariff measures (NTM), making up for over 80% of NTM notifications sent by various countries to the WTO. Developed countries like the US and those in Europe, too, impose such measures in large numbers. While NTMs are not always aimed at curbing imports (for instance, safety, quality and environmental standards are put in place by all countries for imported products), what have often worried analysts is that they can be abused for trade protectionism, especially in times of frosty political ties between trading partners. The NTBs slapped by various trading partners came up for deliberations at an inter-ministerial meeting on December 23, chaired by commerce and industry minister Piyush Goyal. It was also revealed that while most of India’s key partners had built in elevated levels of NTBs, only about 10% of New Delhi’s imported products were subject to various standards. Concerned with a surge in inflows of sub-standard products, Goyal has now asked the Bureau Of Indian Standards (BIS) to develop standards for over 4,500 products (HS lines), preferably over the next six months. The move marks a policy shift in New Delhi from a pro-liberalisation approach to external trade to a more discretionary one, where barriers could be erected, if required, to curb ‘non-essential’ and sub-standard imports that harm the economy, rather than benefit it. New Delhi’s earlier approach was to curb non-essential imports through a hike in tariffs (it had raised duties on a number of electronic and other items in 2018). Exporters say some of the common NTBs that they are subjected to are stringent rules on product certification, labelling standards and import approval requirements. Customs clearances face delays and often (especially in case of China) factory has to be inspected at the exporter’s expense. Customs value of the same item may vary for duty calculation depending on ports and rules are frequently changed and details are not easily available in English. Rakeh Mohan Joshi, chairperson (Research) at the Indian Institute of Foreign Trade, said the entire trade strategy to protect a country’s markets has, over the years, shifted from ‘tariffs’ to ‘non-tariff’ barriers, most of which are hardly transparent. “Rather countries are becoming increasingly innovative to devise new barriers to trade on the grounds of quality, processes, environment or other technical issues that effectivley ward off the foreign goods to enter their domestic markets and have a translucent protectionist strategy,” he said. India pulled out of the 16-nation RCEP agreement in November, as its proposals on safeguard measures to deal with any “irrational spike” in imports, among others, weren’t adequately addressed by potential partners, including China.
Source: Financial Express
Maharashtra Chief Minister Uddhav Thackeray on Saturday said the labourer should at the centre of any amendment in the state's industrial policy. He was addressing a meeting of the Maharashtra Industries department. "Employment generation is a challenge and any new amendment to the industrial policy in the state should ensure that the labourer is the focus and centre point," he said. He said employment generation, along with investment, should be the criteria for industries to get concessions. The CM said industries should take up the task of providing skill training to youth. Thackeray said an international exhibition centre would be set up in Navi Mumbai.
Source: Economic Times
The Tamil Nadu Government has approved of a cluster project for coir units in Pollachi and has disbursed ₹2.14 crore as first phase grant for the programme. The General Manager of Coimbatore District Industries Centre (DIC), B. Karthigaivasan, said that a group of coir units had formed a special purpose vehicle and submitted a project to the government to make coir tufted mats and coir geo textiles. While the total project cost stood at ₹7.98 crore, the State Government would give ₹5.77 crore as grant. The remaining amount would be invested by the industries. The government had released the first phase of the grant amount, he said. A facility was coming up at Vellalapalayam in Pollachi and was expected to be commissioned by the end of this year. One of the members of the cluster said that 33 units had come together to form the special purpose vehicle. These units would supply the raw material (coir yarn) to the common facility centre, which would have tufting machinery and equipment to make geo textiles. The value added products would be marketed by the special purpose vehicle. The member explained that earlier the coir units in Pollachi used to supply yarn to Kerala to be made into products. In the recent years, China was importing a lot of fibre from Pollachi. Nearly 250 new units had come up because of the demand for fibre. But the challenge was that the buyers determined the price and the fibre price was low. “We need to make value added products to get better realisation,” the member said. When the common facility is commissioned, almost 300 coir spinning machines will get jobs. The fibre made into yarn will be supplied to the facility where it will be made into value added products. The project will help coir units in Pollachi get into different product segments.
Source: The Hindu
Speaking at an interactive session organsied by FICCI, Rajnish Kumar said private investment was necessary for achieving the target. State Bank of India chairman Rajnish Kumar on Saturday said the country can become a $5 trillion economy, but was skeptical whether it is achievable by 2024-25 as envisaged by the government. Speaking at an interactive session organsied by FICCI, he said private investment was necessary for achieving the target. We will definitely achieve, there is no doubt. Timeframe, I am not certain. Whether we'll achieve in five years, it is like, a very difficult question to answer. But $5 trillion, we will achieve for sure and again Im saying that it will come on the back of private sector investments revival," Kumar said replying to a query. According to him, the government investments alone cannot achieve it and there is a need for huge investments in the infrastructure sector which would result in boosting the GDP. FICCI president Sangitha Reddy said there is a slowdown in the economy and the government needs to infuse Rs one-two lakh crore to revive the sentiment. This is one thing that we, industry, believes that notwithstanding any impact it may have on fiscal deficit, the government must find ways to induce at least Rs one-two trillion into the economy to boost construction and infrastructureonce again, she said. According to her, there were pending bills getting piled up at every sector and there is a need for structural reforms for boosting the sentiment which would result in re- accelerating the economy. Reddy said the $5 trillion economy target cannot be achieved either by the government or industry alone and they should 'clap hands' together to achieve it.
Source: Business Standard
Investment-starved Karnataka is all set to get a big boost as many Japanese companies have shown interest to invest in the Japanese Industrial Township (JIT) at Vasanthanarasapura, about 90 km from Bengaluru. While nearly a dozen Japanese companies have expressed a keen interest to set up shop at the Japanese Industrial Township, two companies -- Kirloskar Toyota Textile Machinery Pvt Ltd and Showa India Private Limited have received the state government approval for their investment proposals. Both the companies together will be investing around Rs 580 crore. “The Japanese Industrial Township is being developed at Vasanthanarasapura in Tumakuru district along the Chennai-Bengaluru Industrial Corridor (CBIC). The state government has allotted 519.55 acres land for the township,” Gaurav Gupta, Principal Secretary, Department of Commerce and Industries told DH. He said the government has given approval to Kirloskar Toyota Textile Machinery Pvt Ltd to begin its operations at the township. The company has been allotted 41 acres to set up its facility. It will be investing Rs 401 crore on its new plant that will generate employment for more than 800 people. The government has also allotted 18.46 acres land to Showa India Private Limited to establish a unit for the manufacturing suspension system and products for an investment of Rs 180 crore, he said. 10-11 companies are waiting for approval, he said adding that there could be around 100 companies setting up shop in the township once it is fully occupied. Out of 530 acres earmarked for the township, as much as 350 acres will be allottable to industries. “The Japanese industrial township will give impetus to Japanese investment in the state as well as boost tourism between India and Japan,” Gupta added. Karnataka is home to one of the largest clusters for Japanese companies in India. Some of the big names include Toyota Kirloskar Motor, Honda Motorcycle and Scooters India, Toyota Kirloskar Auto Parts, Toyota Boshoku, Toyota Mitsubishi Engineering Industrial Corporation (TMEIC) and Mitsubishi Elevators among others. There are as many as 529 Japanese establishments in India. The key sectors in focus at the JIT will be heavy engineering, machine tools, automotive and aerospace components among others. The township will be a gated community with modern infrastructure. There will be common facilities for packaging and other assorted activities, Gupta said. Last year, a Japanese delegation led by Japan’s Ambassador to India Kenji Hiramatsu visited the state and held discussion with the state government on the investment by Japanese companies in the state.
Source: Deccan Herald
For Tiruppur, the garments hub that exports goods worth ~26,000 crore ($3.6 billion) annually, 2019 has not been a year to remember. At least four of the world’s coveted brands, which sourced ...
Source: Business Standard
US women’s fashion label Anne Klein is in talks with a host of local companies for a partnership to enter the Indian market this year, a top executive has said. “We are very excited about the Indian market,” said Yehuda Shmidman, chief executive of WHP Global that acquired the five-decades old apparel and accessories brand in July last year. “We believe that India will contribute a big part of our future global growth.” Anne Klein already sells its watches in the country in a partnership with Titan. WHP is a $1billion fund set up by investors including Oaktree Capital and Blackrock Capital among others to acquire brands for global expansions. Founded by fashion designed Anne Klein in 1968, the New York-based brand generates about $700 million in annual revenues. About $100 million out of that from international markets. Shmidman said his company is aiming to increase Anne Klein’s sales to more than $1billion in the coming years and international expansions and ecommerce are going to contribute significantly to the number. India will be third country the US fashion brand will enter in 2020 after China and Mexico where WHP has singed long term licensee agreements with local players. The company is also looking to expand into other Asian, Middle East and Latin American countries. WHP is in “active discussion” with a couple of Indian companies to appoint a licensee for the brand here, Shmidman said. “Entering through a licensee is indeed the business model that we believe is the best because it leverages the best of the brand, which we bring to the table, and, of course, the critical local knowhow and the experience the local partner brings,” he said. “We will provide all the brains elements needed and then our licensee in India will be our expert on the ground who will have that role and responsibility to build the stores and ecommerce.”
Source: Economic Times
|
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 = 0.14351 USD 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.
Export earnings fell 5.84 percent year-on-year to $19.3 billion in the first six months of the fiscal year mainly because of lower shipment of apparel items. The receipt between July and December was also 12.77 percent lower than the half-yearly target of $22.12 billion. Of the six months, shipment rose only in July and December, data from the Export Promotion Bureau (EPB) showed. Export rebounded in December with Bangladesh fetching $3.52 billion in the month, registering a 2.89 percent year-on-year growth. In the first half, the shipment of apparel, which usually makes up more than 80 percent of national exports, fell 6.21 percent to $16.02 billion. Knitwear exports were down 5.16 percent to $8.20 billion and woven declined 7.28 percent to $7.81 billion. But the increase in December does not signify that the sector is turning around as such, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association. “December and January are peak months anyway and compared to that, we haven’t had any significant gain,” Huq told The Daily Star in a WhatsApp message. The first two weeks of December remained negative while the second half picked up slightly. “I am strongly stressing on one point: We are losing competitiveness. And we won’t be able to sustain the general expectation of riding on high tides lest we have policy support,” Huq said. The shipment of leather and leather goods, the second highest export earner after garments, kept up a falling trend, weighed down by lower global demand and lower production at tanneries. Between July and December, export earnings from leather and leather goods fell 10.61 percent to $475.83 million. “There is little possibility of a rebound for export of leather and leather goods over the next two years as the demand for non-leather goods is on the rise worldwide,” said Md Shaheen Ahmed, president of Bangladesh Tanners Association. Non-leather goods are comfortable and less expensive compared to leather goods, he said. Major leather and leather goods-producing countries such as India and China also faced negative export growth last year. Only Vietnam achieved 13 percent growth. According to Ahmed, all the tanneries at the Savar leather estate are not fully ready to tan rawhide. So far, 125 out of 155 units have gone into production. Because of a lack of the vital Leather Working Group certification, Bangladesh receives one of the lowest prices from international buyers from the sales of leather items. Frozen and live fish exports declined 7.7 percent to $290.5 million between July and December. The export of cement, specialised textiles, home textile, and terry towel also declined.
Source: The Daily Star
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have urged finance minister AHM Mustafa Kamal to enforce a single-digit lending rate immediately instead of April 1. Top private commercial banks during a meeting with Kamal recently agreed to bring down interest rates to 9 per cent on all loans barring that on credit cards from April 1. BGMEA president Rubana Huq, in a letter to the minister, said the prime minister has instructed the authority to reduce the interest rate to a single-digit mainly to help cut operational costs, boost investments and achieve competitiveness against the competitors. The PM's instructions came following the long-cherished demand for the same from the country's all trade bodies including BGMEA, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA), Bangla media reports quoted her as saying. The textile and readymade garments (RMG) industry has been facing a 'critical situation', including an increase in its operational costs to sustain, Huq observed. In such a situation, she said, implementation of the decision about the 9 per cent interest rate on bank loans with immediate effect is a must to increase exports, boost investments and reduce business costs.
Source: Fibre2Fashion
When Asad Umar quit the corporate sector to join politics in 2012, he told reporters that Pakistani businesses operated in an “Islamabad-controlled, rent-seeking economy.” Two governments, three prime ministers and eight years later, there’s little ‘change’ in the state of the economy, although Umar is now the government’s point man for economic development in Islamabad. In 2020, the industry continues to look towards Islamabad for patronage in the shape of concessions, subsidies and SROs. Some demand favours to enhance export earnings while others point out the need to placate foreign investors. Some demand subsidies for the sake of farmers, others seek handouts in the name of unskilled workers. They love government intervention only when it suits them. Subsidised electricity and gas for industrialists are good, but price checks on medicines aren’t. Merchant energy markets are welcome, but so are capacity payments. Taxes are bad, but taxpayer-funded public-sector projects aren’t as long as they lift the profits of cement makers. Speaking about his years in the private sector, Umar had said that instead of running his corporation, he’d end up spending most of his time badgering the powers that be in Islamabad. Now that the shoe is on the other foot, he and his fellow ministers should try to discourage the kind of rent-seeking that he set out to eliminate eight long years ago. The investment outlook seems bright for the textile sector in 2020. The new textile policy focusing on growth and innovation is about to be announced. The textile sector is willing to invest in manufacturing infrastructure and upgrade production units to deliver on the aim of enhanced exports with the government’s determination to reduce the cost of doing business and eradicate bottlenecks in the policy implementation. The textile sector envisions an increase in textile exports from $13.33bn (2018-19) to $50bn (2029-30) with an additional cumulative investment of $29.54bn in the next ten years. To achieve the targeted exports, business-friendly policies should be ensured for the industry to grow and attain the increased targets on a yearly basis. There is a will and potential in the textile industry to play its role in the economic turnaround. The value-added garment sector has a huge capacity to grow along with synthetic clothing since the world market for these fibres is enormously increasing as consumer preferences shift away from natural fibres like cotton. ‘Ensuring the revival of zero-rating for export sectors, long-term tariff policy for raw material imports, rationalisation of regulatory duties, efficient system of refunds to improve liquidity, reduction in turnover tax and the availability of credit facilitation schemes to indirect exporters is necessary for growing investments’. However, there are a few policy impediments. Correcting them will further facilitate export-based industries. These include the revival of zero-rating for export sectors, long-term tariff policy for raw material imports, rationalisation of regulatory duties on imports of synthetic yarns, efficient system of refunds to improve liquidity, reduction in the turnover tax to one per cent and the availability of credit facilitation schemes like the long-term financing facility and the duty and tax remission scheme to indirect exporters. The power sector will see ample investment in 2020 on the back of the Thar coalfield, implementation of previous letters of intent for wind power (Renewable Policy 2006) and reduction in the institutional risk owing to the auto-indexation policy from the National Electric Power Regulatory Authority (Nepra). Furthermore, the transmission and distribution sector will also see investment because of the digitisation of grid and foreign lender–supported transmission installation projects. Overall, the power sector needs to shift its focus from generation towards the value-chain enhancement. Under such an environment, greenfield investors can achieve good returns by participating in the upcoming bids for transmission and distribution digitisation projects. Moreover, the privatisation of LNG power plants will provide ample opportunities for investing in low-risk, mature projects. Investments in the upcoming year will face friction owing to the absence of: long-term finance, policy framework for repowering, decommissioning policy, overhauling and hybridisation. Furthermore, there is a constant threat of ballooning circular debt, which challenges the financial viability of the power sector. Such an unstable environment has already been exacerbated by politically motivated witch-hunts of established investors leading to higher risk premiums and a lukewarm response from foreign investors. It’s time for the sector to implement much-needed structural reforms that prioritise the debilitated state of transmission and distribution. The privatisation of distribution companies (Discos) is the need of the hour. Unless the leakages within Discos are fixed, the energy basket price is reduced and the transmission network is upgraded, the energy value chain will never be able to come out of the circular debt menace. On another note, demand creation is the key to bringing our basket price down (economies of scale). Currently, our industry is using captive power. We need to come up with lucrative measures to bring the industry back to the national grid. This is only possible if we lower our basket price and ensure system reliability. It is pertinent to mention that any increase in tariffs sways industrial customers away from the national grid — the industry moved to captive power when electricity shortages were high. The electricity cost in Pakistan is already higher than regional competitors. With a further increase, industrial competitiveness will erode, adversely affecting our economic growth in general and exports’ growth in particular. In essence, demand creation and lowering the basket price is inevitable. Moreover, structural reforms need to provide guidelines on: institutional reforms, digitisation targets for the transmission and distribution sector and improvement in collection rates for certain Discos. Needless to say, investment friction can also be alleviated by fast-tracking the development of the merchant market and multiple-buyer model. Pakistan had rightly developed its indigenous fertiliser industry to support the agriculture sector. The fertiliser industry was set up to reduce reliance on imports and ensure its food security. Thus, we have 7m tonnes of urea production capacity against the optimum demand of 6m tonnes. Diammonium phosphate (DAP) is the second major fertiliser manufactured locally to partially meet the national requirement. The fertiliser industry faces a major sustainability challenge owing to fast-depleting natural gas resources while LNG is not a cost-effective option for urea production. Gas prices have also seen a sharp rise during the past one year, thus raising the cost of production. Besides, the gas infrastructure development levy is also haunting the industry. Hence, the affordability and availability of gas remain a major challenge for the industry. The fertiliser sector, through existing fertiliser policy, received a subsidy of Rs180bn during the past 10 years on account of a lower price of gas while the benefit passed on to farmers was over Rs600bn. Thus, the arrangements have worked in a most cost-effective manner. The option of a direct subsidy to the farmers by the Punjab government has not yielded much relief owing to the complexity involved. In the regional and global context, subsidised gas to the industry has been the most successful way of benefiting the farmers. The availability of gas in the form of RLNG is not a viable option owing to the volatility of price and a high cost of production. In order to preserve national self-sufficiency in urea, thus ensuring food security and agricultural development, the government must upgrade the fertiliser sector to the second position on the gas allocation priority list. Furthermore, in view of fast-depleting natural gas resources, the coal gasification option should be pursued seriously to sustain the indigenous urea production at affordable rates by ensuring the sustainability of the fertiliser industry. Textile is the most significant manufacturing sector with the longest production chain and inherent potential for value addition at each stage from cotton to ginning, spinning, weaving/knitting, dyeing/finishing, made-ups and garments. The global apparel market is worth $1.7 trillion, amounting to 2pc of the world’s GDP. The worldwide apparel market is predicted to touch $2.6tr in 2025 with the annual growth projection of 4pc. China will be No. 1 apparel market with $378bn in 2025 followed by India with $121bn. There are big opportunities for Pakistan’s textile sector to increase its share in the global textile trade. No doubt, the textile industry is facing issues, which should be dealt with promptly. Impediments like stuck-up liquidity, high-priced energy inputs and the imposition of duties and taxes on inputs/raw materials have hurt growth. However, with the better utilisation of resources and support from the government, the textile sector can grab more business in 2020. With the right policies and commitment from the government to follow the same, 2020 can be an excellent year for the pharmaceutical industry. It has tremendous growth potential and, if allowed, can generate thousands of jobs and increase exports from just $160m to $1bn within five years. The key impediments to growth are a lack of coherent policies. Even where a policy exists, as in the case of pricing, it is not followed. This sector, while being a vital industry, is not treated like an industry. It is subject to excessive price controls, which render many low-priced drugs unviable to manufacture. There are over 700 pharmaceutical units in Pakistan and a great majority of them are under-utilised or lying idle. Contract manufacturing should be allowed and encouraged to ensure the upgrade and use of existing under-utilised facilities, create jobs and increase exports. Results will be almost immediate. The cement industry is sitting on a huge unutilised capacity. It will despatch just over 47m tonnes this year at the current rate against the installed capacity of 59.65m tonnes. This situation will not trigger any investment and expansion and employment in the sector will gradually decrease. The government should start work on the Public Sector Development Programme and announced housing projects, which will boost the construction sector and create job opportunities for skilled and unskilled labour.
Source: The Dawn
Knitwear exports from the country during first five months of current financial year grew by 8.69 percent as compared the exports of the corresponding period of last year. During the period from July-November, 2019 about 51,240 thousand dozen knitwear worth $1.320 billion were exported as compared the exports of 48,315 thousand dozen valuing $1.215 billion of same period of last year, according the data of Pakistan Bureau of Statistics. Meanwhile, readymade garments exports from the country during the period under review also grew by 13.19 percent as country fetched $1.156 billion by exporting about 26,181 thousand dozen of readymade garments as compared the exports of 19,225 thousand dozen valuing $1.021 billion of same period of last year. During the period under review, textile group exports from the country increased by 4.68 percent as against the exports of the corresponding period of last year as textile products worth over $5.763 billion were exported as compared to exports of $5.506 billion of same period of last year. Meanwhile, on month on month basis, textile exports from the country also grew by 7.03 percent in November, 2019 as it was recoded at $1.177 billion as against the exports of $1.099 billion of same month of last year. However, it was down by 3.10 percent as compared with the month of October, 2019 as textile products worth $1.214 billion exported in previous month, the data reveled. During the period under review 206,971 metric tons of bed wear worth $1.013 billion exported as against the exports of 180,960 metric tons valuing $968.151 million of same period of last year. Where as about 76,210 metric tons of towels worth $317.484 million also exported during the period under review as against the exports of 74,657 metric tons valuing $314.348 million of same period of last year, it added. In last five months, cotton cloth valuing $847.106 million exported as compared the exports of $880.050 million of same period of last year, it was decrease by 3.74 percent.
Source: Business Recorder
China's textile sector reported stable development in the first 11 months of 2019, data from the National Development and Reform Commission showed. Value-added output of enterprises above designated size rose 2.5 percent year on year, with output in the sub-sectors of fiber, industrial textiles and garment up 11.8 percent, 7.1 percent and 1 percent, respectively, according to the commission. Domestic retail sales of apparel and knitwear stood at 1.2 trillion yuan (about 172.4 billion U.S. dollars), up 3 percent year on year. Online garment sales continued to expand nationwide, with the turnover reporting a 16.5-percent yearly growth and new sales modes such as live video streaming attracting consumers, the data showed. From January to November 2019, China's textile and garment export declined 2.6 percent year on year to 246.9 billion dollars, with the pace of drop decelerating 0.1 percentage point from one month earlier. Textile firms over designated size generated combined operating revenue of 4.03 trillion yuan from January to October 2019, up 0.2 percent year on year, while the total profit dropped 8.7 percent year on year to 168.8 billion yuan.
Source: Xinhua
Bangladesh Monitor) Dhaka: The Fashion World Tokyo-2019 began at Tokyo Big Sight on March 27 and Bangladesh, as in every year, participated in this prestigious fashion expo which continued up to March 29. Rabab Fatima, Ambassador of Bangladesh to Japan, visited the stalls of the Bangladesh pavilion and exchanged views with the participating Bangladeshi entrepreneurs on March 27. The Embassy of Bangladesh in Tokyo, Ministry of Commerce (MoC) and Export Promotion Bureau (EPB) of Bangladesh provided every kind of support to the participating businesses. Thirteen apparel and leather companies from Bangladesh joined the exhibition with their high quality, fashionable and latest products this year. Later at the same venue, a seminar on the 'Recent Developments of Bangladeshi Apparel Industry' was organised by the Embassy of Bangladesh in collaboration of MoC and EPB of Bangladesh and was supported by Japan External Trade Organisation (JETRO), United Nations Industrial Development Organisation (UNIDO), Japan-Bangladesh Committee for Commercial and Economic Co-operation (JBCCCEC) of The Japan and Tokyo Chamber of Commerce and Industry (JCCI and TCCI) and Japan Textile Importers Association (JTIA). More than 130 buyers and representatives of Japanese companies joined the seminar. Thanking the participants of the seminar, Ambassador Rabab Fatima said, 'Bangladesh is the second largest garments exporter in the world, and Japan is our number one destination for garments products in Asia. Knitwear is currently our number one export item to Japan' while delivering her welcome speech at the Seminar. She informed that in 2018, Bangladesh apparels had a 34 per cent growth which was the highest in Japanese market. This event was termed by the ambassador as the perfect business matching opportunity for both Japanese buyers and Bangladeshi companies. Yasujiro Miyake, Director, Japanese Ministry of Economy, Trade and Industry (METI), Ikue Toshinaga, Industrial Development Officer, UNIDO, Masahiro Hiraishi, President of Maruhisa Co. Ltd, and Mohammad. Hasan Arif, Commercial Counsellor, Embassy of Bangladesh also presented and discussed on the potentials and the recent developments of Bangladesh apparel sector at the seminar. The seminar ended with the question-answer and networking session.
Source: MENAFN
