A high-level ministerial dialogue to boost trade and investment relations, commitment to remove trade hurdles and expand market access, and increased security cooperation are part of the new broad-based strategic partnership adopted between India and the European Union (EU) on Wednesday. A regular dialogue on trade is expected to pave the way for "balanced, ambitious and mutually-beneficial trade and investment agreements", officials said. Both sides also adopted a policy to enhance bilateral market access. They agreed to optimally use the Investment Facilitation Mechanism (IFM) established in 2017 to promote inbound investments from the EU. The strategic partnership objectives are set to guide ties between India and the bloc over the next five years, and formed a key part of the announcements at the 15th India-EU Summit — held via videoconferencing. Calling the EU a natural partner for India, PM Narendra Modi said a partnership between the two was required for maintaining global peace and stability. "In the wake of the Covid-19 pandemic, new economic challenges have emerged on a global scale and more cooperation between democratic nations was the need of the hour. Pressures on the rules-based international order can also be relieved through economic and human-centric development brought forward by the partnership," he said. Both sides also committed to continuing the regulatory dialogue on pharmaceuticals and medical devices that will align products with international standards and remove quality barriers to active pharmaceutical ingredients and medicine exports, a key Indian demand. Obstacles related to sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) will also be regularly flagged and reduced, both governments said. This was accompanied by a series of other commitments to speed up cooperation on agricultural and marine trade, reduce customs hassles, protect intellectual property and geographical indicators, and foster cooperation between small businesses and start-ups. In the security space, closer military ties have been pushed with a focus on establishing regular security consultations that will exchange information on strategic priorities, security issues, crisis management, and peacekeeping. Early conclusion and implementation of a working arrangement between Europol and the Central Bureau of Investigation (CBI) has also been agreed upon. The two sides also pushed for more convergence between the regulatory frameworks governing cross-border data flows and privacy issues. They would also "make utmost efforts towards reaching an agreement on taxation of the digital economy", with widespread consequences for internet giants like Google.
Green focus
With a view to strengthen policies on climate change and reduce waste, the joint statement also put stress on resource efficiency and circular economy. To this end, Modi has called for more European investments in India's renewable energy sector. "Both sides consider that enhancing resource efficiency and moving towards a more circular economic model that reduces primary resource consumption, striving towards non-toxic material cycles, and enhances the use of secondary raw materials is important, notably in the context of the post-Covid-19 economic recovery efforts that can provide an opportunity to accelerate this transition," it said. The formulation of long-term low greenhouse gas emission development strategies and a joint declaration to restrict the increase in global average temperature to well below 2°C above pre-industrial levels were also announced.
Source: Business Standard
India and the European Union on Wednesday adopted a joint declaration on moving towards a more circular economic model that provides for reduction in primary resource consumption and enhances the use of secondary raw materials. The declaration was adopted at a virtual summit of the leaders of the two sides that resolved to significantly expand bilateral economic engagement, recognising that post Covid-19 recovery priorities offer opportunities to unleash the full potential for trade and investment ties. The India delegation at the summit was led by Prime Minister Narendra Modi while the EU team was headed by President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen. The declaration on the circular economic model said both sides consider that enhancing resource efficiency and moving towards a more circular economic model that reduces primary resource consumption is important, notably in the context of the post Covid-19 economic recovery efforts. The 27-nation EU is India's largest trading partner for goods with trade exceeding 100 billion dollars. The bloc is one of the largest investors in India with cumulative investment of over 91 billion dollars. The EU is also an important source for technology, innovation and best practices for India. Under the new framework of circular economic model, the two sides vowed to strengthen ongoing cooperation by exchanging regulatory and standardisation approaches, management systems, best practices and joint research in the field of resource efficiency, energy efficiency and circular economy. The declaration mentioned that the objectives of the new initiative is to establish an India-EU Resource Efficiency and Circular Economy Partnership, bringing together representatives of relevant stakeholders from both sides, including governments, businesses academia and research institutes. In a separate joint statement, the two sides resolved to boost cooperation to support clean energy transition, resource efficiency and circular economy, and the necessary technological leaps, while opening new business opportunities. "India and the EU will further develop cooperation on smart and sustainable urbanisation, information and communication technology, transport, space and health security," it said. "They agreed to jointly tackle water issues, air pollution, plastic and marine litter. Exchanges on research and innovation will be increased to further underpin progress in these areas," the statement added. In the summit, the two sides also decided to set up a high-level dialogue to address trade irritants and improving conditions for traders and investors on both sides as well as discuss supply chain linkages. "India and the EU agreed to keep the global trading system open, with the WTO as the bedrock of the rules-based multilateral trading system and to step up cooperation to preserve, strengthen and reform the WTO," the joint statement said. It said the cooperation should address today's challenges effectively, including post-Covid-19 economic recovery efforts with the objectives of a sustainable, socially just and resource-efficient economy. The two sides also welcomed the ongoing activity in India of the European Investment Bank and its upcoming planned investments of Euro 550 million in the Pune and Bhopal Metro Rail projects.
Source: Business Standard
Economic reforms are a matter of continuing interest in India. Only recently, marking the birth anniversary of former PM Narasimha Rao, decisions taken during his time to open the Indian economy were recalled. They were bold decisions taken under compelling circumstances. Even from 1989, the brewing balance of payments crisis was getting noticed. India had to undertake higher levels of borrowing, and correspondence with the IMF and World Bank had commenced by late 1990. Without the borrowing, India would have had to default on its external payment obligations. The IMF pegged the release of the credit tranches to our quarterly performances based on specied criteria. The World Bank provided the structural adjustment loans linked to specied benchmarks. Their conditions were to work in tandem. India was to open its economy to be market driven and out of the licence quota raj. To dismantle the four-decade-old command and control model required immense political will, which despite running a minority government Rao had shown. After all, India had to be pulled out of a near bankruptcy. However, several of the agreed conditions remained unfullled. A leadership and its vision for India adds strength to the required political will to undertake reforms which, postNarasimha Rao, the Congress lacks. The nance minister of 1991 was the prime minister for a decade, but the Congress used its political will for itself rather than for India. Several observers called 2004-14 as India’s lost decade. It doesn’t take a crisis to reform, nor should a crisis be allowed to overwhelm India. The rst NDA government (1999-2004) under Atal Bihari Vajpayee took the reforms forward. India had made commitments in 1991 on scal consolidation, as a part of those quarterly benchmarks to be fullled. However, it was PM Vajpayee who enacted the Fiscal Responsibility and Budget Management law. Another promise left unfullled was the rationalisation of state excise rates. In 1999, PM Vajpayee cleared the idea of a single goods and services tax. However, it was in 2017 under PM Narendra Modi that the Goods and Services Act came into force. Within a year after forming the government in 2014, PM Modi held a two-day Gyan Sangam with PSBs. He spoke about addressing the NPAs, changes to recovery laws and mergers of PSU banks. Importantly, he spoke about giving operational freedom to PSBs. Keeping in mind India’s aspirational needs, there were benets to be drawn from expanding the size and scope of our banks. A set of mergers took place in 2017. And a leap forward happened in August 2019. Old India’s 21 PSBs, after consolidation, today stand at 12. In addition we have a payments bank in the India Post Payments Bank. In one of the volumes on RBI history, we nd an interesting observation on the 1969 nationalisation of banks: “single most important economic decision taken by any government since 1947. Not even the reforms of 1991 are comparable in their consequences – political, social and of course economic.” Post-nationalisation, several new branches of PSBs were opened in areas that were till then uncovered. Gross domestic savings doubled as a percentage of national income in the 1970s. However, political interference in banks was rampant in the 70s. It continued unabated through ‘phone banking’ in 2008-14. As a result, that ‘single most important economic decision’ couldn’t achieve either nancial inclusion or steady acceleration of growth even after four decades. The PM Jan Dhan Yojana launched in 2014 has provided over 39 crore poor people access to banks and their services. Together they have over Rs 1.32 lakh crore in these accounts. Over 10 crore farmers are beneciaries of PM Kisan Yojana, which directly transfers monies into their accounts. Equally, market access was critical to multiplying farmers’ income. A major step of giving inter-state market access to all farmers was taken recently. Farmers shall no longer be compelled to sell only to licensees within their areas. Using the electronic National Agriculture Market he can seek the place and price for his product to be sold. The recent steps to energise agriculture have resulted in amending the Essential Commodities Act. Together with changes in land leasing and terms of farming, agriculture is seeing major reforms. Incidentally, removal of administrative export controls on agricultural commodities remains an unfullled commitment of 1991. The Insolvency and Bankruptcy Code and setting up of the National Company Law Tribunal in 2016 provide a major relief for companies looking for an exit policy. Long pending resolutions are happening now. The Code may be on insolvency but now resolutions most often are for going concerns. Speedy disposal also ensures reasonable value realisation. Within one year of being re-elected in 2019, NDA brought in major reforms in taxation. Corporate tax was reduced to 15 per cent for new manufacturing companies and for the old to 22 per cent. Options were provided for those who wished to continue beneting from accumulated exemptions to remain in the old scheme. So was personal income tax simplied and made exemption free. Here too, option to continue in existing/ old scheme was provided. To remove any perception of harassment, tax assessment and scrutiny were made faceless. Using technology, every correspondence with the assesse has a centralised Document Identication Number. Modi invited private players to be co-travellers in the Indian space sector. Also, to strengthen existing indigenous capacities in defence production he has invited greater investment in the sector. Reforms have continued even as the necessary stimulus is being provided for restarting the Covid-hit economy. Reforms are sustained, deep and pronounced under PM Modi.
Source: Economic Times
The outlook for the textile sector highlighted that India and Indonesia, which offer lowcost cheap labour and large domestic markets, may lose out due to the lack of conducive business conditions. Asia is expected to remain a dominant player in garment production over the coming decade even as China looks to reduce its apparel manufacturing operations and move up the value chain, analytics rm Fitch Solutions said in a report on Tuesday. The outlook for the textile sector highlighted that India and Indonesia, which oer low-cost cheap labour and large domestic markets, may lose out due to the lack of conducive business conditions. Even as China moves up the value chain, many other countries in Asia benet from favourable labour market dynamics for apparel production, suiciently predictable logistical connections to serve external trade, free trade agreements that ensure preferential access to major consumer markets, and geographic proximity to raw material producers in China and India, the report said. "Accordingly, we have already started to see Vietnam beneting from these trends and expect to see more investments into the country. In addition, we expect Bangladesh, Cambodia and Myanmar to see greater gains in the coming years as costs in Vietnam also rise," Fitch Solutions said. It identied India and Indonesia as potential recipients of manufacturing shifts and growth in terms of global apparel export share. However, according to the report, the two countries' annual growth rates will look less impressive compared with the other four countries including Vietnam, Bangladesh, Cambodia and Myanmar. "The countries' large populations, at 1.4 billion in India and 274 million in Indonesia, make them the second and fourthmost populous nations, respectively, in the world and suggest strong growth potential for domestic consumption," said the report. However, a lack of preferential trade access to the US and EU markets, as well as higher labour costs, will act as obstacles for these markets, it observed. "We at Fitch Solutions expect rising labour costs in China to continue pushing out low- to mid-range manufacturing to cheaper cost centres across Asia. "However, we believe that it will be exacerbated by rising trade protectionism globally and geopolitical risks attached to operating in China, as relations between China and the West deteriorate. This trend has already taken place for at least half a decade," said the report. It estimates high growth potential for textile manufacturing in neighbouring countries such as Cambodia, Myanmar, Bangladesh and Vietnam, supported by large and growing active populations and low labour costs.
Source: Economic Times
The specific provision under the Customs Act, 1962 is Section 26A that allows refund of import duty if the imported goods are found defective We are a 100 per cent EOU in the aircraft industry, and exported aircraft parts to a SEZ unit three years back. Some parts were rejected by the SEZ unit for technical reasons with proper documents. Now, I would like to re-import some of the parts under B-17 bond (with Procurement Certificate from EPD office) without payment of duty. How can I proceed, and on the basis of which notification? You will have to pay the duty, as re-import from the SEZ is taking place after more than three years of supply, and such a situation is not covered under Annexure-1 to the notification no.52/2003-Cus dated March 31, 2003, for EOUs. Para 2.50 A of the FTP says that imported goods found defective after Customs clearance, or not found as per specifications or requirements, may be re-exported back as per Customs Act, 1962. Can you please advise the corresponding specific provision under the Customs Act along with any conditions or restrictions for the same? The specific provision under the Customs Act, 1962 is Section 26A that allows refund of import duty if the imported goods are found defective, or otherwise not in conformity with the specifications agreed upon between the importer and the supplier of goods. One of the conditions for claiming refund is that the goods should not have been worked, repaired or used after importation, except where such use was indispensable to discover the defects or non-conformity with the specifications. Another condition is that the goods are either exported without claiming duty drawback, or abandoned to Customs, or destroyed or rendered commercially valueless in the presence of the Proper Officer within a period of 30 days (or such extended period as the Commissioner may allow) from the date on which the Proper Officer makes an order for the clearance of imported goods for home consumption. However, no refund shall be available in respect of perishable goods and goods which have exceeded their shelf life or their recommended storage-before-use period. There are other provisions under advance authorisation, EPCG, MEIS, SEIS and EOU schemes, which allow re-export of goods found defective or unfit for use. You can also re-export duty-paid goods against a drawback claim under Section 74, whether the goods are defective or not. You can re-export warehoused goods under Section 69 of the Customs Act, 1962, whether the goods are defective or not. Our letter of credit favouring the foreign supplier called for a complete set of bill of lading (BL) made out to order of our bank. Due to disruption of courier service during lockdown, the supplier surrendered the original set of BL to the shipping line at his end and got an electronic delivery order issued in our favour. The negotiating bank refused to pay against a copy of the BL. Was that correct? Yes. Under a letter of credit, the bank is obliged to pay only against documents that are in conformity with the terms and conditions of the Credit.
Source: Business Standard
NEW DELHI: India posted a trade surplus of $790 million in June, its first in over 18 years, with imports plunging as the coronavirus pandemic hit domestic demand for crude oil, gold and other industrial products, government data showed on Wednesday. Merchandise imports contracted 47.59% in June to $21.11 billion from a year ago, while exports fell 12.41% to $21.91 billion, leading to a marginal trade surplus, data released by the ministry of commerce and industry showed. India last posted a trade surplus - of $10 million - in January 2002, according to Refinitiv data. Commenting on the numbers, Indian Oilseeds and Produce Export Promotion Council (IOPEPC) chairman Khushwant Jain said that oil seed exports are recording growth on account of healthy output and steps taken by the government to promote shipments. “The growth rate will continue in the coming months also. The commerce ministry is resolving all our issues," Jain said. Oil imports declined by 55.29 per cent to $4.93 billion in June. While, gold imports plunged 77.42 per cent to $608.7 million. Mohit Singla, the chairman of Trade Promotion Council of India (TPCI) said as the forward and backward linkages of economic activity are gradually repairing, the supply shock is fading and thus making produce readily available to meet demand. "Many workers are returning back to work mainly in the manufacturing sector which is normalising the manufacturing activities and thus preparing industry to meet the global demand," Singla said. During April-June 2020, exports fell by 36.71 per cent to $51.32 billion while imports shrank by 52.43 per cent to $60.44 billion. The trade deficit stood at $9.12 billion during April-June. Since 2011-12, India's exports have been hovering at around $300 billion. During 2017-18, the overseas shipments grew by about 10 per cent to $303 billion and further to $330.08 billion in 2018-19 and $314.31 billion in 2019-20.
Source: Times of India
House-wares, bathroom accessories and lamps will be on display at the virtual show The 49th edition of 'IHGF-Delhi Fair' was virtually inaugurated by Smriti Zubin Irani, Union Minister of Textiles and Minister of Women and Child Development on July 14. The Prime Minister of India, Narendra Modi also sent in his good wishes to 'Export Promotion Council for Handicrafts' for the virtual fair amidst Coronavirus crisis and said it reflects the indomitable spirit to continue furthering the efforts to strengthen the handicrafts sector. In his message, the prime minister also conveyed that Indian handicrafts have been celebrated the world over for their artistic innovation and creative richness and has carved a niche in the International market. He also said that the world is seeing India as a trustworthy and reliable partner and India is also working towards building a self reliant and self-sufficient India. He urged everyone to be vocal about the locals, so that our local products grow into global brands and this will take the handicraft sector to new heights of vibrancy and prosperity. While inaugurating the fair, Smriti Irani said that during the pandemic, 'EPCH' brought 'IHGF Delhi fair' on a virtual platform, in which a large number of exporters will be showcasing beauty and workmanship of Indian handicrafts. Small, micro and medium exporters of India will be happy to engage with buying agents, buying houses from across the world in the virtual fair. She also wished success for everyone associated with the fair. Ravi K Passi, Chairman of 'EPCH' said, "The challenges posed before us during this COVID-19 crisis had led us to brainstorm and to present before the exporters a viable alternate business model in the form of virtual fair. This is a much bigger show as it is a multi-products show displaying a wide range of home, lifestyle, fashion, furniture and textiles products." Neeraj Khanna, President of the virtual fair, also said, "It is totally a new initiative by 'EPCH' and a much needed one at this critical time of COVID-19 pandemic. 'EPCH' has brought this virtual fair and I am sure this will open many new windows of opportunity for all of us." "Every crisis brings with it an opportunity and this pandemic has given us an opportunity to provide our member exporters with an alternative marketing platform as a virtual fair," said Rakesh Kumar, Director-General, 'EPCH'. House-wares, bathroom accessories, lawn, garden ornaments and accessories, lamps, lighting and accessories etc will be on display. The main countries from where buyers are coming include Australia, Austria, Belgium, Brazil, Canada, Chad, Chile, China and many more. Buyers from companies/ departmental stores, who have already confirmed their visit to the show includes 'Cost Plus World Market', 'Anthropologie', 'Ralph Lauren', 'WKND-WYFR', 'Urban Outfitters', 'Mudpie', 'Cracker Barrel' etc. Not only overseas buyers, but department stores of renowned countries will make their presence on the virtual platform.
Source: Millenium Post
Over the last three decades, India’s exports grew just 18-fold versus 40 times for China, a whopping 110 times for Vietnam, seven times for Indonesia, and 23 times for Bangladesh, etc. Commerce minister Piyush Goyal did well to, in his address to the Bombay Chamber of Commerce & Industry, stress upon a point made by prime minister Narendra Modi that Atmanirbhar Bharat was not about shutting off from the rest of world, but was about engaging more, about India becoming part of global supply-chains, etc. The ground reality, though, appears a bit different. The duty hikes expected on lithium-ion batteries are part of an earlier plan to encourage domestic production of electric vehicles—Mint reports further tweaking of this plan—but there has been a fairly steep hike in average import duties for all products since the Modi government first came to power in 2014. Between then and last year, import tariffs are up from 13.5%, to an average of 17.6%—that is a hike of over 30%; an even greater hike, of 47%, can be seen between 2014 and 2018 in terms of trade-weighted tariffs, that is hikes based on the amount of imports of various items. While the plan to hike import duties across the board, or on items like parts of electric vehicles, including batteries, sounds like a great way to encourage indigenisation, it is worth keeping in mind that import-substitution in place of export-promotion—that countries like China practised—is a 70-year old strategy in India, and it has been a strategy that has spectacularly failed. Over the last three decades, India’s exports grew just 18-fold versus 40 times for China, a whopping 110 times for Vietnam, seven times for Indonesia, and 23 times for Bangladesh, etc. Combine this with the rise in imports, and India’s trade deficit rose from 1.7% of GDP to 5.5%, while China grew its surplus from 2.4% to 2.9% and, Vietnam turned a deficit of 4.6% into a surplus of 4%. Vietnam’s exports were just 3.8% of India’s three decades ago while they are 81.5% today. Indeed, a problem with import duty hikes is their impact on making the economy less competitive as costs of imported components rise, and the fact is that the protection ensures industry doesn’t try as hard to cut costs. And, since local demand has to be met, as we saw in the case of mobile phones where a similar import-duty-increase strategy was followed since 2014, imports have continued to rise. As the government has just done for mobile phones, a better strategy to encourage local production—and, hence, even exports—is to have production-linked incentives; indeed, this is also the policy India plans to put in place to encourage the Active Pharmaceuticals Industry (API) industry to migrate back from China. In the case of lithium-ion batteries, in addition, since little real progress can be made without a lot of R&D, capital subsidies and generous R&D-linked grants/subsidies will probably be a better idea; just one technology transfer agreement has been signed Li-ion batteries so far, between a CSIR-arm and RAASI Solar. More important, if the government truly wants Indian exports to pick up—and imports growth to slow—the only way to achieve this is to genuinely simplify the ease of doing business, and not to tout the rise in the World Bank Ease of Doing Business rankings that are easily gamed. It is only when local firms—or foreign firms that manufacture out of India—have scaled up production that they can hope to be truly competitive; an HSBC study had pointed out, some years ago, that domestic bottlenecks could explain half the recent slowdown in India’s exports. It is only when this is done that India can be, to go back to what the commerce minister has said, truly Atmanirbhar and an important part of the global supply chain.
Source: Financial Express
NEW DELHI: The BRICS Chamber of Commerce and Industry (CCI) has launched a BRICS CCI Young Leaders Initiative on Wednesday with a vision to nurture and empower young leaders and entrepreneurs. The program is committed to enabling young leaders to become better resources and contributors to global development while also helping them explore sustainable and lucrative work opportunities across member nations. The initiative will provide extensive industry exposure and vibrant opportunities to young leaders from the BRICS nations to invest in themselves as well the global economy. BRICS CCI Young Leaders intends to hold numerous activities each year under the pillars of Youth Leadership, Nation Building, Thought Leadership, and will further connect with students through its institutional network. André Aranha Corrêa do Lago, Ambassador of Brazil to India in his message at the launch said “I congratulate BRICS CCI for the initiatives promoted, aiming at supporting MSMEs, young entrepreneurs, women entrepreneurs and start-ups from BRICS countries and other nations. In this context, I am confident that the BRICS CCI YOUNG LEADER’s program will play an important role not only in preparing new generations to succeed in the professional market, but also in bringing together BRICS countries’ future leaders to discuss alternatives to the challenges ahead”. Russian Ambassador to India Nikolay Kudashev in his message appreciated the move and said “It is a timely move reflecting the task to expand the five nations strategic partnership by actively involving business and youth communities. There is no doubt that this event would contribute to the current Russian Championship in 2020 & beyond!” Sun Weidong, Ambassador of China to India said “This year marks the 70th anniversary of the establishment of diplomatic relations between China and India. Both the countries have huge market potential and there is a strong economic complementarity between them. Youth represents the future, and the future of the BRICS countries is in the hands of the youth. Young people should bravely shoulder the important tasks entrusted by the times and contribute more wisdom and strength to BRICS cooperation”
Source: Business Standard
Economists are pitching for a stimulus with a longer-term focus on revival of demand rather than temporary relief measures that have been announced which serve very short-term purpose. The Rs 21 lakh crore packages through a combined monetary and fiscal policy package were not `stimulus' but temporary relief measures and not helping revive the economy. "Relief has not been adequate" said Rathin Roy, the director of the think tank National Institute of Public Finance and Policy, underscoring the need for medium term measures. “The government should clearly communicate how it is going to spend over the next three years” The level of fiscal deficit was not important at this juncture, but what is more important is revival of demand in the economy. The economy is expected to contract at double digit levels in FY'21 following a nation-wide lockdown prompted by the spread in COVID-19 pandemic. The government has not released the growth in the industrial production numbers for May and the June retail inflation at 6.09 per cent is way above the Reserve Bank's comfort levels. Pronob Sen, Programme Director for the International Growth Centre (IGC)-India Programme and former chief statistician felt that the government's move to transfer cash in jan-dhan accounts was a good idea, but the amounts should have been much more. He called for a need to identify projects in which one could ramp up expenditure immediately in sectors such as irrigation, rural housing. Besides, he also called for the need of major upgradation of the health sector, a more of medium term measure. "We need a medium-term strategy to create a virtuous cycle" Ananth Narayan, associate professor, finance, SP Jain Institute of Management and Research (SPJIMR). "(We need) stimulus that will help a firm's bottom line and measure essential to preserve financial sector stability" He underscored the need for real sector reforms that would help generate much needed jobs to revive the economy. The economists were speaking at a seminar organized by academic institution SPJIMR in Mumbai. Anantha Nageswaran, a part-time member of the Economic Advisory Council to the Prime Minister, called for the need to undertake measures that would provide a signal to the public on the ease of doing business and ease of living. Doing away with income tax assessment or capping various cesses were such examples, he noted.
Source: Economic Times
India has asked the WTO members to "urgently" reconsider the continuation of the moratorium on customs duties on e-commerce trade as the coronavirus pandemic has demonstrated the importance of retaining the flexibility to regulate such imports. The e-commerce moratorium is nothing short of duty-free, quota-free' access to digital products of the digitally industrialized members by the rest of the membership, according to the statements delivered by Ambassador and Permanent Representative of India to the WTO at informal open-ended meeting of the General Council on Work Programme of Electronic Commerce held on Tuesday. "In short, the Covid-19 pandemic has demonstrated the importance of retaining the flexibility to regulate imports of electronic transmissions and levy customs duties on their imports by the governments. Therefore, the continuation of the moratorium must be urgently reconsidered by the membership," it said.It said that India is witnessing an exponential rise in imports of electronic transmissions, mainly of items like movies, music, video games and printed matter some of which could fall within the scope of the moratorium. While the profits and revenues of digital players are rising steadily, the ability of the governments to check these imports and generate additional tariff revenues is being severely limited because of the moratorium on e-commerce, it added. According to industry experts, India wants an end to the moratorium and imposition of import duties to protect domestic industry and revenue. Since 1998, the moratorium is being extended time and again for two years. It was last extended by the General Council held in December 2019 until the 12th Ministerial Conference, the highest decision making body of the WTO. It also said that if the scope of the moratorium includes digitised and digitizable goods, its implications are "very serious" as technological developments have resulted in a rapid rise in the growth of online trade of digitized goods. Non-availability of the use of tariffs for digitized goods as a result of the moratorium therefore poses very profound challenges for developing countries, the statement said. "Allowing the moratorium to lapse is important for developing countries to preserve policy space for their digital advancement and provide level playing field to budding domestic producers of intangible goods, which is extremely critical for employment generation and income creation," it added. It also said that the requirement of new sources of revenue to save lives and livelihood during the ongoing Covid 19 pandemic especially in developing countries including LDCs, when millions of their citizens are being pushed into extreme poverty, also underlines the need for ending the e-commerce moratorium. "To the contrary, the unbridled and unchecked imports via electronic transmissions are increasing due to the existing moratorium due to the extended lockdowns as a fallout of the pandemic, resulting in imbalances in importing Members' current accounts," it said.
Source: Business Standard
Iran has ended its agreement with India for two key projects, the second phase of Chabahar Port and development of the Farzad-B block, reflecting the souring relations between the once strong allies. The West Asian country will fund and develop a rail link under the second phase of the Chabahar Port on its own, while the contract for developing the Farzad-B block is likely to be handed over to a local company following slow progress by ONGC Videsh (OVL). A person close to the development said Iran will sign a deal for development of the field with a local oil company soon. In the historic ‘New Delhi Declaration’ signed on January 25, 2003, both countries had decided to jointly develop the Chabahar Port complex and Chabahar-Fahranj-Bam railway link. Since then, the Chabahar project, along with the Farzad-B block deal, has been something that forced India to play a balancing act between the US and Iran. In 2020, however, both projects appear to be out of India’s hands. While the first phase of the Chabahar Port was developed by India, US sanctions stopped progress in the second phase. Though the initial agreement was signed in 2003, a contract was signed between India and Iran to develop the 628-km railway line along the Iran-Afghanistan border, in 2016. Former shipping secretary Vishwapati Trivedi said: “The idea of Chabahar Port was brought back on the table in 2014. Several exchanges happened between the two countries before finalisation of the infrastructure development by India in Iran.” The initial agreement signed in May 2015 translated into a formal 10-year contract. Both the Kandla Port and JNPT were entrusted with the job of developing Chabahar Port. The then chairman and managing director of Shipping Corporation of India was given charge of Indian Ports Global — a special purpose vehicle for execution of the contract. A revenue-sharing pact with a minimum guarantee throughput (MGT) was agreed upon, based on which Iran wanted India to increase traffic at Chabahar Port. MGT is the lowest number of cargo and passengers that can pass through a port on a daily basis, from arrival at the port to loading onto a ship. Now, Iran has indicated it will provide $400 million from the Iranian National Development Fund for the railway line. As part of the deal, Indian railways arm IRCON was supposed to provide $1.6 billion for the rail project. People in the know said the Indian firm could not move ahead with the project because of US sanctions on Iran. In addition, Iran’s growing proximity to China may have also played a part. Iran and China are set to sign a deal worth $400 billion, lining up an investment roadmap for the next 10 years. Even when US sanctions were on a high, India had kept the project on the discussion table. However, strengthening Indo-US relations under Donald Trump forced India to go slow on Iran projects. A prime example was the halt in oil imports from Iran following the recent US sanctions. Earlier in 2006, India and Iran had conducted a joint naval exercise prior to then President George Bush’s visit to India. chartDuring the drill, a top official had termed Chabahar as key to maritime relations between both the countries, addressing 220 sailors. Iran grew sceptical of India’s diplomatic ties with the US and is believed to have delayed certain regulatory clearances that, in turn, affected the project. Just like the Chabahar railway line, US sanctions came in the way of Farzad-B gas field. Last week, Masoud Karbasian, MD of National Iranian Oil Company (NIOC), said the deal for development of the field would be signed soon. An Indian official source, aware of the development, said: “There is no development at present on Farzad-B. It seems Iran is trying to rope in a local player.” SBI and operators, too, had expressed concerns over US sanctions. Though India had been looking to secure a contract for the gas field since 2009, the sanctions against Tehran played spoilsport. Around 75 per cent of the deal was finalised by May 2018, when the US unilaterally withdrew from the nuclear deal and announced sanctions on Iran. The Farzad-B block has gas reserves of 21.6 trillion cubic feet. The major dispute between India and Iran was over setting up of two pipelines, and also over money to be quoted on the development plan, said the source, adding that the Indian firm wanted only one pipeline. The contract for the Block was signed on December 25, 2002, by the consortium comprising ONGC Videsh, Indian Oil Corporation, and Oil India for carrying out exploration in the Farsi offshore block. The contract expired in June 2009 after declaration of commerciality of the block, based on the gas discovery of Farzad-B gas field. When the sanctions were lifted following the nuclear deal with the next US President Barrack Obama, Iran had increased its demands with Indian negotiators for Farzad. Iran’s administration had even hinted about giving the project to a Russian or Chinese firm. In August 2019, Iran indicated that it may not wait for India now.
Source: Business Standard
The ongoing Corona pandemic has hit the Rs 440 crore cost cutting plan of textile firm, Arvind Ltd, as the company expects a sharp fall in the demand for its products and sagging sales in the first quarter of the current fiscal, say bankers. Both Lalbhai group companies, Arvind and Arvind Fashions Ltd, however, are taking several steps including asset sale to cut costs and reduce debt in the current financial year. “The company’s exports are also expected to fall by $100 million in FY20 to $300 million in the current fiscal. Besides, the domestic sales will also move into slow gear as production was impacted due to the lockdown,” a banker close to the development said. The Ahmedabad-based Arvind Ltd had promised banks that it would reduce its fixed costs by around Rs 440 crore during FY21 by reducing salaries, cutting its IT budget, foreign travel and advertisements, and by selling its loss-making units. Apart from cutting its capital expenditure, the Lalbhai group firm has also decided to take the debt moratorium on its outstanding loans and working capital limits. “The company is also taking a Rs 50 crore lifeline loan from State Bank of India,” another source said. An email sent to Arvind on Wednesday did not elicit any response. Reflecting the company’s financial performance, the company’s share price lost almost half its value from Rs 60 a year ago to Rs 32 as on Wednesday, giving it a total market valuation of Rs 835 crore.
Asset sale
Bankers are expecting the company to go ahead with more asset sales to cut debt by Rs 400 crore in the coming months from it total debt of Rs 2,500 crore as on March this year. Its debt was Rs 2,950 crore as on March 2019. In the current year, the company plans to develop its land parcels near Ahmedabad and sell villas to customers. But with a slowdown expected in the real estate sector, the demand from customers may not pick up, bankers fear. Separately, another Lalbhai group firm, Arvind Fashions Ltd, sold 27 per cent stake in its subsidiary, Arvind Youth Brands, for Rs 260 crore to Flipkart. Arvind Youth Brands retails well-known denim brand, Flying Machine on the online retail platform. The firm is also raising Rs 400 crore via a rights issue this week. Following its demerger from Arvind Limited, AFL was listed on the stock exchanges in March last year and is valued at Rs 1,115 crore as on Wednesday. AFL’s operations were impacted by the various Covid-19 pandemic as footfalls started falling from early March, As malls and stores and ware houses shut down, it had a significant adverse impact on revenue and profitability for the March quarter. Post lockdown, the company has managed to re-open 75 per cent of its stores.“The company has put in place a comprehensive cost management plan that covers significant reduction in costs during the lockdown period and until sales normalise. In addition, structural reductions have been effected in the cost structure that will have the impact of reducing company’s breakeven levels by 35 per cent,” the company said in a statement on July 9. “Actions have also been initiated to conserve cash by cutting down capex, reducing inventory levels, controlling immediate buys and bringing a strategic flexibility in the buying process,” it said.
Source: Business Standard
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
768.46 |
USD/Ton |
-0.65% |
16-07-2020 |
|
VSF |
1233.83 |
USD/Ton |
-0.12% |
16-07-2020 |
|
ASF |
1688.48 |
USD/Ton |
0% |
16-07-2020 |
|
Polyester POY |
700.55 |
USD/Ton |
0.82% |
16-07-2020 |
|
Nylon FDY |
2015.88 |
USD/Ton |
-0.35% |
16-07-2020 |
|
40D Spandex |
4003.16 |
USD/Ton |
0% |
16-07-2020 |
|
Nylon POY |
5146.92 |
USD/Ton |
0% |
16-07-2020 |
|
Acrylic Top 3D |
943.60 |
USD/Ton |
0% |
16-07-2020 |
|
Polyester FDY |
1872.91 |
USD/Ton |
0% |
16-07-2020 |
|
Nylon DTY |
1858.61 |
USD/Ton |
0% |
16-07-2020 |
|
Viscose Long Filament |
886.41 |
USD/Ton |
0% |
16-07-2020 |
|
Polyester DTY |
2258.93 |
USD/Ton |
0% |
16-07-2020 |
|
10S OE Cotton Yarn |
1686.33 |
USD/Ton |
-0.04% |
16-07-2020 |
|
32S Cotton Carded Yarn |
2656.38 |
USD/Ton |
0% |
16-07-2020 |
|
40S Cotton Combed Yarn |
3127.47 |
USD/Ton |
-0.02% |
16-07-2020 |
|
30S Spun Rayon Yarn |
1719.93 |
USD/Ton |
0% |
16-07-2020 |
|
32S Polyester Yarn |
1358.22 |
USD/Ton |
-1.04% |
16-07-2020 |
|
45S T/C Yarn |
2173.14 |
USD/Ton |
0% |
16-07-2020 |
|
40S Rayon Yarn |
1887.20 |
USD/Ton |
0% |
16-07-2020 |
|
T/R Yarn 65/35 32S |
1672.75 |
USD/Ton |
0% |
16-07-2020 |
|
45S Polyester Yarn |
1572.67 |
USD/Ton |
0% |
16-07-2020 |
|
T/C Yarn 65/35 32S |
2044.47 |
USD/Ton |
0% |
16-07-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
0% |
16-07-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
16-07-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
16-07-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
-0.30% |
16-07-2020 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
16-07-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14297 USD dtd. 16/07/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
India has not gained much from a drop in China’s share in American imports, despite New Delhi’s close diplomatic relation with Washington and a recent push to boost its own local manufacturing base, a study by Rabobank shows. The South Asian nation saw only a slight increase of its share in shipments to the US last year, according to the Rabobank report, as a trade war with China pushed American companies to diversify their supply chain away from the world’s second-biggest economy.“One of the reasons why India hasn’t benefited more is because the largest shift is found in the computer and electronic products sector,” economists Ralph van Mechelen and Michiel van der Veen wrote in the note. That is “an industry that is relatively small” in India at the moment. Manufacturing imports to the US from China dropped by 17 per cent or $88 billion in 2019, they said. That’s resulting in a decline of China’s share in American imports by 4 percentage points. Besides the trade war, the coronavirus pandemic has increased pressure on firms to reassess their supply chains, according to the report. “Vietnam, Mexico and Taiwan are the main beneficiaries of the shift in US imports,” along with a push toward eshoring back to the US, the economists said. “Going forward, we see the expected rise in geopolitical tensions as the most important reason for a further acceleration of supply chain relocation in a wide range of sectors.”
Source: Business Standard
Sri Lanka’s embassy in Ha Noi said it had started talks with Vietnam’s apparel industry body in a bid to explore co-operation and build links with its counterpart in the Indian Ocean island to meet post Coronavirus challenges. Sri Lanka’s Ambassador Prasanna Gamage had met Vu Duc Giang, Chairman of the Viet Nam Textile & Apparel Association (VITAS), in Ha Noi, along with Prasadi Boomawalage, Third Secretary-Commercial of the Embassy and Hoang Ngoc Anh, Acting Secretary General of VITAS. The talks centered on potential co-operation between the apparel and textiles sectors of Sri Lanka and Viet Nam focusing on especially in the post-COVID business environment. Giang had said there was an opportunity to cooperate between apparel and textile exporting countries in Asia, going beyond competition. Ambassador Gamage had said there were opportunities in building supply chains and finding new markets. He had proposed that VITAS link and cooperate with Joint Apparel Association Forum – Sri Lanka (JAAF – SL). VITAS Giang had said a link would benefit both countries and had hoped that JAAF would visit Vietnam at a suitable date. Sri Lanka’s MAS and Hirdramani apparel groups have factories in Vietnam. Vietnam’s exports, imports and the economy has grown fast after it abandoned import substitution and embraced free trade and monetary stability after Doi Moi reforms in 1986. Vietnam launched an offensive to lift a US trade embargo and et into the World Trade Organization. Following a series of currency collapses which led to an economic contraction the Vietnam also reformed its central bank paving the way for sustained growth. After bi-lateral trade deal with the US in 2001, Vietnam’s exports grew from 15 billion US dollars in 2000 to 263 billion US dollars in 2019. The US trade deal which also paved the way for changes in domestic law, triggered a flood of foreign direct investments. Vietnam has just signed a free trade agreement with the European Union. Vietnam is the global leader in the fight against Coronavirus had the country is now operating normally.
Source: Economy Next
China’s exports and imports both rose in June, even as the pandemic continued to ravage the global economy.
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Source: Bloomberg
Interior minister Priti Patel on Monday condemned a "modern-day scourge" in the UK textile sector, after reports that thousands of people were working in modern slavery. The textile sector has come under scrutiny, particularly in Leicester, central England, after a coronavirus flare-up that forced the city into lockdown two weeks ago. Factories that continued to operate at full capacity at the height of the outbreak were blamed for the surge in cases, although public health bodies said no single source was responsible. But the spotlight on the city threw up fresh questions about unscrupulous practices and exploitation of garment factory workers, including low wages and poor conditions. In parliament, Patel was urged to do more to eradicate the "clear evidence of modern slavery in plain sight" at garment factories. She said she "completely agreed" with the description of them as "a modern-day scourge when it comes to exploitation", and called for better enforcement of existing legislation. Campaigners have in recent weeks highlighted pressures on workers to stay on the job at textile factories in Leicester despite the outbreak, and wages well below the national minimum of £8.72 (S$15.23) an hour. Andrew Bridgen, from Prime Minister Boris Johnson's ruling Conservative party, estimated that the city's garment factories could count up to 10,000 victims of modern slavery. The MP, whose constituency is five miles (eight kilometres) from Leicester, said he had been told wages could be as low as £2.00 per hour. Those affected were a "mixture of local people and immigrant workers", and some were in the country illegally, making them ripe for exploitation, he told AFP, citing whistleblowers. Ms Patel's department, the Home Office, said it took allegations of modern slavery "extremely seriously" and was determined to bring the people responsible to book. "The National Crime Agency and others are looking into the appalling allegations about sweatshops in Leicester and the home secretary has been clear that anyone profiting from slave labour will have nowhere to hide," a spokesman said. Anti-Slavery, a pressure group, said more than 10,000 people were referred to the UK authorities last year as victims of modern slavery but the real number was likely to be higher. Leicester, which has one of the country's most diverse populations, is thought to be home to at least 1,000 garment factories, supplying many leading clothing brands. Shares in one of them, clothing group Boohoo, slumped last week on the back of allegations about exploitation, and has launched a review of its UK supply chain.
Source: Business Times
