Businesses which will provide Aadhaar number while applying for registration under the Goods and Services Tax will get the approval in three working days. The Central Board of Indirect Taxes and Customs (CBIC) last week notified Aadhaar authentication for GST registration with effect from August 21, 2020. The notification also provides that in case businesses do not provide Aadhaar number, then GST registration would be granted only after physical verification of the place of business. Finance Ministry sources said the GST Council in its 39th meeting held on March 14, 2020, had approved operationalization of Aadhaar authentication for new taxpayers. However, its implementation was postponed due to the lockdown on account of Covid-19 pandemic. For a person opting for Aadhaar authentication for new GST registration would get it within just three working days, if no notice is issued and would not need to wait for physical verification. While applicants not opting for Aadhaar authentication for GST registration would be granted it only after physical verification of the place of business or documentary verification which may take up to 21 working days or more if notice is issued, sources said.Sources further said that keeping the Covid-19 pandemic in view, it has been provided that the officer may, if the circumstances warrant, opt for asking for additional documents in lieu of the pre-registration for physical verification of the premises. Aadhaar authentication is expected to facilitate genuine and honest taxpayers while at the same time keeping fake and fraudulent entities away from GST, sources added.
Source a: Business Standard
The CBIC has asked GST field offices to conduct hearings in GST appeal cases via video conferencing for their expeditious disposal while ensuring social distancing. In April, the Central Board of Indirect Taxes and Customs (CBIC) had issued guidelines for conducting personal hearing in virtual mode for appeals under Customs Act, and erstwhile excise and service tax related disputes. In a letter to Principal Chief Commissioners, the CBIC said the feedback received from trade and field formations on this indicated that the initiative has helped in speeding up passing of adjudication and appellate proceedings, saving cost of travel and time, and critically ensuring social distancing in these challenging times. Accordingly, the board has decided to make it mandatory for various authorities, such as Commissioner (Appeals), original adjudicating authorities and Compounding Authority to conduct personal hearing in virtual mode in cases relating to Central GST (CGST) and Integrated GST (IGST), the CBIC said. "This initiative would facilitate all stakeholders such as suppliers under GST, importers, exporters, passengers, advocates, tax practitioners and authorised representatives," it added. The CBIC also issued guidelines for conducting virtual hearing for GST appeals and said in any proceedings before appellate or adjudicating authority, the authority "shall mandatorily indicate" that the personal hearing would take place through video conferencing facility. For this purpose he/she shall also indicate the e-mail address for correspondence, etc. "The virtual hearing through video conference will be conducted through available applications like VIDYO, or other secured computer network. The assessee should download such application in their computer system/laptop/mobile phone beforehand for ready connectivity during virtual hearing, and join the video conference at the time allotted to them," the CBIC guidelines said. AMRG & Associates Senior Partner Rajat Mohan said in view of the coronavirus pandemic scare, government has decided to make personal hearing through video conferencing mandatory for all the erstwhile central indirect tax laws and GST laws. "This would push the authorities such as Commissioner (Appeals), original adjudicating authorities and Compounding Authority to initiate the hearing of the pending cases in a virtual environment, marching towards timely disposal of cases," Mohan said. Under the guidelines, taxpayers are expected to accept personal hearing through video conferencing mode, and only in accentuating circumstances taxpayer would be empowered to deny such digital hearing, he added.
Source: Business Standard
The government has come out with norms for the enforcement of 'rules of origin' provisions for allowing preferential rate of customs duties on products imported under free trade agreements. The new norms have been framed with a view to checking inbound shipments of low quality products and dumping of goods by a third country routed through an FTA partner country. The Department of Revenue has notified the 'Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020' which would "come into force on September 21, 2020".These rules "shall apply to import of goods into India where the importer makes a claim of preferential rate of duty in terms of a trade agreement," it said. The ''rules of origin'' provision prescribes for the minimal processing that should happen in the FTA country so that the final manufactured product may be called originating goods in that country. Under this provision, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods.India has inked FTAs with several countries, including Japan, South Korea, Singapore, and ASEAN members. Under such agreements, two trading partners significantly reduce or eliminate import/customs duties on the maximum number of goods traded between them. According to the notification, to claim preferential rate of duty under a trade agreement, the importer or his agent, at the time of filing bill of entry, has to make a declaration in the bill that the imported products qualify as originating goods for preferential rate of duty under that agreement; and produce certificate of origin. The claim of preferential rate of duty may be denied by the proper officer without verification if the certificate of origin is incomplete or has any alteration not authenticated by the issuing authority or the certificate is produced after its validity period has expired, it said. The importer, it said, also has to possess all relevant information related to country of origin criteria, including the regional value content and submit the same to the proper officer on request. It also said that an officer may, during the course of customs clearance or thereafter, request for verification of certificate of origin from verification authority where there is a doubt regarding genuineness or authenticity of the certificate for reasons such as mismatch of signatures or seal when compared with specimens of seals and signatures received from the exporting country. Finance Minister Nirmala Sitharaman in her Budget speech had stated that the government would review 'rules of origin' requirements, particularly for certain sensitive items, "so as to ensure that FTAs are aligned to the conscious direction of our policy". She had also said that it has been observed that imports under FTAs are on the rise and undue claims of FTA benefits have posed threat to the domestic industry and such imports require stringent checks. Commenting on the notification, AMRG & Associates Senior Partner Rajat Mohan said that under the Aatmanirbhar Bharat call, it was important to establish clear, transparent, and fair administration of Rules of Origin under various bilateral trade agreements signed by India with world economies. "These rules would make it clear for the businesses in India and abroad to know the exact procedures that would be adopted by the proper officer while evaluating the preferential rate of duty under trade agreements and the process for verification of certificate of origin," he said. He added that these rules would make it practically impossible for importers to use the preferential rate of duty in case goods are not imported from the target countries under the said trade agreement. "Rules of Origin are the criteria needed to determine the national origin of a product. Countries which offer zero or reduced duty access to imports from certain trade partners often apply a set of preferential rules of origin to determine the eligibility of products to receive preferential access. "The role of preferential rules of origin is to ensure that only goods originating in participating countries enjoy tariff or other preferences," Mohan explained. He also said that as per the notification, origin related information like country of origin criteria, regional value content and product specific criteria etc. must be possessed by the importer.EY Tax Partner Abhishek Jain said that the regulations have been framed to check the wrong practice of availing concessional customs duty by routing exports to India through preferential trade countries. "However, practically it may be very difficult for genuine importers to comply with these requirements to avail the benefits," Jain said.
Source: Business Standard
The government has already unveiled such incentives for electronics, medical devices and pharmaceuticals. Textiles, garment and leather are labour intensive and have huge employment generation potential. The government is considering production-linked incentives for high employment generating sectors such as textiles, garments and leather. "Some more sectors are under consideration, especially the ones that are labour-intensive....Detailed….
Source: Economic Times
India’s exports have shown a massive improvement sequentially, as the yearly contraction narrowed to -10.2% in July from a severe -60.2% in April, it said. While India focuses on reducing its import-dependence on China, it may be the main export destination for now as exports to other major economies like the United States lag as they struggle to contain the pandemic. Exports to China, which attened the Covid-19 curve, grew 78% year-on-year in June. In contrast, exports declined to western economies like the US, Brazil and the UK, which struggle to contain the infection, according to a CRISIL report on Friday. India’s exports have shown a massive improvement sequentially, as the yearly contraction narrowed to -10.2% in July from a severe -60.2% in April, it said. “The reason is a sharp rise in exports to economies which have been able to control the pandemic,” CRISIL said. Where exports to China grew the most, those to other east Asian economies which had success in controlling the rise in cases, also grew substantially. These included Malaysia (76%), Vietnam (43%) and Singapore (37%). Put together, they make up 16% of India’s export basket, the report said. This explained why exports to certain economies were looking up even as overall exports were still declining, albeit at a slower pace. “The inference? Export prospects for this scal will pivot on the trajectory of the Pandemic across countries,” CRISIL said. China entered and controlled the pandemic much quicker than other economies. Its Covid-19 curve peaked in February after which activity resumed in the economy. The result was that China reported a 3.2% growth in the April-June quarter this year compared to the US, which saw its deepest quarterly plunge in history at -32.9% for the same period. While exports to the US declined 11.2% in June over the year, the gure was a sharp -33.8% for the UK and -6.3% for Brazil. As of Friday, the US recorded 5.75 million Covid-19 cases while Brazil and the UK had 3.5 million and 0.32 million cases respectively. As economies grappled with containing the pandemic, some were seeing a second wave, and a vaccine was still some time away, the report said. “So there’s no telling if this pickup in exports will last or not – but we could read the cues from closely watching the domestic and global spread of the pandemic in coming months,” it said.
Source: Economic Times
The government is looking to provide a pre-packaged resolution framework for stressed companies under the Insolvency and Bankruptcy Code (IBC). A pre-packaged resolution, where a company prepares a restructuring plan in cooperation with its creditors before initiating insolvency proceedings, reduces the time and costs involved in the process. “Government has set up a committee to give a pre-pack framework, we expect the report of the committee to come by the end of this month,” said MS Sahoo, chairperson of the Insolvency and Bankruptcy Board of India (IBBI). “But if this has to be drawn under law and not by market practice, it will require an amendment in law,” Sahoo said, during a webinar on the IBC suspension, hosted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) on Friday. In June, the government promulgated an ordinance suspending sections 7, 9 and 10 of the IBC, barring initiation of insolvency proceedings for defaults occurring from March 25. The six-month suspension, ending next month, may be extended to a year, as per the ordinance. Sahoo likened the decision to a ‘keyhole surgery’. “Most rms which were viable until recently are reeling under stress today. If all such rms were to undergo insolvency proceedings, many of them would end in liquidation for want of plans to rescue them,” he said. The failure to liquidate an unviable rm was a mistake that could be rectied in the future but the mistake of liquidating a viable rm cannot be undone, he said. “Rescuing a viable rm is far more important than failing to liquidate an unviable rm during the current times.” Many experts have questioned the decision to suspend section 10 of the IBC, which enables a corporate applicant to initiate insolvency resolution. According to Sahoo, carving out section 10 from the suspension would disturb the balance the IBC has maintained between the corporate debtor and the creditors. “If you tie the hands of creditors and say debtors can initiate, this will go against the basic principle of the law which is to balance the rights of these two sets of people. That balance cannot be distorted.”
Source: Economic Times
Union Minister for Consumer Affairs, Food & Public Distribution Shri Ram Vilas Paswan has said that the details of manufacturer, date of expiry, MRP and other details of the product should be legible and should be given on packages of all the products. He urged consumers to file complaints, if they found any information missing on the package of any product. He said that this will create deterrence in the minds of the manufacturers who indulge in unfairpractices or pushing sub-standard products into the market. Replying to media queries today during a Video press conference, Shri Paswan informed that the Department of Legal Metrology, Guntur in AP has registered a complaint against the pharmaceutical distributor of medicine ‘Seder OM’. Shri Paswan informed that as per the complaint received, the name of the Manufacturer, Helpline number and date of expiry are not visible. It is further alleged that the size of the numerals and letters of the declaration is less than 1 mm and not easily legible on the above medicine packages. He said that raids were conducted on the premises of the distributor and seller under section 15 of the Legal Metrology Act, 2009 and packets of the above medicine have been seized.
Source: PIB
“On one hand health of banks is very important and on the other hand businesses are under a lot of stress due to covid,” Reserve Bank of India Governor Shaktikanta Das Das said in an interview with CNBC-Awaaz on Friday. New measures to allow Indian lenders to restructure loans will provide a “durable” resolution for cash-strapped businesses and help revive the economy, according to the central bank’s chief. “On one hand health of banks is very important and on the other hand businesses are under a lot of stress due to covid,” Reserve Bank of India Governor Shaktikanta Das Das said in an interview with CNBC-Awaaz on Friday. The plan has replaced a blanket loan moratorium that’s due to expire later this month, he said. Speaking in Hindi, Das said the moratorium was a “temporary solution” for lockdown and not a permanent x. Indian authorities are looking to support an economy that’s been hit hard by the coronavirus, while ensuring the stability of a financial sector where bad-debt is set to swell to a two-decade high. Banks are struggling to accelerate credit growth to revive the economy, which is set for its first annual contraction in more than four decades. Lenders are also dealing with a pile of bad debt that was high even before the pandemic. “We are trying to ensure that such businesses can get some regulatory help via banks on the loans that they have taken,” Das said. “That will help the businesses to revive; jobs will be saved and in turn will help in economic revival.” Addressing concerns that there could be a spike in bad loans once the six-month loan repayment freeze ends on Aug. 31, Das said banks will be able to extend or provide a new moratorium to borrowers under the new plan. Details on the eligibility criteria for companies will be announced by Sept. 6 after an expert panel considers the financial parameters and banks will be able to internally identify the accounts they would like to restructure, Das said. “We will win this war against pandemic,” he said. “I don’t know how much time it will take but we will definitely win this war against Covid.”
Source: Economic Times
Chief Economic Adviser K V Subramanian on Sunday said that India needs more global sized banks to help the country achieve $5 trillion economy by 2024-25. He rued the fact that India has only one bank in top 100 global bank list while a country much smaller in size has more such banks. State Bank of India (SBI) at the 55th position is the only bank in the global top 100 list. China has 18 banks while the US has 12 in the list. "India is the fifth largest economy in the world. So, if the Indian banking sector was proportional to the size of its economy, India should have been where South Korea is, which has six banks in the global top hundred. But in contrast, India has only one bank in the global top hundred," he said. Even countries that are a fraction of India's size for example Finland, Denmark, Belgium, Austria, Norway have at least one bank in the global top hundred, he said while delivering a lecture at the fifth anniversary event of Bandhan Bank. "If you take countries like Sweden and Singapore, Sweden is one-sixth the size of the economy, Singapore is one-eighth the size of the economy, they have three banks in the global top hundred," he said. Subramanian said that "like cricketer M S Dhoni who had shown the country how to win in the foreign shores, the Indian banking system also needs to scale up to global standards”. “The Indian banking system needs to conquer the world. Rather being tigers at home, it should scale up its presence in the world rankings where China is leading in terms of the number of banks, followed by the US," he said. That’s what should now be the goal of the Indian banking sector, because India is not any more a small economy but the fifth largest economy in the world, he said. "So, the basic point I'm trying to make here is that now in order for India to become a USD 5 trillion economy, the banking sector needs to be proportional at least proportional to the size of its economy, if not bigger than the proportionality," he said. In addition to global sized banks, the chief economic adviser said India needs more banks. For instance, he said, the US which is one third of India in terms of population has 20 times more banks. More banks will enhance competition in banking and bring down the cost for consumers, he said. Laying emphasis on adoption of technology, he said, there is also a need to focus more on data analytics, artificial intelligence and machine learning as banking has become more technology driven. Citing a study, Subramanian said technology can play a key role in both scale, and quality of lending. By investing in data analytics and technology, it is possible to actually defeat the nefarious designs of wilful defaulters by using proper data, because there are enough leading indicators available, he added.
Source: Business Standard
The outlay for a key scheme, under which exporters will be reimbursed for all embedded taxes paid on inputs consumed in outbound shipments, could be “much higher” than the Niti Aayog’s much-curtailed estimate of Rs 10,000 crore a year, GK Pillai, former commerce and home secretary, who now heads a panel to fix the refund rates, told FE. Although Pillai refrained from offering a precise estimate of the allocation under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, he said the committee’s intention is not to leave out any event that causes tax content in exports. All the imposts that are not subsumed by the goods and services tax (GST) will be built into the RoDTEP rates, in a potential relief for exporters battered by the pandemic. The government had envisaged an annual allocation of about Rs 50,000 crore under the RoDTEP scheme to make exports zero-rated. This new scheme is to replace the extant Merchandise Export from India Scheme – under which exporters were granted benefits worth about Rs 45,000 crore in FY20 – from January 2021. But the latest Niti proposal had stoked fears of a massive reduction in either the coverage of sectors or the reimbursement rates under the RoDTEP scheme and cast a shadow over an export recovery following the Covid-19 outbreak. While the government is yet to endorse the Niti suggestion, the resource-strapped revenue department has capped the MEIS outlay at just Rs 9,000 crore for the April-December period of FY21, forcing the commerce ministry to block an online module for exporters to apply for such incentives for close to a month now.
The levies that will be considered while fixing the RoDTEP rates include state VAT/ central excise duty on fuel used in transportation, captive power and farming; mandi tax; electricity duty; stamp duty on export documents and purchases from unregistered dealers; embedded central GST and compensation cess; tax paid on transportation; cesses and royalties in case of minerals like coal and iron ore. Such imposts typically inflate exporters ‘costs and contribute to Indian products losing competitive edge in the global market. Merchandise exports have been contracting since March. They witnessed a record 60% crash, year-on-year, in April, although the contraction narrowed to 37% in May, 12% in June and 10% in July, as lockdown curbs were lifted substantially from June. But any sharp reversal in the benefit structure, especially in times of a demand compression in the key US and Europen markets, will potentially jeopadise the export recovery, exporters have already warned. The Pillai committee was formed on July 30 to suggest the RoDTEP rates, among others, and submit a report in three months. A supplementary report, if required, may be submitted two months after that, keeping in view “any issues that may arise”. An earlier committee under Pillai had undertaken a similar, comprehensive exercise in textiles and readymade garments (under chapters 62 and 63 of the harmonised system code). Taxes up to the local level, and including central and state-level taxes, were estimated. For instance, cotton being a principal input in the textile value chain, the panel had to compute the tax incidence in textiles and garments due to the tax on fertilisers used by cotton farmers. So, the exercise is an elaborate and meticulous one, he said. The duty drawback division of the finance ministry is assisting the committee in the exercise, Pillai said. Efforts are on to submit the report within the deadline for the specified tariff lines, the former secretary said. But he conceded that a thorough process, covering all items (at the six-or-eight-digit HS code levels) may take even 1-2 years. The Centre had in 2016 decided to reimburse all embedded state levies paid by garment exporters. Later, the scope of the scheme was expanded to include central levies in it. With RoDTEP, the government will cover all other products. Since tax rates keep on changing, the RoDTEP rates may need annual adjustments.
Source : Financial Express
While loans to micro and small industries shrank 7.6 per cent, for medium-sized industries they dipped by 9.4 per cent. As for growth in lending to large industries, it was nearly flat at 0.4 per cent. The micro, small and medium-sized industries (MSMEs), the most vulnerable to the Covid-19 induced economic stress, are facing a hard time in getting loans as banks remain risk-averse and continue cherry-picking credit portfolios with caution. An analysis of the latest bank credit growth data from the Reserve Bank of India (RBI) showed credit offtake in the MSME sector suffering a steep year-on-year contraction of 12.7 per cent in June 2020 alone. In fact, lending to this sector saw a de-growth of 17 per cent year-on-year (y-o-y) so far this year beginning late March when the lockdown was imposed. While loans to micro and small industries shrank 7.6 per cent, for medium-sized industries they dipped by 9.4 per cent. As for growth in lending to large industries, it was nearly flat at 0.4 per cent, the data showed. "Credit growth continues to remain muted despite large rate cuts. I worry that a negative credit supply shock to the MSME sector may lead to a "credit-gap", i.e., a reduction in the supply of credit to small firms, leading to small businesses shifting towards higher-cost providers of credit. This will have a bearing on growth," said Chetan Ghate, an external member of the Reserve Bank's monetary policy committee. The low offtake comes despite a slew of liquidity infusion measures announced by Finance Minister Nirmala Sitharaman to boost the badly-stressed sector, including the Emergency Credit Line Guarantee Scheme (ECLGS). On Thursday, the finance ministry said that banks have disbursed more than ₹1 lakh crore under the ₹3 lakh ECLGS scheme and loans over ₹1.5 lakh crore has been sanctioned. "The total amount sanctioned under the scheme by banks stands at ₹1,50,759.45 crore, of which ₹1,02,245.77 crore has already been disbursed as of August 18," the ministry said in a statement. "If credit continues to be expensive, these firms will become less capital intensive over time, leading to a lower marginal product of labour. The long-run equilibrium for the economy will involve a negative impact on wages, and therefore demand," Ghate pointed out. In July, the bank overall credit growth moderated but continued to be less than half the level during the last two fortnights. The credit growth was at 5.8 per cent y-o-y in the fortnight ended July 17, and 5.5 per cent y-o-y in the fortnight ended July 31, 2020. "With economic activities remaining subdued, the overall bank credit is expected to remain slower in the near term despite adequate liquidity with banks" analysts at CARE Ratings wrote in a note. Growth in deposits is expected to be higher than the growth in the bank credit offtake, they added. The share of industry in total outstanding credit continues to be the highest at 31.8 per cent in June as compared to 33.2 per cent in June 2019. Among loans to industries, many other sectors saw decelerating credit flow during the March-June period under review. These include mining (-2.4 per cent), edible oil (-8.6 per cent), jute and cotton textiles (- 6.5 per cent), beverages and tobacco (-9.1 per cent) and construction (-1.6 per cent).
Source: The Indian Express
There is an urgent need for deeper and long-term economic reforms which can, inter alia, enhance competitiveness by eliminating distortionary market practices to usher economic growth across sectors. The Prime minister’s vision of achieving a $5-trillion economy by 2025 seems to be under a cloud. The Rs 20-lakh-crore economic package to stimulate growth during and post Covid-19 crisis may take time to bear fruits. However, current macroeconomic indicators do not support the initial euphoria. Moody’s downgraded India’s ratings-outlook from ‘stable’ to ‘negative’ in November 2019, Fitch Ratings released in May projected a 5% decline in growth; even IMF’s recent report on June 24 has projected India’s economy to contract by 4.5% in FY21. IMF has also slashed India’s growth rate to 1.9% in FY21. There is an urgent need for deeper and long-term economic reforms which can, inter alia, enhance competitiveness by eliminating distortionary market practices to usher economic growth across sectors. India has failed to introduce a culture of fair competition in our markets, an essential ingredient for the success of a free-market economy. Why has this not happened so far? Let’ us look back for a while. The 1991 reforms introduced the concept of “free markets” to India. They were aimed to gear up the economy to face competition from within as well as outside. This brought competition into the Indian markets, and the benefits, both in terms of faster economic growth and consumer welfare, are clearly visible. For the first time since independence, the ordinary Indian consumer has become sovereign, and enterprises now compete for his patronage, particularly in some sectors like telecommunication, aviation, consumer electronics, automobiles, etc. In sectors like power, ports, mining, electricity, railways, etc, the benefits of competition are yet to reach to the consumers. It is time for India to have a National National Competition Policy (NCP). Competition policy refers to “those government measures that directly affect the behaviour of enterprises and the structure of industry” to maximise total welfare, i.e., the total of consumer’s surplus and producer’s surplus, as well as taxes collected by the government. However, to be effective in a democracy, such policies should have the cover of the law. The Competition Act, 2002 (Act) which replaced the archaic MRTP Act, 1969 already exists to provide the statutory cover for the NCP. Control of anti-competitive agreements and prevention of abuse of dominant positions by large enterprises, regulation of combinations and competition advocacy are broad thrust areas under the Act. CCI is the statutory body created to enforce the Act, with a mandate to preserve, protect and promote competition in Indian markets. Although enacted in 2002, the Act was brought into force in a phased manner since May 2009. But we have not utilised CCI’s full potential due to the absence of a national competition policy. National competition policies proved a key structural reform to boost economic growth in many developed countries. In the absence of NCP, the benefits of competition are yet to reach all the sectors. Sectors like coal mining have been under monopoly control of the state via PSUs like the Coal India. Other ostensibly “open” sectors have not been able to reap the benefits of competition due to strong governmental interference, particularly the power sector. Although the Electricity Act, 2003, enacted simultaneously with the Competition Act, introduced bold legislative reforms, such as mandating competitive-bidding, open access etc., these measures have remained in the statute book, largely, due to absence of financial autonomy to the now ‘unbundled” State Electricity Boards and also due to political interference by the state governments in their day-to- day functions. Similarly, public procurement, which constitutes approximately 20-30% of our GDP, continues to be infested with cartelisation. No serious attempt has been made except for occasional references made by some large public procurement organisations such as DG S&D, Railways, FCI, etc., to CCI. This appears to be partly due to corrupt nexus between politicians, government officials & bidders and partly due to a general ignorance towards benefits of competition. This apathy and ignorance can be best cured if India adopts NCP as a part of its Directive Principles. NCP will ensure each policy regulation and law is screened based on impact, if any, on the state of competition. However, this requires a strong political will. A 2014 report of OECD, concluded that effective competition policy could result in an extra 2-3% growth. Australia demonstrated this in 2005. Apart from Australia, competition policy has also been adopted and implemented by the UK, Denmark, Italy, Turkey, Mexico, Hong-Kong, Malawi and Botswana. Recently, the Philippines adopted NCP. In India, however, a draft NCP, formulated in November 2011, is gathering dust in the files of the ministry of corporate affairs, despite the three-year agenda of the NITI Aayog recommending comprehensive competition policy reforms. Recently announced initiatives to introduce limited privatisation of Indian Railways for select routes for passenger train services indicates growing realisation of the importance of introducing competition in the public sector. But such ad hoc initiatives must be institutionalised and implemented after the adoption of a well-considered and thoroughly debated NCP, which will be a challenge since PM Modi will have to build a national consensus.
Source: Financial Express
The company which telecasted the first ever colour TV ad in the 1980s is still one of the most recognised and respected textile brands in India. Bombay Dyeing and Manufacturing is the flagship company of the Wadia Group. As everyone knows, towards the end of the 19th CE, Bombay (now Mumbai) was one of the chief cotton ports of the world. The Wadia Group, now more than 250 years old, was primarily engaged in shipbuilding. As new business opportunities opened up through industrialisation, Nowrosjee Wadia recognised greater possibilities in the textile industry and founded Bombay Dyeing in 1879.
Early beginnings
The textile industry is heavily dependent on changing technology, from water wheels to steam engines and shuttles, and raw cotton, which in turn is influenced by crop area, monsoon, fertilisers, pest control, and so on. The other influential factor is the buying power of the consumer. Bombay Dyeing had humble beginnings. A red-brick shed housed the operations, with the cotton yarn being dip dyed by hand in three colours — red, green and orange, initially, and sun dried. There was only one store and Wadia was the manager. A mill was installed in 1897 and production increased as demand steadily went up. The Wadia Group reportedly became the first in India to install automatic looms and by 1956 after having imported 2,000 looms. By the end of the decade, a process house had been added, and Bombay Dyeing became a vertically integrated manufacturing company.
Diverse range of products
Though the company offered a collection of sarees, shirts and dress material alongside bed and bath linen, it slowly came to be known more as the go-to place for bedsheets and towels. In 1961, three retail outlets were established and five distributors were added to the list. By the 1970s, it had entered even rural markets. The manufacturing base was moved from Mumbai to Ranjangaon, near Pune, which was later sold off. The company soon became the first textile brand in India to introduce theme-based design collections. It became the first brand to join up with a leading fashion designer — Sabyasachi — to launch a signature line in 2006. As competition increased, other innovations followed. Bombay Dyeing , in 2010, came out with ‘Aroma Rich,’ a range of fragrant bed linens and ‘E-Magic’ bedsheets with Vitamin E properties. It even launched a mobile-friendly online platform and mobile apps in 2014 in a bid to attract younger consumers. Bombay Dyeing ventured into personalisation of products in 2018 to keep the consumer’s interest. Slowly, customised bedsheets and other textile products were also introduced.
International standards
Apart from the retail business ‘Home and You,’ Bombay Dyeing is also engaged in two other businesses — Realty and Polyester. But textile manufacturing — with spinning and winding facilities exceeding 1.3 lakh ring spindles — is said to be its main activity even today, giving it maximum brand recall among consumers. Its manufacturing units conform to international standards with the ISO9002:1994 certification for ‘Quality Management System,’ the ISO14001:1996 certification for ‘Environmental Management System’ and the BVQI's ‘SafetyCert’ certification for ‘Occupational Health and Safety Management System’. It is also claimed to be the earliest signatory to the ‘Responsible Care’ initiative of the Indian Chemical Manufacturers Association , now known as the Indian Chemical Council. Bombay Dyeing has more than company-owned stores, set to become experience-centres, about 400 franchise stores, 3,000 multi-brand retail outlets, its own e-commerce portal, and a presence in all major e-commerce platforms. It has its own studio to look into innovative new product designs, too. The brand continues to be known for the quality and texture of its linen, its immaculate finish and detailed designs. In 2019, it entered the menswear category with its line ‘Cezari.’
argest exporter of textiles
Almost 50 per cent of its products is exported to the USA, the Netherlands, the UK, Canada, Germany, France, Italy, Poland, Czechoslovakia, Switzerland, Australia and New Zealand, making it the country’s largest exporter of textiles. In its category, Bombay Dyeing was the first brand to move from commodity to brand advertising. As a pioneer in cinema and TV advertising, it has always been in the public eye, right from ‘Knock out fabrics from Bombay Dyeing’ to the ‘Ebony and Ivory’ launch to ‘Fashion forwardness’ and most recently, ‘Make your own bedsheet’ campaign. It has attracted many customers over the years by launching special schemes for Valentine’s Day and festivals, such as, Onam and Durga Pooja. Some of the brand ambassadors are Amitabh Bachchan, Rajesh Khanna, Sharmila Tagore, the late Sridevi, and Lisa Ray.
Social impact
More significantly, it also took up socially responsible issues like the #Takebacksleep campaign which stressed the importance of sufficient sleep and even had an interactive quiz to make it more interesting. Bombay Dyeing was the first company to open a provident fund and one of the first to establish family planning centres for its workers. It had generously contributed to the 2015-16 Tamil Nadu flood relief operations. It has won a slew of awards over the years, including Retailer of the Year 2005 award, Super Brand in 2006-2007, Brand Leadership Award in Retail Sector (Merit) 2013, Asia's Most Trusted Company 2018, India's Most Trusted Brand 2019 and the SRTEPC and TEXPROCIL Gold Trophies for its outstanding export performance for poly cotton blended fabrics and made-ups.
Source: Business Line
The European Union and Britain remained deadlocked Friday in their talks on trade ties after Brexit, with EU negotiator Michel Barnier saying that any chance of a deal seemed to be slipping away. Too often this week it felt as if we were going backwards more than forward given the short time left, he said in a damning assessment of the negotiations.I simply do not understand why we are wasting valuable time, he said after the 7th round of talks concluded with little reported progress. The British side left just as frustrated, saying the EU kept insisting that Britain would have to continue to adhere to EU rules for full free trade even though the nation left the bloc on Jan 31. The EU is still insisting not only that we must accept continuity with EU state aid and fisheries policy, but also that this must be agreed before any further substantive work can be done in any other area of the negotiation, said U.K. negotiator David Frost. Barnier said the effective deadline for the talks was the end of October to allow for legal vetting and national approvals before any deal comes into force on Jan 1, 2021, when Britain’s transition period from member state to non-EU member ends. I am disappointed and worried, Barnier said. He added that British Prime Minister Boris Johnson has yet to live up to his promise to instill a sense of urgency in the talks. The parties disagree on rules for state aid for businesses and on fisheries, with the UK opposed to EU demands for long-term access to British waters. Both say they want to avoid a no deal scenario that would see tariffs and other restrictions imposed on trade. Britain is seeking a free-trade pact similar to one the EU negotiated with Canada. The EU wants to ensure both sides have similar rules on a wide range of issues, including workers’ rights, the environment and government subsidies, before discussing such an agreement.
Source : Financial Express
The Zacks Textile – Apparel industry includes companies and lifestyle brands, which produce, design, distribute and market basic and fashion apparel, footwear and accessories. The industry also comprises providers of athleticwear and related equipment and fitness accessories. Most of the textile apparel players operate through stores and digital networks in the United States and overseas. Notably, some of the prominent industry players are V.F. Corporation (VFC), Ralph Lauren Corporation (RL), Under Armour, Inc. (UAA), Columbia Sportswear and Guess?, Inc. to name a few. Let’s take a look at the industry’s three major themes:
· Companies in the textile-apparel space have been reeling under the impact of the novel coronavirus outbreak. Temporary store closures have hit their performances hard, while some of the companies have also been grappling with supply-chain disruptions. Although most stores have reopened with curbs being lifted, consumer traffic remains below pre-pandemic levels. Further, the second wave of the virus has kept customers confined to their homes, who prefer to step out only for essentials. Certainly, soft traffic, heightened promotional environment and uncertainty related to consumer shopping dynamics pose near-term challenges for companies in the textile-apparel industry.
· Industry players have been benefiting from their efforts to boost online operations, as customers have increasingly resorted to this mode of shopping amid the pandemic. Companies are likely to benefit from digital endeavors like upgraded payment systems, online purchases and pick-up facility at stores, improved ecommerce sites, and effective mobile apps. Apart from this, some apparel players started producing face masks to meet commercial and consumer demand, while some are making medical gowns for the healthcare sector. However, escalated costs associated with such investments, along with the other COVID-19 related expenses may weigh on margins. Apart from this, volatile currency movements due to large overseas exposure are a worry for several textile-apparel companies.
· Efforts to enhance brands via marketing strategies, licensing deals, buyouts, innovation and alliances are likely to keep supporting players in the space. Also, focus on keeping pace with changing consumer preferences is a major driver. In this regard, rising inclination toward health and fitness is working in favor of activewear and sporting equipment providers. Also, many companies offer fitness gadgets and adopt other tracking platforms to make the most of consumers’ evolving tastes.
Zacks Industry Rank Indicates Drab Prospects
The Zacks Textile – Apparel industry is housed within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #216, which places it in the bottom 14% of more than 250 Zacks industries. The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates gloomy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1. The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually becoming less confident about this group’s earnings growth potential. Since the end of March 2020, the industry’s consensus earnings estimate for the current year has slumped 64.1%. Despite the dull prospects, here we present a few stocks that have the potential to outperform the market. But before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.
Industry Underperforms Sector and S&P 500
The Zacks Textile – Apparel industry has underperformed the broader Zacks Consumer Discretionary sector as well as the S&P 500 composite over the past year. The industry has risen 2% over this period, compared with the S&P 500 and the broader sector’s increase of 15.7 and 5.8%, respectively.
Industry’s Current Valuation
On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing consumer discretionary stocks, the industry is currently trading at 28.53X compared with the S&P 500’s 22.78X and the sector’s 33.83X. Over the last five years, the industry has traded as high as 28.7X, as low as 13.28X, and at the median of 18.13X, as the chart below shows.
Bottom Line
The near-term prospects of the Textile-Apparel industry are eclipsed by soft traffic in reopened stores, uncertain consumer behavior and lower demand for discretionary items due to the pandemic. Additionally, escalated costs and increased promotional activity pose threats to margins. Nonetheless, strong online operations and efficient brand management bode well. That said, we are presenting four stocks from the Textile – Apparel universe, which are well positioned to capitalize on opportunities.
Hanesbrands Inc. (HBI): The consensus earnings estimate for this provider of apparel essentials’ current year has improved 58.1% over the past 30 days. Also, this Zacks Rank #1 (Strong Buy) company delivered a significantly high earnings surprise in the last reported quarter. Notably , the company’s shares have rallied 10.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs, Inc. (CROX): The Zacks Consensus Estimate for this innovative casual footwear company’s current-year earnings has more than doubled in the past 30 days. This Zacks Rank #1 company has an estimated long-term earnings growth rate of 15%. Further, the company has a significant trailing four-quarter earnings surprise, on average. Markedly, Crocs’ shares have surged 57.7% in a year.
PVH Corp. (PVH): This provider of branded apparel, footwear and other accessories company has an estimated long-term earnings growth rate of 9.6%. Further, this Zacks Rank #3 (Hold) company’s current fiscal year’s consensus mark for loss has narrowed 2.7% over the past 30 days. Lululemon
Athletica Inc. (LULU): This athletic apparel and accessories provider has an estimated long-term earnings growth rate of 18.3%. The consensus mark for current fiscal year earnings has increased by a cent over the past 30 days. Encouragingly, the Zacks Rank #3 stock has almost doubled in the past year. It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Source: Yahoo Finance
The volume of Azerbaijan’s clothing industry production increased by 15.8 percent during the period between January and July 2020, local media reported with reference to State Statistics Committee on August 21. Products worth AZN 220 million ($129.4M) were produced in the textile, clothing, leather and footwear industries in the reporting period. Moreover, the production of textile industry grew by 0.4 percent, leather and footwear by 13.2 percent, compared to the same period of 2019. Furthermore, during the reporting period, the country increased import of fruits and vegetables. Thus, during the first seven months of the year, 206,100 tons of fruits and vegetables, worth $124 million, were imported to the country. It should be noted that more than 184,300 tons of fruits and vegetables worth $113 million were imported to the country during the same period of 2019. Additionally, Azerbaijan increased import of tea during January-July 2020. Thus, during the reporting period 8,400 tons of tea worth $34 million were imported to the country. Meanwhile, during the same period last year, Azerbaijan imported 7,400 tons of tea worth $28.7 million. Earlier, it was reported that the volume of Azerbaijan’s trade operations amounted to $15.3 billion in the period between January and July, 2020. Some $5.9 billion of trade operations fell on imports and $9.1 billion on exports.
Source: Ayya Lmahamad, Azer News
The French government said on Saturday it would unveil details of its 100 billion euro ($118 billion) plan to reinvigorate the economy in the first week of September, instead of next Tuesday, as it focuses on preparing the new school term. “The recovery plan is ready, the timetable for its implementation still stands,” government spokesman Gabriel Attal said in a statement. Schools are set to reopen on Sept. 1, after most were closed during a two-month lockdown earlier this year to fight the coronavirus, and the government is working to ensure protective measures will be adequate, Attal said. France has already outlined some of the parameters of its crisis measures, including cuts to domestic business taxes, investment in promoting jobs for the young and funding for environmental initiatives.
Source : Financial Express
The Jakarta Fashion Hub (JFH), a collaborative space that combines fashion and creativity for fashion enthusiasts, officially opened on Tuesday (18/8/2020). The JFH will act as a creative space for fashion enthusiasts and will help unlock the potential of the domestic fashion, textile, and creative industries. The Jakarta Fashion Hub was initiated by the integrated viscose-rayon fibre manufacturer Asia Pacific Rayon (APR) with the vision to provide a space for fashion enthusiasts to formulate concepts, design products, and create original works by utilizing the various available facilities. Located in the Tanoto Foundation Building in downtown Jakarta, JFH acts as a collaborative space between fashion enthusiasts, designers, and industry players to bolster the local fashion and textile industry. "We hope that the Jakarta Fashion Hub can become a platform for fashion enthusiasts, students, designers, and fashion business owners to continue to explore their potential and develop creative ideas in creating original Indonesian fashion trademarks and go global, in line with President Joko Widodo's vision of encouraging #BanggaBuatanIndonesia,” said Asia Pacific Rayon Director Basrie Kamba. To upscale national branding, JFH offers everything that a designer needs to launch a top-notch fashion label, including a workshop, photo studio, and display room. Fabrics in various motifs -- including those made from APR’s sustainable viscose rayon -- are available for grab and thus enhancing the supply chain. Workshops are open for fellow fashion enthusiasts to discuss the potential trends and gain insight for better marketing strategies. Didiet Maulana, designer and owner of IKAT Indonesia, welcomed the launch of the Jakarta Fashion Hub as a platform to accommodate young Indonesians who aspire to channel their passion in fashion. "Hopefully, the Jakarta Fashion Hub can serve as a gathering place for fashion designers and communities to innovate and support industry development," said Didiet. Webinar “Make Your Own Fashion Labels - Proudly Made in Indonesia” The launch of the Jakarta Fashion Hub was highlighted at the third Everything Indonesia webinar series, which was focused on the theme “Make Your Own Fashion Labels – Bangga Buatan Indonesia”. The event brought together speakers from the fashion and textile industry, such as Elis Masitoh, Director of Textiles, Leather and Footwear Industry, Ministry of Industry; Josephine ‘Obin’ Kumara, founder of BIN House; Didiet Maulana, owner of IKAT Indonesia; Dana Maulana, co-founder of Danjyo Hiyoji; and Melinda Babyana, CEO of The Bespoke Fashion Consultant. According to the Industry Ministry, Indonesia still needs to improve their national branding for them to take over the domestic market. “We need to work together to promote local brands and convince the public that local brands are not less superior than foreign brands. We need to create a common understanding that Indonesian brands are as good as foreign brands. The government has formulated an integrated action plan for the development of the fashion industry, from encouraging brand creation, improving product quality, promotion and marketing, market access expansion, and skills and knowledge improvement for the human resources,” said Elis Masitoh. BIN House Founder Josephine ‘Obin’ Kumara said that innovation is the key to building a sustainable label. “Creating a brand is about creating a product that lasts, providing jobs for many, being proud of your own creations, and always creating something new by making breakthroughs and doing trials.” Designers can visit JFH at the seventh floor on Jalan Teluk Betung No. 33, Central Jakarta. The fashion platform follows strict health protocol guidelines such as ensuring that all visitors maintain a safe distance. Registration is free of charge until the end of the year.
Source: Jakarta Globe
After dwindling manufacturing over the last few years, textile plants have increased production to keep up with an increased demand for personal protective equipment amidst the pandemic. "Globally, we've had about a five times increase in the amount of medical fabrics we've been able to produce to support the COVID efforts," said Delores Sides, a spokesperson for Elevate Textiles. To keep up with the increase in production, companies in the industry like Elevate Textiles are hiring. Sides said she expects these employment opportunities to last beyond the pandemic. "This is not seasonal work. It's not temporary work. We continue to have very strong manufacturing and production orders. Right now we are focused on the medical fabrics, but there are many other markets that we serve, including the military and barrier fabrics. We believe there is going to continue to be a need for reusable medical fabrics," Sides said. One Elevate Textile employee said her job has new meaning. "I feel great because I feel like I'm helping someone else, especially in these scary times that we're living in now. I'm glad to be part of this team that's helping in this fight against COVID-19," Janice Leath said. Elevate Textiles said it is hiring across the state in Burlington, Raeford, and Rockingham.
Source: Spectrum Local News
