MARKET WATCH 11 FEB, 2020

NATIONAL

INTERNATIONAL

Union textile secretary Ravi Capoor to take inputs for new textile policy

On the textile scenario, he said the Indian textile industry would be able to cash in on the slowdown in the sector in China, which was facing the coronavirus problem. With the framing of the new National Textile Policy under process, textile secretary Ravi Capoor will pay a one-day visit here on February 12 to take suggestions and opinions from captains of industry. Though most problems had already been discussed at the higher level, including with Prime Minister Narendra Modi in December last year, issues remained to be resolved, Confederation of Indian Textile Industry (CITI) Chairman T Rajkumar told reporters here on Saturday. All textile-related associations across Tamil Nadu, Kerala,Andhra Pradesh and Karnataka, particularly weavers,have been invited to participate in a session with the secretary so that they can get a solution to their problems, Rajkumar said. On the textile scenario, he said the Indian textile industry would be able to cash in on the slowdown in the sector in China, which was facing the coronavirus problem. Inquiries have already started coming in from countries doing business with China, he said, adding that the Indian textile industry, if tapped early, can increase the business at least by 25 to 30 per cent. Rajkumar said it was essential to increase production level of man made fibre and filament from the current level of four billion kgs to 12 billions to achieve the textile business size of 350 billion USD by 2025.

Source: Vietnam Plus

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States may not get GST compensation in full, says Finance Ministry

State governments are unlikely to get the full compensation promised for shortfall in goods and services tax (GST) collection as the finance ministry says the amount will be given only through money collected from the cess imposed for this purpose. A key ministry official said states should agree to hike GST or cess rates in the Council meeting, the date for which is yet to be fixed. Earlier, the impression was that whatever losses states bore would be fully compensated to them for five years from the date of GST rollout. The states might not get the full amount of their losses despite the ...

Source: Business Standard

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Govt seeks to engage itself with businesses, industries: FM Niramala Sitharaman

Union Finance Minister Nirmala Sitharaman on Sunday said that the government wants continuous engagement with industries and businesses and will act as a facilitator for hassle-free payments of taxes. She was interacting with the members of trade and industries here, a week after presenting the Union Budget for 2020-21 in Parliament on February 1. "The broad message which is apparent is that the government wants continuous engagement with industry and business. And my presence here is not in response to what is happening inside (country) and outside," Sitharaman said. She said the Centre has introduced some features in the budget like "faceless appeals and sorting out of problems while imparting tax administration". Sitharaman said this will be made possible only with the help of new technology. "Over the years, we had to remove all the dead wood gathered with a pincer. This will help the government to fulfill its commitments made in the budget," she said. Referring to issues relating to GST, the finance minister said it is not the Centre to initiate steps for reduction of rates, the state ministers should also represent cases so that a synergy could be built. Responding to Tea Board chairman P K Bezbaruah's remarks on the scarcity of ATMs in the tea belts of Assam and West Bengal for which "cashless wage payments are becoming a problem", the finance minister said the government is willing to set up ATMs in pockets where there are none. "I know that number of ATMs is minuscule in the tea growing regions. The government is ready to set up such facilities in these areas," she said. Finance secretary Rajiv Kumar said that "there is a need for credit offtake to pick up for genuine businesses. "Commercial lending has to go up. The Central Vigilance Commission (CVC) has already appointed a committee to differentiate between genuine business failure and a fraud," he added.

Source: Economic Times

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Rs 6,700 cr released under Amended Technology Upgradation Fund Scheme between FY16 and FY20

The government has released a total of Rs 6,717.18 crore under the Amended Technology Upgradation Fund Scheme (ATUFS) during 2015-16 to 2019-20, Parliament was informed on Thursday. “A total of 9,641 applications, covering employment of 2.86 lakh persons and investment of Rs. 40026.5 crore submitted by textile units, have been issued with UIDs (unique identification numbers) till January 2020,” textiles minister Smriti Irani said in a written reply in the Rajya Sabha on a questions on competitiveness of the textile industry. Amended Technology Upgradation Fund Scheme (ATUFS), implemented with effect from 13.01.2016, has a provision to meet the committed liabilities of its previous scheme versions in addition to the new sanctions. Irani added that the Indian textile sector faces competition from Bangladesh and Vietnam which enjoy duty free access to key markets like EU while India’s exports face a duty disadvantage. Besides, Bangladesh and Vietnam have the benefit of economies of scale in textile manufacturing and a large and productive labour force.

Source: Economic Times

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Govt to reduce time taken for starting business, to introduce new e-form

Continuing efforts to further improve ease of doing business, the government will introduce an integrated electronic form for incorporating new companies from February 15, wherein EPFO and ESIC registration numbers will also be allotted at the same time. The corporate affairs ministry would introduce the form -- SPICe+ -- to offer 10 services. Currently, the ministry has the electronic form SPICe (Simplified Proforma for Incorporating Company Electronically) and that would be replaced with SPICe+. The 10 services offered through the new form would help in "saving as many procedures, time and cost for starting a business in India," the ministry said in a public notice. The labour ministry, Department of Revenue in the finance ministry and the Maharashtra government would also be offering certain services through the form. Registration for EPFO (Employees' Provident Fund Organisation) and ESIC (Employees' State Insurance Corporation) would be mandatory for all new companies incorporated from February 15. EPFO and ESIC registration numbers would not be separately issued by the respective agencies, the notice said. Further, registration for profession tax would be compulsory for companies incorporated in Maharashtra from February 15. Besides name reservation and incorporation of a company, EPFO and ESIC registration numbers would be issued. Mandatory issuance of PAN (Permanent Account Number), TAN (Tax Deduction and Collection Account Number), Profession Tax Registration (Maharashtra) and opening of bank account for the company concerned would be done through the form. Director Identification Number (DIN) and GSTIN, if applied, would also be allotted. GSTIN is the Goods and Services Tax Identification Number. The corporate affairs ministry is implementing the Companies Act and all required filings under the law as well as incorporation of companies are made through its portal MCA21. The new form would be available on this portal. "All new companies incorporated through SPICe+... would also be mandatory required to apply for opening the company's bank account through the AGILE-PRO linked web form," the notice said. There are more than 11.5 lakh active registered companies in the country and thousands of companies are getting incorporated every month. Generally, active companies are those which comply with all regulatory requirements, including timely submission of filings.

Source: Economic Times

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Customs dept to seek district-level data on goods from exporters

Exporters will need to mention additional information, including district of origin of goods, to customs department from February 15 to help the government fine tune its policies to boost outward shipments. According to a circular by the Central Board of Indirect taxes and Customs (CBIC), exporters will also have to furnish details like 'the state of origin of goods', 'details of Preferential Agreements under which the goods are being exported, wherever applicable', and 'Standard Unit Quantity Code (SQC)'. The data will be used for district-level plans for promoting exports as the commerce ministry has initiated a process to prepare a district export plan specific to every state and Union territory to boost exports. With effect from February 15, 2020, apart from the data/ information required to be furnished in the present electronic form of electronic integrated declaration mentioned in Regulation 3 of Shipping Bill (Electronic Integrated Declaration and Paperless Processing) Regulations 2019, the circular said. "...Board has decided to incorporate additional attributes in the Shipping Bill to enable the Customs System to capture the districts and states of Origin for goods being exported" as the endeavour of the government is boost domestic manufacturing and exports. The initiative is also aimed at bringing uniformity with the data/ information captured in the Goods and Services Tax Network (GSTN), it added. The district level plan of the commerce ministry would include the support required by the local industry to boost their manufacturing and exports with impetus on supporting the industry from the production stage to the exporting stage. The plan includes strategy to enhance logistics and infrastructure at the district level and better utilisation of the Market Access Initiative (MAI) scheme of the ministry for inviting foreign buyers. Budgetary support will be provided to make outreach at the district level and prepare this plan, the commerce ministry said. The ministry also said state and UTs will be assisted in preparing an annual Export Ranking Index of different districts to rank each district on its export competitiveness.

Source: Economic Times

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Importers, exporters to mandatorily declare GSTIN in documents from Feb 15

Importers and exporters will have to mandatorily declare GSTIN in documents from February 15 as the revenue department moves to crackdown on evaders and plug Goods and Services Tax revenue leakage. In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said certain cases have come to notice where the importer or exporter did not declare their GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN. GSTIN is a 15-digit PAN-based unique identification number allotted to every registered person under GST. While importers have to fill Bill of Entry with Customs department while importing goods, exporters have to file Shipping Bill. "With effect from February 15, 2020, the declaration of GSTIN shall also be mandatory in import/export documents for the importers and exporters registered as GST taxpayers," the circular said. Data analytics by the revenue authorities have detected rampant tax evasion through black market and under-valuing of imports. It has come to light that although importers are paying GST, they are supplying the goods without bill. Importers typically pay integrated goods and services tax or IGST on goods they bring into the country. This tax is supposed to be set-off against the actual GST paid by the final consumer, or claimed as refund. While importers are paying IGST on imports but not claiming credit for the same. This essentially means that the supply of imported goods to domestic channels is being done without a bill. A similar situation has been witnessed on cess charged on luxury and sin goods with companies paying it at the time of imports but not claiming credit or setting it off from final GST paid by consumers. "Compulsory capturing of GSTIN by importers and exporters would give an adrenaline rush to the data analytics especially in relation to cross-border transactions. This will push the tax authorities to arrest the massive tax evasion practices on the borders in the form of under-valuation, clandestine removal and under re-reporting," AMRG & Associates Partner Rajat Mohan said. EY Tax Partner Abhishek Jain said the requirement to provide GSTIN in bill of entry/shipping bill will help plug GST revenue leakage and ensure that imports/export data is reconciled with GST data. Further, exporters have also been asked to provide details of the state and district of origin of goods and details of preferential agreements under which goods are being exported in the shipping bill. Jain said the data on district/state of origin of goods will help the Government take measures to facilitate and promote exports. "The requirement to provide details of preferential agreements under which goods are exported will help the Government track the effectiveness these agreements," Jain said.

Source: Economic Times

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nCoV outbreak in China can spur textile sector biz in India

With China reeling under the novel coronavirus (2019-nCoV) outbreak, Indian textile sector could potentially use the situation to its advantage, said industry representatives on Saturday. Pointing out that cargo movement in and out of China has been hit heavily, they said the global textile supply chain that was dependent on China would have to rely on other countries for import. “And India could tap into this opportunity.” According to Rajkumar, chairman, Confederation of Indian Textile Industry, stakeholders, who were importing textiles from China, especially Southeast Asian countries, would look for alternatives, and India, with its capacity, could capitalize on the situation. Speaking to reporters in the city, he said the opportunity could push up export of finished textile goods, clothing and fabrics by at least 20%-30%, providing an immediate relief from the drop in exports last year. Rajkumar said the slump in China was a good opportunity for India. “Ships are not going there, and the number of flights has come down. This might take another 30 to 60 days to set things right. This would directly impact the world supply chain, which would at any time have 30 to 60 days stock. If China doesn’t produce for 30 days, he said, orders might come to India. “It might come to Tirupur or Ludhiana. The possibilities of exporting cotton yarn, polyester yarn and viscose yarn from here also would go up. We have to wake up and work quickly to tap the opportunity.” China's main clients in Vietnam, Cambodia, Thailand, Korea and in the European Union could possibly turn to India for buying finished gods, clothing and fabrics, he said. “This is a big opportunity to Indian textile sector. Inquiries have started pouring in. It would take another week to pick up,” he said. With textile export falling in the past couple of years, this surge would help the industry become buoyant, he said. In the past two years, the export had come down from 100 million kilo per month to 60 million kilo and then 40 million kilo, he said. As the industry’s capacity was not utilized fully because of the fall, he said, the facilities were ready to meet the possible demand. However, the situation also has a flipside. With the slowdown down due to the virus outbreak, yarn exports to China, which has been picking up, would take a hit, Rajkumar said.

Source: Times of India

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Keep the RCEP option open

India chose not to join the consensus reached at Bangkok in November last year when member countries decided that the Regional Comprehensive Economic Partnership (RCEP) would move to the final phase of text-based negotiations and conclude the agreement by the end of 2020. India was not prepared to accept a regional trading arrangement in which it had limited entitlement to deal with import surges. There were issues relating to rules of origin. This is inherent in dealing with an already regionally integrated trading network based on supply chains. Typically, a product from any of the ...

Source:  Business Standard

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Panel to give feedback on new GST system

The Goods and Services Tax Network (GSTN) has set up a consultation committee to provide feedback on new functionalities in the GST system. Suggestions will be related to policy and technology. The committee, which will include representatives from selected states recommended by the GST Council, member secretary of GSTN, representatives from the Central Board of Indirect Taxes and Customs (CBIC) and independent experts, will provide suggestions related to policy and technology, as per an office order issued to the effect. The panel will also have representatives from trade and industry bodies such as CII, Ficci and ICAI. It will provide feedback “when significant changes are brought in the system, or when changes in business processes are contemplated”, the order said. “Provide feedback on procedures and processes from point of view of tax payers and tax consultants,” it said. The committee will elect its chairman at the beginning of every meeting, while the strength of the quorum will be a third of the total number of members. The setting up of the committee comes in the backdrop of taxpayers facing several issues while uploading returns on the GSTN website, and of the government seeking feedback from industry on the new beta version.

STATES TO GET Rs 3,500 CR

The Centre will soon release another Rs 35,000 crore to states to compensate for the revenue loss on account of GST rollout, an official said. Under the GST law, states are guaranteed compensation for revenue loss for five years if their revenue does not increase 14 per cent on the base year of 2015-16. There were no differences between the Centre and states with regard to compensation payment in 2017-18, 2018-19, and in the first four months of the current fiscal. Importers and exporters will have to mandatorily declare GSTIN in documents from February 15 as the revenue department moves to crackdown on evaders and plug GST revenue leakage. In a circular, the Central Board of Indirect Taxes and Customs said that in certain cases the importer or exporter did not declare their GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN.

Source: Economic Times

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Utilise shift in orders from virus-hit China, textile exporters urged

Importing nations making enquiries’

With several businesses said to be affected in China due to the coronavirus, the Indian textile and clothing sector should seize the opportunity in global trade, T. Rajkumar, chairman of the Confederation of Indian Textile Industry, said. “We expect China will take 3-4 more months to return to normalcy [following the outbreak of the coronavirus]. Indian textile and clothing exporters should be aggressive and tap overseas orders that will shift from China,” he told mediapersons here.

Higher orders expected

“We hear that several businesses have been hit in China, especially during the last one week. Indian exporters are beginning to get enquiries from importers in different countries as they cannot source from China now. “I expect higher orders for apparel and made-up exports from India even before the end of this financial year,” he added. Countries such as Bangladesh that are strong in garment exports may also face challenges as they import raw material. For Indian exporters, the entire textile value chain is available. They should reach out to buyers and tap opportunities, he said. On the announcements in the Union Budget, Mr. Rajkumar said that abolition of anti-dumping duty on PTA would lead to 20-25% of textile mills switching over to synthetic yarn production from cotton. The anti-dumping duty on PTA was $26 to $160 a tonne depending on the country from where it was imported. With removal of the anti-dumping duty, the raw material for production of MMF (man-made fibre) will be available at international price. At present, cotton yarn production in India is higher than synthetic yarn. Several mills will move to MMF now, he said. Textile Secretary Ravi Capoor will visit Coimbatore on February 12-13 and hold meetings with representatives of textile associations from the southern State, Mr. Rajkumar said.

Source: The Hindu

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Resolve deadlock over benefits for garment of made-up exporters, says FEIO

This is a fatal blow to the apparels and made-ups industry, which is one of the largest employment generation industry particularly supporting the women workers. The Federation of Indian Export Organisations (FIEO), the apex trade promotion body, has sought an intervention to resolve the deadlock over export benefits for the garment and made-ups exporters. Highlighting the acute liquidity problem faced by apparel and made-ups exporters, particularly those in MSME, Sharad Kumar Saraf, president, FIEO, said the Rebate of State and Central Taxes and Levies (RoSCTL) scheme was not implemented in entire 2019 and Merchandise Exports from India Scheme (MEIS) also stopped from August 1, 2019 for apparel and made-ups sectors. This is a fatal blow to the apparels and made-ups industry, which is one of the largest employment generation industry particularly supporting the women workers. Huge funds of exporters are now blocked under this scheme for no fault of theirs, FIEO said in a statement. According to him, no funds have been disbursed since the announcement of RoSCTL scheme from March 7, 2019 and MEIS from August 1, 2019. This amount itself is nearly `6,000 crore. Most of the apparel exporters are from MSME sector and some of them are already in the process of closure and default. Exporters of these products were surprised to see the gazette notification from MoT dated January 14, 2020 announcing one time additional ad-hoc incentive of 1% to offset difference between rebate of state levies (RoSL) & MEIS and RoSCTL from March 7, 2019 to December 31, 2019. This is completely contradictory to what was already announced by the government and factored by the industry to maintain their competitiveness in view of fierce competition. Many of them have paid statutory taxes also on RoSTL and MEIS benefits, the FIEO president pointed out.

Source: Financial Express

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Coronavirus impact: PTA prices decline by 10% in a week on duty cut

Decline in crude prices also contributes to lowering the key textile raw material. In a major relief to synthetic yarn manufacturers, Purified Tephthalic Acid (PTA) has become cheaper by 10 per cent during the past one week following temporary suspension of import from China due to the spread of coronavirus there. Withdrawal of anti-dumping duty on this critical synthetic textile raw material has made it cheaper in India. Trading currently at $600-$620 a tonne, PTA prices has slumped from around $660-$700 about a fortnight ago. PTA prices are determined by the movement in crude oil prices which have also slumped by 10-12 per cent in the past one week. Since PTA is linked to crude oil, its prices are quoted in dollars even by domestic manufacturers. Synthetic yarn manufacturers attribute the PTA price decline to the abolition of 2.5 per cent of anti-dumping duty by the government, proposed in the last Union Budget announced on February 1. Apart from that, PTA import has also come to standstill due to the coronavirus outbreak in China, the world’s largest exporter. Indian producers have sufficient stock to meet the import component of supply to synthetic yarn makers, and offset the impact of temporary import suspension. “PTA prices have dropped by almost 10 per cent since eruption of the coronavirus epidemic in China. The Indian government’s move to abolish anti-dumping duty has also supported the price decline, apart from the fall in crude oil prices. Prices of other polymers have also declined. Producers were charging us $30-40 a tonne as anti-dumping duty on PTA,” said Madhusudhan Bhageria, Chairman and Managing Director, Filatex India Ltd. Meanwhile, experts believe the abolition of duty on PTA will boost the profitability of synthetic yarn manufacturers. Demand will rise due to low raw material cost and benefits will be passed on to consumers. “The abolition of anti-dumping duty on PTA will make its availability to the industry at competitive prices and give a boost to downstream value added product. Additionally, the scheme for remission of duties and taxes on exported products will be launched this year which will refund levies such as electricity duties and value added tax (VAT) on fuel used for transportation. The textile players do not get such refund as of now. Such benefits will certainly go a long way in improving the competitiveness of the textiles products in the export markets,” said K.V.Srinivasan , Chairman, Cotton Textiles Export Promotion Council (Texprocil). When prices go down, some extra demand gets created. Hence, synthetic textile manufacturers would get benefit of the additional demand which will help boost their profits in coming quarters. T Rajkumar, Chairman, Confederation of Indian Textile Industry (CITI) believes that if Indian textile industry has to achieve the market size of US$ 350 billion by 2025, it couldn’t have been done by without making our raw material available at an internationally competitive price. With an installed capacity of around 5 million tonnes, Indian producers including large crude oil refiners utilizes around 80 per cent PTA capacity. China has a production capacity of 45 million tonnes of which 35 million tonnes is consumes locally. The remaining quantity 10 million tonnes is used for exports.

Source: Business Standard

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Vietnam’s garment-textile expects boom in 2020

Vietnam’s garment-textile sector is expected to make breakthroughs in 2020 thanks to the Fourth Industrial Revolution. Vietnam’s garment-textile sector is expected to make breakthroughs in 2020 thanks to the Fourth Industrial Revolution. Other factors including free trade agreements (FTA) that will take effect in 2020 and the penetration of international brands like Zara, H&M and Mango will also favour the industry’s growth. The sector has made significant progress, especially in yarn and dyeing, through IT applications, as reflected in improved productivity, accelerated production and reduced labour force. According to Truong Van Cam, Vice President of the Vietnam Textile and Apparel Association, more than 2.5 million tonnes of yarn were churned out in 2019, of which over 1.5 million tonnes valued at about 4 billion USD were exported. Fabric output also increased six times and export value clocked up 2.1 billion USD, he added. The Fourth Industrial Revolution’s impacts on production mindset and methods are tangible. An example is Duc Quan Investment and Development JSC in the northern province of Thai Binh, which has doubled its yarn output to 17,000 tonnes per year through the application of Big Data in production and management. Garment 10 Corporation JSC has also used online business management software DIP BMS.NET to better monitor transactions of distribution chains. Members of the Vietnam National Textile and Garment Group (Vinatex) such as Hoa Tho Textile-Garment Joint Stock Corporation, Viettien General Garment JSC and Nha Be Joint Stock Corporation have joined the trend. Vinatex General Director Le Tien Truong said technological applications offer workers stable jobs with higher incomes while helping the group double its profits. Optimising the achievements of the Fourth Industrial Revolution has become an inevitable trend. However, this has met with a range of difficulties, especially a severe shortage of labourers who can use the new equipment. Humans, particular technicians, play a key role in the process, said Vinatex Managing Director Cao Huu Chien, adding that the group has mobilised different resources for personnel training. The Prime Minister has also agreed to upgrade the Hanoi Industrial College for Textile, Garment and Fashion to the Hanoi Industrial Textile Garment University, creating a major personnel training channel for the sector, he said.

Source: Vietnam Plus

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Australia, Indonesia move to implement trade deal

Australia and Indonesia announced a 100-day plan on Monday to implement a long-awaited trade deal, as the two countries hailed a "new beginning" for their sometimes troubled relationship. The two G20 economies hope to deepen trade currently worth a modest US$12 billion a year, in a region increasingly dominated by China''s economic and military might. Addressing Australia''s parliament on a landmark state visit, President Joko Widodo cast the two nations as would-be "Avengers" -- "forces of good" uniting to defeat a "common enemy" and shared challenges like protectionism, intolerance and climate change. Widodo said his visit to Australia marked "a new beginning of a new relationship" between the two nations. The 58-year-old former furniture manufacturer was sworn in for a second term late last year, promising to reduce widespread poverty as Indonesia becomes one of the world''s largest economies. Negotiations over the Australia-Indonesia trade deal began in 2010 and it was ratified by Indonesia''s parliament last week, ahead of Widodo''s visit. The agreement will eventually see the elimination of all Australian trade tariffs, while 94 percent of Indonesian duties will be gradually eliminated. Greater access to the Australian market is expected to spur Indonesia''s automotive and textile industries, and boost exports of timber, electronics and medicinal goods. The pact also includes improved access for Australia''s agriculture industry to Indonesia''s vast market of 260 million people. Australian universities, health providers and miners will also benefit from easier entry to Southeast Asia''s biggest economy. In a joint public appearance with Widodo in Canberra, Australian Prime Minister Scott Morrison outlined a 100-day "action plan" for implementation. He called the long-delayed deal a "mutually beneficial arrangement, one that sees the cooperation of our economies for the strong growth that we will see over the next decade and beyond".The leaders also eyed talks aimed at making it easier for Indonesians to enter Australia and a review of Australian travel advice for tourist destinations in Indonesia, Morrison said. Ties between Canberra and Jakarta have often been strained, including over Australia''s hardline approach to asylum seekers. The trade deal was meant to be signed in 2018, but stalled when Morrison proposed the relocation of Australia''s embassy in Israel to Jerusalem -- a move that angered Indonesia, the world''s most populous Muslim country. Both countries have also struggled to manage their relationship with a more assertive Beijing. Last month, Indonesia sent jets and warships to patrol islands near the disputed South China Sea, accusing Chinese vessels of "trespassing".

Source: Outlook India

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Cambodia: Coronavirus likely to result in lay-offs as China factories close

The Ministry of Labour and Vocational Training has warned that some garment factories in Cambodia may be forced to shut down temporarily or lay off workers next month due to a shortage of raw materials. As the 2019 Novel Coronavirus (2019-nCoV) continues to spread across China, many textile factories there have halted operations, disrupting the supply of raw materials to Cambodia, said ministry spokesman Heng Sour. Most Cambodian garment factories import fabric from China, he said. Sour said some government critics might link future factory closures and lay-offs with the potential cancellation of the EU’s Everything But Arms (EBA) scheme, which is not true. “In March, some factories might have to close or lay off employees. This is not because of the EBA issue. Garment factories in Cambodia depend on China to supply raw materials. Once they place an order, it takes these factories about 40 days to receive the fabric. “Before Chinese New Year, a lot of fabric was imported into the country, but then factories in China closed. They remain closed to this day,” Sour said, adding that it is not known when Chinese factories will reopen for business. To contain the virus’ spread, China has allowed major companies to close their doors since the Lunar New Year. Chinese citizens have been allowed to take indefinite leave or to work remotely from home. The virus has killed more than 800 people and infected 37,198 others across mainland China as of press time. Sour said about five per cent of factories in Cambodia could face fabric shortages by the second week of March and 10 per cent by the end of that month. “Factory owners have tried to place new orders, but factories in China are not taking them due to their closure,” he said. Critics, he said, could hijack the issue of factory closures and worker lay-offs to hurt the government. “Any closures should not be linked to the EBA issue as its caused by the shortage of raw materials,” he stressed. The EU is set to make a decision on the EBA issue on Wednesday. The European Commission could cancel the deal entirely or partially, or it could choose not to cancel it at all. Collective Union of Movement of Workers president Pav Sina said the government should intervene if workers are laid off. “If factories close due to a lack of raw materials, workers will not have any source of income. Many loans must be repaid, so they could be in serious financial trouble. The government could consider providing some sort of financial aid to these workers if worse comes to worst,” he said. Garment Manufacturers Association in Cambodia (GMAC) deputy secretary-general Kaing Monika could not be reached for comment on Sunday. The World Bank recently said from 1998 to 2008 the Cambodian economy enjoyed an average expansion of its gross domestic product (GDP) of eight per cent due to the strong export and tourism sectors. During that period, the Kingdom was one of the fastest-growing economies in the world. By 2019, economic growth had decelerated to seven per cent. In 1996, Cambodia had 60 garment and footwear factories and the sector employed 80,000 workers. Today, there are 1,000 factories employing 810,000 people, said Minister of Labour and Vocational Training Ith Sam Heng.

Source: The Phnom Penh Post

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Problem for Vietnam's textile firms due to coronavirus

Textile and footwear makers in Vietnam are struggling to import material from China where factories have closed due to the coronavirus outbreak. Firms have been advised by the Vietnam Textile and Apparel Association (VITAS) to tap other markets to meet targets. China in 2019 accounted for 60 per cent of Vietnam’s garment imports and 55 per cent of fibre imports. The coronavirus outbreak could negatively impact 10 major industries in Vietnam, including textiles, as Chinese factories shut down, stock brokerage firm SSI Securities Corporation (SSI) observed. Some Vietnamese factories have either run out of raw material stock, some companies’ stock will last a few weeks more, and some have enough raw material for a few months, according to a report in a Vietnamese newspaper. There is little scope to order more stock from China under the current circumstances. In China’s central Hubei Province, where the majority of coronavirus-related deaths have occurred, factories will not resume production until February 14 and could run on a limited scale after that. Nguyen Quoc Anh, chairman of Ho Chi Minh City Rubber Plastic Manufacturer Association (HRPMA), said production of rubber and plastic in Vietnam is largely dependent on China with 70 per cent of materials imported from that country. In January, Vietnam’s imports of fabric from China fell 18.1 per cent to $950 million, according to the Vietnam’s General Statistics Office (GSO). Exports of textiles, a key sector, in all markets fell by 21 per cent year on year to $2.6 billion in January, while that of footwear fell by 9.7 per cent to $1.6 billion, it added.

Source: Fibre2Fashion

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Pakistan: Textile sector major taxpayer

Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) North Zone, chairman Sohail Afzal on Sunday said that value-added garments sector of the textile industry showed 3.03 percent growth in 2018-19 despite various challenges. The value-added garments sector was the major tax payer, largest employment generator in whole textile chain and exporting to US$ 5.5 billion textile products, he disclosed. Talking to APP, said the sector had a huge scope of expansion and industry comprising mostly on SMEs which needed special attention of the concerned authorities for resource allocation for developing it sound and sustainable level at par with its competitors Turkey, India and Bangladesh. Sohail said that exporters should focus on market research and market their products. He suggested that ‘One Window’ operation should be introduced for replacing the lengthy procedures that involve interaction of manufacturer with certain government agencies. Social Security, EOBI and other taxes should be merged and deducted at source as a result of which government exchequer will receive more revenue, Sohail added. At present, the garment sector had a very limited product line for export market due to non-availability of the latest fabric locally and foreign buyers demanding new garments based on G3, G4, and technical fabric material and under the circumstance, we need to focus on diversified products to cope with the fast changing global trends, he said. The chairman further said the government should announce its clear policy for the clearance all pending refund claims in a stipulated time to facilitate exporters and the business community facing serious financial constrains due to blockage of their working capital and without it nobody can run the industry.

Source: Pakistan Observer

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Cambodia Garments, Possibly Losing EU Trade Status, Now Hit by Coronavirus

At least four textile factories in Cambodia may suspend operations because of delays to the supply of raw materials from China caused by the coronavirus outbreak, the labour ministry said on Monday. Ministry spokesman Heng Sour said there had been delays in deliveries of garments, yarn, buttons and shoe soles. The garment industry is Cambodia's largest employer, generating $7 billion for the economy each year. The European Union will decide on Wednesday whether or not to suspend Cambodia's special trade preferences over human rights concerns. Cambodia benefits from the EU's "Everything But Arms" trade programme, which allows the world's least-developed countries to export most goods to the European Union free of duties. "If by the second week of March, factories still don't know when they will be able to get the materials from China, they may suspend for two to three weeks," Sour told Reuters. Sour said that four factories, which employ around 3,000 workers in total, had expressed their concerns to the government. Sour declined to provide names of the factories or which brands they supplied. Global clothing and shoe brands, including Adidas, PUMA and Levi Strauss, have written to Cambodia's longtime leader, Hun Sen, saying the country's record on labour and human rights threatens to bring down sanctions on the garments industry. Cambodia's only confirmed case of coronavirus, a Chinese national in the coastal city of Sihanoukville, had recovered and left hospital on Monday, the Ministry of Health said in a statement.

Source: Prak Chan Thul

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