Commerce and Industry Minister Piyush Goyal on Wednesday warned against imports under the "others" category and said that within a month, high duty will be imposed on all products categorised as "others" if they are not carry the specific globally accepted tariff code. Goyal said India is facing “big” problem in the country's imports of a category called “others” and in that category, all sorts of stuff is being imported into the country. “I will follow the German model,” he said at the sixth National Standards Conclave organised by the Confederation of Indian Industry, adding he would wait for response from importers for next 30 days and thereafter, “I will restrict the import of any product which goes in the others category”. Citing an analysis, he said one out of the four products being imported in India is under this category. Imported products, termed “others”, do not have HS codes and are tagged along with parts and accessories of categorised goods. He said that importers will have to approach the ministry to take a special licence for that import without which “you cannot import any product in the others category”. “Today, I would like to give a final announcement that I appeal to everybody who is importing any product or services into the country, please categorise your product into a respective HSN code under which it falls,” he said. Every traded product is categorised under an HSN code (Harmonised System of Nomenclature) which is the global systematic classification of goods. “We will start the process to create a separate HSN code if it is not fitting into any existing code or amend the existing code... Very soon, I shall be coming out with serious consequences. The consequences could be a higher duty on products which come under others category,” he added. This measure, he said, will help the government assess what is being imported into the country.
Source: Economic Times
The textile ministry has announced a special one-time additional ad hoc incentive of up to 1% of free on board (FoB) value for exports of apparel and made-ups. As per the recommendations of the Expenditure Finance Committee (EFC), the incentive will be provided to offset the difference between the newly notified rebate on state and central taxes and levies (RoSTCL) and the previous rebate on state levies (RoSL) and the Merchandise Exports from India Scheme (MEIS, a ministry notification said. Effective retrospectively, exporters of apparels and made-ups will be able to avail incentives up to 1% of the FoB value for each line in a shipping bill for those exports which have received lesser benefits under the RoSCTL as against the RoSL and MEIS. The period for which exporters can make claims for the incentive is from March 7, 2019, to December 31, 2019, with the amount capped at Rs 600 crore. While the notification has specified that claims are applicable for those exports that received MEIS at 4%, the RoSL provides for rebates anywhere between 1.2% to 3.9% for the exports in question.
Source: Economic Times
India-China trade declined by $3 billion last year while India's trade deficit continues to be high amounting to $56.77 billion as both sides experienced economic slowdown. Government figures showed the total trade in Chinese currency in RMB-Yuan terms saw a marginal rise of 1.6 per cent year on year but in dollar terms, it was down by about $3 billion. General Administration of Customs of China (GACC) vice minister Zou Zhiwu, who released the annual trade figures to the media, said China-India bilateral trade totalled to 639.52 billion yuan (about $92.68) which is 1.6 per cent increase year on year. China's exports to India increased by 2.1 per cent last year totalling to 515.63 billion yuan while India's imports to China decreased by 0.2 per cent totalling to 123.89 billion yuan, he said. The trade deficit for India in 2019 was $391.74 billion yuan, he said. However, in dollar terms the trade has declined. The bilateral trade in 2018 totalled to $95.7 billion raising hopes of India-China trade touching the landmark $100 billion in 2019. But the total trade amounted to $92.68 billion last year about $three billion less than 2018, according to a news agency report. The Chinese exports in dollar terms to India last year amounted to $74.72 billion compared to $76.87 in 2018. India's exports to China amounted to $17.95 billion against $18.83 billion last year. In the face of slacking trade, the trade deficit also declined from $58.04 in 2018 to $56.77 billion. The declining trade was largely attributed to the slowdown of the economies of the two countries. According to the figures posted on the website of the Indian Embassy in Beijing, from January to November 2019, the total trade between the two neighbours in the 11 months last year was declined by 3.72 per cent amounting to $84.32 and the trade deficit for the 11 months stood at $51.68.
Source: Fibre2Fashion
Revenue Department using its data analytics has discovered a fraud in GST refunds with as many as 1,200 exporters, who have have claimed Rs 350 crore refunds, are now untraceable. The department has reasons to consider that nefarious elements among the customs broker community may be connected with these frauds, involving fictitious entities, existing only in virtual space through identity thefts with fake and morphed documents, according to sources. The detection of fraud has resulted in saving the exchequer over Rs 350 crore of refunds, they added. Central Board of Indirect Taxes and Customs has obligated customs brokers under their licensing conditions to independently verifying the KYC of exporters, the sources noted. However, going by the cases detected in recent months, at least 50 customs brokers have been found to have dealt by and large with such exporter entities which are untraceable at their registered addresses and such custom brokers are also under the lens, the sources said. As investigators probe deeper, newer modus operandi are surfacing, they said, adding that a company by the name of SSR Export was investigated and led to discovering a fraudulent refund claim of Rs 9.88 crore. As per the investigation, the firm was ostensibly exporting readymade garments to an special economic zone (SEZ). Now, with newer techniques of data analytics-based risk management being available to officers, the taxpayer was selected for physical scrutiny and found non-existent at his declared address, they noted. Using a web of fake invoicing of over Rs 847 crore, the firm created a fraudulent credit of Rs 195 crore and investigations led to discovering untraceable suppliers. Department of Revenue is carrying out continuous risk evaluation of exporters with the help of predictive modelling, the sources said, adding regular strategy meetings are being held at a very high level by the Revenue Secretary himself with data analytic experts, state and centre tax investigators. Over 800 entities have been interdicted during the last five months while exporting overvalued merchandise of Rs 1,500 crore to claim fake IGST refunds have been suspended in these cases.
Source: Economic Times
Currently, under the LUT route, they need not pay tax on their export bills, but they stand to lose refunds on taxes paid on capital goods. Taxes on all other inputs get refunded. In a bid to alleviate exporters’ concerns amid an economic slowdown, the government is likely to propose changes to the goods and services tax (GST) policy to allow for the refund on taxes paid on capital goods purchases to exporters. Though this will need a resolution from the GST Council, the finance ministry may announce the proposal in the upcoming Union Budget, scheduled on February 1, Business Standard has learnt. This will help those businesses which prefer the Letter of Undertaking (LUT) route to export their products or services. Currently, under the LUT route, they ...
Source: Business Standard
India is planning a new law to safeguard foreign investment by speeding up dispute resolution, aiming to attract more capital from overseas to boost stuttering domestic growth, two officials with direct knowledge of the matter told Reuters. In a 40-page initial draft, India's finance ministry has proposed appointing a mediator and setting up fast-track courts to settle disputes between investors and the government, one of the sources said. "The idea is to attract and promote foreign investment, but a major issue for investors is enforcement of contracts and speedy dispute resolution," said the official. The draft proposal is aimed at diffusing investor mistrust around the sanctity of agreements, which has worsened recently after some state governments decided to review approved projects, or threatened to cancel contracts. Both officials declined to be named as the proposal is not public, and is still being assessed by different ministries and regulators. A spokesman for the finance ministry did not respond to a request for comment. Foreign investors have highlighted the enforcement of contracts as one of their biggest concerns, said the second official, adding that improving on this front would also reduce litigation for the government. While investors can still rely on the existing legal system to settle disputes, it often takes several years for cases to be decided or settled. Investors previously had an option to take India to international arbitration courts under bilateral investment treaties (BITs) the government had agreed with dozens of nations. But, after suffering setbacks in overseas arbitration matters, India has allowed most of its treaties to lapse, giving investors little to fall back on in case of major disputes. BITs are agreements between two countries that give foreign investors protections, and among other things, legal recourse via international arbitration in disputes with a government. India is entangled in more than 20 such overseas arbitration cases - the most against any country - brought by companies including Vodafone, Deutsche Telekom and Nissan Motor Co for disputes over retrospective tax claims and breach of contracts. If India loses these cases, brought before most of its BITs lapsed, it could end up paying billions of dollars in damages. The government's thinking is that India may not need to sign investment treaties with other nations if the new law, which is modelled on a BIT, can give confidence to investors, said the first source. A domestic law, however, cannot be a substitute for a BIT as its scope cannot allow investors to take their case to international arbitration, the sources said.
CONTRACT WRANGLES
Though India's overall ranking in the World Bank's ease of doing business report has improved to 63 from 142 in 2014, it still ranks poorly - 163 out of 190 - when it comes to enforcement of contracts. The latest example of a contract wrangle is a dispute between the Andhra Pradesh state government in southern India and renewable energy companies. The state has been curtailing power procurement from the companies, citing high prices, and has pushed to renegotiate its supply contracts with them. Investors including Goldman Sachs, Japan's SoftBank Group, Singapore's GIC Holdings, the Abu Dhabi Investment Authority and France's Engie have invested in renewable projects in the state. The draft proposal for the new law includes a plan to set up an investment tribunal in state high courts that will take up cases as a matter of priority, or will see if the National Company Law Tribunal (NCLT), which also handles insolvency and corporate matters, can handle it. "We are yet to evaluate what the risks of bringing such a law are and if it would do more harm than good," said the second source, adding that discussions were at an early stage. The finance ministry has held several meetings with other ministries to discuss the draft law, said the official. The most recent meeting in December was attended by officials from the ministries of commerce, external affairs and law, as well as the banking and stock market regulators, all of whom have been asked to submit their comments, said the first source. It was not immediately clear when the deadline to submit comments is, or when the next meeting will be held. The ministries and regulators did not respond to requests for comment. Pratibha Jain, a partner at law firm Nishith Desai Associates who advises foreign investors, welcomed the government plans. "The idea is good and the government should consider broadening the scope to private disputes between foreign investors and domestic companies, as well as arbitrary rule changes by regulators, central bank decisions, and white collar crime cases that impact overseas investment," she added.
Source: Reuters/ Economic Times
The merchandise exports contracted 1.8 per cent in December, declining for fifth month in a row month, even as the trade deficit fell to $11.25 billion from a year ago period, the government data released on Wednesday showed. In December 2019, the exports fell to $27.36 billion as against the corresponding period a year ago. The imports also declined 8.8 per cent to $38.61 billion, the data also showed. The trade deficit during December 2018 was $14.49 billion. The oil imports contracted by 0.83 per cent to $10.69 billion, while gold imports dipped by about 4 per cent to $2.46 billion.During April-December 2019-20, exports fell 1.96 per cent to $239.29 billion, imports declined by 8.9 per cent to $357.39 billion, leaving a trade deficit of $118.10 billion. “Exports in December 2019 were USD27.36 billion, as compared to USD27.86 billion in December 2018, exhibiting a negative growth of (-)1.80 per cent. In Rupee terms, exports were Rs. 1,94,764.74 crore in December 2019, as compared to Rs. 1,97,044.76 crore in December 2018, registering a negative growth of (-)1.16 per cent,” the government release said. Non-petroleum and non-gems and jewellery exports in December 2019 were $21.05 billion, as compared to $21.16 billion in December 2018, exhibiting a negative growth of (-)0.54 per cent. Non-petroleum and non-gems and Jewellery exports in April-December 2019-20 were $177.81 billion, as compared to $177.65 billion for the corresponding period in 2018-19, an increase of 0.09 per cent. “With services imports expanding by a sharp 13.5% in November 2019, outpacing the services exports growth of 7.9%, the services trade surplus recorded a contraction of 0.7% on a YOY basis, after having sustained a rise in the previous three months. With the sharp fall in the merchandise trade deficit to US$34.4 billion in Q3 FY2020 from US$50.1 billion Q3 FY2019, we expect the current account deficit to shrink to US$3-5 billion in the just concluded quarter from US$18 billion in the same period of FY2019,” Aditi Nayar, Principal Economist, ICRA said.
Source: Financial Express
Amazon.com Inc Founder and Chief Executive Officer Jeff Bezos said on Wednesday that his company would invest an additional $1 billion (about Rs 7,000 crore) to help bring small businesses online in India, and also committed to using the retail giant’s “size, scope and scale” to export $10 billion of made-in-India goods by 2025. Bezos’ India visit — for the maiden edition of his firm’s micro, small and medium enterprises (MSME)-focussed event, Amazon Smbhav — comes at a time when the Competition Commission of India (CCI) is probing his company, as well as Walmart-owned Flipkart, on complaints of deep discounting practices and tie-ups with preferred sellers. Seeking to reach out to critics, Bezos, donning traditional Indian attire, said his company was committed to being a long-term partner of India. “Actions speak louder than words,” he added, addressing a packed house in New Delhi. “We’re making this announcement now because it’s working...When something works, you should double down on it. I want to make a prediction for you. I predict that the 21st century is going to be the Indian century. The dynamism, the energy… everywhere I go here, I meet people who are working in self-improvement and growth. This country has something special, democracy,” he said. Make one more prediction for you: In this 21st century, the most important alliance is going to be the alliance between India and the US,” Bezos added. The firm aims to digitise 10 million MSMEs with the proposed investment. In addition to providing training and enrolling MSMEs into its programmes, Amazon will help them work on cloud technology through specialised Amazon Web Services offerings at low costs. It will also establish 100 “digital haats’ in cities and villages throughout India. Amazon has invested $5 billion in India in the past five years. The e-commerce platform also announced plans to support local neighbourhood shops and kiranas. It will expand its Amazon Easy programme. The kirana shops will be able to set up kiosks to provide assistance to customers in choosing the right product, placing an order and earning commission on sales. It also plans to expand its ‘I Have Space’ programme.
Source: Business Standard
All these departments, in the past six months, were being managed by the three deputy governors. Reserve Bank of India’s (RBI) new Deputy Governor Michael Patra (pictured) will be heading the Monetary Policy Department, including Forecasting and Modelling Unit, as was widely expected. This department was earlier headed by B P Kanungo who took charge of the department after Viral Acharya left in July. Patra will also be heading the Financial Markets Operations Department, Financial Markets Regulation Department including Market Intelligence, International Department, Department of Economic and Policy Research, Department of Statistics & Information Management, Corporate Strategy and Budget Department as well as the Financial Stability Unit, according to a statement on the RBI website. All these departments, in the past six months, were being managed by the three deputy governors. Patra was named the fourth deputy governor of the RBI on Tuesday by the government for a period of three years. He was the executive director of the central bank, and an internal member of the six-member monetary policy committee. As deputy governor in charge of Monetary Policy Department, Patra will continue to remain in the committee, whereas Kanungo will have to leave it.
Source: Business Standard
A national textile policy is being drafted for the development of textile industry in Myanmar, according to the Ministry of Planning, Finance and Industry. Drafting started in January 2018, and the first stakeholder meeting was called in January 2019 involving relevant ministries, officials from private organizations and businesspeople from the textile industry. The ministry has stated that the adoption of a national textile policy will produce benefits such as action plans, drawing of necessary roadmaps, laws, rules and procedures, infrastructural development, creation of a business environment that encourages local and foreign investment, manufacturing of value-added products, socio-economic development, technological acquirement, market competition, easy external trade and strengthened economic cooperation. The national textile policy is being drafted with the help of Germany's GIZ. Myanmar is also implementing National Export Strategy-NES. Under NES, there will measures such as transition of CMP garment system into FOB system, adoption of bonded warehouse system and establishment of specialized textile and garment zone for boosting export.
Source: Eleven Myanmar
The trade truce with China set to be signed soon does not include a deal to roll back tariffs imposed on most Chinese goods, US officials said recently. "There is no agreement for future reduction in tariffs. Any rumours to the contrary are categorically false," according to the joint statement from the Treasury and the US Trade Representative's office. The statement came after a global newswire reported that tariffs on billions of dollars in Chinese goods will stay in place until after the US presidential election in November, after which they might be removed.
Source: Fibre2Fashion
The global trade of baby’s garments and clothing accessories (not knitted or crocheted) has shown a slight decline in recent years. Total trade slashed by 0.07 per cent in 2018 over the previous year, according to data from TexPro. The global trade of baby’s garments and accessories was $4,761.20 million in 2017, which dropped to $4,758.10 million in 2018. The total trade of baby’s garments and accessories is anticipated to move down to $4,599.00 million in 2021 with a drop of 3.34 per cent from 2018, according to Fibre2Fashion's market analysis tool TexPro. The global export of baby’s garments and accessories was $2,060.53 million in 2016, which lowered by 1.15 per cent to $2,036.89 million in 2018. Total exports decreased by 2.33 per cent in 2018 over the previous year and is expected to reach $2,001.93 million in 2021 with a down of 1.72 per cent from 2018. The global import of baby’s garments and accessories was $2,807.25 million in 2016, which curbed by 3.06 per cent to $2,721.21 million in 2018. Total imports moved up by 1.70 per cent in 2018 over the previous year and is expected to cut by 4.56 per cent to $2,597.07 million in 2021 from 2018. China ($534.77 million), Spain ($266.48 million), India ($257.29 million), Italy ($132.58 million) and Poland ($118.90 million) were the key exporters of baby’s garments and accessories across the globe in 2018, together comprising 64.31 per cent of total export. These were followed by the UK ($100.02 million), France ($78.53 million), Germany ($71.15 million) and Turkey ($68.65 million). From 2013 to 2018, the most notable rate of growth in terms of export, amongst the main exporting countries, was attained by the Spain (150.42 per cent), Italy (66.08 per cent) and Poland (337.32 per cent). Spain ($404.51 million), US ($403.97 million), UK ($311.33 million), France ($215.96 million), Germany ($185.26 million) and Italy ($181.30 million) were the key importers of baby’s garments and accessories across the globe in 2018, together comprising 62.56 per cent of total import. These were distantly followed by Poland ($134.39 million), Netherlands ($92.59 million), Japan ($52.88 million) and Russia ($42.73 million). From 2013 to 2018, the most notable rate of growth in terms of import, amongst the main importing countries, was attained by Spain (170.11 per cent), UK (87.46 per cent) and Germany (34.44 per cent).
Source: Fibre2Fashion
Clothing consumption habits have a heavy impact on the environment, and online second-hand apparel marketplace ThredUp wants to increase awareness of what that impact is. ThredUp has created a “fashion footprint” calculator that helps shoppers determine what happens if they put one more piece of clothing in their shopping cart – or in the garbage can. The tool aims to educate consumers about the carbon impact of their clothing habits — and, of course, to encourage them to buy their clothes “gently used” rather than new to lessen that impact. The life cycle of clothing for the average consumer creates 1,620 pounds of annual carbon emissions, ThredUp said. By answering a series of questions about how they buy, wear and care for your clothes, consumers can see how they stack up against the average clothing shopper when it comes to impact. The company also estimates that new apparel production releases 4 million tons of harmful carbon emissions annually, contributing more than 8 percent of global greenhouse emissions. The tool suggests ways clothing consumers can reduce that carbon footprint and includes an “Eco-Directory” of sustainable brands and green shopping discounts. According to the United Nations, the fashion industry produces 20 percent of wastewater and 10 percent of carbon emissions. A 2018 UN report said that the equivalent of one garbage truck of textiles is landfilled or burned every second worldwide, and that by 2050, the fashion industry could consume a quarter of the world’s carbon budget. Clothing production doubled from 2000 to 2014 and consumers bought 60 percent more clothing each year, per McKinsey, but kept clothing items about half as long as they did 15 years ago. But an HSBC Navigator survey found that 96 percent of businesses feel increasing pressure to increase their sustainability efforts. Many clothing manufacturers and retailers have embraced sustainability, developing processes that use less water, fewer hazardous chemicals and recycle materials used in garments. For example, denim manufacturer Levi’s has a line that uses up to 96 percent less water to make. Reformation uses sustainable fabrics and upcycled materials to make clothing. Eileen Fisher buys back and resells its own clothing on its Renew website. Fast-fashion has especially faced criticism for introducing multiple low-cost collections each year, encouraging a buy-wear-toss mindset. But H&M, which has accepted all brands of clothing for recycling since 2013, has integrated “smart” bins in some of its stores that reward shoppers who bring in donations with a 15 percent discount. The bins debuted this week at the retailer’s flagship store on Fifth Avenue in New York City, Chain Store Age reported. A scale within the bin weighs the donation and donors get a QR code to scan for a discount, a thank-you message and direction to a web page outlining H&M’s sustainability programs. More bins will follow in Miami, Atlanta, Houston, Washington, D.C., Chicago, San Francisco, and Los Angeles stores, and the company plans to expand the project overseas by 2021, per CSA.
Source: Biz Women Journal
The Bangladesh Tariff Commission recently identified 110 products to seek preferential market access for their export to Nepal under the planned preferential trade agreement (PTA) between the two nations. The request list, which includes products from the readymade garment, plastic, footwear and steel sectors, has been prepared considering their export potential. The commission will soon finalise the list after discussing with exporters and stakeholders, according to newspaper report in Bangladesh. BTC on December 26 last year held a meeting with stakeholders, including exporters, about the list and sought opinions from trade bodies. It decided to prepare the list following a request from the commerce ministry as part of the negotiation on signing the PTA with Nepal. Both countries had expressed interest to sign a PTA during the fourth meeting of the Nepal-Bangladesh commerce joint secretary-level technical committee held in Kathmandu on 22-23 October last year. The meeting decided that Bangladesh would exchange its request list containing the name of products against which it seeks duty benefits with the country. In 2016, Bangladesh prepared a request list containing 56 products and an offer list of 108 Nepalese products for preferential market access to the Bangladesh market. But the move was unsuccessful. Nepal now maintains a sensitive list of 998 products for least developed countries (LDCs) and 1,036 products for non-LDCs that are not entitled to preferential trade benefits under the South Asia Free Trade Agreement. The commission also assessed the products’ prospects for future export based on the analysis prepared by the Bangladesh embassy in Nepal.
Source: Fibre2fashion
