The threat of input supply disruption from China is becoming very real for pharmaceutical, electronics and automobile industries due to the coronavirus-induced shutdown of factories in that country, Commerce and Industry Minister Piyush Goyal has said. He is likely to meet industry representatives and export bodies on Thursday to discuss the economic impact of the rapidly spreading virus. The meeting was earlier scheduled last week but was deferred. “The Minister will discuss both the concerns of the sectors hit by falling imports of essential inputs from China as well as opportunities for exporters,” a person familiar with the matter told BusinessLine. In a written reply to the Lok Sabha on Wednesday, the Minister said: “Indian Missions abroad have also been asked to explore the possibility of sourcing raw material for our production, in their respective countries.” The Minister’s response comes after several industries raised the red-flag over the deteriorating situation. Auto industry body SIAM said many automakers import about 10 per cent of their raw materials from China. “The disruption in availability of these parts is likely to critically hamper production across all segments, namely passenger vehicles, commercial vehicles, three-wheelers, and two-wheelers and will gravely affect electric vehicles,” said a statement issued by SIAM on Wednesday.
Impact on pharma, IT sector
Another major industry that relies on Chinese raw material supplies is pharmaceuticals. A committee has been formed by the Department of Pharmaceuticals to regularly review the availability of stock of Active Pharmaceutical Ingredients/Key Starting Materials and API-based medicines, and to suggest measures for their management. With businesses of most of its key clients — airlines, retail, and oil and gas sectors — impacted by the coronavirus outbreak, growth for India’s IT services sector will be a big challenge the coming fiscal year, predicted former Infosys Chief Financial Officer V Balakrishnan. Talking to the media, he said that the situation looked similar to 2008 (global economic and financial meltdown). “But the issues are different as we don’t know how long this is going to continue.” “The Minister,” said the source, “has especially mentioned that the sectors hurt by the coronavirus should be present at the meeting so that there is a better idea of the extent to which they are getting impacted.” Simultaneously, the Commerce Ministry has been identifying items where Indian manufacturers can increase their production to step up exports for filling the supply gaps left by Chinese exporters. According to a preliminary study, there are more than 500 products where Indian exporters can plug global supply gaps. China is India’s top source. In 2018-19, imports from that country totalled $70.39 billion. China is India’s No 3 export destination with outbound shipments valued at $16.5 billion in FY19. The number of people infected with the coronavirus in about 100 countries has crossed 115,000, with the death toll reaching more than 4,200. In India, the number of infected is now estimated at 60.
Source: Business Line
Entrepreneurs involved in textile manufacturing can make use of the ₹ 2.5 crore subsidy offered by the State government for starting small textile clusters/parks, said Sivaganga Collector J. Jeyakanthan. A consultative meeting was organised with textile entrepreneurs and investors here on Wednesday. The Collector said that the textile industry was an important sector because of its ability to generate a large number of jobs. He also highlighted that Chief Minister Edappadi K. Palaniswami had made an announcement under Rule 110 in the Tamil Nadu Legislative Assembly regarding the subsidy of ₹ 2.5 crore for starting textile parks and added that an organisation with a minimum of three members would be eligible for the scheme. They must also possess two acres of land for the purpose. He said that this initiative of the State government was to promote the growth of textile industry and modernising it. The objective was to enhance production and also focus on yield. As a result, the workforce can also be trained to the state-of-the-art technologies available, which would facilitate survival in the sector. The Collector added that the creation of such small textile parks in different regions will help in creation of employment, thus boosting the economy overall. Migration of labourers can be prevented. Also, the workforce would not be concentrated in one city or town, but spread across the length and breadth of the State, Mr. Jayakanthan said. He appealed to the entrepreneurs to make use of the government’s initiative and help in the creation of jobs for generations. Some of the participants welcomed the objective and hoped to take it up in the ensuing fiscal year.
Source: The Hindu
Goods and services tax (GST) rates on mobile phones, footwear, textiles and fertiliser are likely to be raised on Saturday. That is when the GST Council meets as part of an exercise to correct an inverted duty structure and to boost revenue collection. The proposal for a monthly lottery scheme for consumers, with a bumper prize of Rs 1 crore, will also be placed before the Council — the aim is to encourage invoice collection by buyers. “The inverted duty structure under GST needs to be corrected, it is resulting in huge refunds outgo. Mobile phones, ...
Source: Business Standard
A Parliamentary Panel on India’s Ministry of Commerce and Industry calls for avoiding over-dependence on the United States and European Union to promote trade and exports. Observing the decline in India’s export due to global economic slowdown, increasing protectionism, heightened trade tensions between US and China, US sanctions against Iran, the Committee urged the ministry to make vigorous efforts for market expansion and establish trade synergies with new emerging trade destinations in Africa, Latin America and West Asia region to reduce overdependence on developed countries especially US and EU for exports and to minimize uncertainties in our exports due to adverse global event/scenario. It recommended the Government to be vigilant in checking fluctuations in the exchange rate of rupee and unfair trade practices adopted by the trading partners. The recommendations were made by the 31 Member Department-related Parliamentary Standing Committee on Commerce headed by Rajya Sabha Member, V. Vijayasai Reddy, which presented its 152nd and 153rd Reports on Demands for Grants of the Department of Commerce and the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry to Parliament today. Taking note of an allocation of Rs.6219.32 crore in BE 2020-21 against the Department’s projected demand of Rs.9238.51 crore, the Committee felt that reduction of allocation to the tune of Rs.3019.19 crore will adversely impact the promotion of trade, augmentation of export and revival of a subdued trend in export. It recommended enhancing budgetary allocation for optimal implementation of policies and schemes in the ensuing year while ensuring maximum utilization of funds at the disposal of the Department.Land acquisition reforms to make India an attractive global destination for MNEs facilitating its participation in GVCs. Committee says inadequate allocation of funds for Department of Commerce and Department for Promotion of Industry and Internal Trade will hit recovery goals.
2. Parliamentary Panel in its Report has stressed the need for a calibrated approach, concerted efforts, diversification of India’s export basket, removal of supply chain bottlenecks and simplification of export procedures, among others, to achieve the goal of making India a significant global player in goods and services trade with USD 1 trillion export volume by 2024-25.
3. The Committee in its Report noted that in 2019, India was the 19th largest exporter in the world in merchandise trade with a share of 1.7 per cent and 10th largest importer with a share of 2.6 per cent. India’s exports have surpassed half trillion mark (USD 538.08 billion) in 2018-19 for the first time. The Committee, however, expressed its concern on the contraction of exports in 2019-20 and noted volatility in export growth in key sectors such as engineering goods, petroleum products, gems and jewellery, cotton yarn/fabrics, leather, etc. It recommended undertaking detailed analysis of performance and close monitoring of existing schemes and policies aimed at boosting exports.
4. Taking note of an allocation of Rs.6219.32 crore in BE 2020-21 against the Department’s projected demand of Rs.9238.51 crore, the Committee felt that reduction of allocation to the tune of Rs.3019.19 crore will adversely impact promotion of trade, augmentation of export and revival of subdued trend in export. It recommended to enhance budgetary allocation for optimal implementation of policies and schemes in ensuing year, while ensuring maximum utilization of funds at the disposal of the Department.
5. Observing decline in India’s export due to global economic slowdown, increasing protectionism, heightened trade tensions between US and China, US sanctions against Iran, etc., the Committee urged the Department to make vigorous efforts for market expansion and establish trade synergies with new emerging trade destinations in Africa, Latin America and West Asia region to reduce overdependence on developed countries especially US and EU for exports and to minimize uncertainties in our exports due to adverse global event/scenario. It recommended the Government to be vigilant in checking fluctuations in exchange rate of rupee and unfair trade practices adopted by the trading partners.
6. The Committee appreciated the strategic initiatives taken by the Government to deal with unfair trade practices against India, to safeguard the Indian domestic industries against dumping of cheap and subsidized goods and setting up a monitoring committee to address key issues related to Free Trade Agreements (FTAs), etc. The Committee recommended to strengthen the Directorate General of Trade Remedies (DGTR) for conducting quality investigations into unfair trade practices within reasonable time frame.
7. Expressing concern on discriminating measures such as delisting India from ‘Developing Beneficiary Country’ under the ‘Generalised System of Preferences (GSP)’, inclusion of India in ‘Priority Watch List’ by United States Trade Representative (USTR) and increase in disputes against India in the WTO, the Committee urged the Department to undertake a comprehensive study/analysis of trade remedial measures and constitute a research wing under DGTR for detailed examination and assessment of such issues and for apprising traders/exporters of the adverse consequences.
8. Referring to the Economic Survey 2019-20, the Committee noted that specialization of labour intensive sectors and identification of group of industries in network products for including them in Global Value Chains (GVCs) would tremendously boost India’s trade competitiveness and export performance. While appreciating measures undertaken by the Government for facilitating ease of doing business, the Committee felt that India’s integration in GVCs calls for sustainable trade growth, strengthening of export infrastructure, effective implementation of GST, timely refunds of duties and taxes to the exporters, reforms in land acquisition and making India an attractive global destination for investment by Multinational Enterprises (MNEs), etc. The Committee recommended the Government to formulate a Global Value Chain Integration Policy to facilitate Indian industries participation in GVCs.
9. Pointing out that proper assessment of the Merchandise Exports from India Scheme (MEIS) vis-à-vis the WTO norms since its implementation from 2015 has not been made by the Government, the Committee felt that merely discontinuing the MEI Scheme before putting in place any suitable substitutive mechanism will impact the sectors which at present are under the garb of inverted duty structure. The Committee recommended to make a careful evaluation and analysis of new scheme viz. Remission of Duties or Taxes on Export Products (RoDTEP) Scheme before its implementation for its compliance with global trade norms.
10. Taking note of the significant role of MSME sector in country’s economy accounting for nearly 48 per cent share in India’s total exports and about 29 per cent contribution in GDP, the Committee stressed the need to address issues concerning MSME sector and apprised MSME exports about the benefits of various schemes and subsidies and encourage their participation in the GVCs. The Committee recommended to devise a customized export scheme encompassing financial, technological and policy aspects for holistic promotion of MSME sector, which would provide much needed fillip to the overall exports of the country.
11. Appreciating the Government to come out with a new Agriculture Export Policy aimed to double farmers’ income by 2022 and boost agricultural exports by integrating farmers and agricultural products with the GVCs, the Committee recommends the Department to ensure active participation of the State Governments in effective implementation of the policy in agriculture clusters for promoting exports in the year ahead.
12. The Committee noted that the Scheme of Price Stabilisation Fund aimed at providing financial relief to small growers of tea, coffee, rubber, tobacco, etc. has discontinued since 2013 and in its place a new Scheme of Revenue Insurance Scheme for Plantation Crops (RISPC) has not been implemented. The Committee has recommended to launch a new crop insurance scheme at the earliest to provide security to the plantation growers in terms of price stabilization and crop protection and thus contributing to the welfare of farmers in the plantation sector.
13. The Report has also expressed its deep concern on the substantial reduction of the budgetary allocation made to Agencies/Commodity Boards viz. Agricultural and Processed Food Products Export Development Authority (APEDA), Marine Products Export Development Authority (MPEDA), Tea Board, Coffee Board, Rubber Board and Spices Board from the proposed outlay under the Medium Term Expenditure Framework. The curtailing of funds will, thus, impact the functioning of the schemes and programmes of the Agencies and Boards and the shortfall may lead to upsurge in liabilities in the coming years. It, therefore, recommended the Department to engage with Ministry of Finance for additional allocation at the supplementary grants stage for their optimal functioning.
14. While appreciating the initiatives of the Government in according high priority to promote trade and exports from the North Eastern Region, the Committee felt that the allocation of funds provided under various schemes for boosting trade from the region is considerably low. The Committee laid emphasis on raising budget to give effect to various activities such as production, processing, marketing, infrastructure, packaging, international meets and seminars to promote exports from this region. Taking cognizance of trade facilitation measures being taken by the Department for boosting trade and commerce in the North-East Region, the Committee stressed the need for devising a comprehensive trade promotion programme for the entire region of North East.
15. As regards 153rd Report relating to the Department for Promotion of Industry and Internal Trade, the Committee took note of the declining sectoral growth rate of Index of Industrial Production (IIP) comprising three sectors, namely, mining, manufacturing and electricity with mining registering a negative growth rate during April-October 2019-20 and the declining growth rate of Gross Value Added (GVA) in industry at constant prices with manufacturing sector registering a negative growth rate during second Quarter (2019-20). While appreciating the measures taken by the Department to boost industrial production, the Committee recommended the Government to make concerted efforts to revive the industrial sector with focus on mining, manufacturing and electricity sectors given their importance in the economy and address declining capacity utilisation of manufacturing sector considering its impact on investment and job creation.
16. The Committee appreciated the Department for devising new Industrial Policy, which is currently under consideration, having the objective to improve the share of manufacturing sector to more than 20 per cent by focusing on 10-12 industry sectors for boosting competitiveness, generating jobs and growth in manufacturing and exports. The Committee has recommended to finalise the policy at the earliest in tune with changing global scenario.
17. The Committee took note of the positive trend in the FDI inflows since the launch of Make in India flagship programme in 2014. In the last 5½ years (April 2014-September 2019) India received FDI inflows worth USD 319 billion which is 50 per cent of the total FDI inflow (USD 642 billion) in the last over 19 years since April 2000. The Committee while appreciating the measures taken by the Department for making the process of FDI simpler and investor friendly, has, however, expressed its concern on the declining FDI inflow in manufacturing sector and also disparity in FDI inflows among the States and recommended to address these issues to make India an attractive destination for investment.
18. Regarding the budgetary allocation to the Department, the Committee noted that an allocation of Rs.6605.55 crore in BE 2020-21 has been made against the Department’s projected demand of Rs.16767.40 crore and expressed its concern on the shortfall in allocation at a time when the industrial sector is in doldrums. It stressed the need for adequate allocation for implementing optimally the major schemes such as National Industrial Corridor Development and Implementation Trust, Refund of Central and Integrated GST to Industrial Units in North Eastern Region and Himalayan States, Transport/Freight Subsidy Scheme, etc.
19. Regarding the intellectual property rights, the Committee appreciated the steps taken by the Department for reducing the time to examine and dispose of the patent applications from average 72 months in 2014-15 to about 24-36 months at present. The Committee stressed the need to further reduce the time for examination and disposal of patents to match the international standard, create awareness among various stakeholders and fill the sanctioned posts of Patent Examiners and Controllers at the earliest. While taking note of the World Intellectual Property Organisation (WIPO) Report 2019 which ranks India at 13th place in Patent Cooperation Treaty (PCT) filing of patent applications, the Committee stressed the need to strengthen intellectual property ecosystem to keep pace with research and innovation and to compete with developed countries.
20. Taking note of the World Bank’s Doing Business Report, 2020 which ranks India at 63rd amongst 190 countries, improving its rank by 14 from 77 in the 2019 Report, the Committee appreciated the sustained measures taken by the Department for improving India’s ranking in ease of doing business. It stressed on the need for further improvement to foster a vibrant business environment thereby promoting entrepreneurship, innovation and wealth creation and to make India an attractive destination for business and investment.
21. Regarding Startup India, a Government’s flagship initiative aimed at building a strong ecosystem for nurturing innovation and start-ups to drive sustainable economic growth and to generate large scale employment opportunities, the Committee recommended the Government to fast track the finalisation of Startup Vision 2024 which aims to facilitate establishment of 50,000 new start-ups by 2024 creating 20 lakh jobs. Further, it recommended to increase registration of Startups in GeM portal, facilitate establishment of start-ups in those States with dismal record, address the issue of insignificant drawing of funds from the Fund of Funds Scheme for Startups, to operationalise Credit Guarantee Scheme for Startups to ease the availability of credit to start-ups, etc. Expressing concern over the delay in payment by the PSUs and the Government Departments to the Startups, the Committee recommended to increase procurement by PSUs and Government Departments from Startups and payment of dues within a stipulated time period to maintain constant cash flow to the Startups.
22. Regarding five industrial corridors viz. Delhi-Mumbai, Chennai-Bengaluru, Amritsar-Kolkata, Vizag-Chennai and Bengaluru-Mumbai Industrial Corridors, the Committee expressed its displeasure at their slow pace of their development and urged the Department to expedite their construction to provide much needed thrust to the Indian industry.
23. Regarding the industrial development of backward and remote areas, the Committee took note of the various schemes, viz. Transport/Freight Subsidy Scheme, package for special category States for J&K (now UTs of J&K and Ladakh), Himachal Pradesh and Uttarakhand, refund of Central and Integrated GST to industrial units in North Eastern Region and Himalayan States, North East Industrial Development Scheme, etc. and expressed displeasure at slow pace of utilisation of funds and urged timely disbursal of incentives, subsidy and tax refunds to industrial units and adequate allocation of funds under the schemes in the ensuing financial year.
Source: The Indian Awaaz
Once again, crude oil prices seem to favour the Modi government, which has been facing much flak for the country’s economic situation. But is the government prepared to turn the steep fall in oil prices to its advantage or will it become a case of another missed opportunity?“ The oil price crash comes at an inopportune time for the energy-hungry and import-dependent Asian economies,” said Vandana Hari, founder and CEO of Vanda Insights. “It may provide marginal relief, but it is no match for the debilitating economic impact of the coronavirus. It could, thus, end up being a lost opportunity as it is unlikely to spur consumption.” Economic uncertainty is a huge dampener on spending, she said, adding: “Had India been ready with its strategic storage infrastructure, it could have filled it up with cheap oil. Overall, the cheap oil this time also comes with huge uncertainty — the OPEC+ alliance could get back on track. So, it is going to be hard for countries to plan their spending based on today’s prices.”Indian Strategic Petroleum Reserves Ltd is responsible for building buffers. Currently, it has 5.33 million tonnes of underground strategic reserve facility in Visakhapatnam, Mangaluru and Padur (Karnataka), while another 6.5 mt facility is coming up at Padur and Chandikhole (Odisha). Work on two more facilities — at Bikaner in Rajasthan and Rajkot in Gujarat — will be initiated soon.
What works for India
But does the price offer any comfort? Energy expert Narendra Taneja says, “Neither ultra-low nor ultra-high prices are good for India. Prices that encourage growth in both the exporting Gulf countries and India are good for us; after all, nearly 10 million Indians work in the GCC countries, who send over $40 billion in remittances.” The price which should keep everyone happy is $60 a barrel, he said, adding: “Ultra-low prices may help India in the short run but can hurt in the medium to long run.” But for the main Opposition party, the Congress, the low crude prices offer a new ammunition against the government. The party has urged the government to pass on the benefits of the low crude prices to the common man, by reducing the retail rates of petrol, diesel and cooking gas. “The Modi-Shah government must pass on the relief of record low crude oil price to the people of India against the stagflation (rising inflation combined with economic slowdown) and rising unemployment by lowering petrol/diesel/LPG rates in consonance with the huge fall in international crude oil prices,” it said in a statement.
Political tussle
“In dollar terms, the international crude oil prices are down to the level of 2004 November, when petrol, diesel and LPG were available at ₹37.84, ₹26.28 a litre, and ₹281.60 per cylinder, respectively... For the last six years, the government and oil marketing companies have been making huge windfall gains amounting to lakhs of crores per year. The BJP government has looted more than ₹16-lakh crore in the last five years by charging exorbitant taxes on petrol-diesel,” charged the party statement. It said: “The central excise duty has been hiked more than a dozen times since the BJP came to power. It has been increased by 218 per cent on petrol and 458 per cent on diesel by the Modi government since May 2014.”. The consumer would certainly want the duties — which account for the major portion of retail price — reduced and pump prices lowered. But the government would prefer to raise them to maximise revenues. Now, all eyes are on the government if it will tweak the excise duty and other levies on fuel.
Source: The Hindu Business Line
India is exploring workable components of a possible free trade agreement with Australia, following the visit of Australian Trade Minister Simon Birmingham to New Delhi last month, when he discussed the advantages of forging such a pact with his Indian counterpart Piyush Goyal. “Australia already knows about many of our red lines which include dairy and certain agricultural products and seems ready to accept them. That makes it easier for us to negotiate an FTA,” an official said. The formal decision to launch negotiations for an FTA — officially known as Comprehensive Economic Cooperation Agreement (CECA) — between India and Australia will be taken after both sides go through what each is ready to offer the other, in a series of video-conference meetings. “India and Australia both are working on what they can offer each other. Once it is discussed, a decision can be taken on whether negotiations should begin on a CECA,” the official said.
Decision on agreement
In his meeting with Goyal, the Australian Trade Minister said while his country wanted India to re-enter the Regional Comprehensive Economic Partnership (RCEP) negotiations, it was willing to look at India’s proposal of a bilateral pact. India had exited the RCEP, the 16-member proposed bloc, including the ten-member ASEAN, China, Australia, New Zealand, India, Japan and South Korea, in November 2019 as it was not comfortable with the high levels of market access being sought by other members and inadequate protection against cheap imports from China due to less stringent Rules of Origin norms. “Both India and Australia are willing to see if the work we have done bilaterally in relation to RCEP could be captured between the two countries. We have asked our officials to look at that,” Birmingham had said in a select media briefing following his meeting with Goyal.
Bilateral pact
Trade between India and Australia trade has grown steeply over the last decade but is heavily skewed in Australia’s favour. In 2018-19, India’s imports from the island-nation were valued at $13.3 billion, while Australia’s imports from India accounted for only at $3.52 billion, resulting in a trade deficit of almost $10 billion. However, as Birmingham pointed out, the imbalance is mostly due to high imports of coal by India from the country. India and Australia had started negotiating a bilateral CECA in May 2011, but the talks got suspended in 2015 because of disagreement over issues such as the market access in agriculture and dairy products demanded by Australia. “If Australia adopts a flexible approach in dairy and agriculture and is willing to accommodate some of our interests in the services sector including easier visa rules for workers, a free trade pact can certainly be worked out,” the official said.
Source: Business Line
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
895.50 |
USD/Ton |
-1.89% |
3/12/2020 |
|
VSF |
1379.90 |
USD/Ton |
-0.21% |
3/12/2020 |
|
ASF |
2019.55 |
USD/Ton |
0% |
3/12/2020 |
|
Polyester POY |
905.56 |
USD/Ton |
-0.79% |
3/12/2020 |
|
Nylon FDY |
2112.98 |
USD/Ton |
-0.68% |
3/12/2020 |
|
40D Spandex |
4125.34 |
USD/Ton |
0% |
3/12/2020 |
|
Nylon POY |
1940.49 |
USD/Ton |
-0.74% |
3/12/2020 |
|
Acrylic Top 3D |
1185.86 |
USD/Ton |
-0.60% |
3/12/2020 |
|
Polyester FDY |
5390.25 |
USD/Ton |
0% |
3/12/2020 |
|
Nylon DTY |
2199.22 |
USD/Ton |
0% |
3/12/2020 |
|
Viscose Long Filament |
2371.71 |
USD/Ton |
0% |
3/12/2020 |
|
Polyester DTY |
1078.05 |
USD/Ton |
-0.66% |
3/12/2020 |
|
30S Spun Rayon Yarn |
2041.11 |
USD/Ton |
0% |
3/12/2020 |
|
32S Polyester Yarn |
1624.26 |
USD/Ton |
0% |
3/12/2020 |
|
45S T/C Yarn |
2407.65 |
USD/Ton |
0% |
3/12/2020 |
|
40S Rayon Yarn |
1739.25 |
USD/Ton |
-0.82% |
3/12/2020 |
|
T/R Yarn 65/35 32S |
1940.49 |
USD/Ton |
0% |
3/12/2020 |
|
45S Polyester Yarn |
2285.47 |
USD/Ton |
0% |
3/12/2020 |
|
T/C Yarn 65/35 32S |
2184.85 |
USD/Ton |
-0.65% |
3/12/2020 |
|
10S Denim Fabric |
1.27 |
USD/Meter |
0% |
3/12/2020 |
|
32S Twill Fabric |
0.70 |
USD/Meter |
0% |
3/12/2020 |
|
40S Combed Poplin |
0.98 |
USD/Meter |
0% |
3/12/2020 |
|
30S Rayon Fabric |
0.54 |
USD/Meter |
0% |
3/12/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
3/12/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14374 USD dtd. 12/03/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
President of Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain, has said that the issues confronting the textile sector should be resolved so that it can play an effective role in national development. Speaking at a meeting of FPCCI Standing Committee for Textile, Dying and Processing, through a video link in which business leaders from Karachi, Lahore and other cities participated, he called upon the government to start working immediately so that the next cotton crop could be saved from collapse. He said that increased taxes, costly energy, the demand for bank guarantees by gas utilities and delayed refunds had increased the cost of doing business. He said that the importance of textile sector had increased manifold in the current global economic scenario which must be realized. He said that textile exports could fetch extra billions of dollars for the country. Mian Zahid Hussain said that apart from all other things, the coronavirus had also reduced price of cotton which would provide relief to our textile sector. He said that President of FPCCI Anjum Nisar had been busy in serving the business community and forwarding research-based proposals to the government which would go a long way in resolving the issues of industrialists and traders. Chairman of the committee, Irfan Saeed, said that the textile processing industry was in tatters which should be bailed out. Taxes, energy and exchange rate erosion had taken a toll on this important sector while the cost of raw material had been increased by 30 to 35 percent. This sector was finding it difficult to fulfill commitments of dying and printing, therefore, duties on the import of raw materials should be reduced, he demanded. Deputy Convener of the committee Tahir Mahboob said that extension in GSP Plus for two years was a welcome development.
Source: Brecorder
BANGKOK - Thailand should be downgraded by the US State Department in its annual report on human trafficking because of its lack of progress in protecting garment and fishing workers, according to a coalition of human rights groups. The South-East Asian country had failed to provide sufficient evidence of increased efforts to combat human trafficking, said the Thai Seafood Working Group (SWG), a coalition of almost 60 labour, human rights and green groups. Last year, Thailand was ranked as a Tier 2 country - above the lowest ranking of Tier 3 - in the US State Department's Trafficking in Persons (TIP) report which noted significant efforts to combat trafficking.
Source: Eco Textile
The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved a special relief package to further continue the provision of subsidized electricity at 7.5 US cents per KWH till end June 2020 to five export-oriented sectors, namely textile, carpets, leather, sports and surgical goods. The Finance Division (FD) issued two statements at the conclusion of the ECC meeting, which was chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh here on Wednesday. Soon after the meeting, the FD issued an official statement, saying that the ECC approved a proposal by the Power Division for a special relief package of Rs 20 billion to further continue provision of subsidized electricity until June 2020 to five export-oriented sectors. However, later a revised statement was issued where the amount of Rs 20 billion was not mentioned and stated as, “ECC approved a proposal by Power Division for a special relief package to further continue provision of subsidized electricity until June 2020 to five export-oriented sectors".According to the Power Division summary submitted to the ECC of the Cabinet, Finance Division will budget Rs 28 billion as subsidy for fiscal year 2019-2020 to be paid to the Power Division in the first week of July 2020 out of the budget of fiscal year 2020-2021. According to the summary of the Ministry of Energy (Power Division), which was submitted to the ECC of the Cabinet, the five export sectors would be provided electricity at an all-inclusive rate of 7.5 US cent per unit (Kwh) from January 1, 2019 to June 30, 2020 plus applicable taxes. Electricity bills issued from January 2019 till date, which included surcharges, quarterly adjustments, and fuel price adjustments, financial cost surcharge (FC) and Neelum-Jhelum Surcharge (NJ), will be adjusted to a fixed tariff of US cents 7.5 per unit (kWh). Taxes of the period will be paid by the consumers in addition. The summary, which was submitted to the ECC, maintained that in order to promote five export sectors, namely textile, carpets, leather, sports and surgical goods, the ECC of the Cabinet on October 24, 2018 decided to provide electricity at US cents 7.5/Kwh to these export-oriented sectors from January 1, 2019. Pursuant to that electricity tariff was reduced to US cents 7.5/ Kwh vide SRO 12(1)2019 dated January 1, 2019 issued by Ministry of Energy (Power Division). Later on, it was also clarified that to all the XWDISCO's that Financial Cost Surcharge (FC), Neelum-Jhelum surcharge (NJ), taxes and positive fuel adjustments will be part of billing, and would be part of subsidy claims to be picked up by the government, subject to confirmation by the Finance Division. However, Finance Division conveyed that the fiscal implications of financial cost surcharge, Neelum-Jhelum surcharge, taxes and fuel adjustment are estimated at Rs 4-5 billion annually. No budgetary allocation for this purpose was provided in fiscal year 2018-2019 and fiscal year 2019-2020. Being a pass through item, it should be billed to the industrial consumers. Alternately, the ECC of the cabinet may like to consider exemption of the same. While processing five export-sector subsidy claims, the ECC of the Cabinet's directions were silent on quarterly adjustment, distribution margin, US $ to Pk rupees conversion rates, etc. The Minister for Finance at that time indicated that the understanding given to five sectors was indeed a fixed tariff of US cents 7.5/Kwh; however nothing was provided for as additional subsidy in the budget. Subsequently, the matter was deliberated in the ECC of the Cabinet meeting held on October 2, 2019, and accorded approval for imposition of quarterly adjustments and annual indexations on five export sectors. Resultantly, the quarterly adjustments and other allied expenses were applied and charged over and above the notified tariff for five export sectors consumers, i.e., at US cents 7.51 per Kwh. When the five export sectors appealed the same in the court, the committee constituted by the ECC of the Cabinet to review the matter, held its 3rd meeting on 23.10.2019 under the chairmanship of Minister for Economic Affairs in office of Advisor to the Prime Minister on Commerce, Textile, Industries and Production and Investment. The ECC of the Cabinet meeting dated 27.11.2019 approved the committee's recommendations, wherein the committee inter alia recommended to continue power tariff of US cents 7.5 till June 2020, and quarterly adjustment charges and fuel adjustment charges also be added to the tariff. The Finance Division raised objections and asked to seek clarification from the ECC of the cabinet as there are no directions whether the tariff differential would be cross-subsidized or paid by the GoP as subsidy, which is estimated to be around Rs 23 billion/annum. Further, clear direction from the ECC would also be required on the taxes and surcharges as whether the same are to be exempted from recovery or otherwise. This may have financial implications of Rs 4-5 billion annually. Subsequently, the ECC of the cabinet dated 2.10.2019 directed the Power Division to submit the case in light of the report of the Advisor to the Prime Minister on Commerce, Textile, Industry and Production and Investment on the outcome of meeting with the APTMA as directed by the prime minister during the meeting of the cabinet on 1.10.2019. In order to implement the ECC of the Cabinet decisions, a high-level meeting was held on 26.2.2020 in meeting Minister for Energy (Power Division) Omar Ayub Khan, Minister for Economic Afairs Hammad Azhar, Special Assistant to Prime Minister on Petroleum, Nadeem Babar, Advisor to the PM on Industries, and Commerce Abdul Razak Dawood and Punjab Governor Chaudhry Mohammad Sarwar held deliberations with the APTMA and other industrialists on their issues related to special relief for five exports sectors.
In the meeting following decision were taken:
(a) The five exports sectors would be provided electricity at an all-inclusive rate of US cents of 7.5 per unit (Kwh) from January 1, 2019 to June 30, 2020 other than taxes,
(b) electricity bills issued from January 2019 till date would be adjusted on rate charged above US cent of 7.5 per unit (Kwh) from January 1, 2019, which had included surcharges, quarterly adjustment and fuel price adjustment other than taxes,
(c) Finance Division will budget Rs 28 billion as an additional subsidy to the Power Division in the next fiscal year 2020-2021.
Despite a financial crunch faced by the power sector, Ministry of Energy (Power Division) supports the government's initiative to boost exports and provide relief to five export sectors.
However, in this regard following submissions are required to be deliberated:
a. The total volume of subsidy package from January 2019 to June 2020 would be around Rs 28 billion as per following breakdown: Adjustment from January 2019 to June 2019 on account of the FPA, the Neelum-Jhelum surcharge, O&M cost, fixed charges etc – Rs 5 billion, tariff from July 2019 to June 2020 on account of quarterly adjustment plus tariff differential subsidy plus FPA, fixed charges etc – Rs 23 billion per year.
b. This relief package would yield an increase on circular debt by an amount of Rs 28 billion by the end of June 2020 subject to actual on the current set targets.
However, given the cautioned litigation and position of the five export sectors, the commitment to them was a fixed all-inclusive US cents of 7.5 per unit (Kwh) plus taxes, the following recommendations are submitted for consideration of the ECC of the Cabinet.
a. The five export sectors would be provided electricity at an all-inclusive rate of US cent of 7.5 per unit (Kwh) from 01.01.2019 to 30.06.2020 plus applicable taxes.
b. Electricity bills issued from January 2019 till date, which included surcharges, quarterly adjustments, fuel price adjustments, FCC, and NJS will be adjusted to a fixed tariff of US cents of 7.5 per unit (kWh).
Taxes of the period will be paid by the consumers in addition;
c. Finance Division will budget Rs 28 billion as subsidy for fiscal year 2019-2020 to be paid to the Power Division in the first week of July 2020 out of the budget of fiscal year 2020-21;
d. For continuation of relief package in the next fiscal year 2020-2021, additional subsidy will be capped at Rs 20 billion, making a total of Rs 48 billion in the budget of fiscal year 2020-2021 for both gas and power sectors.
In view of urgency, the matter is being submitted to the ECC of the Cabinet.
The Finance Division may offer its views and comments during the ECC of the Cabinet meeting. Approval of the ECC of the Cabinet is solicited for the recommendations made above. The ECC also approved a proposal by the Ministry of Energy (Power Division) for two amendments aimed at providing ease of doing business to upstream petroleum sector. The amendments are related to extension of exploration licences beyond two years by the ECC rather than the Minister in-Charge of Petroleum Division and creation of a new Zone-1 (F) for onshore licensing regime and consequent revision in the Zonal Map. The ECC has discussed proposal to increase wheat support price to Rs 1,400 per 40kg and will convene a special session on Thursday (today) afternoon to discuss a detailed plan to keep the wheat flour prices at the lowest possible level throughout the year in view of any increase in support price and incidental charges for supply of the PASSCO procured wheat to provinces and allied issues related to procurement of wheat by provinces and the private sector. The ECC also okayed the National Telecommunication Corporation's revised budget estimates for 2018-2019 and 2019-2020. The ECC also gave an approval, in principal, to a proposal for SAR 22.5 million equity investments abroad by Eastern Products (Pvt) Ltd. Pakistan.
Source: Brecorder
Italy’s sweeping nationwide restrictions that have put the entire country under lockdown in a desperate attempt to contain the coronavirus outbreak have brought to a standstill the world’s eighth-largest economy’s trade with other countries, including Turkey. The spreading illness has dealt a serious blow to the country’s economy – the third-largest of the 19 countries using the euro – as authorities said 631 people have died of COVID-19, with an increase of 168 fatalities recorded Tuesday. Infections in the country have topped 10,000 – more than anywhere but China. The health crisis is said to have brought to a halt Turkey’s trade with Italy, which is its third-largest export and fifth-largest import market. Flights have already been halted and Rome announcing Monday it was putting the entire country under lockdown has left in a lurch business trading with the country. There were over 119,000 cases of coronavirus globally and nearly 4,300 deaths linked to the virus as of early Wednesday. Among the countries with cases, Italy is the one Turkish business are having most difficulties with, said Istanbul Leather and Leather Products Exporters Association (İDMİB) Chairman Mustafa Şenocak. “Orders in Italy were cut like a knife. Previously given orders are also pending,” Şenocak told Turkish daily Dünya Wednesday. “Leather-related fairs were held in Italy, which we attended and received orders. Now, the companies that placed these orders say that they do not want them because they cannot open their stores,” he added.
Third-largest export market
Turkey’s bilateral trade with Italy amounted to nearly $19.7 billion in 2018, before it dropped to $17.9 billion last year. Exports in January of this year were up 9.2% year-on-year to $887 million, while imports reached $623 million. Automotive goods, staple and subindustry goods, textile, steel and byproducts spearhead exports to Italy, while machinery, electronic devices, means of transport, metals and chemical goods lead in imports. There are some 1,500 companies with Italian capital operating in Turkey. The country is said to have made around a $3.7 billion investment in Turkey between 2002 and 2019. It ranked second just to the Netherlands in 2018 when it made $523 million foreign direct investments.
Wait could last until June
There are serious contractions in the orders of Turkish companies doing business with Italy, according to Mediterranean Exporters' Associations Coordinator head Hayri Uğur, who said this rate is already up to 50-60%. “The orders could be canceled. A serious contraction is expected in trade volume,” Uğur continued. “Things are very difficult in Italy. There is no solution suggestion for now. Have to wait. The wait could last until at least June and then the assessments will be made depending on the situation.” Concerns persist that the same situation could also be experienced in other countries as well, he noted. “Works from home continue. Lastly, the Inditex Group has decided not to accept any manufacturer in its office. Also, company officials that were expected to arrive next week postponed their trips to the end of May,” Uğur added.
Anxious wait for automotive industry
Uludağ Automotive Industry Exporters' Association (OİB) Chairman Baraç Çelik noted Italy was an important destination for the Turkish automotive industry. “It is a third-largest export market for the Turkish automotive sector. ... We make more than 15% of our total exports to Italy. The quarantine is currently being implemented in Italy. To look at the short-term effect of this, it is important how much the products supplied from Italy will be affected,” Çelik said. “If Italy solves this by April 3, our automotive industry will manage this situation somewhat. But if it extends until mid-April, there may be a problem,” he added. Even though they are two competing countries in the home and kitchen utensils sector, Italy is an important export market in the said industry. “Now many of our customers in Italy had to cancel their orders. We have companies that have their products ready but cannot load due to this reason. On the other hand, Italy is a country where we import intermediate goods in some product groups. It's too early to see the whole picture,” Burak Önder, the chairman of the Home and Kitchenware Industrialists and Exporters Associations, told Dünya.
No current obstacles in transportation
Italy is also an important route in transit transport to other European countries. Both highway transport and roll-on, roll-off, or Ro-Ro, transport with Italy continue; however, transportation companies are concerned that the borders will be completely shut down. International Transporters Association of Turkey (UND) officials have said there were currently no obstacles in transportation to Italy, where around 40,000 export trips are made annually. Fuat Pamukçu, sales, marketing, business development and strategy vice president at the Mediterranean Business Unit of DFDS, which is one of the most important companies engaged in Ro-Ro transport between Turkey and Italy, said nearly 45 Ro-Ro monthly trips are made to Italy. “We have called off trips for nearly one month. Crews are changing in Turkey. We transfer the drivers from Slovenia, not from Italy. Even though Italy is in a quarantine state, factories, workplace and rig traffic continue. Precautions have been taken everywhere. We are following the developments closely,” Pamukçu was cited as saying.
Source: Daily Sabah
HÀ NỘI — The Ministry of Finance has submitted to the Government a five-month extension of value-added tax (VAT), personal income tax and land rent fee payments for those affected by the COVID-19 epidemic. The extension is a key part of the Government draft decree on extension of tax payment and land rent to those affected by the epidemic, which is expected to come into effect soon to help businesses recover production and overcome difficulties, contributing to gaining the set economic growth target of 2020. If the draft is approved by Prime Minister Nguyễn Xuân Phúc, there will be three groups of beneficiaries. The first group includes businesses, organisations, individuals, groups of individuals and households engaged in production activities in agricultural, forestry and fisheries sectors, production and processing of food, textile and garment, footwear, production of rubber products, production of electronic products and computers, and automobile manufacturing and assembling (except for cars with nine seats or fewer). The second group covers those operating in transport sectors (railway, road, waterway, aviation, warehousing and supporting activities for transportation), accommodation and catering services, activities of travel agents, tour businesses and support services related to tour promotion and organisation. And the third is small and super small enterprises defined by regulations of the Law on Supporting Small and Medium Enterprises. The ministry said the total amount of the five-month extension is estimated to be about VNĐ30.1 trillion (US$1.3 billion), which is not expected to affect the State budget balance in 2020. However, the budget revenue this year will not decrease because enterprises must complete payment to the State budget before December 31, 2020. According to recommendations of the Vietnam Association of Small and Medium Enterprises sent to the Prime Minister and the Ministry of Finance recently, the COVID-19 epidemic has directly affected many industries and production fields of Việt Nam, causing supply chain disruptions and indirectly effecting the entire economy. A forecast by the Ministry of Planning and Investment shows that in case the epidemic is controlled in the first quarter of this year, the country's economic growth rate is forecast at 6.25 per cent, down 0.55 percentage point compared to 6.8 per cent set out in the Government's Resolution No.01/NQ-CP on January 1, 2020. In case the epidemic is controlled in the second quarter of this year, the economic growth will reach 5.96 per cent, down 0.84 percentage point against the target. Phạm Đình Thi, Director of the Tax Policy Department under the Ministry of Finance, said that in a short time, the ministry collaborated with other ministries and agencies to finalise the draft decree to submit it to the Government for approval and promulgation, aiming to provide assistance to those engaged in production and business activities in economic sectors directly affected by the Covid-19 epidemic. All beneficiaries of the draft decree must send a written request for extension of tax and land rent to the tax authorities before May 31, 2020 (electronic or other methods selected by taxpayers). — VNS
Source: Vietnam News
Karachi: Pakistan designs to take away obligations on many raw materials employed by exporters, aiming to make them far more regionally competitive and assist the financial state escape a recurring increase-bust cycle. Obligations on imported raw products, which ended up eradicated on extra than 1,600 items final calendar year, will be even more reduced or removed in this year’s funds, Abdul Razak Dawood, commerce and expense adviser to Pakistan’s key minister, said in a interview in Karachi. Dawood also reported he’s “very hopeful” the govt can proceed providing discounted power to export-dependent factories. Pakistan’s economic development is noticed decelerating to 2.4% in the 12 months through June, its weakest speed in more than a 10 years. Globe Lender data show use expansion slowed and investment decision contracted past fiscal calendar year as authorities sought to stabilize the financial state right after fiscal and present-day-account deficits and dwindling reserves resulted in a stability-of-payments crisis. Remedial actions involved Asia’s most aggressive desire-price tightening, with the central financial institution much more than doubling its policy fee since January 2018, to 13.25%. To consist of the problems from soaring deficits, Pakistan has devalued its forex by 50 percent in excess of the earlier two many years and secured a $6 billion loan final yr from the Global Financial Observed, its 13th bailout from the loan provider considering the fact that the 1980s. Shipments from the South Asian country have been mainly stagnant — ranging in between $20 billion-$25 billion for each 12 months — more than the past decade, a time when other building economies like Vietnam and Bangladesh have viewed their export sectors prosper. The devaluation and import-duty cuts have improved Pakistan’s competitiveness, with exports envisioned to rise by $1.5 billion this fiscal 12 months and upcoming to a report $26 billion, in accordance to Dawood, who also suggested the governing administration in a identical purpose from 1999-2002. Much more than 50 percent of Pakistan’s exports are textiles, according to Dawood, with the industry now functioning in close proximity to utmost capability. The most important textile firms — which include Interloop Ltd., Nishat Team and Sapphire Group — are searching to broaden, reported Dawood, founder of Lahore-based mostly Descon Engineering Ltd. The European Union, which normally takes about a person-3rd of Pakistan’s exports, has prolonged favorable obtain to its marketplaces for two additional years, Dawood explained. Pakistan’s exports to Europe grew by 30% in the two a long time right after it been given favorable entry in 2014, but the tempo has slowed due to the fact. Dawood stated he’s “really pushing hard” to devise a coverage for community producing of cellular telephones. China-based Infinix Mobility, which last month became the to start with cell cell phone assembler in Pakistan, stated it will contemplate developing circuit boards locally if the plan is authorized. Dawood also expects a absolutely free-trade agreement with China, which took effect in January, to enhance abroad shipments by at least $500 million on a yearly basis. “There is a global slowdown right now but Pakistan’s exports are exhibiting very, very great results,” Dawood explained. “I’m hoping this will be the to start with indicator of an upward development.”
Source: Go Tech Daily
