The government on Monday lifted the prohibition on export of all non-woven fabric used for production of masks and coveralls other than those in the 25-70 GSM (grams per square metre) and melt-blown categories. The Directorate General of Foreign Trade (DGFT) in a notification said export of non-woven fabric for 25-70 GSM and melt-blown fabric continues to be in the prohibited category. “All other non-woven fabrics with GSM other than 25-70 GSM are freely allowed for exports,” DGFT said. Last month, India allowed the export of personal protective equipment (PPE) medical coveralls with a monthly quota of 50 lakh. It also permitted the export of non-surgical/non-medical masks made up of rayon, nylon, and polyester, viscose fabrics in woven, blended and knitted form in addition to masks made up of cotton, silk and woollen. The DGFT had prohibited exports of textile raw materials for masks and PPE coveralls in March fearing their shortage amid the outbreak of the Covid-19 pandemic.
Source: Economic Times
Commerce and industry minister Piyush Goyal on Monday said India is not against imports and will need to import certain products as every country can't produce everything. “We will need to import certain products where we have difficulty. Every country can’t produce everything...Every country can’t be competitive in everything,” Goyal said at a virtual event of the Bombay Chamber of Commerce and Industry. “We are not against imports but we should also export,” he said, adding that the Covid-19 pandemic has taught the country to be self-reliant and not over-dependant on anyone. His statement assumes significance in the wake of the government erecting barriers to curb imports especially those from China. Goyal also said that the government has been identifying sectors to enhance exports and substitute imports. It has identified 12 industry sectors to promote Indian manufacturing including food processing, iron and steel, electronics, industrial machinery, furniture, auto parts, and leather and footwear. “We are looking at new sectors to promote Indian manufacturing. We are trying to create a single window mechanism which is transparent but not prone to misuse,” he said.
Source: Economic Times
Synopsis As part of the Aatmanirbhar Bharat package announced in May, Finance Minister Nirmala Sitharaman had announced that the Centre has decided to accede to the request and increase borrowing limits of states from 3 per cent to 5 per cent, for 2020-21, which will make available extra resources of Rs 4.28 lakh crore. The finance ministry has written to the states on additional borrowing of 2 per cent of their projected GSDP in the current nancial year, amid stress in revenue due to coronavirus-induced lockdown. Further, public and private sector banks have together sanctioned loans worth over Rs 1.20 lakh crore, while the disbursal amount stood at Rs 61,987 crore, under the Emergency Credit Line Guarantee Scheme for MSMEs. As part of the Aatmanirbhar Bharat package announced in May, Finance Minister Nirmala Sitharaman had announced that the Centre has decided to accede to the request and increase borrowing limits of states from 3 per cent to 5 per cent, for 2020-21, which will make available extra resources of Rs 4.28 lakh crore. However, she had said part of the increased borrowing limit would be linked to specic reforms undertaken by the states in areas of universalisation of One Nation-One Ration Card, ease of doing business, power distribution and urban local body revenues. "In an eort to support the nancial position of the state governments presently suering from stress on account of revenue losses due to lockdown, the Department of Expenditure issued a communication to all the state governments for additional borrowing of 2 per cent of projected GSDP (gross state domestic product) to the states in 2020-21, subject to implementation of specic State Level Reforms," according to an oicial statement. Further, the economic package also included a Rs 3-lakh crore collateral-free automatic loans for businesses, including micro, small and medium enterprises (MSMEs). With regard to a Rs 30,000-crore special liquidity facility for non-banking nancial companies (NBFCs), housing nance companies (HFCs) and micronance institutions (MFIs), the ministry said the scheme has been launched. "RBI (Reserve Bank of India) has also issued a circular to NBFCs and HFCs on July 1, 2020, itself on the scheme. SBICAP has received 24 applications requesting about Rs 9,875 crore of nancing as on July 7, 2020, which are being processed. The rst application in this regard has received its approval and the remaining are also being considered," the statement added. The government had in May announced an economic package of Rs 20 lakh crore, equivalent to 10 per cent of India's gross domestic product, to ght the COVID19 pandemic. "The ministries of nance and corporate aairs have immediately started implementation of the announcements related to the economic package under the Aatmanirbhar Bharat Abhiyaan. Regular reviews and monitoring of the implementation of economic package is being overseen by the nance minister personally," the statement added. To give eect to certain measures announced in the package, the Department of Expenditure has amended present Rule 161 (iv) of General Financial Rules, 2017 and GFR Rules relating to Global Tenders, giving a major relief to local MSMEs. "Now, no global tender enquiry shall be invited for tenders up to Rs 200 crore, unless prior approval is obtained from Cabinet secretariat," the statement said. In a relief to contractors, it was announced by the nance minister that all central agencies, such as Railways, Ministry of Road Transport and Highways, and Central Public Works Department, will give an extension of up to 6 months for completion of contractual obligations, including in respect of EPC (engineering-procurement-construction) and concession agreements. "In this regard, the Department of Expenditure has issued instructions that (due to the COVID-19 pandemic) on the invocation of Force Majeure Clause (FMC), contract period may be extended for a period not less than three months and not more than six months without imposition of any cost or penalty on the contractor/concessionaire," the statement said. It added that "instructions were also issued to return the value of performance security to the contractor/ suppliers proportional to the supplies made/ contract work completed to the total contract value. The same is being implemented by various Departments/Ministries".
Source: Economic Times
Hon’ble Prime Minister Shri Narendra Modi on May 12th, 2020, announced the Special economic and comprehensive package of Rs. 20 lakh crores - equivalent to 10% of India’s GDP – to fight COVID-19 pandemic in India. He gave a clarion call for Aatma Nirbhar Bharat or Self-Reliant India Movement. He also outlined five pillars of Aatma Nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand. Following the call of the Hon'ble Prime Minister, Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman laid down the details of the Aatma Nirbhar Bharat Package in a string of press conferences from 13th May to 17th May 2020. The Ministries of Finance & Corporate Affairs have immediately started implementation of the announcements related to the Economic Package under Aatma Nirbhar Bharat Abhiyaan. Regular reviews and monitoring of the implementation of economic package is being overseen by the Finance Minister personally. In the latest review taken by Smt Nirmala Sitharaman the following progress has been reported so far:
It was announced by the Finance Minister that all central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements. In this regard, Department of Expenditure has issued instructions that (due to COVID-19 pandemic) on the invocation of Force Majeure Clause (FMC), contract period may be extended for a period not less than three months and not more than six months without imposition of any cost or penalty on the contractor/concessionaire. Instructions were also issued to return the value of performance security to the contractor/ suppliers proportional to the supplies made/ contract work completed to the total contract value. The same is being implemented by various Departments/Ministries.
The Finance Minister announced that the Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only in view of the unprecedented situation. This will give States extra resources of Rs. 4.28 lakh crore. In an effort to support the financial position of the State Governments presently suffering from stress on account of revenue losses due to lock down, Department of Expenditure issued a communication to all the State Governments for additional Borrowing of 2 per cent of projected GSDP to the States in 2020-21 subject to implementation of specific State Level Reforms.
To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29th February 2020, in the form of a Term Loan at a concessional rate of interest will be provided. This will be available to units with upto Rs. 25 crore outstanding and turnover of up to Rs. 100 crore whose accounts are standard. The units will not have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3 lakh crore to more than 45 lakh MSMEs. After taking Cabinet approval on 20.05.2020, Department of Financial Services issued Operational Guidelines for the Scheme on 23.05.2020 and Emergency Credit Line Guarantee Scheme (ECLGS) Fund was registered on 26.05.2020. In a short period of about one and half months noticeable progress has been achieved in identifying units, sanctioning as well as disbursing of loans to MSMEs. Following is the progress as on 9th July 2020:
Existing Partial Credit Guarantee Scheme (PCGS) will be revamped and extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 per cent first loss sovereign guarantee to Public Sector Banks. After the Cabinet approval on PCGS on 20.05.2020, Operational Guidelines for the Scheme were issued on 20.05.2020 itself. Banks have approved purchase of portfolio of Rs. 14,000 crore and are currently in process of approval/negotiations for Rs. 6,000 crore as on 3rd July 2020.
New front loaded special refinance facility of Rs. 30,000 crore sanctioned by NABARD during COVID-19 to RRBs & Cooperative Banks. This special facility to benefit 3 crore farmers, consisting mostly small and marginal farmers in meeting their credit needs for post-harvest and kharif sowing requirements. When kharif sowing is already on its full swing Rs. 24,876.87 crore out of Rs. 30,000 crore has been disbursed as on 06.07.2020, out of this special facility.
The Department of Revenue, vide its Press Release dated 13.05.2020, announced the reduction in TDS rates for specified payments to residents and specified TCS rates by 25% for transactions made from 14th May, 2020 to 31st March, 2021.
Between April 8 and June 30, the Central Board of Direct taxes (CBDT) has issued refunds in more than 20.44 lakh cases amounting to more than Rs. 62,361 crore, as stated in press release dated July 3, 2020. Remaining refunds are under process. The Department also issued Notification dated 24.6.2020, the due date for income-tax return for FY 2019-20 (Assessment Year 2020-21) has been extended from 31st July, 2020 (for individuals etc.) and 31st October,2020 (for companies etc.) to 30th November, 2020. Further, the due date for furnishing of tax audit report has also been extended from existing 30th September, 2020 to 31st October, 2020. The Department of Revenue has extended the time barring date for assessments getting barred by limitation on 30th September, 2020 to 31st March, 2021. In this regard, through the Press Release dated 24.6.2020, it has been already been communicated that making payment without additional amount under the ‘Vivad se Vishwas’ Scheme will be extended to 31st December, 2020 and the legislative amendments for the same in the Vivad Se Vishwas Act, 2020 (VsV Act) shall be moved in due course to time. Further, through the Notifications, compliance dates mentioned under the VsV Act falling during period 20th March, 2020 to 30th December, 2020 have been extended to 31st December, 2020.
The Ministry of Corporate Affairs has raised the threshold of default under Section 4 of the IBC, 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh) i.e. “in exercise of powers conferred under Section 4 of Insolvency & Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby specified Rs 1 crore as the minimum amount of default for the purposes of the said section” vide Notification dated 24.6.2020. The Ministry of Corporate Affairs is finalising a special insolvency resolution under section 240A of the Code, to provide relief to the MSMEs and the same would be notified soon. Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 has been promulgated on 5th June, 2020 thereby provided for insertion of Section 10A in the Insolvency and Bankruptcy Code 2016 to temporarily suspend initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7, 9 & 10 of the Code for a period of six months or such further period, not exceeding one year from such date.
After the Cabinet approval of the Special Liquidity Scheme for NBFCs/HFCs, the Scheme has been launched. RBI has also issued a circular to NBFCs and HFCs on 1st July, 2020 itself on the Scheme. SBICAP has received 24 applications requesting about Rs. 9,875 crore of financing as on 7th July, 2020 which are being processed. The first application in this regard has received its approval and the remaining are also being considered.
Source: PIB
Piyush Goyal said that India is open to engage with UK for a preferential trade agreement with the ultimate goal of a free trade agreement. India has started trade talks with the European Union (EU) and is open to dialogue with the United Kingdom for a free trade agreement, the trade minister said on Saturday, as Asia’s third largest economy looks for new markets for its products. Piyush Goyal said that India is open to engage with the UK for a preferential trade agreement with the ultimate goal of a free trade agreement. He is also in dialogue with the European Union’s trade commissioner for a deal that could start with a preferential trade agreement. He added that the ultimate goal here too would be to have a free trade agreement. “We’re talking to the EU and I am in dialogue with the EU trade commissioner. I am looking for an early harvest deal. Open to discussions on a variety of subjects. It’s up to the UK and EU whoever picks up the gauntlet first,” Goyal said. Negotiations for a comprehensive free trade agreement between the EU and India were suspended in 2013 after six years of talks. India pulled out of the Regional Comprehensive Economic Partnership last year due to fears over China’s access to its markets and is looking for new ways to boost its exports. The country has also been raising trade barriers to block cheap imports from China and replace them with locally made goods for domestic consumption and exports. “Apart from pharmaceuticals, we have textiles, handicrafts, leather, furniture, industrial machinery, toys are areas where India can engage with UK & EU at competitive prices,” Goyal said. India’s economic growth has largely been driven by local consumption and successive governments have struggled to expand exports. In the last six years Prime Minister Narendra Modi’s government has been trying to push exports through various programmes like “Make in India” but with limited success.
Source: Deccan Chronicle
‘With new leaders at the European Commission and European Council, existing differences could narrow’. India and the EU may take a fresh look at the long-pending bilateral Broad-based Trade and Investment Agreement (BTIA) and see if a meeting ground could be reached and the talks taken forward when leaders meet at the India-EU Summit on Wednesday, an official source has said. “With new leadership taking charge of the European Council and the European Commission, there is a renewed interest in the bilateral free trade agreement. This may get translated into the talks re-starting,” the source, aware of the agenda for the meeting, told BusinessLine. Prime Minister Narendra Modi will represent India at the summit, to be held via video-conference, while the EU will be represented by European Council President Charles Michel and European Commission President Ursula von der Leyen.
Combating Covid
The other issues that would be discussed at the summit include the impact of the on-going pandemic on the economies of India and the EU and what should be the agenda of various global institutions to deal with the crisis, the official said. The two will also review political and security relations and focus on things that can be done together. The new chiefs of the European Commission and European Council took over in December 2019 bringing in a new vision of uplifting the EU’s status in the international arena to match the bloc’s contribution to the global economy and polity, the source said. “The new EU leadership is also keen to redraw its relationship with important trade partners such as India. In fact, PM Modi was one of the first leaders that the new Presidents of the European Council and the European Commission spoke to after taking over. This gives us confidence that the EU would want to be less rigid on pending issues,” the source added. Negotiations for India-EU BTIA, launched way back in 2007, were suspended in 2014 following major differences over key market access issues including automobiles, wines & spirits, dairy and also movement of professionals. Last year, the EU had expressed interest in exploring a bilateral investment protection agreement (BIPA) with India that would be delinked from the proposed free trade pact, but no agreement was reached. The EU is India’s largest trading partner accounting for about $100 billion bilateral trade in goods and $40 billion in services, with India running a small trade surplus.
Source: Business Line
It is learnt that Chief Economic Advisor Krishnamurthy Subramanian will give a presentation to PMO officials Senior officials of the finance ministry are expected to brief their counterparts in the Prime Minister’s Office (PMO) on Monday regarding the Centre’s stressed revenue position and ways to augment receipts at a time when the Indian economy is on track for a contraction due to the Covid-19 pandemic. The possible measures that could be discussed include further rationalising rates through re-positioning some items in the inverted duty structure by the Goods and Services Tax (GST) Council, recovering amounts stuck in disputes, and, on the non-tax side, seeking higher ...
Source: Business Standard
This, despite average tariffs being much higher than peers, says WTO report; officials call for need to scrutinise FTAs Duty-free imports remain prominent in almost a fifth of inbound manufacturing categories, despite average tariffs in India being much higher than other major countries, a report by the World Trade Organization (WTO) has revealed. As high as over 30 per cent of electrical machinery imports, 19 per cent of non-electrical machinery, and 18 per cent of various types of manufactured goods came to India as of 2018 through the duty-free route, according to the World Tariff Profile 2020. While the government has since then gone on a tariff hike spree, officials feel the figures strengthen the case for deeper scrutiny into India’s existing free-trade agreements (FTAs) to stop imports from coming in. As of now, duty-free benefits are accorded to imports from nations with which India has various trading agreements. Focus on Asean “While China has remained the major target of New Delhi’s push for import substitution in all these categories, the WTO data shows that imports have continued to pour in from nations for which duties on goods have been waived. These are usually the Association of Southeast Asian Nations (Asean) economies,” a senior official said. Over the past two years, New Delhi has aggressively implemented the phased manufacturing programme, which pushes for large-scale domestic manufacturing of consumer goods like mobile phones, televisions, and computer hardware. This has been done through progressively higher duties on imported goods. On the other hand, machinery products and components have been identified as a key sector for providing incentives for domestic manufacturing. In November, the government said it had begun reviewing the FTA with Asean that could include issues like customs procedures, further liberalisation of trade in goods and exchange of data. “India hasn’t been able to crack into the Asean market despite having an agreement. The Asean economies are known for erecting non-tariff barriers. Domestic firms also have to compete with cheap Chinese products,” trade expert Biswajit Dhar said. The WTO’s publication is jointly prepared with the United Nations Conference on Trade and Development and the International Trade Centre. The report shows India’s share of binding coverage, a broad indicator of a country’s commitment to establish bound rates for imports and by extension slowly reduce tariffs, was 74 per cent, lagging China’s 100 per cent. The global trade law for the 164 WTO members prohibits discrimination on the basis of tariffs. But, in-practice bound tariffs are not necessarily the rate at which members charge taxes on another country’s products, with the ‘applied tariff rate’ — less than or equal to the bound rate — being opted for. Developed economies like the US and the EU have had lower duties, working on eventually eliminating all tariffs on imports. On the other hand, nations like India and Brazil have had to compromise between lowering import duties to participate more in global trade while at the same time protect its own industries by keeping in place import restrictions.
Source: Business Standard
The minister said that new industrial policy and forest policy would be brought out soon, along with further forms in the mining sector The government is looking to further ease the foreign direct investment (FDI) norms with investments being allowed in certain sectors, which continue to have constraints, Commerce and Industry Minister Piyush Goyal said on Saturday. It will also soon come out with a new industrial policy and forest policy. Speaking at the India Global Week 2020 Summit, Goyal said that some reforms in the economic policy were being considered as 'significant items were on the table'. "We are looking at further reforms in the mining sector. Also, we are looking to opening up foreign direct investment (FDI) in certain sectors where there still are some constraints, foreign investment will be permitted," Goyal said. "We are looking at the banking sector and capital market reform, so the agenda is vast and we are open to new ideas", Goyal added. "Further work on improving the ease of doing business are also ongoing with the ministry working on simplifying domestic approvals and beaureacratic processes", he said. Back in early-2019, the government had decided to return to the drawing board on the proposed industrial policy, despite announcing about two years back that the policy framework could be overhauled. In the meantime, the government has continued to refer to an initial 14-page discussion paper on the proposed policy — released in August 2017 — as the draft. The ministry had then announced that the final draft will be put out by January 2018. The new policy is expected to tie in existing government initiatives and serve as a focal point for various industry-wise policies. “It will absorb the 2011 national manufacturing policy and focus on technological issues of Industry 4.0, apart from furthering the government’s push of the Digital India initiative,” a senior official from the Department for Promotion of Industry and Internal Trade (DPIIT) said. Economic recovery "While the Covid-19 pandemic had thrown a 'spanner in the works', the timeline of reforms remains firm", the minister said. This was supported by resiliency in the economy and a fast pace of recovery, he added. Goyal said the railways were moving commodities at a faster pace. The transportation of fertilizers, coal, food grains, milk, and petroleum products, among other goods, has now increased to 92 per cent of what they were a year ago, on a weekly basis. Similarly, electricity consumption and receipts from the goods and services tax have reached 90 per cent levels of the usual, he said. He said that the consumption is expected to steeply rise in the next 3-4 months, given the record levels of agricultural output and rising sale of tractors. Goyal also stressed that the government had offered to begin trade talks with both the United Kingdom and the European Union after the Brexit exercise was over. "New Delhi remains committed to secure early harvest trade packages with both before work on a full preferential trade agreement can happen. India can be a lucrative market for Britain given the widespread import of scotch whiskey and other commodities, Goyal said. However, arguing that the ball rests in their court as of now, Goyal said India is open to sitting down for talks by Monday morning if they respond soon. Last year, the government relaxed the rules for single-brand retail, more than seven years after the foreign investment cap was removed for the segment to attract marquee foreign brands such as Gucci, Louis Vuitton, Ikea, and others into the country.
Source: Business Standard
Synopsis Coinciding with a 20-25% decline in orders, suppliers have been asked to provide up to 20% discounts on prices across sectors, extend credit periods and reduce lead time to ensure that products reach before October. Buyers in the United States and the European Union are renegotiating contracts, citing the severe impact of the Covid-19 pandemic on their businesses, as they start placing orders with…………
Source: Economic Times
The bilateral trade between India and China has dipped to $81.87 billion in 2019-20 from $87.08 billion in 2018-19 The US remained India's top trading partner for the second consecutive fiscal in 2019-20, which shows increasing economic ties between the two countries. According to the data of the commerce ministry, in 2019-20, the bilateral trade between the US and India stood at $88.75 billion as against $87.96 billion in 2018-19. The US is one of the few countries with which India has a trade surplus. The trade gap between the countries has increased to $17.42 billion in 2019-20 from $16.86 billion in 2018-19, the data showed. In 2018-19, the US first surpassed China to become India's top trading partner. The bilateral trade between India and China has dipped to $81.87 billion in 2019-20 from $87.08 billion in 2018-19. Trade deficit between the two neighbours have declined to $48.66 billion in 2019-20 from $53.57 billion in the previous fiscal. The data also showed that China was India's top trading partner since 2013-14 till 2017- 18. Before China, UAE was the country's largest trading nation. India is also considering certain steps like framing technical regulations and quality control orders for host of items with a view to cut import dependence on China and boost domestic manufacturing. Trade experts believe that the trend of widening trade ties between New Delhi and Washington will continue in the coming years also as both the sides are engaged in further deepening the economic ties. Presence of Indian diaspora in the US is one of the main reasons for increasing bilateral trade, Biswajit Dhar, professor of economics at Jawaharlal Nehru University, said. "Presence of Indian diaspora is creating demand for Indian goods such as consumer items and we are supplying that. A balanced trade deal will further boost the economic ties," Dhar said. India and the US are negotiating a limited trade pact with a view to iron out differences at trade front and boost commercial ties. Professor at Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said that although the trade pact will be mutually beneficial for both the countries, India should be a bit cautious while negotiating the pact with the US in areas such as agriculture, dairy and issues related intellectual property rights. Ludhiana-based Hand Tools Association President Subhash Chander Ralhan said there is huge potential to boost bilateral trade between the countries on account of increasing anti-China sentiment in both the nations. "Because of the anti-China sentiment, several US companies are exploring news suppliers in countries like India to cut dependence on China and if it will happen, then it will greatly help India to boost exports to the US," Ralhan said. India is seeking relaxation in US visa regime, exemption from high duties imposed by the US on certain steel and aluminium products, and greater market access for its products from sectors such as agriculture, automobile, automobile components and engineering. On the other hand, the US wants greater market access for its farm and manufacturing products, dairy items, medical devices, and data localisation, apart from cut on import duties on some information and communication technology products.
Source: Business Standard
Last week, Moody’s Investors Service changed the outlook for JSW Steel to negative while S&P downgraded Delhi International Airport (DIAL) to ‘B+’ as it anticipates a slow recovery in traffic in the wake of the travel restrictions. At around 21 downgrades a day between January and now, the finances of corporate India continue to deteriorate. Close to 3,936 firms have been downgraded during this time while 593 have been upgraded. From 464 in January to 582 in June, downgrades have been rising steadily;the first nine days of July have seen 161 downgrades. Businesses, whether in manufacturing or the non-banking financial companies (NBFCs) space, are stressed. About 35% of credit ratings on Indian companies have either a negative outlook or are on credit watch with negative implications, S&P Global Ratings had observed in a note on June 24. “That increases to one-in-two ratings if we exclude debt-free companies in the IT sector,” analysts at the rating agency wrote, adding further downgrades were possible in spite of several negative rating actions over the past three months. Last week, Moody’s Investors Service changed the outlook for JSW Steel to negative while S&P downgraded Delhi International Airport (DIAL) to ‘B+’ as it anticipates a slow recovery in traffic in the wake of the travel restrictions. DIAL’s ratio of operating cash flow to debt, the agency observed, was expected to stay below its downgrade trigger of 5% over the next 12 months even if the airport operator receives its commercial property development (CPD) deposit and an upcoming tariff revision is favourable. “The rating confirmation recognises that while JSW’s credit profile will deteriorate reflecting the challenges brought by the pandemic, we believe that the company’s financial metrics will likely recover to levels commensurate with the current ratings by the fiscal year ending March 2023 (fiscal 2023),” Moody’s wrote. Even before the pandemic made things worse, the economy was slowing with GDP growth in FY20 clocking in at an anaemic 4.2%. For a sample of 1,691 companies (excluding banks and financials), net profits crashed 38% during the year; excluding TCS and Reliance Industries (RIL), the fall was a steeper 45%. With the lockdowns being reimposed in parts of states such as Maharashtra and Karnataka, espeically in big cities and industrial hubs, economic activity could be further hurt. This in turn, would hurt banks. India Ratings observed recently the stressed – debt ratio in India’s banking system is likely to surge to 18.21% of the total, from 11.57% currently. On June 26, S&P lowered the ratings on four NBFCs, Shriram Transport Finance, Bajaj Finance, Manappuram Finance and Power Finance Corporation as believing that worsening operating conditions, following Covid-19, have increased risks for financial institutions operating in India and expect a recession to hurt the financial sector. “We expect the asset quality of Indian finance companies to deteriorate, credit costs to rise, and profitability to decline over the next 12 months. Given the large acceptance of moratorium by borrowers, funding and liquidity problems could worsen for these companies,” S&P wrote. Earlier on June 18, Moody’s Investors Service had downgraded Tata Motors’ corporate family rating (CFR) and the company’s senior unsecured instruments rating to ‘B1’ from ‘Ba3’. The outlook on all ratings was changed to negative from ratings under review. Crisil believes downgrades will continue to outnumber upgrades in 2020-21 following the economic impact of the pandemic.
Source: Financial Express
Mumbai: The Central Board of Direct Taxes on Monday lifted an embargo on e-communication with taxpayers under the faceless scheme, issuing a circular asking its officers to reach out to assessees and start proceedings in all pending cases. The CBDT has set a target of completing 5,000 assessments a week, according to the circular that ET has seen. To ensure that tax officers don’t come across harsh to the assessees facing the brunt of the Covid-19 pandemic, the board has suggested a preface that the officers need to carry while sending out the notices. "It is advisable to start all communications with the following preface: 'We appreciate the anxiety and uncertainty that is facing all of us in the times of Covid-19. This communication is to assist you in ending the uncertainty which is pending e-assessment in your case for AY 18-19'," it. The cases where partial response is on record may be prioritised, said the circular issued by the office of the National e-Assessment Centre, Delhi. The CBDT in a circular on May 8 had asked its officers to not have any adverse communication with the assesses in the wake of the pandemic and lockdown and their effect on the economy.
Source: Economic Times
Synopsis Ficci has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent. Industry body Ficci on Sunday said its Economic Outlook Survey has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent. With the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally, the latest forecast marks a sharp downward revision from the growth estimate of 5.5 per cent reported in the January 2020 survey, it said. The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased. While addressing SBI Banking and Economics Conclave on Saturday, RBI Governor Shaktikanta Das said the Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. "It is, however, still uncertain when supply chains will be restored fully; how long will it take for demand conditions to normalise; and what kind of durable eects the pandemic will leave behind on our potential growth," he said. In May, the Reserve Bank had said the GDP growth during 2020-21 is likely to remain in the negative territory. Releasing details of the survey, Ficci said the present round of 'Economic Outlook Survey' was conducted in June 2020 and drew responses from leading economists representing industry, banking and nancial services sector. "The latest round of Ficci's Economic Outlook Survey puts forth an annual median GDP growth forecast for 2020-21 at (-) 4.5 per cent - with a minimum and maximum growth estimate of (-) 6.4 per cent and 1.5 per cent respectively for 2020-21," it said. As per the survey, the quarterly median forecasts indicate GDP growth to contract by (-) 14.2 per cent in the rst quarter of 2020-21, with a minimum estimate of (-) 25 per cent and a maximum estimate of (-) 7.4 per cent. Economic activity-wise annual forecast indicated a median growth of 2.7 per cent for agriculture and allied activities for 2020-21. "Agriculture seems to be the only sector with a silver lining right now. There is an apparent upside as far as the performance of monsoon is concerned this year and the water reservoir levels in the country stand at good levels," the industry chamber said. According to the survey, the rural sector supported by a steady agriculture performance and hopefully a contained number of COVID-19 cases will be a key demand generator for India this year. The survey further said that industry and services sector, on the other hand, are expected to contract by 11.4 per cent and 2.8 per cent, respectively in 2020-21. Weak demand and subdued capacity utilisation rates were already manifesting into a drag on investments and the COVID-19 pandemic has further extended the timeline for recovery, it said. Even though activity in sectors like consumer durables, FMCG is gaining traction, majority of the companies are still operating at low capacity utilisation rates. Labour availability and feeble demand remain as major issues for the companies, it added. "Therefore, fresh investments will be diicult to come by in the near to medium term. Also, a signicant change in consumption patterns is expected on back of uncertainty with regard to jobs and income losses," Ficci said. It noted that absence of demand stimulus, a second wave of the pandemic and continuation of social distancing and quarantine measures will weigh heavy on growth prospects. "With demand and investment outlook muted, robust government expenditure has been the only saviour. Nonetheless, growth is likely to bottom out post the second quarter of current scal year," it said. According to the survery, some of the stimulus measures are reaching to the ground - especially through the credit guarantee scheme for MSMEs and support through MGNREGA - which is positive. During the survey, economists were asked to share their views on the scal stimulus package 2.0 and any additional measures that can be undertaken. Participants were of the view that government measures in stimulus focussed broadly on saving lives and undertaking deep structural reforms. "They, therefore, felt that while the quasi scal measures and structural reforms announced were undoubtedly steps in the right direction, on ground implementation and results will take a long time to work through in the present environment," it added. A majority of economists believed that the government could have undertaken "a more aggressive" scale stance than what has been announced in the two packages combined. Participating economists also highlighted that the measures announced by both the Reserve Bank of India and government focussed largely on addressing supply side constraints with limited support for creation of demand. Ficci said the surely participants unanimously believed that the RBI would undertake further cuts in the repo rate going forward to minimise the economic shock and stabilise nancial markets. Nonetheless, a majority of the participants also opined that cutting interest rates would not pump economic growth given that the demand conditions have remained subdued from even before the COVID pandemic struck the economy. The fast-changing macroeconomic environment and deteriorating outlook for growth necessitated o-cycle meetings of the Monetary Policy Committee (MPC) of the RBI - rst in March and then again in May 2020. The MPC decided to cumulatively cut the policy repo rate by 115 basis points over these two meetings, resulting in a total policy rate reduction of 250 basis points since February 2019. Ficci said economists were asked to suggest ways with which India could best utilise the present opportunity to expand its presence in the global value chains. Eorts towards liberalisation of FDI policy must be complemented with improving infrastructure and ease of doing business in the country, it added.
Source: Economic Times
The world will closely watch how India copes with the spread of Covid-19, particularly the different types of restrictions that states impose Last week, Prime Minister Narendra Modi told a global audience that ‘Atmanirbhar India’ ('self-reliant India') does not mean being self-contained or being closed to the world but is about self-sustaining and self-generating. He assured that India will pursue practices that promote efficiency, equity, and resilience. His audience will evaluate those words by the policies and actions that help Indian businesses become globally competitive. A few weeks back, hardly anyone had heard the word 'atmanirbhar'. The PM surprised many by invoking 'atmanirbhar' as ...
Source: Business Standard
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
772.71 |
USD/Ton |
-1.01% |
14-07-2020 |
|
VSF |
1234.05 |
USD/Ton |
-0.23% |
14-07-2020 |
|
ASF |
1686.82 |
USD/Ton |
0% |
14-07-2020 |
|
Polyester POY |
699.87 |
USD/Ton |
-0.81% |
14-07-2020 |
|
Nylon FDY |
2021.04 |
USD/Ton |
0% |
14-07-2020 |
|
40D Spandex |
3999.24 |
USD/Ton |
0% |
14-07-2020 |
|
Nylon POY |
1856.79 |
USD/Ton |
0% |
14-07-2020 |
|
Acrylic Top 3D |
878.40 |
USD/Ton |
0% |
14-07-2020 |
|
Polyester FDY |
2285.28 |
USD/Ton |
0% |
14-07-2020 |
|
Nylon DTY |
5141.88 |
USD/Ton |
0% |
14-07-2020 |
|
Viscose Long Filament |
942.68 |
USD/Ton |
0% |
14-07-2020 |
|
Polyester DTY |
1878.21 |
USD/Ton |
-1.13% |
14-07-2020 |
|
30S Spun Rayon Yarn |
1721.10 |
USD/Ton |
0% |
14-07-2020 |
|
32S Polyester Yarn |
1371.17 |
USD/Ton |
-0.52% |
14-07-2020 |
|
45S T/C Yarn |
2171.02 |
USD/Ton |
-0.33% |
14-07-2020 |
|
40S Rayon Yarn |
1571.13 |
USD/Ton |
0% |
14-07-2020 |
|
T/R Yarn 65/35 32S |
2042.47 |
USD/Ton |
0% |
14-07-2020 |
|
45S Polyester Yarn |
1885.36 |
USD/Ton |
0% |
14-07-2020 |
|
T/C Yarn 65/35 32S |
1671.11 |
USD/Ton |
0% |
14-07-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
0% |
14-07-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
14-07-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
14-07-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
14-07-2020 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
14-07-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14283 USD dtd. 14/07/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Oil prices were little changed on Monday after falling earlier as a record daily rise in global coronavirus cases boosted concerns that demand could fall again, while a producer meeting this week was expected to recommend an increase in output. The World Health Organization reported a record daily increase in global coronavirus cases on Sunday, with the total up by more than 230,000. In the United States, infections surged over the weekend as Florida reported an increase of more than 15,000 new cases in 24 hours, a record for any state. Brent futures remained unchanged at $43.24 a barrel by 11:23 a.m. EDT (1523 GMT), while U.S. West Texas Intermediate (WTI) crude rose 4 cents, or 0.1%, to $40.59. "The energy patch is under pressure this morning from both sides of the supply/demand equation today," said Bob Yawger, director of energy futures at Mizuho in New York, noting "Increases in Covid-19 cases has dented the demand side, and (OPEC) appears determined to increase supply." Oil traders also remained on edge as the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) prepares to meet on Tuesday and Wednesday to recommend levels for future supply cuts. OPEC and allies including Russia, a group known as OPEC+, are expected to ease their production cuts to 7.7 million barrels per day (bpd) after a recovery in global oil demand. OPEC+ cut output by a record 9.7 million bpd for May, June and July. A gradual rise in oil demand as countries ease coronavirus lockdowns and record supply cuts by OPEC+ are bringing the oil market closer to balance, OPEC Secretary General Mohammad Barkindo said on Monday. Libya, meanwhile, re-imposed force majeure on all oil exports on Sunday because of a renewed blockade by eastern forces. The move comes only two days after Libya exported its first crude cargo in six months.
Source: Business Standard
The British government is aiming to reach a trade deal with Japan "around the end of this month," according to London's chief negotiator with Tokyo. "We are working very quickly and would both like to reach an agreement around the end of this month and sign a trade agreement formally in September," Graham Zebedee said in an online business seminar earlier this month. The two governments kicked off negotiations on June 9 and are keen to have a deal come into force by the end of this year when the free trade agreement between the European Union and Japan no longer applies to the United Kingdom, which left the regional bloc on Jan 31. The countries are working to clinch an agreement on the basis of the Japan-EU FTA, with Tokyo looking to scrap auto tariffs as soon as possible while London wants benefits for its financial services and textile industries. Trade between the two countries totaled about $38 billion in 2019, with Japan being the United Kingdom's 11th largest export market and the United Kingdom the 12th biggest market for Japan. In the July 2 webinar organized by the global consultancy group EY, Zebedee said, "We have looked at every aspect of the EPA (the Japan-EU deal) and decided whether we can improve on it." The negotiator with the Department for International Trade was referring to an economic partnership agreement, an arrangement that eliminates barriers to the free movement of goods, services and investment between countries. Zebedee said there are some aspects in the existing pact that can be changed for the better in a new bilateral agreement. "The EPA is a starting point but not necessarily a finishing point." The Japan-European Union FTA came into effect in February last year, removing or lowering tariffs on agricultural products such as wine and cheese from Europe while scrapping the 10 percent tariff on Japanese automobiles in its eighth year and immediately removing those on auto parts.
Source: Japan Today
With global buyers canceling most orders, Vietnam’s textile and garment sector could see more job losses in the second half of the year. Textile production grew by 2.8 percent year-on-year in the first half of the year compared to 11.5 percent in the same period last year, according to a report by the Ministry of Industry and Trade. Garment production fell 4.7 percent with the industry having difficulties sourcing raw materials and rapidly losing export orders to the pandemic, it said. Many export orders were canceled or delayed in May and June, including half of all orders in the former month, and global prices fell 20 percent as a result of the plunging demand, it added. A report by the Vietnam Textile and Apparel Association said 80 percent of businesses in the industry laid off personnel in April and May, and more cuts are expected in the third quarter. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group, said the company’s revenues and profit have fallen by half. The company is making efforts to retain as many of its staff as possible, but if the current situation persists for more than six months, cuts are probable, he said. Most companies have shifted their focus from clothes to face masks to meet the rising demand globally. Vietnam exported 557 million masks in the first six months, with the U.S., Germany, Singapore and South Korea being the main markets, customs figures show. But insiders said mask exports would not make up for the lack of garment orders. Truong forecast that in the worst case scenario textile and garment exports would fall by 23 percent this year to $30 billion.
Source: VN Express
Rather than going overseas, China seeks to ensure its people shop for foreign luxury products within its own boundaries. For that, the government is proposing a new annual cap of RMB100,000 ($14,000) per person for tax-free shopping in the southernmost province of Hainan, China. Each year the popular tourist destination attracts more than 75 million tourists, mainly domestic. The new limit is over three times that of the current RMB 30,000 ($4,200). The allowance rise and free port policy announcement followed the ‘Two Sessions’ annual plenaries of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference which ended last week. Among other aspects of the free port plan relevant to duty-free retailing include the plan to increase its number of tourists by making Hainan an international aviation hub; liberalizing air rights including fifth and seventh freedoms; and constructing a cruise tourism pilot zone. The Chinese increased their share of the global $313 billion personal luxury goods market by as much as 35 per cent last year, according to consultancy firm Bain & Company. China was also responsible for increasing the personal luxury market in 2019 almost single-handedly.
Source: Textile Focus
