In a major relief for textile exporters struggling to maintain their share in an uncertain global market, India has decided to continue with export sops for the sector in the new fiscal and, probably, the following two years as well. This is despite the US demanding that such incentives be done away with immediately.
Washington argues that New Delhi no longer qualifies to give such concessions under the World Trade Organisation (WTO) rules as it attained export competitiveness in the textile sector eight years back. With India sticking to its stand, the Centre will not feel compelled to withdraw export incentives for the textile sector while announcing the Budget (for 2015-16) or the Foreign Trade Policy.
While not willing to withdraw the sops right away, the Commerce and Textile Ministries have, however, started working on alternative schemes that are WTO compliant, so that export sops for the sector can be replaced over the next three years.
Phase-out period
“The US has been claiming that we need to stop our export sops for the textiles sector from 2015, but we believe that our phase-out period ends in 2018. We will stick to our deadline,” a Commerce Ministry official told Business Line. The sops that will have to be phased out include the popular Focus Product and Focus Market schemes under which exports to targeted markets are incentivised, the EPCG scheme and the interest subvention scheme for export credit.
As per WTO’s Agreement on Subsidies and Countervailing Measures, export subsidies can be given only by countries that have not attained export competitiveness, which is defined as attaining a 3.25 per cent share in world trade for a product for two consecutive years. Members get eight years to phase out their export subsidies once they reach export competitiveness. New Delhi’s argument is that since the WTO undertook a computation of India’s world trade share following a member’s request only in 2011, and determined that it had retained competitiveness on the basis of data of 2009-10, it can be inferred that the phase-out period would end in 2018.
As per statistics compiled by the WTO, India’s share in world trade for textile and clothing was 4.66 per cent in 2013 with exports worth $37 billion. Textile and clothing exports contribute more than 10 per cent to India’s export basket.
SOURCE: The Hindu Business Line
According to Wrong, India has a lot of potential to grow in terms of design industry but the major problem is that manufacturers in India have a linear thinking. They don’t want to experiment or expand their horizon. In fact, one of the key drawbacks is lack of quality and disciplined manufacturers hence designers prefer to use their own manufacturing units to fabricate their products rather than utilise services of untrained 'karigars'.
Manufactures in India are "not very disciplined and transparent," which leads a lot of designers to take upon the responsibility of manufacturing their own products. On the other hand in China, manufacturers are bang on time with their delivery and are transparent in the sense of their commitment towards the designers. They are willing to hear you out and work towards meeting your needs, said Wrong. Another participant at the Expo, Caroline Young who has been living and working in India for the past 10 years said that a "sense of pride" among the country's manufacturers prevents them from thinking out of the box away from tried and tested methods and exploring different opportunities.
In India, if a manufacturer is producing a table top he will continue to do only that. He will not give you a finished product, which is a pain for designers. Several domestic designers, such as product designer Lekha Washington and Anjana Somany, who heads Design and Development at Schablona India Ltd, said that they produce their own products and are involved in the entire process. It is better to produce your product as you can never be sure of the quality you will get from manufacturers sourced locally. It's the question of their reputation and they cannot send out products which are not up to the standards abroad, said Washington who founded 'Ajji- The Odd Product Company' in the year 2013.
According to Archana Pillai, group publisher and CEO of Ogaan, organisers of Design ID, lack of exposure of Indian craftsmen and their 'juggad' and 'chalta hai' attitude creates a problem. If people pay money for a product it better be upto the standards. People here accept whatever is given to them. If they stop doing that and train their craftsmen to international standards things can change tremendously. Bulk manufacture and supply of hand embroidery and textile work, two highly sought after items from India is an issue with several designers who point out that they have had also to deal with issues of copyright.
According to Wrong, people are trying to copy Indian product that's actually quite flattering but at the end of it, it takes away credit from the designers. China produces some very good quality copied product at half the price but that's not original everyone knows that. Copying products and buying them is a big illegal nexus and the money generated by these industries go into funding of acts which are not acceptable by civil society and will not do any good to anyone. They need to stop buying copied products.
At the ID Symposium, one of the verticals at the Design Fair, designers discussed the diminishing margins of industries who sustain on copying originals. An Annual Design Week brought professionals from varied design disciplines and end consumers together at a single location in India. It fostered a dialogue between India and the global fraternity with a key focus on promoting the business of design. The exhibition attracted design enthusiasts from across the country, for a glimpse of made in India designs.
SOURCE: Yarns&Fibers
Seeking to streamline the procedure, the Commerce Ministry has put in place an online system for instant generation of import-export code on submission of documents. The move would help companies or an individual wanting to enter the trade sector. Import-Export Code (IEC) is needed for shipments.
"This is a major step towards improving ease of doing business in the country. If all the documents are in place, a trader would get the code in a few minutes. Otherwise, if there is a problem, an automatic email or a sms would be generated and it will be sent to the concerned person," a senior official in the DGFT said. Earlier it used to take weeks to six months to get this code, the official added.
On February 1, the Directorate General of Foreign Trade (DGFT) made it mandatory to submit online applications for IEC. Within a week, the DGFT has got over 2,500 applications for IEC code. Federation of Indian Export Organisations (FIEO) said that the move would help in reducing transaction costs for both exporters and importers. The online submission system would also help the DGFT office to save lakhs of rupees which were spent on renting godowns to store these applications. The Delhi office of DGFT used to get about 60,000 applications per year and one application consists of about 20 pages.
The DGFT has set a checklist for its officials through which they can easily process an IEC application. For example to check PAN and DIN details, officials can verify it from the website of Income Tax Department and Ministry of Corporate Affair's website respectively. "The new IEC system will reduce time in grant of IEC as applications with all details and attachments will be cleared quickly. The verification of document has been provided online with authorities like CBDT, MOCA etc which will reduce transaction time," FIEO President Rafeeque Ahmed said.
The Commerce Ministry is intensely engaged with different departments, including revenue and shipping, to reduce paper work in a bid to cut transaction cost for exporters and improve the ease of doing business. The DGFT, under the Commerce Ministry has prepared a report suggesting various ways to improve India's ranking in the World Bank's report of ease of doing business, reduce transactions cost for exporters and boost outward shipments. The ministry aims at reducing the number of mandatory documents from nine to three (bill of lading, invoice and shipping bill) for exports, and from ten to four for imports. The government is aiming to improve India's overall ranking in ease of doing business index to 50th position in the next two years from the current 142nd.
SOURCE: The Economic Times
With increased Internet penetration, adoption of smart devices by people across the globe and India, the industry is looking at doubling the country’s annual handicraft exports from $3 bn to 5 bn and create employment capacity of more than 1.5 crore either directly or indirectly. The $5 billion Indian Handicrafts Industry is likely to witness growth like never before both in the domestic and international markets.
With Prime Minister Narendra Modi asking the Ministry of Tribal Welfare to explore the possibilities of online marketing of products produced by tribals through e-commerce platforms, a host of handicraft exporters are eagerly waiting to jump on to the wagon of e-commerce and joining hands with popular portals to tap the Indian market. At a time when India’s handicraft exports declined by about 10 per cent year-on-year in January to USD 120 million, the industry is looking at the government to develop India as one of the fastest-growing e-commerce markets in Asia-Pacific.
With increased Internet penetration, adoption of smart devices by people across the globe and India, the industry is looking at doubling the country’s annual handicraft exports from $3 bn to 5 bn and create employment capacity of more than 1.5 crore either directly or indirectly. Sources in the Export Promotion Council for Handicrafts (EPCH) said that handicrafts is a labour-intensive sector and would create more jobs based on the demand.
Getting skilled man-power in this sector is a huge problem as margins are low and markets are out of reach. In the forthcoming budget, the council expects the government to take necessary steps to boost the sector’s growth domestically and internationally too. Bamboo goods, house-ware, fashion jewellery, home textiles, furniture, beads and glassware are some of the goods that can be sold online, added the source.
SOURCE: The Dollar Business
While clarity on the accumulated tax credit by total export oriented units as how they will get refund and rebate and what kind of new mechanism for doing this is likely to come with GST bill, certain incentives like removal of inverted duty structure which is a major deterrent for manufacturing in India have to be completely corrected as domestically-produced goods cost more than imported ones.
“Thanks to the new NDA government which has brought all the states on board, the GST Bill is most likely to come into force next year,” said Ajay Sahai, DG & CEO of FIEO (Federation of Indian Export Organisations) couple of days ago. Adi Godrej, Godrej Group Chairman pitching for incentives for the manufacturing sector in the upcoming budget said that the Centre must roll out goods & services tax (GST) from next fiscal as it would boost economic growth by 2%.
The main objective behind the implementation of the GST is to make country a unified market with lesser number of taxes. Lesser taxes will enable companies to invest more leading to increased growth in GDP. While clarity on the accumulated tax credit by total export oriented units as how they will get refund and rebate and what kind of new mechanism for doing this is likely to come with GST bill, certain incentives like removal of inverted duty structure which is a major deterrent for manufacturing in India have to be completely corrected as domestically-produced goods cost more than imported ones. Both GST and inverted duty structure when addressed will control the fiscal deficit as lower subsidies and future disinvestments will add to the growth spurt. The transaction costs that are adversely affecting the manufacturing sector and its competitiveness also need to be addressed if the measures on GST and the inverted duty structure have to bear fruit.
GST as a concept was introduced by then finance minister in UPA government P Chidambaram in 2006 while presenting the annual budget. It was further pursued by next UPA finance minister Pranab Mukherjee but he could not get the bill passed for many years due to lack national political consensus on the issue. The Union Budget 2015 will be presented by the Finance Minister, Arun Jaitely on February 28.
SOURCE: The Dollar Business
The success of ISRO’s Mars Orbiter Mission and DRDO’s successful test-firing of Agni series of surface-to-surface intermediate range ballistic missile (IRBM) have added thrust to the ‘Make in India’ programme. Minister of State (Defence) Rao Inderjit Singh, speaking at the three-day international seminar ‘Aerospace: Vision 2050’, said ‘Make in India’ now is being targeted to become mutually beneficial with many countries and private enterprises via joint ventures.
The meet is a prelude to the biennial, air show — Aero India 2015 — which begins on Wednesday. The aerospace meet organised by Defence R&D Organisation (DRDO), in association with Aeronautical Society of India (AeSI), has set the tone to dwell and exchange ideas on matters that converge on ‘needs of the times’ in the ever-emerging realm of aerospace — both military and civil.
Exchanging ideas
Rao Inderjit Singh recounted the outcome and achievements of ‘India’s Aerospace Technology Plans’ and its implementation, describing it as ‘very rewarding’. Lauding the recent successful launch of Agni-V on February 1, with a range of over 5,000 km and capable of carrying a warhead of over one tonne, he said: “The Agni-V is a major addition to the country’s strategic strike capability.”
Among the other notable DRDO achievements that found a mention, included ‘Nirbhay’, the indigenously developed sub-sonic long-range cruise missile, Airborne Early Warning & Control (AEW & C) system and Light Combat Aircraft (LCA) ‘Tejas’, among others.
In a first, the seminar also has a special theme in its 10th edition inviting nations to ‘Make in India’ for mutual benefit through joint ventures. The large-scale economic initiative encompasses infrastructural sectors in aviation, space, defence systems, airport infrastructure, defence engineering, renewable energy and thermal power, among other civilian sectors.
Evolving spirit
The ‘Make in India’ economic programme launched by the Prime Minister opens up opportunities for innovative minds to exploit the globally evolving spirit of ‘teaming up’ and ‘pooling resources’, the MoS said to an audience comprising over 800 delegates, including 15 foreigners. Earlier, MoS for Heavy Industries & Public Enterprises, GM Siddeshwara, while speaking on the occasion, described the various indigenously developed systems in aerospace as symbols of ‘Indian Prowess’ in the aerospace arena.
Seminar souvenir
Dignitaries present on the occasion included Distinguished Scientist and DG (Aero), K Tamilmani, CMD Bharat Electronics Ltd, SK Sharma and CMD Hinduatan Aeronautics Ltd, T Suvarna Raju and Distinguished Scientist and Programme Director, AEW & C and Centre for Airborne Systems, S Christopher. A ‘Seminar Souvenir’ and a special issue on ‘Airworthiness and Certification’ were also released during the event.
SOURCE: The Hindu Business Line
India is ready to open the doors wider for Asean countries under the Regional Comprehensive Economic Partnership (RCEP) pact being negotiated with 16 countries. New Delhi hopes to do one better than even Japan, China, New Zealand and Australia
In the RCEP negotiations in Bangkok last week, India, backed by China and South Korea, said it would cut tariffs on 70 per cent of all traded items with the 10 Asean (Association of South East Asian Nations) members; for the others it would make cuts on just 40 per cent of the tariff lines, a Commerce Ministry official told Business Line. “Since India has free-trade agreements (FTAs) with not only Asean but also a number of members of the bloc independently, it will not be too difficult to commit to wider market access for the region. But with other countries, caution has to be maintained,” the official said.
Ambitious pact
RCEP seeks to create the largest regional trading bloc in the world. RCEP countries, which include Asean and its FTA partners, account for 45 per cent of the world population, with a combined gross domestic product of $21.4 trillion. The ambitious pact — it includes goods, services, investment, economic and technical cooperation, intellectual property, competition and dispute settlement — is expected to be concluded by the end of the year. To discuss specific numbers related to the tariff cuts and the services sectors that are to be opened up, a series of meetings have been planned for March and April. “Depending on the progress that happens at these meetings, a decision will be taken on whether a ministerial meeting of trade ministers from RCEP countries is to be held April-end,” the official said.
India needs to be cautious with China as goods from that country are anyway flooding the domestic market. It also has to be careful about what it offers Australia and New Zealand, the two countries with which it does not have an FTA. India has FTAs with both Japan and South Korea. ASEAN, comprising Malaysia, Indonesia, the Philippines, Vietnam, Thailand, Brunei, Singapore, Cambodia, Laos and Myanmar, has been trying to convince members to go for wide-scale opening up, of not less than 80 per cent of items.
It is looking at a three-tiered structure where member-countries offer different market openings to ASEAN, their individual FTA partners and non-FTA partners. Australia and Japan, too, are pushing for wide-ranging tariff cuts.
SOURCE: The Hindu Business Line
India and Myanmar today agreed to enhance trade and investment between the countries by removing bottlenecks such as lack of good connectivity and banking arrangements. The issues came up for discussion during the 5th India-Myanmar Joint Trade Committee (JTC) meeting, which was held in Nay Pyi Taw today.
The meeting was co-Chaired by Commerce and Industry Minister Nirmala Sitharaman and Myanmar's Commerce Minister U Win Myint. "Both sides agreed to work together to remove the bottlenecks hampering the bilateral trade and investment such as lack of good connectivity, lack of banking arrangement both for regular and border trade," an official statement said. It said that India has offered to support Myanmar to develop infrastructure at the border trade points, upgrade trade training institutes in Yangon and also provide training to Myanmar officials on WTO and international trade related issues.
Besides, New Delhi would support in establishing direct shipping links between the countries to promote bilateral trade, it added. The two ministers also reiterated their commitment to increase cooperation in the field of promoting two-ways investment, infrastructure development particularly to promote border trade, connectivity, agriculture, energy, skill and entrepreneurial development, pharmaceutical and people-to-people contacts. Both sides agreed to hold the next Joint Trade and Investment Forum meeting in Chennai during which Myanmar would organize a roadshow showcasing investment opportunities in Myanmar especially in the special economic zones. The two ministers also agreed to jointly inaugurate the land custom station in Zawkhatar, Mizoram shortly at a mutually convenient date. The bilateral trade stood at USD 2.18 billion in 2013-14.
SOURCE: The Economic Times
Oil slipped below $61 a barrel on Tuesday, dragged lower by weakness in some other commodity markets, although threats to West Asia crude supplies and expectations lower prices may prompt a slowdown in US output limited the fall. Silver fell by up to 5 per cent and gold snapped a three-day rally. Investors in those commodities remained cautious after a breakdown of debt talks between Greece and euro zone finance ministers. “I think it all started in silver with squeezing out of long positions, then spilled over to gold and then to oil,” said Carsten Fritsch, commodities analyst at Commerzbank.
Brent crude was at $62.00 a barrel by 1101 GMT but fell to $60.73 by 1504 GMT. It reached a 2015 high of $62.57 on Monday. US crude was 43 cents higher at $53.21 a barrel, before falling to $51.39. Lending support to oil earlier, Egypt on Monday bombed Islamic State targets in Libya, where violence has reined in most oil output. Iraq’s semi-autonomous Kurdistan Regional Government threatened to withhold oil exports if Baghdad failed to send its share of the budget.
Oil prices collapsed in the second half of 2014 on oversupply. The Organization of the Petroleum Exporting Countries refused to cut its output, choosing to defend market share against US shale oil and other competing sources. Brent has still jumped by about 35 per cent in the last four weeks, supported by a sharp fall in US oil drilling. It had reached $45.19 on January 13, the lowest in almost six years, down from $115 in June. The threat to Iraq’s northern exports from the revenue dispute arises as bad weather has cut Iraq’s southern shipments this month. With risks to West Asia supply back on the market’s radar, International Energy Agency Chief Economist Fatih Birol warned the rise of Islamic State presented a major challenge for the investment necessary to prevent an oil shortage in the next decade.
Even so, some analysts see the rally as overblown because the market remains oversupplied. Crude inventories in top consumer the US have hit record highs for the last five weeks. “US refinery outages, through seasonal maintenance and industrial action, will weaken US crude demand, exacerbating the crude stock excess in the near term,” BNP Paribas analysts Gareth Lewis-Davies and Harry Tchilinguirian said in a report.
SOURCE: The Business Standard
PTA prices rose in Asia in the last week ending Feb 13, due to hike in buying interest in the region. In FE Asia, average prices went up by US$ 5/ton or 0.85 per cent and were assessed at US$ 590/ton in last week, as compared to its previous week. In SE Asia, average prices moved up by US$ 10/ton and were quoted at US$ 615/ton last week, up 1.65 per cent from its previous week.
In India too, average prices grew by US$ 25/ton and were offered at US$ 620/ton last week from its previous week, an increase of 4.20 per cent. In China, average prices mounted by US$ 5/ton and were spotted at US$ 585/ton or 0.86 per cent from its previous week.
SOURCE: Fibre2fashion
Asian MEG prices climbed in the last week from tight product availability in the region. In SE Asia, average prices grew by US$ 15/ton or 1.91 per cent and were quoted at US$ 800/ton last week, as compared to its previous week.
In India, average prices also went up by US$ 15/ton and were assessed at US$ 800/ton last week, up 1.91 per cent as against its previous week. In China too, average prices rose by US$ 20/ton and were quoted at US$ 790/ton last week from its previous week, an increase of 2.60 per cent.
SOURCE: Fibre2fashion
Federal Textile Board has been restructured and notified to facilitate the textile sector stakeholders. The platform will be used to monitor the implementation of Textile Policy (2014-19), including rationalization of cess/surcharges applicable to the textile value chain industry and its exports, utilization.
The Research, Development and Advisory (RDA) Cell will act as secretariat of the board and existing RDA Cell officers will be responsible for the overall implementation and monitoring of Textile Policy. The proposed law would empower the ministry to form regulations and standards for achieving sustainable growth, increase productivity and value addition throughout the textile chain.
According to Sources, the proposed textile law would require all the functioning textile units to register themselves with the ministry as only registered textile units would get incentives announced in the textile policy. Currently, textile ministry lacks complete information about the textile units and their production data to make appropriate plans regarding the implementation of textile policy.
Presently, there is no textile export and import law in the country. In the proposed textile Act rules would be laid down and growth and activity of the industry would be monitored, sources added. The proposed law would empower the textile ministry to monitor the implementation of the textile policy and to ensure accurate statistics of production capacity, exports and total number of textile units in the country. It will be the first-ever law pertaining to the textile industry, which will empower textile division to take final decision on every issue. Presently, the ministry has no power and cannot even issue an SRO.
SOURCE: Yarns&Fibers
The ambassador said that that the Japanese business community is reluctant to invest in Pakistan owing to deteriorating law and order situation. However, Japan is keen to enhance bilateral trade relations with Pakistan and will support every activity which will be initiated in this regard.
Japan will assist Pakistan in technical support and interaction between the business communities will be enhanced to boost the bilateral trade. He said that Japanese companies are already working in health, education and energy sector of Pakistan and mutual cooperation will be enhanced in future. He also discussed various trade-related issues with RCCI President Syed Asad Mashadi during the visit.
Speaking on the occasion President RCCI Syed Asad Mashadi said that Japan must transfer technology to Pakistan and increase its investment in the country. He said that trade volume between the two countries is around $ 2 billion and it is need of the hour to take solid steps to boost the business activities between Pakistan and Japan. He said that RCCI trade delegations will participate in two expos which are being held in Tokyo this year to promote direct interaction between business communities of both sides. Vice President Saboor Malik, former presidents Sohail Altaf, Shimail Daud, members of executive committee and other members of the chamber were also present on the occasion.
SOURCE: Yarns&Fibers
New York cotton (futures) market amid increase in demand for the commodity there maintained upward trend, according to brokers at the Karachi Cotton Exchange. The Karachi Cotton Association (KCA); however, kept its official spot rate unchanged on the second working day at Rs4, 900 per maund.
Traders bought 4,700 bales (155 kilograms) at Rs4, 500 to Rs5,150 per maund, the KCA reported. But several textile mill-owners continue to import the commodity from the United States, India and other parts of the world instead of buying it from the local markets.
According to the brokers, trade activities at cotton market would remain dull till the new crop comes in June-July, as this is off-season for the commodity production in the country.
SOURCE: Yarns&Fibers
Bangladesh's Central Bank has said it will set aside US $500 million of low cost finance to help the country's ready-made garment industry adopt sustainable technologies and practices. The announcement of the green fund followed recommendations by experts and entrepreneurs at a seminar on sustainability in the country's textiles sector, organized by the Policy Research Institute of Bangladesh (PRI) and International Finance Corporation. The 'Green Export Development Fund' will be in addition to Bangladesh's existing export development fund (EDF) of US $1.5 billion.
SOURCE: The EcoTextile
The new factories are expected to be constructed in the Dangara and Jilikul districts of the Khatlon province. The design works for the new factories are nearing completion, the ministry said on Monday. Chen Dao Chuan reportedly expressed gratitude to the Tajik government for allocation of 15,000 hectares of land in the Dangara district for cotton cultivation. He also proposed creating of the so-called Chinese Corner in these two districts, where the Chinese side will introduce the latest agricultural machinery and technology, methods to grow lemons, construction of fish ponds, bee-keeping technology, and agricultural training centers, so that Tajik farmers could get acquainted with activities and achievements of Chinese farmers.
Proposal has been also put up to set up training and dealer centers to display high quality farm produce for sale. The Agriculture Ministry has supported the Chinese proposals. Last November it was reported that China’s Henan province will invest $800 million in the agricultural sector of Tajikistan in accordance with the agreement signed in Beijing during a meeting between Tajikistan President Emomali Rakhmon and the Governor of the Henan province, Xie Fuzhan.
Chinese investments will fund construction of facilities to process agricultural produce in Tajikistan, to build a flour plant, a mineral fertilizer plant, a vegetable oil plant, as well as agricultural machinery and fodder plants. The two sides agreed to work closely in future to develop agriculture sector in the country.
SOURCE: Yarns&Fibers
China's economic growth could slow to between 6.9 per cent and 7.1 per cent this year as the country fends off deflation risks, the head of the Chinese central bank's research bureau said on Tuesday.
In an opinion piece in the China Daily newspaper, Lu Lei said fixed asset investment growth in the world's second-largest economy is likely to cool further this year, dragged by a sagging property market and a fall-off in state investment. "China's economic growth rate may remain stable at a relatively lower level in 2015, between 6.9 per cent and 7.1 per cent, restricted by sluggish demand," Lu wrote.
SOURCE: The Business Standard
The euro zone had a bigger than expected unadjusted trade surplus in December, as exports surged eight percent year-on-year and imports edged just one percent higher, data showed. The European Union's statistics office Eurostat said the trade surplus of the 18 countries sharing the euro last year was Euro 24.3 billion, almost double the Euro 13.6 billion in December 2013 and well above market expectations of Euro 20.5 billion.
For the whole of 2014, exports rose 2 per cent over 2013 while imports were flat, bringing the overall trade surplus for the whole year to Euro 194.8 billion from Euro 152.3 billion in 2013. More detailed data for December was not yet available, but numbers for the January-November period showed that much of the improvement in trade balance was due to a sharp fall in the deficit in the energy trade, thanks to plummeting oil prices.
Eurostat said that in the first 11 months of last year, the energy trade deficit fell to Euro 256.7 billion from Euro 292.5 billion in the same period of 2013. Adjusted for seasonal swings, the euro zone's trade surplus was only minimally smaller at Euro 23.3 billion in December, as exports fell 1.1 per cent month-on-month and exports declined 2.4 per cent.
SOURCE: The Business Standard
Foreign direct investment (FDI) in China grew at its strongest pace in nearly four years in January, surging 29.4 per cent from a year earlier to $13.9 billion as investors largely shunned the troubled manufacturing sector and focused on the more resilient services industry. But analysts cautioned about reading too much into economic indicators for January alone, given the strong seasonal distortions caused by the timing of the Lunar New Year holidays, which began on January 31 last year but start on February 19 this year.
January FDI rose 4.5 per cent from December, the Commerce Ministry said on Monday. In terms of value, January FDI was the highest since June 2014. Earlier data showed FDI in China rose just 1.7 per cent in 2014, the slackest pace since 2012. The weak performance underscored a cooling economy which is spurring more Chinese firms to plow money into assets overseas in a trend that is soon set to overtake inbound investment.
Foreign direct investment is an important gauge of the health of the world economy and is also a good indicator of where capital is flowing within the country. Shen Danyang, the ministry’s spokesman, told reporters that China’s foreign direct investment will be stable for 2015, but it was too early to predict whether China will continue to be the world leader in attracting FDI this year.
China overtook the United States to become the top destination for FDI in 2014, largely due to falling inflows caused by a deal between US firm Verizon Communications Inc and its British partner Vodafone, according to the United Nations economic think-tank UNCTAD.
SOURCE: The Business Standard
The International Labour Organisation (ILO) and Pakistan Textile Exporters Association (PTEA) have forged a unique partnership to promote decent work in garment and textile industry in Faisalabad. The signing ceremony was held at Islamabad on Tuesday.
Dignitaries from the government, President of Federation of Pakistan Chambers of Commerce and Industry(FPCCI) Mian Muhammad Adress, representatives of employers and workers organisations, representatives of diplomatic missions in Pakistan including the German Embassy and the Royal Embassy of Netherlands participated amongst other bilateral development partners.
The Partnership Agreement includes a comprehensive framework on improving industrial relations through training and compliance with International Labour Standards including occupational safety and health, wages, nature of employment, discrimination and other forms of mal-practices. Addressing the participants, Francesco d' Ovidio, Country Director, ILO said that issues in the garment industry are systemic and require action that helps develop effective industrial relations and promote respect of international labour standards. There is, therefore, an urgent need to establish strategic and comprehensive public private collaborations.
Sohail Pasha, Chairman PTEA said that foreign trade has a lot of attached responsibilities as the international buyers are increasingly getting sensitive about ethical sourcing and international compliances. We are pleased in collaborating with ILO for improvement of working conditions and implementation of International Labour Standards in textile industries. At the same occasion, Sikandar Ismail Khan, Secretary Ministry of Overseas Pakistani and Human Resource Development (OPHRD) said that GSP Plus is an opportunity and this collaboration will help improve the image of Pakistan textile industries as responsible workplaces that are compliant with national laws, including those based on International Labour Standard. Amir M Khan Marwat, Federal Secretary, Ministry of Textile Industry endorsed the partnership and said that the Ministry has also reflected compliance to labour laws in the textile policy which is of immense importance in order to reap the benefits of trade preferences such as GSP Plus.
SOURCE: The Business Recorder
In the last few years, the number of Turkish companies active in Pakistan increased. However, the trade volume has been reduced because of Turkey’s increased duty on textile. Aziz termed Turkish Prime Minister Ahmet Davutoglu’s interest and support for Pakistan as "extremely valuable." Davutoglu is expected to visit Islamabad between Feb. 17 and 18, where the fourth meeting of the Pakistan-Turkey High Level Strategic Cooperation Council will also take place. This will be the Turkish premier's first visit to Pakistan since assuming his post in August, 2014.The council meeting is expected to focus on trade, energy, communications and transport, education and culture sectors.
According to the Turkish Statistical Institute, the trade volume between the two countries was $695.3 million in 2014. Aziz said that in 2011, the trade volume reached to $1 billion, but then it decreased to $800 million, and now it was around $600 million. Pakistan would be negotiating with Turkey for the possibility of a free trade agreement that may allow duty free imports.
Regarding a three-way regional cooperation process between Pakistan, Afghanistan and Turkey known as the "Istanbul process," Aziz said that Turkey has been a very strong supporter of Afghanistan in the last few years because of its cultural, religious and economic links. The most significant initiative of Turkey was the Heart of Asia Istanbul process, which brought together 16 members and 50 observers in China.
According to the initiative's official website, the Istanbul process provides a new agenda for regional cooperation in the “Heart of Asia” by placing Afghanistan at its center. The process is aimed at achieving a sincere and result‐oriented cooperation for a peaceful and stable Afghanistan.
SOURCE: Yarns&Fibers
Board of Investment (BOI) Chairman Dr Miftah Ismail said that it will be the third meeting of Pakistan Turkey Business Forum since the Pakistan Muslim League-N government came into power. Prime Ministers of both the countries would attend the forum. Sources said that the decisions on preferential trade agreement (PTA) between Pakistan and Turkey will also be held on the sidelines of the business forum. Turkey has expressed its willingness to sign the much-awaited PTA with Pakistan as it has no outstanding issues to settle.
Turkey has been imposing an anti-dumping tariff on textile products from many countries, including Pakistan, since 2011 in order to prevent unfair pricing. As a result, the bilateral trade volume between Turkey and Pakistan decreased from $2 billion in 2010 to $1 billion in 2011 and to $726 million in 2013. Private companies, especially from Turkish energy and construction sector are going to be part of the delegation Sources said that the dispute between the government of Pakistan and leading Turkish energy company, Karkey Karadeniz, would also come under discussion during the upcoming meeting of the two prime ministers.
Karkey is seeking compensation from Pakistan for breach of Pakistan's obligations under the BIT in connection with Karkey's investment in a rental power project (RPP) in Karachi, as well as for loss of earnings and costs associated with Pakistan's detention of its ship. The dispute has escalated to the highest levels of the government and was discussed during the recent visit to Turkey of Prime Minister Nawaz Sharif. Dr Miftah Ismail said that the government was trying to find an amicable solution of the dispute as it was sending a negative signal to foreign investors not only in Turkey but other mega international companies. The government of Pakistan's Cabinet Committee of Economic Co-ordination Committee (ECC) had offered to commission seven out of 10 RPPs which were exonerated by the National Accountability Bureau (NAB). Karkey Company was not exonerated by the NAB. However, in Pakistan, Turkey has already been working with the Punjab provincial government. Turkey is co-operating in different energy projects which will help Pakistan textile industry which is facing energy crisis affecting export growth.
SOURCE: Yarns&Fibers
Masud Rahman, president of Canada Bangladesh Chamber of Commerce and Industry (CanCham) said that they plan to increase their two-way trade to $5.0 billion at the end of 2020. CanCham to boost up the contact between people to people of both the countries and thus increase bilateral trade and investment has organized a two-day trade fair on Saturday. They also want to increase export diversification and also want to involve Bangladeshi diasporas in Canada for investment in Bangladesh.
Masud said that in view of the robust growth of the Bangladesh economy, Canadian investment would be encouraged from the current investment of more than $300 million. Although Bangladesh's overall exports to Canada have grown they are not diversified, but concentrated on a limited number of products. Clothing accounted for 70 percent of Bangladesh's total exports to Canada.
The enormous export potential in the Canadian market for Bangladesh is largely unexplored. Many apparel products have potential in the Canadian market, followed by other fabric items, frozen shrimps and crabs, leather and footwear and ceramic ware. Bangladesh was the third largest pulse export market for Canada in 2013 and a major market for wheat. Agri-food was the leading export sector from Canada to South Asia in 2013, making Bangladesh the second largest Canadian agri-food buyer in South Asia.
SOURCE: Yarns&Fibers
