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MARKET WATCH 17 AUGUST, 2020

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PM Modi launches 'Transparent Taxation' portal, a new faceless tax system

Prime Minister Narendra Modi Thursday rolled out a new platform for ling income tax returns to ensure a transparent tax environment by eliminating physical interface between tax authorities and taxpayers. “Our eort is that our tax system should be seamless, painless and faceless,” Modi said after launching the Transparent Taxation Platform and a taxpayer charter outlining rights and obligations of taxpayers through videoconferencing. The measures include a directive that takes away powers of regular assessing oicers to conduct surveys, restricting such powers to only the investigation and tax deducted at source wing, that too only after authorisation from a senior oicial of director general or principal commissioner rank. The prime minister urged those who owe taxes to come forward and honestly pay their dues to contribute to nation building, saying only 15 million paying taxes in a population of 1.3 billion was too low. “The new platform, apart from being faceless, is also aimed at boosting the condence of the taxpayer and making him or her fearless,” he said. Faceless appeal that allows a taxpayer to contest any tax claim without any personal interaction with authorities—the next step after faceless assessment—will begin from September 25. Finance minister Nirmala Sitharaman said, “With dynamic jurisdiction and teambased assessment, taxpayers can respond to the scrutiny notice online… Speedy completion of cases is another hallmark of the scheme.” Notices, if any, will be sent only by the centralised computer system, and taxpayer can respond to them electronically without the requirement of visiting a tax oice or meeting any oicial. Further, most assessment orders will have to be passed by National e-Assessment Centre through the Faceless Assessment Scheme, 2019. The prime minister said this will end the era of “jaan pehchan” (acquaintance) to get scrutiny or notices settled.

Source: Economic Times

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PM Modi’s mantra for Atmanirbhar Bharat: Value-Addition to raw material, making finished goods

Prime Minister Narendra Modi addressing the nation on the 74th Independence Day from the Red Fort reinforced his push for the Atmanirbhar Bharat. The Prime Minister said that for India to become self-reliant or Atmanirbhar it needs to stress on ‘value addition’ to raw material that it otherwise exports. Prime Minister Modi asked that for how long will India continue to export raw material and buy the finished products from other countries. Modi said that as India nears its 75th Independence Day, it needs to stand on its own feet and carve out a large role for itself in the world. The Prime Minister was addressing the nation for the 7th time as the Prime Minister on the Independence Day. Prime Minister added that India needs to add value to raw material and produce finished products in India. He added that these finished products can then be exported by India to other countries as he stressed on the need for India to leave a large-imprint on the world. After the onset of the coronavirus pandemic the Prime Minister had laid out the Atmanirbhar Bharat or self-reliant India vision earlier in May. The ceremony of the 74th Independence Day has been carried out keeping the social distancing rules in mind with a very thin crowd attending the event. Under the Atmanirbhar Bharat push, Prime Minister Narendra Modi has focused on being ‘vocal for local’. India’s successful efforts in the PPE manufacturing strengthened the Atmanirbhar Bharat push. From manufacturing near-zero PPE kits before the pandemic to manufacturing almost 1.5 lakh kits daily, the industry now is the second largest just behind China. Under the Atmanirbhar Bharat push the Defence Ministry, earlier last week announced that it would impose an embargo on 101 items in a staggered manner to boost local manufacturing.

Source: Financial Express

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‘Transparent Taxation’ platform will ease compliance burden, brings in fair objective: FM Nirmala Sitharaman

Union Finance Minister, Nirmala Sitharaman at launch of platform for “Transparent Taxation–Honouring the Honest” said this new platform will ease compliance burden and brings in fair objective and adjust system. “PM's vision is to empower the taxpayer, to provide a transparent system and to honour honest taxpayers.

Source: Economic Times

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Sector and Industry wise study of ground level issues for policy formulation is the need of the hour: Shri Nitin Gadkari

Shri Nitin Gadkari, Union Minister for Micro, Small & Medium Enterprises and Road Transport & Highways has highlighted the need for sector wise and industry wise study of the ground level issues by Think Tanks so that new policies may be formulated taking into account their recommendations. He said this while addressing a webinar today. During his interaction with MSME member bodies and Sectoral Associations of FICCI, he said that all the sectors like plastic, garment, leather, pharmaceuticals etc. and industries associated with them have unique problems. He requested FICCI and other industry associations to study ground level problems of important sectors through various Think Tanks and present their recommendationsso that policy decisions can be taken to solve various problems. He appealed to the industry bodies to associate themselves with the initiative of Atma Nirbhar Bharat Abhiyan so that import bill may be reduced and more employment opportunities are created through enhancing manufacturing activities and production in the country."We are trying to develop industrial clusters throughout the country especially in rural, tribal and agricultural areas," Shri Gadkari said. He added that policy for a social micro finance institution is being finalized which will make available finance upto Rs. 10 lakhs for very small entrepreneurs, businesses and shop owners, etc. The Minister also suggested that since social distancing is the new norm, automation and digitalization in the MSMEs should be followed on a bigger scale. Industry association representatives suggested to create an online digital directory of top 50,000 MSMEs along with other suggestions and also assured to cooperate fully with the objective of Atma Nirbhar Bharat Abhiyan.

Source: PIB

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Implement GST, to Boost Direct Tax

The government’s tax transparency initiative with faceless assessment and appeals and a taxpayer charter is welcome. Corruption depends on human interface and the misuse of arbitrary powers by taxmen. That must go. Contactless assessment will minimise the interface between the assessing officer and the assessee, and improve compliance. Tax officers must also desist from making highpitched assessments in their zeal to meet collection targets. Launching the platform for ‘Transparent Taxation — Honouring the Honest’, Prime Minister Narendra Modi urged people to introspect and pay their tax dues. However, the way to increase direct tax collections is to clean up the goods and services tax (GST), which generates audit trails to income currently escaping tax. Nearly 66% of the total tax collections in the country come from indirect taxes that are borne by the rich and poor alike. The share of direct taxes in total tax revenues must rise. The mining of GST data and electricity bills makes it eminently feasible. The gross value added for the economy is equal to the gross profits plus wages and salaries. It holds at the firm level and can be used to estimate the value added by each production unit, and its distribution to taxable entities. Electricity bills and employee provident fund payouts must tally with the claimed production and value added levels. Many small units are outside the formal banking system. The remedy is to extend the reach of formal finance, make small units keep books and bring these into tax net. Data analytics must be used to track the physical volumes of raw materials along their production chain ending in tax-evaded goods. If garments evade taxes, the suppliers of the fibre that is spun into yarn later converted to fabric should be asked to furnish the details of all their customers. These should be traced, and their customers, and so on. Reverse charge should be used more widely, also be universal so that buyers can pay tax on their purchases directly to the government while recognising the vendor on whose behalf the tax is being paid.

Source: Economic Times

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Bring faceless assessment in indirect tax regime, demand textiles exporters

A small and medium textiles exporter' association has asked the government to introduce 'faceless assessments and faceless appeals' in the indirect tax regime as well so that exporters' interaction with GST officials could be eliminated. The income tax department on Thursday amended its e-assessment scheme to align it with faceless assessment. Amending the e-assessment scheme launched last year, the Central Board of Direct Taxes (CBDT) has notified changes to include change in nomenclature of scheme from ''E-assessment scheme'' to ''Faceless Assessment Scheme''. Home Textile Exporters' Welfare Association (HEWA) said Prime Minister Narendra Modi has declared that the faceless assessments and taxpayers' charter would come in force immediately, and faceless appeals would begin from September 25 onward. The aim of this scheme is to eliminate the face-to-face interactions between taxpayers and Income Tax Department officers, it said in a statement. "On the same footing HEWA urges the government to introduce the faceless assessments and faceless appeals in indirect tax regime also, so that exporters' interaction with GST officials is eliminated," it said. HEWA further said that in case any exporter is red flagged or declared as 'risky exporter', in that case the exporter must be informed by field formation the exact cause or the reason for his being red flagged. Exporters are identified as 'risky' on the basis of specific risk indicators based on customs, GST, income tax and DGFT data. The identified risky exporters'' information is shared with the CGST formations for physical and financial verification. Meanwhile, in a letter to the Prime Minister, HEWA has sought help for small and medium textiles exporters impacted by the Covid-19 pandemic by relaxing the GST tax regime. The letter said that exporters are facing liquidity crunch due to delayed overseas payments and large scale migration of labourers and reduction of working hours, shortage of working space due to adherence of social distancing norms. HEWA further said Indian textile exporters are "not well versed" with the GST tax regime and depend on tax consultants who charge hefty amount as professional fee. "In such troubled times, HEWA requests the government for extending its full support to textile export industry by relaxing the complicated new GST tax regime," it said. The body sought government's "cooperation" so that textiles exporters can make their best possible contribution towards the 'Atmanirbhar Bharat' initiative.

Source: Business Standard

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Not taken into confidence for faceless assessment scheme: Tax officers

Days after Prime Minister Narendra Modi announced the faceless assessment scheme as part of the measures to promote transparency in taxation, the association representing income-tax (I-T) officers and employees has expressed distress over not being “taken into confidence” to carry out a reform requiring complete overhaul of the department. In a letter to the Central Board of Direct Taxes (CBDT) Chairman P C Mody, the association has highlighted the unease among 97 per cent of the I-T department workforce with respect to the implementation of the scheme. While it ...

Source: Business Standard

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CBDT undergoing significant restructuring for faceless assessment

The income tax department is undergoing a complete restructuring exercise with regional e-assessment centres (ReAC) set up across 20 cities, apart from the national centre in Delhi. Some 4,224 officers have been diverted to the faceless assessment unit, leaving about 2,000 officers in the residual jurisdiction, which will no longer carry out any assessment exercise. Detailed guidelines have been issued on reallocation of roles and functions to do away with physical interface between the taxpayer and the tax authorities. Prime Minister Narendra Modi on Thursday launched the faceless assessment scheme, which eliminates territorial jurisdiction and substitutes individual discretion with team-based assessment, with the aim of bringing in transparency and objectivity to the process. “All these (faceless assessment) functions will be through electronic means, for which the national e-assessment centre (NeAC) will be the getaway… for all the flow of information. The officers and staff in the ReACs will perform the functions relating to the assessment and verification function under the income tax act…but all communications from the department to the taxpayer…will be in the name of the NeAC,” the note said. Officers in the faceless assessment units will carry out assessments and verification related to assessments. They will also carry out review of draft orders, apart from providing technical support. The final orders, however, will be passed and dispatched by the NeAC only. The remaining 2,000 officers outside the NeAC and ReAC hierarchy will perform functions other than assessment, such as taxpayer outreach and taxpayer education, taxpayer facilitation, grievance handling, collection and recovery of taxes and audit functions. They will also be responsible for judicial functions like giving effect to appellate orders of commissioner appeals, ITAT, High Court Supreme Court, Settlement Commission, etc. The Central charges, international tax, transfer pricing charges and investigation charges have not been diverted and will continue in the same role. The power of conducting surveys will be exercised only by the investigation directorates and TDS charges only. The faceless scheme will be led by 30 chief commissioners of income tax and 154 principal commissioners of income tax. About 32 chief commissioners of income tax and 96 principal commissioners of income tax will be in charge of the residual jurisdiction. Finance Minister Nirmala Sitharaman had said that the platform brings in a transparent, efficient and accountable tax administration using technology, data Analytics and artificial intelligence.

Source: Business Standard

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India may allow export of N-95 masks

 The textiles ministry is closely watching the supply situation in the country to ensure that there is no shortage of N-95 masks in case export curbs are lifted, according to a government oicial. “We are considering opening up exports because restriction is not a healthy policy. We will remove the restrictions as the situation here improves,” the official told ET. Industry has also sought the removal of export restrictions, citing surplus capacity and its potential to produce 7 million N-95 masks daily. India is producing around 400,000-500,000 N-95 masks every day. Exports were banned in February amid the Covid-19 pandemic even as the government gradually removed restrictions on most personal protective equipment (PPE), including clothing and masks used in healthcare activities where there is risk of contamination. However, medical coveralls of all classes, except surgical drapes, isolation aprons, surgical wraps and X-ray gowns; masks other than non-medical/non-surgical masks, and nitrile/NBR gloves are prohibited. “We are watching the situation now so that there is no shortage of N-95 masks here,” the oicial added India has xed a monthly export quota of 40 million units per month for 2/3 ply surgical masks and 2 million units per month for medical goggles, for the issuance of export licences to eligible applicants. Industry has pitched for allowing exports as it fears business will go to competitors such as Pakistan, Bangladesh and Indonesia. “We now have the capacity to produce 2 crore 3-Ply masks and 70 lakh N-95 masks daily. There is more-than adequate capacity to meet domestic requirements. Since exports are not being allowed, the capacity is grossly underutilized, causing huge losses to manufacturers,” said Anshumali Jain, vice president of the Non-oven Federation of India (NWFI), which represents regional associations of spun-bond non-woven fabric manufacturers and its products, including masks. The association has requested the government to remove export restrictions and stop duty-free import of masks.

Source: Economic Times

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CPI inflation soars to 6.93% in July

 While food inflation reversed an easing trajectory witnessed in May and June to hit as much as 9.62% in July, core inflation, too, inched up to a 21-month peak of about 5.87%, reflecting underlying price pressure in the economy. Retail inflation spiked to 6.93% in July, against a revised 6.23% in June, despite a purported Covid-induced demand compression in the economy. While food inflation reversed an easing trajectory witnessed in May and June to hit as much as 9.62% in July, core inflation, too, inched up to a 21-month peak of about 5.87%, reflecting underlying price pressure in the economy. The headline inflation for April and May had hit 7.22% and 6.27%, respectively, but the price pressure was mostly aided by dearer food articles. However, even core inflation has risen from about 4% in March to 5.87% in July. This suggests supply disruptions may have more than offset any demand destruction in the economy following Covid. Retail inflation remains above the Monetary Policy Committee’s tolerance band of 4 (+/- 2)% for 7 of the past 8months. At 7.04%, rural inflation stayed higher than urban, which stood at 6.84%. ICRA principal economist Aditi Nayar said soaring vegetable prices amid heavy rainfall and localised lockdowns contributed to the spike in food inflation in July (with a 90-basis point rise from June). This is expected to ease a bit in August. “The evolving trends for the ongoing month suggest that the CPI inflation may remain appreciably above 6% in August 2020…. Accordingly, the likelihood that the MPC (monetary policy committee) would persist with a pause in its October meeting has climbed sharply, with a final rate cut likely to be deferred to the December 2020 or February 2021 meeting,” she said. The price stabilisation in crude and retail fuels in recent weeks would ease incremental pressures on CPI inflation in August. India Ratings chief economist DK Pant said: “Inflation increase at a time of depressed demand is perplexing, which suggests the increase is mainly due to supply disruption not due to demand pressure. Both industrial production (IIP contraction narrowed to 16.6%, year on year, in June from 33.9% in May) and inflation trend suggests different monetary policy action.” Last week, the RBI had said headline inflation could remain elevated in the September quarter but likely to ease in the second half of this fiscal, aided by favourable base effects.

Source: Financial Express

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India's planned duty on RMG: Exporters may feel the heat

The Indian move to slap import duty will hit Bangladesh's apparel exports, thus widening further the ballooning bilateral trade gap, officials say. The duty imposition will also go against the provisions of the South Asian Free Trade Agreement or SAFTA under which India granted duty and quota-free access of the goods from the least-developed member countries of the regional trade bloc to its market, they added. New Delhi moved to impose import duty on Dhaka's clothing export pressed by the lobby group the Clothing Manufacturers Association of India or CMAI. Against this backdrop, the Bangladesh ministry of commerce has asked the Export Promotion Bureau to examine the possible impact of the duty imposition. The Bureau has recently forwarded its opinion to the ministry. Bangladesh exported goods worth US$1.096 billion to India in the fiscal year 2019-20, of which $420.72 million or almost 47 per cent was textiles products. The EPB study reveals that Bangladesh, despite being the second-largest apparel exporter in the world, has only 13.71 per cent share in the Indian import of clothing from rest of the world. On the other hand, Dhaka imported goods worth $7.645 billion from New Delhi in fiscal year 2018-19, which was 13.66 per cent of Bangladesh's total global imports. The EPB said the balance of trade between Bangladesh and India has always been skewed in favour of the latter. Bangladesh has been trying for a long to enhance its exports to India with an eye to slashing the gap-the effort has seen modest success in recent years. The demand for Bangladesh's textile and apparel goods in India has recently been rising since many international retailers are directly sourcing readymade garment from Dhaka, the EPB said. Contacted on Friday, EPB vice-chairman A H M Ahsan said the bilateral trade gap between the two countries is high historically. "If any tariff is imposed on the textile articles of Bangladesh, the trade gap will widen further," he told the FE. The EPB suggested that Dhaka should convey New Delhi its concern about the move to impose duty/tax on any article of textiles imported from Bangladesh. It also suggested reminding the giant neighbour that any move to impose duty/tax on any commodity imported will increase the trade gap. The unilateral imposition of the duty out of the SAARC Forum will contravene to the provisions of the SAFTA. "Bangladesh may also inform India that as Bangladesh imports large quantity of yarn and fabrics from India, any fall in export from Bangladesh will also have a negative impact on the import from India," it said.The EPB also suggested informing the Indian side that in the event of imposition of any tariff on any item of import from Bangladesh to India, the country will be left with no choice but to reciprocate with similar/appropriate protection safeguard measures. Vice president of the Federation of Bangladesh Chambers of Commerce and Industry Siddiqur Rahman told the FE on Friday Bangladesh's apparel export to India is meagre compared to the large volume of raw materials imported from that country for its clothing industry. "The bilateral trade imbalance is exceptionally high, thus the Indian government should easily overlook the less than half a billion-dollar apparel export there instead of imposing a duty," he said. "Indian is now using our ports to carry goods to its seven sister states where its vessels get priority berthing instead of us," said Mr Rahman who is an apparel exporter. Mr Rahman said Bangladesh's relations with India are now friendly, thus the government of the two countries should sit together to resolve the issue through discussion.

Source: Financial Express

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GST threshold: Why does a law have to be so complicated that even tax officials interpret it differently?

The complicated prescription for determining if a business is above the threshold for GST registration trips even laywers and tax professionals. I am reminded of a famous qawwali from the 1960s:“Main idhar jaoon ya udhar jaoon/Badi musquil mein hoon ab kidhar jaoon”. The digitalisation/computerisation of the spheres of governance has no doubt made life simpler for many. Taxpayers have got accustomed to the GST Network. But, a complicated threshold takes away the joy, especially for those who have to decide whether they are in the tax system and, therefore, have to register for GST and file 37 or so returns, or are out of it and can relax. The success of a tax system lies in its simplicity and the taxpayers’ ability to navigate it. A pragmatic tax system can lose its sheen if the procedure or the machinery provisions are complicated. Therefore, the most emphasised canons of taxation are certainty and simplicity. The prime minister had called GST a ‘good and simple tax’. If the malady of multifarious conditions in the threshold is not remedied in time, it will lead to unprecedented litigation in the days to come. At the core of the problem is the highly ‘qualified’ aggregate turnover-based threshold, the likes of which perhaps don’t exist in any other tax system. At present, the threshold limit for GST registration has been kept at Rs 20 lakh for services and Rs 40 lakh for the supply of goods. One aspect of this limit is that, under the old tax systems, the threshold for VAT by various states was between Rs 5-10 lakh, and for services under the Finance Act, 1994, was Rs 10 lakh. When GST came was rolled out, an equal threshold, of Rs 20 lakh, was kept for both services and goods. With the changed thresholds, arbitrariness has come to determine the fixation. The other contour of the problem is in the threshold being defined in most complicated terms for any tax system. The threshold has been defined in terms of aggregate turnover, which includes the value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse-charge basis), exempt supplies, exports of goods or services or both, and inter-state supplies of the persons on all-India basis but excluding central tax, state tax, etc. There have been a number of advance rulings sought by persons just to determine whether they are required to register. What makes the threshold complex is the fact that one has to know what supplies of services and goods are GST-exempt and, therefore, know the applicable tariff. Also, what are taxable supplies and what are not, what will constitute inter-state supply of service and what won’t, and what are exclusively reverse-charge or exempt supplies for the purposes of registration under Section 22 of GST Act, including those made on behalf of someone else. Understanding GST is difficult since one has to run through a gamut of provisions, including various tariffs and notifications. This is a complex job for lawyers, tax officials and other professionals, let alone the common tax payer. The dynamics of this frequently-changing law is complicated by the GST Council, which keeps redefining it on nearly a monthly basis. Once the audit starts, those for whom the threshold becomes a virtual stranglehold with duty, interest and penal liabilities, will suffer the most. To make matters worse, the rulings of the Advance Ruling Authority (ARA) further complicate the issue. In the matter of Re: Anil Kumar Aggarwal, the ARA on GST of Karnataka recently ruled that even the interest on FDR, whether accrued or received, interest on Post Office deposits in National Savings Certificates, interest income credited to PF account or on National Pension Scheme (NPS), shall all be part of aggregate turnover and registration will be needed after factoring these in. The ARA, without going into the question in much details, ruled so, without even bringing out whether these interests earned were in relation to business or otherwise. As deposits are made in personal capacity in savings schemes like PPF and NPS, the same cannot, by common sense, be for business purposes. Further, the ARA did not go into whether Service Accounting Code (SAC) 9971 is applicable to deposits extended by banks and, therefore, only those are exempt, since SAC 9971 is applicable only to deposits extended by banks and does not cover individuals. It has also not dealt with the question whether an amount kept in one’s own account in a bank can be treated as transfer and, therefore, a supply of service? The cryptic order passed has no reasoning, but just a declaration that the interest on the types of deposits indicated above are exempt, but still inclusible in the aggregate turnover as it forms supply. There is an urgent need to simplify the “threshold”, and more so for services. Why does a law have to be so complicated that even tax officials interpret it differently? Is the common man required to be a tax-expert simply to pay taxes? Is he required to devote time to business or providing services, or should be running around just to find out whether he has a tax liability or not and whether he has crossed the threshold limits and is obliged to file 37 returns for services provided? Despite such efforts, he may encounter different shades of opinions from lawyers and other professionals. The minimum that the policymakers should do is to make an absolute and unconditional threshold of GST at whatever level it is deemed appropriate, like the case is in other tax systems. Though, the problem is, in a federal tax structure, even if the Centre decides to do it today, it may take about six months before the Council affords approval and the notifications are issued. Till such time, the GST will continue to remain complicated at the threshold only.

Source:   Financial Express

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Lack of data could prevent RBI from breaching its mandated inflation target

If the average inflation is more than or lower than the prescribed tolerance level for any three consecutive quarters, it is considered a failure in achieving the mandated ination target. Non-availability of retail ination numbers for April and May means the Reserve Bank of India may not be in breach of its ination management mandate.The central bank is mandated by the monetary policy framework to keep inflation at 4% with a tolerance band of 2% on either side…

Source: Economic Times

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India's key Central European partner Poland keen to increase two-way investments in post-Covid scenario

Central Europe’s biggest nation and India’s traditional partner in the region is keen to invest in India and simultaneously keen to expand basket of Indian investments in the country. PM Narendra Modi is keen on creating new investment opportunities in India in the post-COVID period and on facilitating the inow of foreign investments. India is the primary location in Asia for Polish investors (currently 270 mln USD). Poland would encourage its entrepreneurs to invest in India and also would like to invite more Indian investors to make business in Poland, sources informed ET. “However, for Poland – and many other European states – the lack of bilateral investment treaty is a serious obstacle. We regret that there is no agreement in place between the EU and its member states,” a Polish government source said. Increasing two-way investments was one of key issues discussed at the Indo-Polish Foreign Oice Consultations held last week through a virtual meet. Poland has also proposed cooperation with India on research and innovation. The global COVID-19 crisis has seriously challenged free trade and created significant disruptions in global supply chains, which is particularly problematic as regards deliveries of medical and protective equipment needed to tackle the pandemic. The best way to overcome this global crisis is by strengthening international cooperation. “Poland considers India as a major source of pharmaceuticals and personal protective equipment which have been an essential element of the EU’s response to the COVID-19 crisis. As the world continues to ght the COVID-19 pandemic, it is of utmost importance to increase the production of vital medical supplies and to step up cooperation to ensure continued deliveries of these goods,” according to the Polish government source mentioned above. “Due to the persisting epidemiological threat related to COVID-19 it is essential to undertake common efforts to limit world supply chain disturbances, as well as mitigate possible negative effects of the crisis on agri-food products supply to regional and local markets. There is also a possibility for broader cooperation in food processing. Poland sells not only high processed food products, like soft beverages, but also others technologies, which can be applied in India,” the source informed It may be recalled that the Polish Investment and Trade Agency opened a new Foreign Trade Office in Mumbai in 2018.Poland is India’s largest trade partner and export destination in the Central European region, with bilateral trade growing almost seven-fold over the last ten years. As per Indian statistics, the overall value of bilateral trade in 2018 was $ 2.351 billion. India’s export to Poland contributed to 0.48% of overall India’s export. Indian investments in Poland are valued at over $3 billion which comprises companies such as ArcelorMittal, Videocon, Escorts, Strides Arcolab, Ranbaxy, Essel Propack, KPIT Cummins, Zensar Technologies Ltd, Tata Consultancy Services, HCL Technologies Ltd, Infosys and Wipro, Jindal Stainless, Berger Paints India, UFLEX and Glenmark Pharmaceuticals, Rishab Instruments (acquired Lumel) and CRISIL. Total Polish investment in India is estimated at $ 672 million.Poland possesses world class food processing including preservation/storage technologies while India is one of thelargest producers for many fruits, dairy and Agro products. A MoU on Agriculture for technical and institutional cooperation has already been signed between both countries during the visit of Vice President of India to Poland in April 2017. Around thirteen Indian IT companies, employing more than 10,000 professionals, are currently active in Poland and are operating also their Europe operation from Poland. (Indian IT companies Infosys and HCL have strong presence in Poland providing outsourcing services to various rms, HCL has base in Krakow, where 1200 employees are handling work related to Deutshe Bank). Presently, about 30-40% of goods exported by India to Poland are reexported to other EU Countries. Poland possesses reputed clean coal technologies and Polish public-sector companies have played a substantial role in development of mining and power sectors in India. Coal India Limited’s trainee engineers received training in Polish mines which specializes in intelligent mining. India and Poland signed a Memorandum of Understanding last year to enhance bilateral cooperation in the coal and mining sector. Poland others excellent opportunities to Indian investors and exporters in the automotive sector. With the number of imported used cars being close to one million units per annum, Poland is a large market for used vehicles with an average price of 7,000 Euros. Indian manufacturers are recognizing this opportunity for using near shoring strategy to other new cars of the same price range for sale in Poland and adjoining countries. Given Poland’s strategic location, shortages in healthcare personnel and 25% growth in pharma market in last 5 years, there are good opportunities for Indian exporters and investors.

Source: Economic Times

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Global Textile Raw Material Price 16-08-2020

 Item

Price

Unit

Fluctuation

Date

PSF

795.55

USD/Ton

0%

16-08-2020

VSF

1202.67

USD/Ton

0%

16-08-2020

ASF

1698.99

USD/Ton

0%

16-08-2020

Polyester    POY

765.34

USD/Ton

-0.19%

16-08-2020

Nylon    FDY

1913.34

USD/Ton

0%

16-08-2020

40D    Spandex

3999.31

USD/Ton

0%

16-08-2020

Nylon    POY

1812.64

USD/Ton

0.40%

16-08-2020

Acrylic    Top 3D

1870.18

USD/Ton

0%

16-08-2020

Polyester    FDY

935.09

USD/Ton

0%

16-08-2020

Nylon    DTY

2172.29

USD/Ton

0.67%

16-08-2020

Viscose    Long Filament

5178.96

USD/Ton

0%

16-08-2020

Polyester    DTY

963.86

USD/Ton

0%

16-08-2020

30S    Spun Rayon Yarn

1660.14

USD/Ton

-0.09%

16-08-2020

32S    Polyester Yarn

1345.09

USD/Ton

0%

16-08-2020

45S    T/C Yarn

2165.09

USD/Ton

0%

16-08-2020

40S    Rayon Yarn

1841.41

USD/Ton

0%

16-08-2020

T/R    Yarn 65/35 32S

1668.78

USD/Ton

0%

16-08-2020

45S    Polyester Yarn

1510.53

USD/Ton

0%

16-08-2020

T/C    Yarn 65/35 32S

2042.81

USD/Ton

0%

16-08-2020

10S    Denim Fabric

1.14

USD/Meter

0%

16-08-2020

32S    Twill Fabric

0.64

USD/Meter

0%

16-08-2020

40S    Combed Poplin

0.93

USD/Meter

0%

16-08-2020

30S    Rayon Fabric

0.47

USD/Meter

-0.61%

16-08-2020

45S    T/C Fabric

0.65

USD/Meter

0%

16-08-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14386 USD dtd. 16/08/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Global exports of artificial filament's sewing thread down

 The global export of sewing thread of artificial filaments fell 1.83 per cent from $139.49 million in 2017 to $136.93 million in 2019. Total exports slipped 7.91 per cent in 2019 over the previous year and is expected to drop to $133.28 million in 2022. Global import value dropped 22.04 per cent from to $64.83 million in 2019 (2017: $83.16 million). Total imports plunged 17.98 per cent in 2019 over the previous year and is expected to diminish to $62.78 million in 2022 with a rate of 3.17 per cent from 2019, according to Fibre2Fashion's market analysis tool TexPro. China ($93.48 million) and Germany ($12.94 million) were the key exporters of sewing thread of artificial filaments across the globe in 2019, together comprising 77.72 per cent of total export. These were followed by Ireland ($6.08 million), South Korea ($2.71 million) and Italy ($2.64 million). From 2016 to 2019, the most notable rate of growth in terms of export value, amongst the main exporting countries, was attained by Ireland with very high increase in demand. Pakistan ($7.22 million), UK ($6.56 million), India ($5.88 million) and Myanmar ($5.42 million) were the key importers of sewing thread of artificial filaments the globe in 2019, together comprising 38.69 per cent of total import. These were followed by Ethiopia ($3.11 million), Italy ($2.16 million) and Germany ($1.96 million). From 2016 to 2019, the most notable rate of growth in terms of import value, amongst the main importing countries, was attained by Myanmar (129.93 per cent) and UK (123.69 per cent).

Source: Fibre2Fashion

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UK fashion exports to face continued tariffs in US

Seventeen UK fashion and textile product lines will continue to be hit with an additional 25 per cent tariff in the US. The tariffs were first introduced in October 2019 as part of a long running dispute between the US and the EU over subsidies to the aircraft industry. Sweaters, apparel, blankets and bed linen are among the product lines affected. “This is hugely disappointing news. The impact of the additional tariffs have been devastating for UK manufacturers selling to the US. We are the only country to be hit with tariffs on fashion products and the current situation piles even more pressure on companies already reeling from the impact of covid-19 and the hugely uncertain trading situation with the EU. Waiting for the outcome of a potential free trade agreement with the US isn’t enough. We need the government to take direct action now to support our manufacturing industry,” said UK Fashion & Textile Association (UKFT) CEO Adam Mansell in a press release. We are exceptionally disappointed that these tariffs remain in place and continue to punish our industry for a dispute which is completely outside of our control,” said Simon Cotton, CEO of Johnstons of Elgin, which makes cashmere and fine woollen cloth, knitwear and accessories in Scotland. Bill Leach, global sales director at knitwear brand and manufacturer John Smedley, said: “This is hugely disappointing. John Smedley has invested heavily into the US market for many years, resulting in strong sales and customer satisfaction across a wide array of America’s finest retailers. We also enjoy strong following on social media from across the US and we are immensely proud of the excellent working partnerships we have developed with customers, clients and media over decades. “Since October 2019, when the retaliatory additional 25 per cent tariff was applied to all of our sales to the US, John Smedley has been forced to absorb this punitive cost in order to maintain the ongoing retail pricing of our collection and to maintain our existing proposition to our valued customers and clients in the US market. “The fact that British-manufactured knitwear has become embroiled in the longest running trade dispute in WTO history to this extent is deeply irritating, unfairly punitive and continues to have a deep and long-lasting impact on our business in the UK. Our connections to and with the airline industry are non-existent. “Should this retaliatory tariff application continue, John Smedley will need to take some tough decisions about our strategy for the US market.” The additional tariffs apply only to UK manufactured products. The 17 fashion lines affected are those that fall under HTS Codes 6110.11.00, 6110.12.10, 6110.20.20, 6110.30.30, 6202.99.15, 6202.99.80, 6203.11.60, 6203.11.90, 6203.19.30, 6203.19.90, 6208.21.00, 6211.12.40, 6211.12.80, 6301.30.00, 6301.90.00, 6302.21.50, and 6302.21.90. UKFT said it has written to Liz Truss, secretary of state for International Trade, requesting a meeting and demanding an immediate resolution to this dispute which has nothing to do with the UK fashion and textile industry.

Source: Fibre2Fashion

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Vietnam's garment export orders continue to fall sharply

The orders of garment enterprises in Ho Chi Minh City continuously declined to 40 per cent of what it was during the same period last year, according to the HCM City Textile and Garment-Embroidery Association. In the first seven months of the year, textile production increased by 1.8 per cent and apparel production decreased by 4.6 per cent compared to the same duration last year, the ministry of industry and trade said. Chairman of the Vietnam Textile and Apparel Association (VITAS) Vu Duc Giang said the pandemic has caused a change in consumer culture as people have shifted spending on essential products instead of laying too much emphasis on shopping as before. To manage to survive, many garment enterprises are returning to the domestic market, but domestic demand is also weak because people are tightening spending, according to a Vietnamese newspaper report. Garment and textile export turnover in the first seven months was estimated at $16.18 billion, down by 12.1 per cent; fibres and yarns of all kinds decreased by 20.9 per cent over the same period last year. The total export turnover of the industry this year is projected to be about $32.75 billion, down 16 per cent compared to last year.

Source: Fibre2Fashion

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Textile Exchange unveils 2020 Organic Cotton Market report

Textile Exchange, a non-profit organisation of leading brands, retailers, and suppliers, has released its 2020 Organic Cotton Market report. The report reveals data collected for the 2018/19 harvest year. It shows an increase of 31 per cent in organic cotton production over the previous year, making it the second-largest harvest on record after 2009/10. In addition to data per region, the report is sprinkled with insights from industry professionals about their current projects, challenges, successes, goals, and visions for the organic cotton sector, with a particular focus this year on impacts of, and responses to, the dual threat of COVID-19 and climate change, according to a press release by Textile Exchange. In summary, the results show that 222,134 farmers grew 239,787 metric tons of organic cotton in 19 countries on 418,935 hectares. In addition, 55,833 hectares of cotton-growing land was in-conversion to organic, helping to meet the increasing demand. While this report celebrates growth in global organic cotton production and the important contributions this makes to the health of people, the environment, and farming communities around the world, Textile Exchange is highly conscious of the turmoil the world is in right now. From the omnipresent Coronavirus pandemic to reports of egregious human rights abuses within the textile industry and our communities, Textile Exchange is not short of reasons to support farming and processing systems that protect the health of people and the planet. To create a complete picture of global organic cotton supply, the 2020 Organic Cotton Market report shares production data from all regions growing certified organic cotton around the world, totalling 19 countries. According to report findings, 97 per cent of global organic cotton was produced in seven countries; India (51 per cent), China (17 per cent), Kyrgyzstan (10 per cent), Turkey (10 per cent), Tajikistan (5 per cent), Tanzania (2 per cent), and the US (2 per cent). Of the 55,833 hectares of land in-conversion to organic, India and Pakistan are leading the way followed by Turkey, Greece, and Tajikistan. Looking to the future, pre-COVID estimates show that global organic cotton production will grow by a further 10 per cent in 2019/20. The number of facilities certified to leading voluntary organic textile standards increased substantially in 2019, with facilities certified to the Organic Content Standard (OCS) growing 48 per cent and the Global Organic Textile Standard (GOTS) up 35 per cent. The next few months will no-doubt unveil challenges that businesses are enduring, and it will be no different for cotton farmers as the unpredictability will impact the next growing cycle. The future will require much more transparency and sharing of the risks and rewards as we collectively aspire to ‘Climate Action’ as well as the other 16 UN Sustainable Development Goals.

Source: Fibre2Fashion

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Rieter Wins Patent Dispute In China

Rieter protects its innovations and products with patents and registered designs. The company takes consistent action against patent and design infringements. In mid-July 2020, in a legal dispute, the Shanghai Intellectual Property Court of the People’s Republic of China ruled in favor of Rieter Ingolstadt GmbH (Germany). Rieter machines stand for outstanding quality, high operational safety, excellent performance and user-friendliness as well as unique design. In order to benefit from these characteristics, competitors copy the successful Rieter machine concepts and even adopt the coveted Rieter design. Rieter protects its innovations by means of patents and registered designs. The company takes consistent action against companies that infringe Rieter patents or designs and copy products or machines. In 2018, Rieter registered design infringe- ments by Shenyang Hongda Textile Machinery Co., Ltd. in relation to double-head draw frames, and decided to file a lawsuit against the Chinese company. In mid-July 2020, the Shanghai Intellectual Property Court of the People’s Republic of China determined that the double-head draw frames JWF1316 and JWF1316T of Shenyang Hongda Textile Machinery Co., Ltd. are similar to and fall within the scope of protection of the design patent concerned. The defendant Shenyang Hongda Textile Machinery Co., Ltd. was sentenced to compensate the plaintiff Rieter Ingolstadt GmbH for financial losses and expenses.

Source: Textile World

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